AG2014/10717, Transcript of Proceedings [2015] FWCTrans 120 (16 March 2015)

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PN1.

THE DEPUTY PRESIDENT: Good morning. I'll open this hearing into matter AG10717 of 2014. The matter is an application by SRSW Pty Ltd for approval of an enterprise agreement. If I can just start by taking appearances?

PN2.

MR S H NANCE: If the Commission pleases, my name is NANCE, S H, I appear for SRSW Pty Ltd on behalf of the Kennedy Group, and I seek permission to appear in this matter. If the court pleases.

PN3.

THE DEPUTY PRESIDENT: Thanks, Mr Nance.

PN4.

MR NANCE: With me is Mr Scott MacDONALD, who is the chief operating officer.

PN5.

THE DEPUTY PRESIDENT: Thank you. And you're seeking permission on the basis you're a paid agent?

PN6.

MR NANCE: Yes, your Honour.

PN7.

THE DEPUTY PRESIDENT: Yes, thank you.

PN8.

MR THOMAS: Your Honour, should I stand?

PN9.

THE DEPUTY PRESIDENT: No. I think it's probably easier if you just stay seated.

PN10.

MR A THOMAS: Thank you, your Honour. Your Honour, I seek permission to appear and be heard in this matter. My name is THOMAS, initial A, for the CFMEU.

PN11.

THE DEPUTY PRESIDENT: Thank you. Mr Nance, what's your views in relation to that, in relation to Mr Thomas being heard?

PN12.

MR NANCE: If the Commission pleases, it would be our position that Mr Thomas not be given the right to be heard in this matter. I accept that the Commission does have powers under section 590 of the Fair Work Act to grant such requests, however, our submission is that the CFMEU were not a bargaining agent in respect to this matter; the employees were not members of the CFMEU. Further, the Commission has rightfully sought the CFMEU's comments regarding the proposed agreement, they have submitted their initial submission to you on or around 22 December 2014, we had responded or SRSW responded to the CFMEU's submission and a copy went to the CFMEU, and they have also responded to our submission on or around 2 January.

PN13.

If the court pleases, we would submit that the ruling here is that the CFMEU does not have a right to intervene in this matter, the legislation is very clear that they don't have a right, and they should not be given that right. I accept that Mr Thomas will be referring to the Collinsville Full Bench decision and I would just state there that paragraph 66 states that:

The statutory framework includes the enterprise agreements are made principally between an employer and employees; that bargaining representatives have a role in relation to enterprise bargaining either by default or appointment; that default bargaining representatives can be displaced by the appointment or by revocation; that enterprise agreements operate primarily at the single enterprise and do not create rights of general application across an industry.

PN14.

It then goes on to paragraph 68 which states:

There is no such express right to be heard in the Fair Work Act and the role of organisations of employees in the bargaining and agreement provisions under the Fair Work Act is very different to that provided by the previous Industrial Relations Act.

PN15.

Commissioner, we would make the submission that the Commission has obtained the observation of the CFMEU regarding this agreement. And on that basis we don't believe that the CFMEU, in respect to their submissions that came in on or around the 2nd has given you that right or enough information to show that there is a significant issue of why they should appear in this matter. On that basis, Commissioner, we would oppose the appearance of the CFMEU.

PN16.

THE DEPUTY PRESIDENT: Thanks. Mr Thomas, do you want to say anything in response?

PN17.

MR THOMAS: Yes, your Honour. We acknowledge that the CFMEU was not a bargaining rep and has no automatic right to appear in this matter. However, as section 590 of the Act states, the Fair Work Commission can choose to give approval to hear from an organisation, and in our submission of 29 January, your Honour, we make reference to the Collinsville decision, and in particular paragraph 75 which in effect states that it is open to the Commission to inform itself in the most appropriate way it chooses, and in that regard it can grant a right for any party to be heard. So, I won't read out that particular paragraph for your Honour, it's in our submission I think, the parties are aware of it so we can take that as read.

PN18.

Moving from that, what we say is that at this point the commission has, firstly, at the request of the CFMEU, provided material relevant to this matter, for example, the F16 and F17 documents. The Commission has, secondly, requested the CFMEU to provide any submission it may wish to make, it placed no restrictions on the content of nature of such submission. In response the Commission - sorry, the CFMEU has made detailed submissions prior to Christmas and just recently. Thirdly, the Commission has notified the CFMEU of the matter today. Your Honour, that brings us up to where we sit at this point.

PN19.

It is our position that the action to date indicate that the Fair Work Commission has given a view that it considers it appropriate in this matter to exercise its broad powers to inform itself on any matter by seeking to hear from the CFMEU. The hearing to date is, in our submission, a continuation of the process the Commission, using its powers under section 590 of the Act to inform itself, is and has engaged in. It will then counter, in our submission, to what had already gone on before to deny the CFMEU an opportunity to appear to address the issues in our submission, indeed we say that given the events to date, it would be a somewhat extraordinary way to deal with the matter.

