[2021] FWCFB 3659

The attached document replaces the document previously issued with the above code on 6 July 2021.

The models at paragraph [40] have been amended to correct an error to the number of allowances counted.

Associate to Deputy President Gostencnik

6 July 2021

Fair Work Act 2009
s.604—Appeal of decision

Construction, Forestry, Maritime, Mining and Energy Union
v
Hully Foundations Pty Ltd
(C2021/830)

Appeal against decision [2021] FWCA 376 of Commissioner Williams at Perth on 27 January 2021 in matter number AG2020/3832.

Decision of Deputy President Gostencnik and Commissioner Bissett

Introduction

[1] By its notice of appeal lodged on 17 February 2021, the Construction, Forestry, Maritime, Mining, and Energy Union (Appellant) seeks permission to appeal and if granted appeals a decision made by Commissioner Williams on 27 January 2021, approving the Hully Foundations Pty Ltd Enterprise Agreement 2020 (Agreement). 1 By way of background, Hully Foundations Pty Ltd (Respondent) applied under s 185 of the Fair Work Act 2009 (Cth) (Act) for the approval of the Agreement on 10 December 2020. Subsequently, by email correspondence dated 14 December 2020 directed to the Adelaide Registry of the Commission, the Appellant requested any documents that were lodged with the Respondent’s application for approval of the Agreement. On 16 December 2020, by email correspondence from “Member Assist” of the Commission, copies of the redacted documents that were lodged by the Respondent were attached and provided to the Appellant.2 That correspondence also contained the following information:

“It is noted that the CFMMEU is not listed as a Union Bargaining Representative at question 4.2 of the Form F16 application in this matter. Should the CFMMEU not be able to establish their status as a bargaining representative for this enterprise agreement or the CFMMEU is not otherwise permitted by the presiding Member to be heard or to make submissions, you are reminded that the CFMMEU will not be included in any correspondence including notification of the Member’s intention to determine the application.

If no person contacts the Commission wishing to be heard, applications may be approved or refused no earlier than seven business days from the date the application was lodged.”

[2] The Appellant did not apply to be heard or to make submissions in connection with the application to approve the Agreement. Consequently, the Appellant did not raise any matter relating to the approval of the Agreement before the Commissioner approved it.

[3] Despite being put on notice by the Respondent that it relied on the Appellant’s inaction in connection with the application for the approval of the Agreement as a matter weighing against the grant of permission to appeal, the Appellant did not provide any explanation before the hearing of the appeal for its failure to take steps during the Agreement’s consideration for approval to raise the matters it now seeks to raise on appeal.

[4] During the course of the hearing before us, the Appellant submitted that its lack of participation during the consideration of whether the Agreement should be approved was not a forensic decision and that the email from it to the Adelaide Registry on 14 December 2020 should have, but did not, specify that the Appellant sought to be heard in relation to the application. 3 We will return to this as well as the issue of standing raised by the Respondent later in our decision.

[5] Unsurprisingly, as the application for the approval of the Agreement was not contested the Commissioner’s decision is brief indicating relevantly that he was satisfied that each of the approval requirements have been met. 4 The Agreement commenced operation on 3 February 2021 and has a nominal expiry date of 26 January 2025.5

The appeal grounds

[6] The Appellant raises two grounds of appeal both relating to the requirements in s 186(2) of the Act. The first ground contends that the Commissioner erred in being satisfied that the Agreement passed the better off overall test (BOOT) when it did not. The second contends that the Commissioner could not be reasonably satisfied that the Agreement was genuinely agreed to by employees covered by the Agreement.

Consideration

BOOT

[7] The issue raised by this appeal ground arises from the changes to the spread of ordinary hours for which the Agreement provides compared to the Building and Construction General On-Site Award 2010 (Award) and the consequential entitlements to particular payments under the two instruments.

[8] Clause 5.6.1.4 of the Agreement defines a “morning shift” as commencing at or after 4:30 am and before 6:00 am, except where ordinary hours commence at 5:00 am “in accordance with clause 5.1.1” (sic) [intended to be a reference to 5.1.3]. Clause 5.1.3 provides for the span of ordinary hours (6:00 am to 6:00 pm Monday to Friday) to be altered during summer months (November to March) so that ordinary hours may be commenced at 5:00 am.

