Minor procedural or technical errors

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Minor procedural or technical errors relating to genuine agreement
The proper construction of section 188(2)
Section 188(2)(a): minor procedural or technical errors
Case examples

Minor procedural or technical errors relating to genuine agreement

See Fair Work Act 2009 s.188(2)

The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (the Amending Act) has revised s.188 of the Fair Work Act to provide a mechanism for the Fair Work Commission to conclude that an enterprise agreement has been genuinely agreed, within the meaning of s.186(2)(a), despite 'minor procedural or technical errors'.

Section 188(2) reads as follows:

An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the [Commission] is satisfied that:
1. the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
2. the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174.[1]

The Amending Act received the Royal Assent on 11 December 2018 and the amendments to s.188 commenced on 12 December 2018.

Examples of what may be considered minor procedural or technical errors are provided in the Revised Explanatory Memorandum to the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017:[2]

Examples of minor procedural or technical errors could include (without limitation):

employees being informed of the time and place for voting on the proposed enterprise agreement or the voting method that will be used for the agreement just after the start of the access period rather than by the start of the access period (subsection 180(3));
employees being requested to approve a proposed enterprise agreement on the 21st day after the last Notice was given, rather than at least 21 days after the day on which the last Notice was given (subsection 181(2));
the inclusion of the employer's company logo or letterhead on a Notice;
the inclusion of additional materials that are stapled with a Notice; or
minor changes to the text of the Notice that had no relevant effect on the information that was being communicated in it (for example, the Notice may say to contact a particular person in the human resources department rather than 'contact your employer').

The proper construction of section 188(2)

The Full Bench of the Commission considered how the introduction of s.188(2) could be applied in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others.[3]

The following propositions[4] emerged from the Full Bench’s consideration of the proper construction of s.188(2):

Subsections 188(1) and (2) are to be approached sequentially. The first question is whether the Commission is satisfied as to the matters at s.188(1)(a) to (c). If it is so satisfied then the agreement has been genuinely agreed to and there is no need to consider s.188(2).
The reference to the 'employees covered by the agreement' in ss.188(1) and (2), is a reference to those employees employed and covered by the agreement at the time of the request to vote under s.181.
Subsections 188(1) and (2) both provide that an enterprise agreement has been genuinely agreed if the Commission is satisfied as to certain matters (ie those in s.188(1)(a) to (c) and ss.188(2)(a) and (b) respectively). The latitude as to the choice of the decision to be made by ss.188(1) or (2) is quite narrow in that the decision maker is required to conclude that the agreement was genuinely made if he or she forms a particular opinion or value judgment. Assessing the genuineness of agreement under ss.188(1) and (2) involves an evaluative assessment.
Section 188(2) is confined to circumstances where the Commission is not satisfied that an agreement has been genuinely agreed to within the meaning of s.188(1), as a result of 'errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights'.
Section 188(2) does not extend to circumstances where the Commission is not satisfied that an agreement was genuinely agreed to in a more general sense, as might arise from a consideration of s.188(1)(c).
Section 188(2) does not apply to all procedural or technical requirements with which an employer must comply when bargaining for an enterprise agreement. The 'minor procedural or technical errors' referred to in s.188(2)(a) must be errors 'made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights' [emphasis added].
The following table sets out the procedural or technical requirements to which s.188(2) applies.

Table 1: Scope of s.188(2)

Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[5]

Section	Procedural or technical requirement
188(1)(a)	Comply with subsection 180(2) – take all reasonable steps to ensure that relevant employees are given the written text of the agreement and any materials incorporated by reference during the access period or that the relevant employees are given access to these materials throughout the access period
	Comply with subsection 180(3) – take all reasonable steps to notify the relevant employees of the time, place and method of vote, prior to the start of the access period
	Comply with subsection 180(5)(a) – take all reasonable steps to ensure the terms of the agreement and their effects are explained to the relevant employees
	Comply with subsection 180(5)(b) – take all reasonable steps to ensure the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees
	Comply with subsection 181(2) – the employer must not request that the employees approve a proposed agreement until at least 21 days after the day on which the last notice of employee representational rights (NERR) is given
188(1)(b)	The agreement must be made in accordance with subsection 182(1) or (2)
173(1)	Take all reasonable steps to give a NERR to each employee who will be covered by the agreement and is employed at the notification time for the agreement
173(3)	Issue the NERR as soon as practicable, no later than 14 days after the notification time
174(1A)(a)	The NERR must contain the content prescribed by the regulations
174(1A)(b)	The NERR must not contain any other content
174(1A)(c)	The NERR must be in the form prescribed by the regulations