PN20.

Your Honour, it is submitted also that the CFMEU has a long history in the coal mining history, is heavily involved in the industry, is heavily involved in the making of enterprise agreements overwhelmingly in the industry, is heavily involved in industrial relations generally in the industry, and it has an extensive knowledge and experience of matters of interest to this Commission in the coal industry. In that regard we submit that the CFMEU is in a position to make a positive contribution to the task the Fair Work Commission has in this matter and we seek the opportunity to do so and to make such a positive contribution to the Fair Work Commission's deliberations.

PN21.

As such, your Honour, taking into account section 590, the position of the Full Bench in the Collinsville decision, the procedure to date and the role that the CFMEU generally plays in the coal industry to which this matter relates to, we submit that they constitute grounds for allowing us to be heard in this matter and in such a way to assist the Commission in its deliberations on this matter.

PN22.

Finally, Commissioner, you will note from the submissions this isn't exactly a straightforward matter, there are a number of issues that have been raised, a number of issues that, firstly, at this point are contested and we believe that we can assist and make a positive contribution to the deliberations of the Commission. If the Commission pleases.

PN23.

THE DEPUTY PRESIDENT: Thank you. Having heard from the parties in relation to this matter, I accept the submissions of the CFMEU. Notwithstanding that the CFMEU isn't a bargaining representative for the agreement, it has raised some issues of substance and, in my view, I would be assisted. And I do have the power to inform myself as I see fit, and I will be assisted in this matter by the submissions of the CFMEU in relation to the issues that it sees with the agreement as filed, and on that basis I intend to allow the CFMEU to be heard in these proceedings.

PN24.

I have listed this matter for the purpose of allowing the parties to speak to their submissions, both parties have filed submissions, and the CFMEU have amended its submissions in an email that I received early this morning in relation to the sections of the Act that it's referring to. Mr Nance, have you seen that?

PN25.

MR NANCE: No, your Honour. Unless we are referring to ‑ ‑ ‑

PN26.

THE DEPUTY PRESIDENT: Point 10 and point 18 in the submissions of - the CFMEU is seeking to amend some typographical references to the sections of the Act.

PN27.

MR NANCE: On that basis, your Honour, I would just take them to be given.

PN28.

THE DEPUTY PRESIDENT: Yes. Well, perhaps given that, Mr Nance, you're the applicant, perhaps you might like to speak to the application and tell me why this agreement should be approved.

PN29.

MR NANCE: Thank you, your Honour. As you have correctly pointed out we have provided you a reference submission dated 8 January and, with respect, I'm not going to read through that again. So I'm just going to take you to some of the pertinent points that I believe this agreement is being challenged on. This is an application that was made on 9 December for approval of the SRSW Pty Ltd Enterprise Agreement. The application is made in accordance with section 185 of the Act, and it is a single enterprise agreement. In the lodgement of the agreement we would submit that Form 16 and Form 17, the employee statutory declaration signed by Mr Scott MacDonald, has been submitted in support of the application for the approval of the enterprise agreement.

PN30.

If I could just refer to the first point, which is really section 173, the notice of the employees’ rights, we would submit here that the company has complied with the sending out of the notice of the employees’ representational rights. As I have stated in my submission on 8 January, the only parts that were not included in the representation on notice were the optional parts. And those optional parts, if your Honour pleases, refers to the low paid bargaining order and if the company has already an AWA or a flexible enterprise agreement in place, and SRSW does not, so we did not include those two provisions into the notice of the employees’ representational rights.

PN31.

Prior to that notice going out to the employees the company did speak to the seven employees regarding the intentions to make an agreement, they advised the employees at that time that they would be sending out the notice. The notice was sent out to all employees, all seven employees via email. The majority of the employees, as in accordance with the notice, then met in Brisbane on 24 November, with a further meeting in Mackay on Thursday 27 November. The CFMEU is raising that the issue regarding the wording of the notice may be misleading or in default. Now, what we would state is that if you read schedule 2.1 it specifically states that:

If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be the bargaining representative for the agreement unless you appoint another person, or you are represented, or you revoke the union status as the representative.

PN32.

In this case, your Honour, the seven employees were not members of the union and therefore when they came, or when they received the notice they did email back to the organisation saying that they're happy to be a bargaining rep.

PN33.

THE DEPUTY PRESIDENT: But, Mr Nance, that wasn't what they were asked, they were required, that's as I understand the difficulty. The email that they were sent doesn't say if you want to nominate yourself as a bargaining representative you can, or if you want to nominate somebody else you can, it says:

I require you to send me a return email asap to nominate yourself or another person.