[9] Relevantly, payments for and the organisation of ordinary hours for shift work in the Agreement is as follows:

“5.6.2 Where an Employee is employed continuously on shiftwork (inclusive of public holidays) for five shifts Monday to Friday, the following rates will apply:

5.6.2.1 afternoon, night and early morning shifts — ordinary time hourly rate plus 50%;

5.6.2.2 morning and early afternoon shifts — ordinary time hourly rate plus 25%.

5.6.3 In the case of broken shifts ((i.e. less than 38 ordinary hours worked over five consecutive shifts Monday to Friday), an Employee shall be paid penalty rates as per clause 5.4.1.

5.6.4 The ordinary hours of morning, early afternoon, afternoon and night shift will be eight hours daily inclusive of meal breaks. Provided that where shift work comprises three continuous and consecutive shifts of eight hours each per day, a crib time of twenty minutes duration shall be allowed on each shift and will be paid for as though worked. Such crib time will be in lieu of any other rest period or cessation of work elsewhere prescribed by this agreement.

5.6.4 For the purpose of this clause an employee will not be required to work for more than five hours without a meal break.

5.6.5 Where practicable, an employee will be given at least 48 hours’ notice of the requirement to work shift work.” [repetitive numbering of clauses 5.6.4 appears in the original]

[10] Clause 5.6.2 fixes the rate for broken shifts to be paid in accordance with clause 5.4.1 (which deals with overtime). Those rates are one and a half time ordinary rates for the first two hours and at double time thereafter.

[11] As is evident from the above provisions, ordinary hours of work commencing at 5:00 am during November to March in accordance with clause 5.1.3, will not be a morning shift and thus not shift work. That is the purpose of the exclusionary words in clause 5.6.1.4 of the Agreement which otherwise defines a morning shift. The additional payments prescribed (by way of the general shift penalty or the broken shift payments) will not apply and nor will these hours attract overtime under clause 5.5, since they are ordinary hours within the permissible span for which clause 5.1 provides.

[12] The Award provides for the span of ordinary hours to commence at 7:00 am but ordinary hours may start at 6:00 am by agreement between the employer and the employees and their representative(s), if requested. 6

[13] Clause 34.1(a) of the Award defines “morning shift” as a shift starting at or after 4.30 am and before 6.00 am. It is to the same effect as Clause 5.6.1.4 of the Agreement but without the exception concerning changes to the span in summer months.

[14] Payments and the organisation of ordinary hours for shift work in the Award was at test time as follows:

“34.1 General building and construction and metal and engineering construction sectors

. . .

(b) When an employee is employed continuously (inclusive of public holidays) for 5 shifts Monday to Friday, the following rates will apply:

(i) afternoon, night and early morning shift—150% of the ordinary hourly rate;

(ii) morning and early afternoon shifts—125% of the ordinary hourly rate.

(c) Where a job finishes after proceeding on shiftwork for more than 5 consecutive days or the employer terminates the employee’s services during the week, the employee must be paid at the rate specified in clause 34.1(b) for the time actually worked.

(d) In the case of broken shifts (i.e. less than 38 ordinary hours worked over 5 consecutive shifts Monday to Friday) the rates prescribed will be 150% for the first 2 hours and 200% thereafter.

(e) The ordinary hours of early morning, morning, early afternoon, afternoon and night shift will be 8 hours daily inclusive of meal breaks. Provided where shiftwork comprises 3 continuous and consecutive shifts of 8 hours each per day, that 24 minutes of each shift will accrue towards a rostered off shift and a crib time of 20 minutes duration will be allowed on each shift, and will be paid for as though worked. Such crib time will be instead of any other rest period or cessation of work elsewhere prescribed by this award.

(f) An employee must be given at least 48 hours’ notice of the requirement to work shiftwork.”

[15] There is some, but for present purposes, no material difference between these provisions and those corresponding under the Agreement reproduced earlier. But there is a difference in their effect because of the exclusionary provisions in clause 5.6.1.4 of the Agreement.

[16] Under the Award, ordinary hours commencing at 5:00 am during summer months (as prescribed in the Agreement) could only be worked as a morning shift. Unlike under the Agreement there is no provision in the Award which would permit the span of ordinary hours to be altered to allow a 5:00 am commencement and there is no exclusion of such hours from the morning shift definition in the Award. Pursuant to clause 34.1(b) of the Award all ordinary hours for the morning shift would be paid at 125%. If the shifts are broken shifts the rates are 150% for the first two hours and 200% thereafter. Starting at 5:00 am other than as a morning shift would, under the Award, involve overtime. But unlike the scheduling of ordinary hours and shift work hours, overtime may be refused if it is unreasonable (clause 36.1(b)).