Section 188(2)(a): minor procedural or technical errors

When considering the definition of minor procedural or technical errors the Full Bench found the following:[6]

The adjective minor qualifies both procedural errors and technical errors, such that the expression reads 'minor procedural errors or minor technical errors'. The word minor is a limitation upon the type of errors contemplated by s.188(2)(a).
A failure to comply with a procedural requirement will constitute a procedural error within the meaning of s.188(2)(a).

A procedural requirement is one which requires an employer to follow a particular process or course of action.

For example:

An example of a procedural requirement may be providing employees with a NERR as soon as practicable, and not later than 14 days after the notification time (s.173(3)), or ensuring there are at least 7 clear days between notifying employees of the voting process and the commencement of that process (s.180(3)).

A failure to comply with a technical requirement will constitute a technical error within the meaning of s.188(2)(b).

A technical requirement includes an obligation to comply strictly with the form and content of an instrument, such as the NERR.

A single error may have both procedural and technical components.
The impact of the errors is to be assessed by reference to the objects of the requirements in ss.188(2)(a), 188(1)(b), 173 or 174.
What constitutes a minor error calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances.

Table 2 (see below) examines each of the procedural or technical requirements, considers the underlying purpose of these requirements and outlines some ways in which employees might be disadvantaged by a minor technical or procedural error.

Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a minor error.

For example:

Informing the employees of the time and place at which the vote will occur, and the voting method that will be used as per the requirements of ss.180(3)(a) and (b) just after the start of the 7 day access period (for instance 6 days before the start of the voting process) is likely to be a minor error in most cases.

However this will depend on the circumstances.

If it is the first agreement at the enterprise; the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a minor error.

Conversely, only informing the employees of the time and place at which the vote will occur some 4 days before the voting process starts may be a 'minor error where there is a history of bargaining at the enterprise; the agreement is, in effect, a roll over agreement; the employer takes further active steps to remind employees of the time and date of the vote; and a high proportion of employees actually vote.

Whether an incidence of non-compliance is characterised as a minor error also depends on the nature of the requirement which has not been complied with.

For example:

The need to inform employees of the time and date of the vote (s.180(3)(a)) is more significant than informing them of the voting method (s.180(3)(b)) – the first requirement may impact on the employees' capacity to participate in the voting process, the second may not.

Some species of error are unlikely to be classified as minor.

For example:

The deletion of the prescribed text of the NERR which deals with an employee's right to appoint a bargaining representative and the role of the unions as the default bargaining representatives. But, again, it may depend on the circumstances.

The test in s.188(2)(b) is whether the employees covered by the agreement were 'not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174' [emphasis added].

The impact of the errors is to be assessed by reference to the objects of those requirements and not by reference to any more general sense of genuine agreement.

Cost or inconvenience to the employer and employee covered by an agreement associated with a delay in the approval of the agreement is not relevant to the question of whether the employees covered by the agreement 'were not likely to be disadvantaged by the errors'.
The test suggested by s.188(2)(b) is whether 'the employees covered by the agreement were not likely to have been disadvantaged by the errors.
The word likely in s.188(2)(b) means probable in the sense that there is an odds-on chance of it happening, rather than merely being some possibility of it happening. The word disadvantaged suggests a deprivation which manifests in the employees covered by the agreement being prevented from substantively exercising their rights within the bargaining regime in Part 2-4 of the Fair Work Act.
In assessing whether employees were not likely to have been disadvantaged by an error, it may be necessary to consider the particular circumstances of the employees concerned at the time the error occurred and the impact of the error on the subsequent course of bargaining. This may include considering any steps taken by the employer to address the adverse impact of the non-compliance.