PN34.

MR NANCE: I realise that the wording that was used in the email came from Mark Power, the manager of the workforce. It was an issue there that he was aware that they weren't members, he was just trying to assist in the process, that they do need to nominate themselves as a bargaining representative. The issue itself is that the notice itself conforms with the schedule. I do accept, and I'm not going to hide from the fact that the email that was sent out by Mark Power does imply that there's no other options, which was not the case, because the notice itself states that they can be represented by the union in default.

PN35.

THE DEPUTY PRESIDENT: And then we have the next issue, which is:

The vote will be conducted by email ballot.

PN36.

So they have to respond to the email to indicate how they vote, it's like a secret ballot and it's right up there with close your eyes, put your hands up and I'll count. I don't think - it's hardly a secret ballot, is it, when they have to reply to an email to vote yes or no.

PN37.

MR NANCE: I accept that when you use the term or word "secret" that one implies that you don't know who is actually returning.

PN38.

THE DEPUTY PRESIDENT: Well, I accept it's not required to be a secret ballot.

PN39.

MR NANCE: No.

PN40.

THE DEPUTY PRESIDENT: But genuine agreement is required and I would question how, when people have to identify themselves in order to vote, there could be genuine agreement.

PN41.

MR NANCE: In response to that issue that you have raised, your Honour, the issue here is that we're not talking about a large number of employees, we're talking about, at the end, six employees that work all in a room together, that all indicated that they were prepared to agree to the terms of the agreement. The issue of the ballot is a secondary issue in the sense that they responded by email to the organisation whether they approved or disagreed; all six employees approved the making of the agreement. The issue here is a genuine - because the email comes back and the person knows who has actually voted, the legislation doesn't prevent that from happening, your Honour, it doesn't mean that it is not genuinely agreed if that process didn't occur, or in this case it did occur.

PN42.

To rule that the agreement is null and void because the employees notified - or the process that was adopted by SRSW in the sense that they emailed back to the organisation or to Mr MacDonald their intentions on whether they would accept the agreement or not, in my submission, it does not mean that the agreement was not genuinely made under section 180(8). The issue here is that all employees voted in favour, all employees indicated their support of the agreement when they had met with the company on the two meeting dates.

PN43.

I know that it's always - I know it's been an issue that how secret is secret or whether it should be done in a different manner. In hindsight it may have been better not to send the ballots back to the company but to an independent person so that there's some rigor behind that, however if we're just looking at this process that the ballot did go back or was emailed or texted back to the company, I would submit does not mean that the agreement was not done under genuine consensus.

PN44.

THE DEPUTY PRESIDENT: I understand your submission.

PN45.

MR NANCE: The second aspect that was raised by the CFMEU is really in respect to the process of section 180. We would submit that on 24 November SRSW provided all employees with a copy of the EBA, on 27 November there was a further meeting in Mackay where staff were provided with the proposed agreement. During both of these meetings the company took the employees through line by line of the agreement and explained the terms of the agreement. The employees were also offered the opportunity to access the modern awards, which they chose not to.

PN46.

THE DEPUTY PRESIDENT: Well, where is the evidence of that in the employer's declaration?

PN47.

MR NANCE: I would say that ‑ ‑ ‑

PN48.

THE DEPUTY PRESIDENT: In the steps taken nowhere does it say they were told anything about the modern award and where they could access it.

PN49.

MR NANCE: I accept, your Honour, that those words were not included but it is, and I can put Mr MacDonald on to say that that was the steps that were taken both in the Brisbane meeting and in the Mackay meeting.

PN50.

THE DEPUTY PRESIDENT: Well, Mr Nance, I would have thought that issue was up in lights from the correspondence from the CFMEU and its submissions, and that if you wanted to put in additional evidentiary material you could have done so because the CFMEU has raised that issue right up front. And I also have a question mark in relation to that matter because the Act clearly states that where material is to be incorporated into the agreement it's to be treated in the same way as a copy of the agreement.

PN51.

MR NANCE: Your Honour, with respect, the issue of whether the award should be made available to the employees or copies should be given to the employees, in our submission, is not required.

PN52.

THE DEPUTY PRESIDENT: But the award is specifically incorporated into the agreement by virtue of not only the award, the awards.

PN53.

MR NANCE: Yes, there's five of them, your Honour.

PN54.

THE DEPUTY PRESIDENT: And if I can, 6.1:

The agreement incorporates the following modern awards as at 1 October 2014 that would otherwise apply to an employee and as such should be read and interpreted.

PN55.

So you haven't only referred to the awards in the agreement, you've specifically incorporated them, and as such you're required to provide access to a copy of the agreement and to anything, any document that's incorporated within it.

PN56.

MR NANCE: Access, with respect, in our submission, does not mean you've got to give them a hard copy.

PN57.