[17] The Appellant contends that as the Agreement permits ordinary hours in summer to be worked at any span of time between 5:00 am and 6:00 pm Monday to Friday, employees can have variable start times within a week as there is no requirement that work always start at 5:00 am during summer months. It says that because the default mode of employment under the Agreement is daily hire, such employees may be engaged for only short periods of time, for example two days. Thus, it is possible that both a short engagement and variable start time could occur under the Agreement, with the consequence that the employees would not be better off overall if the Agreement applied than if the Award applied. This is because the broken shift penalty applies under the Award but would not apply under the Agreement to work under the summer months span of hours. The same result would pertain if employees and the Respondent agreed pursuant to clause 5.1.4. of the Agreement to work 10 hours of ordinary hours per day. 7

[18] In addition, work in a day under a 10 ordinary hours agreement made pursuant to the Agreement would mean employees are not entitled to overtime for two hours under the Agreement whereas the reverse is true under the Award. Employees working 12 hours in a day under such an arrangement would under the Agreement be paid time and a half for the two hours in excess of the 10 hours, whereas under the Award those hours would be paid at double time. 8

[19] The Respondent says there is no appealable error. It says that the Appellant’s contention as to potential working hours of daily hire employees under the Agreement – the hypothetical scenario of a particular employee who is only engaged for two days (Monday and Tuesday) before having their employment terminated – is nonsense. Citing the decision in Construction, Forestry, Maritime, Mining, and Energy Union v Allstyle Concrete (Allstyle Concrete) 9 the Respondent says satisfaction about whether the Agreement passes the BOOT should be assessed by reference to a pattern of work permitted by the terms of the Agreement.10

[20] This submission overly simplifies what is said by the Full Bench in Allstyle Concrete. Summarising the discussion by the same Full Bench in the Loaded Rates Agreements Decision 11 about the application of the BOOT to an enterprise agreement containing a loaded rate structure, the Full Bench in Allstyle Concrete noted that in applying the BOOT, it was necessary to start with an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment for which the agreement provides or permits.12 The Full Bench then observed:

“ . . . . In the case of a loaded rates agreement, this will require a focus on the practices and arrangements concerning the working of ordinary and overtime hours by existing and prospective employees that flow from the terms of the agreement. However the Commission may take into account objective evidence that a particular pattern of working hours or roster pattern permitted by an enterprise agreement is not practicable, or cannot or is unlikely to be worked.” 13

[21] The Respondent says that on no meaningful construction of the terms of the Agreement, was it reasonable for the Commission to consider the possibility that a person might be employed for two days only when considering whether employees were better off overall. 14

[22] In so far as the Appellant’s contention concerns daily hire employees who work the arrangements posited for only two days before employment ends, we agree with the Respondent.

[23] As the Respondent has pointed out, the Agreement provides for, and thus contemplates, that employees will usually be employed to work ordinary full-time hours, being 38 hours per week on average (or 40 hours per week if participating in the RDO scheme) (Clauses 3.1 and 5.1 of the Agreement). Although clause 3.1 of the Agreement contemplates that the default mode of employment of employees is as “daily hire” employees, this is significant only for the purposes of determining the notice which must be given by the Respondent to terminate an employee’s employment. Other entitlements, such as leave, accrue to daily hire employees. Except for the period of notice to be given on termination, the Agreement contemplates that the default mode of employment as a daily hire employee will be on full time hours on an ongoing basis until employment is terminated on the giving of notice. In this regard, that is the position of a full time (ongoing) employee under the Award, whose employment may be terminated, albeit on a longer period of notice. We do not consider the working scenario posited by the Appellant, though possible, is likely under the Agreement.

[24] However, that is not the end of the matter. A daily hire worker under the Agreement may be required to work variable starting times throughout a week. So that in the case of five days of eight ordinary hours with start times at 5:00 am on Monday, Wednesday and Friday and 6:00 am on Tuesday and Thursday.