Table 2: Procedural or technical requirements & potential disadvantages

Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[7]

Section 188(1)(a)

Procedural or technical requirement	Underlying purpose of requirement	How might employees be disadvantaged?
Comply with subsection 180(2) – take all reasonable steps to ensure that relevant employees are given the written text of the agreement and any materials incorporated by reference during the access period OR that the relevant employees are given access to these materials throughout the access period	To ensure employees have a reasonable chance to make an informed decision when voting	In the circumstances employees may not have had effective access to materials or insufficient time to consider them to make an informed decision when voting
Comply with subsection 180(3) – take all reasonable steps to notify the relevant employees of the time, place and method of vote, prior to the start of the access period	To ensure employees are able to attend and participate in the voting process (should they choose to do so)	In the circumstances employees might be unaware of the voting process occurring thus preventing them from effectively participating in the voting process
Comply with subsection 180(5)(a) – take all reasonable steps to the terms of the agreement and their effects are explained to the relevant employees	Ensure that employees understand the effect of the agreement that is to be voted on, enabling them to make an informed decision	In the circumstances the steps may have been taken such that the employees might not be in a position to make an informed decision about the terms of the agreement upon which they are eligible to vote
Comply with subsection 180(5)(b) – take all reasonable steps to ensure the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees	Ensure that particular classes of employees are able to understand the agreement not withstanding any particular circumstances or needs	In the circumstances the employees may have received the explanation in a language they do not speak thus they may not be in a position to make an informed decision when voting
Comply with subsection 181(2) – the employer must not request that the employees approve a proposed agreement until at least 21 days after the day on which the last NERR is given	To provide the employees with a minimum period of time for the bargaining process to occur before voting on an agreement	In the circumstances the period is cut short preventing the employees from effectively appointing bargaining representatives and participating in genuine good faith bargaining

Section 188(1)(b)

Procedural or technical requirement: The agreement must be made in accordance with subsection 182(1) or (2)

Section 173(1)

Procedural or technical requirement	Underlying purpose of requirement	How might employees be disadvantaged?
Take all reasonable steps to give a NERR to each employee who will be covered by the agreement and is employed at the notification time for the agreement	To ensure that all employees are aware that their employer intends bargain for an enterprise agreement and that they are aware of their representational rights	In the circumstances the NERR may be so altered that employees fail to understand and exercise their representational rights and effectively participate in the bargaining process

Section 173(3)

Procedural or technical requirement	Underlying purpose of requirement	How might employees be disadvantaged?
Issue the NERR as soon as practicable, no later than 14 days after the notification time	To ensure that the employees understand their representational rights within a reasonable period before bargaining commences thus allowing them to exercise those rights in a timely manner	In the circumstances the employees may have received the NERR later than the 14 days thus period preventing them from attending initial bargaining meetings and thus effectively influencing the bargaining process even after they do participate

Section 174(1A)

Procedural or technical requirement	Underlying purpose of requirement	How might employees be disadvantaged?
(a)The NERR must contain the content prescribed by the regulations	To ensure that the employees understand the scope of the proposed agreement, who is the employer and what their representational rights are prior to the actual bargaining commencing	In the circumstances the employer may have been incorrectly named within a complex group of companies thus creating real confusion resulting in employees failing to effectively participate in the bargaining

Section 174(1A)(b)

Procedural or technical requirement	Underlying purpose of requirement	How might employees be disadvantaged?
The NERR must not contain any other content	To ensure that the employees understand the scope of the proposed agreement, who is the employer and what their representational rights are prior to the actual bargaining commencing	In the circumstances the employer may have been incorrectly named within a complex group of companies thus creating real confusion resulting in employees failing to effectively participate in the bargaining

Section 174(1A)(c)

Procedural or technical requirement	Underlying purpose of requirement	How might employees be disadvantaged?
The NERR must be in the form prescribed by the regulations	To ensure that the employees understand the scope of the proposed agreement, who is the employer and what their representational rights are prior to the actual bargaining commencing	In the circumstances the employer may have been incorrectly named within a complex group of companies thus creating real confusion resulting in employees failing to effectively participate in the bargaining

Case examples

Employees do NOT genuinely agree

Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union

Ostwald Bros Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 9512 (Watson VP, Watson SDP, Gooley C, 8 November 2012).