THE DEPUTY PRESIDENT: No. But you haven't addressed at all, in the statutory declaration the employer filed, what steps you took to give access to documents incorporated within the agreement. And on your own - the terms of 6.1, you had five documents that were incorporated into the agreement.

PN58.

MR NANCE: That is correct, your Honour.

PN59.

THE DEPUTY PRESIDENT: So section 180(2) says that:

You must take reasonable steps to provide copy of the following materials, the written text of the agreement and any other materials incorporated by reference in the agreement, or they have access throughout the access period for the agreement to a copy of those materials.

PN60.

So, for the entirety of the seven day period they had to have access, arguably.

PN61.

MR NANCE: And access can be in the public domain as the Full Bench has said in another matter, your Honour, that because the awards are generally available under the Fair Work Commission or under the Fair Work Ombudsman, they can have access to that in the public domain.

PN62.

THE DEPUTY PRESIDENT: So what decision is that? What Full Bench decision is that?

PN63.

MR NANCE: It was in respect to the McDonalds decision where they were talking about the legislation and the Commission, or the Full Bench said that:

While the long service leave legislation was incorporated into the agreement the employer was not required to provide a copy because the legislation was freely available in the public domain.

PN64.

And the same argument would apply, that the modern awards are freely available on the website.

PN65.

THE DEPUTY PRESIDENT: But, Mr Nance, in the McDonalds case the incorporated provision was but one minor part of the agreement. This agreement, arguably, the incorporated documents are the whole of the agreement, they are the hours of work, the rostering, pretty much everything. The substance of these agreements is in the modern awards that have been incorporated. So I understand your argument, so you say it's sufficient that the employees had access to those agreements via the internet or the public - those awards via the internet or the public domain?

PN66.

MR NANCE: And they had access to them at the meetings themselves.

PN67.

THE DEPUTY PRESIDENT: How? And where is the evidence of that?

PN68.

MR NANCE: The evidence, unfortunately, was not contained in the statutory declaration.

PN69.

THE DEPUTY PRESIDENT: Right. So how did they have ‑ ‑ ‑

PN70.

MR NANCE: They were made available in the sense - at the meetings on the 24th and the 27th, when the company was going through line by line the employees were given the option of having a look at the modern awards.

PN71.

THE DEPUTY PRESIDENT: Well, it doesn't say that in the statutory declaration. So, we'll move on.

PN72.

MR NANCE: The issue of the access for the seven days. We would state that the access period started at the end of the meeting on the 27th, which was the last meeting. We state that because of the issues, that the employers were advised of the voting, they were advised that the vote would occur on Friday the 8th - sorry Friday 5 December which was eight days after the commencement of the access period. The CFMEU have raised issues that during the access period the company did speak to the employees, and we acknowledged that they did, but there is nothing in the legislation which states that they can't talk to the employees about the agreement or talk to them further about the voting period or the voting method.

PN73.

It was made very clear at the end of the meetings on the 24th and the 27th that the employees were advised, and it was part of the documentation that they were given, that the agreement would go out for ballot on December the 5th. On that day they were also sent out further information just confirming that they understood how to undertake the vote, and that was the email that you had previously raised. We would submit that the SRSW gave a copy of the agreement to all our eligible employees to vote, provided the access of the copy of the agreement to all employees during the access period.

PN74.

We would submit that the employees had access through the access period for the agreement to a copy of all the materials which we just have discussed. The employees were notified of the ballot process and time and place of the vote, this was undertaken at the end of each meeting. We would submit, your Honour, that based on the compliance of the specific sections under the Act, that the company has allowed eight days between the end of the discussions to the commencement of the voting period, and that is starting on Friday the 28th and the ballot was undertaken on the 5th, which is eight days.

PN75.

In respect to the section 18(1) the employees - I don't think this has been an issue raised by the CFMEU, but the 21 days, the vote was taken after the 21 days. In respect to section 180(2), prior to 5 December the majority of employees, or all six employees voted in favour of the agreement even though the agreement was open till the Sunday. In respect to the mandatory position ‑ ‑ ‑

PN76.

THE DEPUTY PRESIDENT: Sorry, say that again?

PN77.

MR NANCE: The agreement was open between the 5th - all six employees voted on that day.

PN78.

THE DEPUTY PRESIDENT: Right.

PN79.

MR NANCE: In respect to the mandatory provisions we would submit that the agreement contains the mandatory provisions, the consultation clause, the dispute clause and the operative date. We would submit that the agreement was genuinely made with its employees. In respect to the section 193, the issues regarding the better off overall test, we would submit that overall the six employees would be better off under this agreement.

PN80.

THE DEPUTY PRESIDENT: Do you want to tell me how? Because as I read this agreement, Mr Nance, the scenario is essentially you get paid the same as the award. That's it. How are they better off when essentially they're agreeing that they'll get paid what the award provides?