[25] Before assessing the consequence of this pattern of work and others permissible under the Agreement, it is necessary to say something about the operation of the shift work and broken shifts provision of the Award. The Respondent contends that the Appellant’s BOOT contention based on the operation of the broken shifts provision of the Award assumes that all hours worked would be subject to penalty rates of time and a half for the first two hours and double time thereafter. The Respondent says this is erroneous. 15

[26] The Respondent contends that the entitlement to the broken shift allowance “in clause 17.1(d)” (sic) of the Award [the reference should be to clause 34(1)(d)) of the Award] only arises in circumstances where an employee has been given notice to work shift work, in accordance “with cl. 17.1(f)” (sic) [the reference should be to clause 34.1(f) of the Award] and a shift pattern does not run for at least 38 hours over five consecutive shifts, Monday to Friday. In contrast, day workers who work outside of the span of ordinary weekly hours (such as an employee with a 5:00 am start contemplated by the Appellant in their modelling), who are only entitled to be paid penalty rates for the hours that are worked outside of the span of ordinary hours. 16 In other words, payment is at overtime as is clear from the modelling attached as Annexure C to the Respondent’s outline of submissions. On this construction of the Award, the Respondent contends the Agreement passes the BOOT.17

[27] We do not accept the Respondent’s construction. The Award allows for the working of ordinary hours either between the prescribed (or agreed) span of hours (7:00 am (or 6:00 am) to 6:00 pm) or as shift work which is relevantly defined by reference to a starting span of time (starting at or after [X] time and before [Y] time). The controversy here is whether a 5:00 am start for working ordinary hours under the Agreement during summer months in accordance with clause 5.1.3 of the Agreement would be a morning shift under the Award.

[28] The relevant comparison of these hours under the Agreement with the Award is with ordinary hours, not overtime, since under the Agreement the 5:00 am start during the summer months would be ordinary hours. The Agreement permits all ordinary hours of work on Monday to Friday to commence at 5:00 am during these months. Such a start time is permitted under the Award and is worked as a morning shift. Shift work under clause 34.1 of the Award is defined by reference to the start of work not by its pattern. It is relevant that clause 34.2 which deals with “shiftwork” in the civil construction sector does so by first defining that term (by reference to a pattern), whereas clause 34.1 contains no such definition. Thus, whether work is upon a “morning shift” under the Award (for the general building and construction sector) depends entirely on when work is to start. Overtime under the Award is payable for all “time worked beyond an employee’s ordinary time of work” 18 [underlining added] and an “employee’s ordinary time of work” is inclusive of time worked for accrual purposes as prescribed in clause 33 (ordinary hours of work) and clause 34 (shift work).19 The overtime provisions do not engage when work is performed outside of the spread of ordinary hours in clause 33 because work during such hours is ordinary hours worked as shift work under clause 34, unless the work during such hours is “beyond” the number of ordinary hours permitted by the Award. The ordinary meaning of “beyond” is “on the far side of; past; in addition; more”.

[29] Clause 34.1(f) of the Award which places an obligation on an employer to give an employee at least 48 hours’ notice of the requirement to work shift work, also does not have the effect for which the Respondent contends.

[30] The requirement under the Award to give notice of shift work, does not affect the character of the work as shift work, if the start time for ordinary hours falls within the commencing window, relevantly, of a morning shift. The failure to give notice might have two consequences. First, an employee may be permitted to refuse to work a shift because notice has not been given. Second, if the employee works a shift notwithstanding the lack of notice, the employer might be exposed to an imposition of a pecuniary penalty for a breach of the Award, but the employee is not thereby deprived of the benefit of the shift loading for which the Award provides. On the Respondent’s construction although an employee is not given notice as required under the Award, an employee starting at 5:00 am (say in the summer months) in accordance with the employer’s instruction, would receive a lesser benefit, at least for the first and second shift, at time and a half for the first two hours until 7:00 am and ordinary time for the remaining 6 hours - 9 hours total pay at ordinary time, compared to the morning shift loading at eight hours at ordinary time plus 25% - 10 hours total pay at ordinary time, that would apply had the employer given notice as required by the Award.

[31] Moreover, it is apparent that under the Agreement the same result would pertain if the start times during non-summer months were at 5:00 am. That is, this would be a morning shift because the exclusionary provision is not engaged. Were it otherwise, there would be no necessity to provide for the 5:00 am commencement exclusion during summer months in the definition of “morning shift” in clause 5.6.1.4 of the Agreement. The Agreement’s morning shift definition and the Award definition of a morning shift, save for the exception, is the same. The exception in the Agreement is necessary to ensure that employees commencing at 5:00 am are not working a morning shift as defined. Because the start time is permitted within the spread of hours all hours will thus be part of the unloaded ordinary hours worked and overtime under the Agreement is also not payable.