At first instance, the Commission declined to approve the enterprise agreement on the basis that the notice of employee representational rights (Notice) provided to employees did not meet the form and content requirements in the Fair Work Regulations because it did not give notice of the default bargaining representatives.

On appeal, the Full Bench was required to consider whether it could be satisfied that the agreement had been genuinely agreed where the Notice given to employees was not in the form required.

Permission to appeal was granted and the majority concluded, based on the statutory context, in order for an agreement to be genuinely agreed the last Notice issued in advance of a vote must meet the content requirements of section 174. That is, if the Notice did not meet the content requirements (for example, because it did not give notice of default bargaining representatives), the Notice was not valid. Accordingly, the Commission could not be satisfied that the agreement was genuinely agreed by employees and therefore could not approve the enterprise agreement.

The majority dismissed the appeal.

Re ENM Group Pty Ltd

Re ENM Group Pty Ltd [2013] FWC 3035 (O’Callaghan SDP, 17 May 2013).

ENM Group Pty Ltd (trading as Eagle Boys Mawson Lakes) lodged an application seeking approval of the ENM Group Enterprise Agreement. The agreement proposed to cover 6 employees, 5 of whom were under 21 years of age.

The Commission found that the agreement only narrowly satisfied the better off overall test. Transitional arrangements were shortly due to be varied which would have had the effect of increasing award entitlements.

On the information provided (and despite numerous requests to the employer to provide information to allay the Commission's concerns) the Commission was unable to establish what the employees understood or were told about the effect of the agreement. This was particularly the case in relation to the overall impact of the agreement on employees relative to their award entitlements.

The Commission was not satisfied that the agreement was genuinely agreed to by the employees and declined to approve the agreement.

CEPU v Mirait Technologies Australia Pty Ltd

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Mirait Technologies Australia Pty Ltd [2015] FWCFB 5078 (Hamberger SDP, Gostencnik DP, Riordan C, 27 July 2015).

Re Mirait Technologies Australia Pty Ltd [2015] FWC 8338 (Gostencnik DP, 1 December 2015).

At first instance the Commission approved the application for approval of the Mirait Technologies Australia (MTA) Enterprise Agreement 2015 – 2019. The decision was appealed on grounds that at the time the decision was made, there were reasonable grounds for believing that the agreement had not been genuinely agreed to for the purposes of s.188(c) and that the Commission could not have been satisfied as required by s.186(2)(a). Other grounds of appeal included the failure to convene a hearing and the adequacy of given reasons for the decision.

The Full Bench were able to dispose of the appeal on the ground of non-compliance with pre-approval steps. Two statutory declarations made by the employer in support of the application contained information that was different and inconsistent. The Full Bench was satisfied that the appeal raised important questions about the proper consideration and application of the pre-approval steps set out in the Fair Work Act.

Permission to appeal was granted and the appeal upheld. The decision at first instance was quashed and the application for approval of the agreement was remitted for determination.

Upon rehearing the Commission was not satisfied that the statutory requirements which would enable the agreement to be approved had been met, in that the employees covered by the agreement genuinely agreed to the agreement. The Commission found that the employer adopted a ‘very convoluted and indirect method of communicating fairly simple information to relevant employees about the time and place of voting and the method of voting by passing on information to supervisors who, in turn, were encouraged or asked to pass on that information to relevant employees’. The Commission provided the employer with seven days to provide a satisfactory undertaking to address the issue. The employer advised that they would not provide an undertaking and the application for approval was dismissed.