PN81.

MR NANCE: The agreement does state that, yes. However the agreement also has made provisions for remuneration, that rates of pay will be paid under market conditions. The issue here is that SRSW would pay at all times above the award rates.

PN82.

THE DEPUTY PRESIDENT: But there's nothing in this agreement that indicates that. It says the rates represent the minimum that will be paid, so I have to assume, for the purposes of the BOOT that people are going to get paid the minimum rate. Because in some situations the assignment may provide for an all-inclusive rate and the total payment in that case will be better than you would have received under this agreement or the relevant modern award. So there's nothing - that's not a given at all, it's pretty much up to the company whether they pay some market rate that's not defined.

PN83.

So the starting point for me is what is in it for the employees. They're agreeing that we'll get paid exactly the same as the award and in return for that we might get - we're going to get some additional matters that aren't in the award like abandonment of employment and a range of other things that aren't even in the award. So I just can't for the life of me see how I could be satisfied that they're better off overall under this agreement because I can't see what they're getting. What benefit are they getting from it that I'm missing?

PN84.

MR NANCE: I think the benefit - with respect, your Honour, you're not missing the issue. The issue here is that the company has implied that the employees will always be in receipt of something greater than the award because they would be paid under the market.

PN85.

THE DEPUTY PRESIDENT: Well, it doesn't say that.

PN86.

MR NANCE: When, your Honour, the market rate is always significantly higher than what is currently under the award.

PN87.

THE DEPUTY PRESIDENT: But it's only where the assignment provides an all‑inclusive rate. So I read that to be subject to our client reimburses us enough to pay above the award, there's no guarantee at all that anyone is going to get anything other than the award. Because what this agreement does fundamentally is allows you to put casual employees on to sites and pay them the award rate, that's what it does.

PN88.

MR NANCE: Yes, your Honour. It does if you just read it by that.

PN89.

THE DEPUTY PRESIDENT: So how are they better off?

PN90.

MR NANCE: Well, they're better off in the sense that, as I was saying, you wouldn't put a casual on the award rate onto one of those sites.

PN91.

THE DEPUTY PRESIDENT: How do I know that and how does this agreement tell me that that's the case? And again, how are they better off when, for example, the Black Coal Award doesn't have provision for casual employment at all?

PN92.

MR NANCE: Well, the benefit there for those people is that they can obtain - they're getting 25 per cent loading rate, they're getting an additional 1 per cent above that. The issues that have been raised by the CFMEU in respect of the other matters I think are not that relevant other than this issue of the remuneration. And if it would assist the Commission, we are prepared to give some form of undertaking to ensure that the Commission is satisfied that they would be paid above any minimum award under the five parent awards that have been named in the agreement. It is not the intention of the company to pay the award, that was never the intention.

PN93.

THE DEPUTY PRESIDENT: Well, Mr Nance, I don't know how you can say that when clearly clause 13.1 provides you can pay the award, and in fact that's the minimum that they'll get and it doesn't give any guarantee about any more than that. I don't know how you can say that wasn't the intention, arguably it's exactly the intention. It is exactly what this agreement does, it puts people out there in a labour hire situation being paid the minimum award rate with no benefit at all for them above what they would get if the award applied to them.

PN94.

MR NANCE: I can't challenge your Honour's interpretation of the words that have been used, your Honour, it does state that we will pay the minimum that will be paid to the employees, the company will assess the market conditions and may pay the employees a higher rate of pay and more attractive terms where it is determined by the company at its sole discretion. It is in that sense that the company was always intending to pay above the rate. Now, it may not - I understand your point because it's fair if it said that - well, it says "and shall pay the employees" then there's a definitive ‑ ‑ ‑

PN95.

THE DEPUTY PRESIDENT: Even then I don't know how, without having rates in there, how I can even make that assessment.

PN96.

MR NANCE: Then the only course of action I can propose is that we would be prepared to, as an undertaking, put in some weekly rate above the award that would satisfy that concern.

PN97.

THE DEPUTY PRESIDENT: All right. Well, obviously I have to give you an opportunity to provide undertakings in the event that - because if the other issues are right then no amount of undertakings is going to deal.

PN98.

MR NANCE: With respect, Commissioner, if we don't get past the first base of the notification then the balance of the arguments ‑ ‑ ‑

PN99.

THE DEPUTY PRESIDENT: I understand. But all you can point me to in terms of benefits are where an award has got casual conversion provisions you're going to pay them 1 per cent, is that right?

PN100.

MR NANCE: That's correct.

PN101.

THE DEPUTY PRESIDENT: For those provisions, which won't apply in the Black Coal because they don't have a casual conversion clause at all, and in fact they don't have casual provisions at all. And other than that I can't see any benefit at all to employees.