[32] If the 5:00 am start time during summer months is implemented on a continuous basis then such a pattern of work would under the Award involve morning shift work for the whole of the period. But if the start time is implemented on a sporadic basis the effect of which would be that the 5:00 am start did not constitute the whole of the 38 hours worked over five days as in the example we have earlier given, then the broken shift allowance would apply under the Award to the ordinary hours worked on the Monday, Wednesday and Friday. Because of the exclusion in clause 5.6.1.4 of the Agreement, broken shifts penalties would not apply.

[33] The modelling below (based on a 50 hour working week in the construction sector) shows that when account is taken of the morning shift allowance payable for such work under the Award, an employee working this pattern of hours, which is contemplated by the Agreement during summer months, would at test time be paid less if the Agreement applied than if the Award applied:

[34] The modelling above takes into account and assigns a value to paid meal breaks for shift work under the Award. This is a conservative approach. An alternative method would be to assume that the actual time worked would still be eight hours plus paid time for breaks (8.5 hours total) before regular overtime commences. In that event, instead of the value we have assigned, the additional time worked beyond the eight hours (30 minutes) would be paid at double time under the Award.

[35] The modelling below shows the effect of a work pattern involving a start time of 5:00 am for only some of the week (3 days) and a 6:00 am start time for the remainder (2 days). It does not take into account paid meal breaks on days when shift work is performed.

[36] The models above do not take into account other allowances for which the Award provides, and which may be payable in particular circumstances. The higher rates of pay for which the Agreement makes provision together with the piling allowance and the higher fares allowance are identified in the employer’s statutory declaration 20 filed with the application for the approval of the Agreement as more beneficial terms under the Agreement compared to the Award are taken into account in the modelling above. As to the other more beneficial terms identified (living away from home allowance and redundancy pay) these are contingent benefits which may never arise or be paid. Whilst it is appropriate that they be taken into account in assessing the BOOT, the analysis above shows that even with the availability of contingent benefits, some employees and prospective employees were not better off overall at test time. We have undertaken the same analysis for other classifications in the Agreement but it is not necessary to reproduce those here. It is sufficient to note that the BOOT problem appears to us to be confined to the classifications identified in the models reproduced above. The Commissioner had available to him a similar analysis or the means by which it could have been procured. It is apparent that the Commissioner did not turn his mind to the impact on the BOOT of the variation to hours of work for which the Agreement provides. In the circumstances we do not consider that it was open to the Commissioner to conclude that the Agreement passed the BOOT. The Commissioner was in error to have concluded otherwise.

[37] We turn next to deal with the Appellant’s contention about the capacity to work 10 hours of ordinary time under the Agreement. We agree with the Respondent’s contention that the analysis of the 10-hour work arrangement by the Appellant is misconceived. The Appellant’s contention proceeds upon the basis that 10 hours of ordinary time work can be engaged in on all of the five days (Monday to Friday) during which ordinary hours are worked. This is incorrect. The alternative arrangements for which provision is made in clause 5.1.4 of the Agreement which may involve working of ordinary hours not exceeding 10 hours on any day is to be read subject to the overriding proviso in clause 5.1.1 which requires ordinary hours to be an average of 38 hours per week. An arrangement which would involve working 10 hours of ordinary time on each of Monday through Friday is not permitted. Assuming an arrangement is made for the working of 10 hours per day and assuming, most beneficially to the Appellant, that such an arrangement is entered into in conjunction with the alteration of start times to 5:00 am during summer months, the result would be that 10 hours of ordinary time could only be worked on four days and the fifth day would be overtime under the Agreement. Such an arrangement is not permitted under the Award and so eight of the 10 hours worked on each day would be ordinary hours worked as a morning shift and the balance on each day would be overtime at double time as provided for in clause 34.1(i) of the Award.

[38] Factoring in a 50 hour working week, the result would be as set out in the modelling 21 below:

[39] It follows that this work scenario posited by the Appellant will not result in the Agreement failing to pass the BOOT.

[40] However, if the alteration to 10 hours ordinary time by agreement is worked on a variable start time basis which would engage the broken shifts provision of the Award the following may result. Again, the model below does not take into account the effect of a paid meal break for days on which shift work is performed.

[41] Working such a pattern, which the Agreement would allow, would result in such employees not being better off overall under the Agreement compared to the Award at test time.

[42] For the above reasons, the Appellant has made good the first appeal ground. We will now deal with the second of the appeal grounds.