PN102.

MR NANCE: The benefit would be from the company's perspective and I understand your comments, your Honour, is that it may have been better if it was rewritten in a different manner to ensure that those employees would have been entitled to significantly higher rates than what is contained in the awards, which may have made this issue a little more simpler to respond to.

PN103.

THE DEPUTY PRESIDENT: Thanks for that. Is there any other submission you want to make?

PN104.

MR NANCE: Your Honour, no. Look, I think the written submissions that I have provided and the questions that you have asked, that's our submissions in respect to this matter.

PN105.

THE DEPUTY PRESIDENT: Thank you. Mr Thomas?

PN106.

MR THOMAS: Yes, thank you, your Honour. There are a number of points we wish to make and at the outset would say that there are a number of technical faults with this agreement that should lead the Commission to refuse to approve it, notwithstanding any considerations of the BOOT. At the outset today I would just refer your Honour to the earlier discussion about the notice of employee representational rights. As you would be aware from our second submission, we now don't challenge the actual form, we think it is consistent with schedule 10.1. Our earlier concern was based on the fact that we hadn't seen that form.

PN107.

However, as part of receiving the form we also received the document that your Honour had a discussion with Mr Nance about, and that was the document that says to the effect that the employer required the employee to send or return via email to nominate yourself or another person as your bargaining representative. We say, your Honour, that that is misleading and it is misleading to the extent that it offends section 180(8) of the Act. We refer to that in our second submission, and in particular your Honour was on the Moorvale Full Bench and its decision.

PN108.

THE DEPUTY PRESIDENT: Yes, I was.

PN109.

MR THOMAS: So you may or may not remember this part, your Honour, that that Full Bench referred to:

Where additional material is provided with a notice and that material has the character of being, for example, misleading or intimidatory then this will be relevant in the Commission's assessment of whether the enterprise agreement has been genuinely agreed.

PN110.

You will find that quote on page 1 and 2 of our submission, your Honour. We say that that wording is indeed misleading, that it gives an employees - and I think we have to take into account, your Honour, the context here, that we are talking about employees who, to our knowledge, wouldn't be experts in the negotiating, or the circumstances or the procedures for the making of enterprise agreements. They would be relying, given none of them (indistinct) they would be relying very substantially on what they got from their employer. But in this case the employer, we say, has misled the employees and given them the very distinct impression that they either had to nominate themselves or another person. Now, we say that irrespective of the notice of employee representational rights which refer to the default union clause.

PN111.

It tends to ignore that and I would submit that the employees would be very influenced by this email from Mr Mark Power. And in any event, your Honour, we say that the company say there were no members ‑ ‑ ‑

PN112.

THE DEPUTY PRESIDENT: Sorry to interrupt you, Mr Thomas, but is the fire alarm going off where you are?

PN113.

MR THOMAS: No. I can hear something but it's not going off in this building here.

PN114.

THE DEPUTY PRESIDENT: Good. I don't think it's here either so we'll carry on.

PN115.

MR THOMAS: Your Honour, I would say that whilst they say there were no members with the union, well, they may - they're not really in a position to know that, an employee may well have wished to object to that for him or herself and to have indeed notified the union. Now, it may well not be the case but we would submit that the employer can't take into account that as far as it knows there were no members of the union and use that as an excuse or some sort of rationalisation to send out an email in the form that they have. So we suggest or submit, Commissioner, that it is misleading, that it goes to section 180(8), and in that sense the Commission cannot be satisfied that therein lies genuine agreement.

PN116.

We say, your Honour, that that is reinforced in fact by a concern raised by your Honour earlier, going to the nature of the ballot. The nature of the ballot is in the same form as the nature of the bargaining agreement material in that the employees were, in effect, told to vote by email that they sent to the employer. We say that that does not give an employee the freedom to genuinely act. We say that it puts an employee under pressure, an unnecessary pressure, and we would say that it is something that is not implied in the spirit of the Act, to vote in that manner.

PN117.

It is true that the Act doesn't call for secret ballots but the Act does call for a vote and it does call for some form of ballot which implies that the employees will be given a genuine right to exercise their choice. We say that the manner in which this ballot is conducted would deny the employee the genuine right to exercise that choice. And in accordance with section 180(8) the Commission cannot be satisfied that there was genuine agreement.

PN118.

The next matter I'd like to move to, your Honour, is the access period. It is our submission that, whichever access period you wish to choose, the employer in this matter has all of the powers of the provisions of the Act. The employer argues or contends that the access period commenced on 27 November. They say that is the day that they decided that a ballot would be held and the ballot was held eight days after that, on 5 December. Well, in our submission, Commissioner, that stands in stark contrast to what they say in their affidavit. And in that regard I refer the Commission to the page 4, the table in 2.4.

PN119.

Now, remember that the applicant is saying that they informed employees on 27 November of their intention to go to a ballot. If you go down to the very last box which is under Tuesday 2 December, the very last box says:

Given that our employees seem happy with the proposed agreement and no changes were required we elected to proceed to a vote on the agreement.

PN120.

Now, in our submission, your Honour, that's fairly clear that the decision to elect to go to a vote was made on 2 December and that is in the employer's own affidavit. So it's not under contest, that's what they are saying, and that's our view, Commissioner, on the basis of the material before us. And we say that our view was that if the decision was made on the 2nd the access period opened on the 3rd, but what then happened was, your Honour, the vote occurred on the 5th. Clearly, the seven day access period in that respect was not followed, was not met in the two days between those two events.

PN121.

Further, section 180(3) of the Act says that:

On the day that it is decided to go the ballot the employer must provide the employees with the kind of place in which the vote will occur and the voting method that will be used.

PN122.

That was not provided to the employees on that day. Indeed, your Honour, one of the documents that the Commission has, and it's actually in response to the vote, it states - and it was sent on the 5th:

Commencing Friday 5 December you will all have the opportunity vote in the proposed enterprise agreement. Voting will close at 5 pm on Sunday the 7th to allow you time to lodge your response.

PN123.

Now, your Honour, here is an email sent on 5 December providing information for a vote that opened that very day, whereas section 180(3) states that the information and notification of that material must:

The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement, (a) the time and the place in which the vote will occur, and (b) what voting mechanism will be used.

PN124.

That didn't occur and there is nothing before the Commission about reasonable steps or otherwise. So, in that respect, Commissioner - your Honour, sorry, we submit that the employer has failed to meet the requirements of section 180(2) and (3) on the basis of the access period being either the 2 or 3 December, we say 3 December being the day after they elected to go to the ballot.

PN125.

On the other hand, if your Honour looks or takes the employer's position, and that is that the access period commenced on the 27th then they fall foul of section 180(3). As you can see, the notification of the information was not even on the 27th or anywhere around the 27th. Indeed, on the evidence from the company itself, material was given to them notifying them of the details of the election on the very day it opened, and that is not what the Act calls for.

PN126.

Now, your Honour, I have addressed those two issues in page 2 of our submission of 29 January and also in the earlier submission in points 10 to 17. So, your Honour, you can read those in your good time once you get some more detail or hear what I have said again. So, your Honour, what we say is at this point, this agreement cannot be certified, regardless of anything else - this agreement cannot be approved, sorry, I had "certified" that's from the old days so to speak - because they have not met the requirements, the pre‑approval requirements of the Act. So at this point, Commissioner - your Honour, sorry, we can basically shut up shop and go home, the agreement cannot be approved, but there is more to it than that if the Commission is not convinced or persuaded by that argument.

PN127.

What we next say is that the employer failed to explain the terms of the agreement in accordance with section 180(5), and also the employer failed to provide the relevant material, being section 180(2)(b). Both of those matters, your Honour, are addressed in our submission. Your Honour correctly pointed out the importance of the awards that are incorporated into the agreement, and as your Honour will observe, it wasn't one award, it was five, because these employees can work across a range of industries to which those modern awards have applications. One of those awards is of course the Black Coal Mining Industry Award, and that's our area of concern.

PN128.

Now, nowhere - and this is raised in our initial submission - does the employer say anything about the documents being incorporated into the agreement, and it being either provided to employees or access being given to the employees, the stat dec from the employees is cited on that, and that's one of the reasons why we raised it, and we make that observation in our submission at point 24 of the submission on 22 December. And we say that is so despite the stat dec itself specifically referring to that in the material. So, the stat dec actually seeks from an employer, in point 2.4 of the stat dec, specific reference going to such documentation; the employer chose, for whatever reason, not to respond to that.

PN129.

So, after our submission comes in it goes to the Commission on 2 December, the employer responds on 8 January saying, well, we told the employees at the meeting that they could have access to these agreements. While they’re not contending the - in the stat dec is the question that your Honour asked, and your Honour will deal with the responses you were given. Be that as it may, the employer then relies on the McDonald’s decision saying all we have to do is tell them what's available, this material is in the public domain, therefore we satisfy that requirement of the Act. We say that that's not quite the position; your Honour made certain comments having access to the documents in these circumstances.

PN130.

In the case of the NTEU v University of New South Wales which we have referred to at page 3 of our submission on the 29th, the Full Bench said it would appeal an appeal on a decision to approve the enterprise agreement of that institution, the McDonalds case was specifically referred to. And the Full Bench in addressing that I think were mindful of some of the comments that your Honour made earlier, states - and this quote can be found in page 3 of our submission:

We do acknowledge however that there may be cases where the characteristics of the workplace and the composition of the workforce may require more than what that Full Bench indicated was adequate.