Genuinely agreed

[43] The Appellant contends that the Commissioner could not have been satisfied that the Respondent took all reasonable steps to explain the terms of the Agreement and the effect of those terms to the relevant employees or that there were no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees. 22 The basis for these contentions is as follows:

•  Clause 5.6.1.4 defines a “morning shift” as commencing at or after 4:30 am and before 6:00 am, except where ordinary hours commence at 5:00 am in accordance with clause 5.1.1 (sic) [intended to be a reference to 5.1.3];

•  Clause 5.1.3 provides for the span of ordinary hours (6:00 am to 6:00 pm Monday to Friday) to be altered during summer months (November to March) so that ordinary hours may be commenced at 5:00 am;

•  The Award provides for the span of ordinary hours to commence at 7:00 am but may start at 6:00 am by agreement between the employer and the employees and their representative(s), if requested; 23

•  Although the Respondent provided an explanation of the variable span of hours, it did not explain the consequential effect that this has on the broken shift allowance; and

•  The Award provides that in the case of broken shifts (i.e. less than 38 ordinary hours worked over five consecutive shifts Monday to Friday) the rates prescribed will be 150% for the first two hours and 200% thereafter.

[44] The Respondent contends that the Appellant’s assertion that the Respondent failed to provide an explanation as to the consequential effect of the alteration to ordinary hours of work during summer months proceeds upon an erroneous foundation of the operation of broken shift allowance under the Award.

[45] For the reasons already explained we do not agree with this contention. Moreover, for the reasons which follow, the Appellant has made good this ground of appeal.

[46] The Respondent provided to relevant employees a document detailing the key terms of the Agreement and comparison of those terms to the Award. 24

[47] Relevantly the document contained an explanation of the ordinary hours of work provisions of the Agreement by reference to the corresponding provisions in the Award. The document contains the following explanation:

“47. Clause 5.1.3 states that ordinary hours of work will be worked between the span of hours of 6:00am to 6:00pm Monday to Friday. During summer months (defined as November to March), the ordinary hours may be worked from 5:00am. This will allow for greater flexibility to start work early on hot days. Under the award, ordinary hours are between 7:00am to 6:00pm, with provision for the employer and employees to agree for ordinary Hours to commence at 6:00am. Therefore, under the award the first hour worked when an employee starts at 5:00am would be paid at time and half. The rates in the Agreement adequately compensate employees for not being paid this rate.

48. Clause 5.1.5 allows ordinary daily hours to be varied to no more than 10 hours per day by agreement. For example, it could be agreed for an employee to work 3 x 10 our days and 1 x 8 hour day in a week (with a day off). This is designed to provide more flexibility around when hours can be worked. It will only be used if there is agreement between the company and an employee. This is not provided for under the Award.” 25 [Underlining added]

[48] Two things may be observed from the explanation. First, for the reasons earlier explained, the pattern of work described above (in [47]) would under the Award involve working morning shifts. The explanation of the rate of pay payable is therefore incorrect as is the assessment that in all cases the rates in the Agreement will adequately compensate employees when compared to the Award. Second, the explanation given in [48] extracted above, assuming a summer month’s 5:00 am early start time would involve working broken shifts because the 38 hours worked would be over four days and not five consecutive shifts Monday to Friday. As the Appellant rightly contends, on the example given, the Respondent has not explained the effect of the Agreement in this regard.

[49] The alteration to working hours arrangements under the Agreement compared to those under the Award and the entitlements to payment in respect of each material matters. The early start provision during summer months can operate for up to five months. Given the errors in the explanation it could not reasonably have been concluded that the Respondent took all reasonable steps to explain the terms of the Agreement and the effect of those terms to employees.

[50] The Appellant has therefore made good this ground of appeal.

Standing and permission

[51] We are satisfied with the Appellant’s explanation about its inaction at first instance. The inaction was erroneous rather than forensic. We accept that it did not make a deliberate decision not to participate in the application for the approval of the Agreement. Although nothing is guaranteed we consider that had it foreshadowed the matters it now raises before the Commissioner, it is likely that it would have been allowed to make submissions. This coupled with the fact that the Appellant has the right under its rules to represent employees covered by the Agreement we consider gives the Appellant an interest in the decision to approve the Agreement beyond that of an ordinary member of the public. As to permission to appeal, we consider that the Appellant’s notice of appeal raises an arguable case of appealable error. The matters raised go to the power of the Commission to approve the Agreement, and although the assessment of whether an enterprise agreement passes the BOOT is a question of satisfaction, that satisfaction must be formed reasonably. For the reasons earlier identified, that could not have been the case here. There is a public interest in ensuring that the exercise of the power to approve enterprise agreements is properly discharged. Although we accept that the Appellant did not raise the matters it now raises below, having accepted its explanation and taking into account our assessment of the appeal grounds, we do not consider in this case the absence of the Appellant’s participation in the first instance proceeding should weigh against the grant of permission to appeal. Permission to appeal is therefore granted.

Conclusion

[52] For the reasons given we consider that the appeal should be upheld and the decision to approve the Agreement should be quashed. The concerns that we have identified about the Agreement not passing the BOOT may be capable of being addressed by undertakings.

[53] Despite what was done by a Full Bench of the Commission in Skout Solutions Pty Ltd 26 we do not consider that there is any power to vary the decision below to accept undertakings. Both parties also accepted that this was the case.27 If that were the only matter then the convenient course might be for this Full Bench to redetermine the application.

[54] However, as we have identified appealable error on the second ground, three issues would arise. First, whether there is any further evidence which the Respondent may wish to lead which would resolve the concern. Second, if there is no further evidence, whether s 188(2) of the Act may be engaged so that notwithstanding the explanation error the Agreement was nevertheless genuinely agreed to by the employees. Self-evidently this was not a matter considered by the Commissioner nor is it the subject of any submissions made in the appeal. Third, if s 188(2) cannot be engaged whether any undertaking (including those that may be proffered to meet the BOOT concern) can be given by the Respondent which might meet the concern. In those circumstances we consider that the more appropriate course is to remit the application to the National Practice Leader for allocation to a single-member for redetermination.

Orders

[55] We order as follows:

1. Permission to appeal is granted;

2. The appeal is upheld;

3. The decision in Hully Foundations Pty Ltd [2021] FWCA 376 is quashed; and

4. The application for the approval of the Hully Foundations Pty Ltd Enterprise Agreement 2020 is remitted to the National Practice Leader for allocation.

Decision of Deputy President Anderson

[56] I have had the advantage of reading the reasons for decision of the majority.

[57] I agree that appealable error has been identified with respect to the BOOT as it relates to a work pattern of a 5.00am start time in summer months on a continuous basis, or a 5.00am start time in summer months on at least three days of a week. I also agree that as the effect of these terms, properly construed, on the relevant employees was not explained and that as a contrary effect (one that was incorrect) was expressly explained, it cannot be said that the employer took all reasonable steps to explain the terms of the Agreement and the effect of those terms.

[58] However, I do not consider it appropriate to grant the appellant permission to appeal.

[59] The appellant is a sophisticated trade union. Whilst not a bargaining representative of any of the relevant employees, it sought information (as was its right) about the application from the Commission on 14 December 2020 shortly after the application for approval was filed (10 December 2020). That information was provided by a Commission officer in a timely manner (16 December 2020). That information specifically drew to the appellant’s attention the Union’s need to contact the Commission if it wished to be heard in the approval proceedings, given that it was not listed as a bargaining representative and would not otherwise be automatically included in correspondence on the application. No arm of the Commission heard again from the appellant in advance of approval proceedings by Commissioner Williams. The Union neither applied to be heard or to make submissions in connection with the application to approve the Agreement.

[60] The appellant is an industrial association in the construction sector with constitutional coverage under its rules for persons performing the type of work undertaken by relevant employees under the Agreement. It actively participates in proceedings concerning the relevant Award against which the BOOT test was to be applied. Its interest in the application goes beyond that of an ordinary member of the public. It has standing to appeal. However, whilst it is a “person aggrieved” by the Commissioner’s decision within the meaning of s 604 of the Act, there is no automatic right to have the appeal determined. The appeal can only proceed if permission to appeal is granted.

[61] The principles associated with the grant of permission to appeal are well established and need not be repeated. Suffice to note that the legislature has provided that permission is to only be granted if it is in the public interest to do so.

[62] Ordinarily, the public interest test would be satisfied where (in a case such as this) the grounds of appeal disclose an arguable case of appealable error. However, that circumstance also ordinarily involves appeals where not only the appellant has standing but where the appellant was a participant in the first instance proceedings.

[63] In assessing the public interest in this matter, consideration must be given to the fact that an arguable case of appealable error exists.

[64] However, consideration must also be given to the appellants conduct with respect to the application as a whole. Self-evidently, the appellant made inquiries about the application and was provided information on which it could have sought permission to be heard at first instance. It failed to do so. It now seeks to agitate on appeal the very issues that would have grounded a request to be heard as a contradictor. Moreover, the failure of the appellant to seek to be heard and, for example, present the work pattern scenarios and Award construction that it now advances on appeal, bore directly on the issues the Commissioner was required to adjudicate.

[65] The explanation for the failure to participate at first instance (or more correctly, to seek permission to participate) is unconvincing. The appellant says it did not make a forensic (considered) decision not to do so, just a failure to do so. It does not assert that it did not receive the Commission’s email of 16 December 2020. The inference that can readily be drawn, if it is accepted that it was not a forensic decision not to participate, was that the appellant was inattentive to the matter, allowing its interest to ‘slip through the cracks’.

[66] In circumstances where the appellant is a sophisticated industrial association experienced in industrial matters and the processes of the Act and the Commission, this is not a convincing explanation. I do not accept the explanation proffered by the appellant that it should have but did not specify in its letter of 10 December 2020 that it sought to be heard. Given that it was specifically put on notice in writing by a Commission officer six days after the application was filed that it needed to initiate a request to be heard, the appellant’s explanation is particularly unconvincing. Aside from the fact that it would be unusual to seek to be heard on an application before being sent the application, had the Commission’s communication of 16 December 2020 been read and absorbed, it would have been readily apparent that any early expression of an intent to be heard had not been made.

[67] It is in the public interest that proceedings before the Commission be conducted in an orderly, timely and efficient manner, including that persons with an interest appear in first instance proceedings where evidence is more properly able to be adduced, tested and weighed.

[68] Absent compelling reasons, it is not in the public interest that industrial associations have an opportunity to cure their own failures of oversight or inadvertence concerning Commission proceedings by being granted permission to appeal decisions in respect of which they did not participate or seek to participate but could have, and then advance in their grounds of appeal matters of substance that advance facts and submissions that could have, and should have, been put at first instance. Appeal proceedings exist to cure errors by the Commission, not avoidable errors by industrial associations which by oversight fail to appear at first instance. Granting permission in these circumstances not only compromises the orderly processes of dealing with applications but also adds uncertainty and delay for the employer and relevant employees.

[69] In this matter, these weighty considerations outweigh the existence of appealable error with respect to the application of the BOOT test on one prospective summertime work pattern (5.00am starts on a continuous or periodic basis).

[70] For these reasons, and notwithstanding that an arguable case of appealable error exists, I would not grant permission to appeal.

DEPUTY PRESIDENT

Appearances:

P Russell of the CFMMEU for the Appellant
M Minucci of Counsel for the Respondent

Hearing details:

2021
Melbourne (via video link)
19 April

Final written submissions:

Appellant, 27 April 2021 and 30 April 2021
Respondent, 27 April 2021 and 30 April 2021

Printed by authority of the Commonwealth Government Printer

<PR731040>

 1   Hully Foundations Pty Ltd [2021] FWCA 376

 2   Annexure A to the Outline of Submissions of the Respondent dated 12 April 2021

 3   Transcript PN16

 4   Hully Foundations Pty Ltd [2021] FWCA 376 at [2]

 5   Ibid at [3]

 6   Building and Construction General On-Site Award 2010, clause 33.1, 33.5

 7   Appellant’s outline of submissions at [13]-[18]

 8   Ibid at [19]-[20]

 9   [2018] FWCFB 3823 at [9] - [10]

 10   Outline of Submissions of the Respondent dated 12 April 2021 at [29]-[30]

 11   [2018] FWCFB 3610

 12   [2018] FWCFB 3823 at [9]

 13   Ibid, see also [2018] FWCFB 3610 at [115]

 14   Outline of Submissions of the Respondent dated 12 April 2021 at [29]

 15   Ibid at [31]

 16   Ibid at [32]-[33]

 17   Ibid at [34]

 18   Building and Construction General On-Site Award 2010, clause 36.2

 19   Ibid

 20   Appeal Book 48

 21   This model was contained in Annexure G to the Respondent’s supplementary submissions. It was likely incorrect in that it assumed that under the Agreement time worked in excess of 40 hours would be overtime all paid at time and a half. However, as we have explained, the overtime under this model would most likely be worked on the 5th day (the first four being the 10 hour ordinary time arrangement). In that circumstance, overtime would be as set out in the model under the Agreement.

 22   Appellant’s outline of submissions at [25]

 23   Building and Construction General On-Site Award 2010, clause 16

 24   Appeal Book 62 – 70

 25   Appeal Book 67 – 68

 26   [2021] FWCFB 119

 27   Supplementary submissions of the Respondent dated 27 April 2021 at [4] – [8]; Supplementary submissions of the Appellant at [48] – [51]