PN131.

That will be the McDonald’s Full Bench. And we would think that that should be taken into account in this matter and addressed in the context of the matter that is before the Commission. We say that it's not simply informing employees what the documents entail and it's on the website if you know how to get into the Commission's website, or AustLii or any of the others, or if you're an expert or have some knowledge of the workings of the web you can go in and find the thing, in particular it is of importance because the awards form such a large part of this agreement, they virtually are the agreement.

PN132.

It seems to us, your Honour, that the reality of the situation is that the employees had not seen those awards as a part of the negotiating process. We find that that cannot be considered a reasonable position, and how employees can be expected to genuinely reach agreement when five different awards are thrown at them, and they may well know what award applies to what, experienced industrial relations practitioners can have difficulty with award coverage, let alone employees working in coal mines or other related activities.

PN133.

Your Honour, we also say that whether or not this material should be provided needs to be seen in the context that this is the first agreement that the applicant or employer has made with its employees. It incorporates a number of awards across a wide range of industries and occupations. There is no evidence before this Commission of reasonable explanations or reasonable detail or any other evidence other than a couple of meetings to explain the material. There was no active campaign as had happened in enterprise agreements where employees have been very aware of the nature and contents of the agreement, and it is in the context of a small number of employees spread over a large geographical area. There is no evidence of that experience of an enterprise agreement or an enterprise bargain on behalf of any of the employees.

PN134.

In that scenario we say, your Honour, that a couple of meetings and a telephone conversation, with the process packed into a period of 13 days, and I'm quoting from our submission here, at page 4, your Honour, of a submission of the 29th, the 13 days being from 24 November to 2 December from beginning to end and that includes the access period, is inadequate for explanatory purposes. In my corrections that I put in, your Honour, we've changed the word "adequate" to "inadequate", clearly the previous context should be "inadequate". And for that reason we say, your Honour, the employer has not met its obligation under the Act to either provide the relevant material, give access to the relevant material or properly explain the agreement.

PN135.

Your Honour, one other issue is the dispute settlement procedure. We have made comment about dispute settlement procedure with respect to the BOOT but we would also submit that it doesn't meet section 186(6)(b) of the Act, and that's addressed in page 3 and 4 of our submissions of the 29th. Section 186(6)(b) provides that:

An enterprise agreement must provide for the representation of employees covered by the agreement for the purposes of the agreement.

PN136.

We submit that DSP in this agreement doesn't meet that requirement. Representation, as it says in the Act, in our submission goes beyond mere support as the word is used in the agreement. And it also allows the employee to choose a representative unhindered by such notions as workplace representative which appears to confine such support to another employee rather than a person of the employees’ choice. And those are the terms and restrictions placed on the right of representation under the dispute settlement procedure in the agreement as it appears before you.

PN137.

And finally, your Honour, can I turn to the BOOT test. What we say is, and I think your Honour has picked it up, is that this agreement at its best is merely the award. The better off overall test, as the statute says in its wording itself, says is that an employee must be better off overall under the agreement than he or she would be under the award, not the same, but better off. And we say that there is nowhere in this agreement, nothing in this agreement that allows or provides for an employee to be better off. On the contrary, your Honour, we say that there are a number of provisions in this enterprise agreement that mean an employee would be worse off under the agreement than they are under the terms of the Black Coal Mining Industry Award.

PN138.

And at point 46 of our submission of 22 December we go into a number of issues. And to run briefly, the provision of the fixed term or fixed class employment which is not provided in the Black Coal Award addresses the issue of job security. The agreement provides an abandonment of employment clause, the Black Coal Award does not. We submit that that's a provision that can be used in a detrimental way against the employee, whereas it cannot occur under the award. The agreement provides for a six month probation period, the award does not. Again, it's an issue of being less secure under a probation period even though acknowledged in the provisions of the unfair dismissal in the Act.

PN139.

Nevertheless, the agreement provides for what we say is a rather confused clause on casual conversion. It provides that a casual conversion - that in lieu of a casual conversion clause, where it exists in the award, the employer will pay an additional 1 per cent to a casual employee so that they can't convert, or to forego that right under the award. But it then goes on to say that the 1 per cent loading can be absorbed in any agreement award payment, in any over agreement award payments that may be made to employees. In that sense, your Honour, in the event that they pay anything greater than 1 per cent over the award, which they suggest they will do, being the 1 per cent disappears.

PN140.

Further, your Honour, in terms of the Black Coal Award, as there is no provision for casual employment for the production and engineering employees as distinct from the staff employees, then it's a meaningless clause. And what it does do, in our submission, by creating a casual employment clause is provide an insecure form of employment to employees covered by the production and engineering schedule in the Black Coal Award that those employees do not currently have, they are either full‑time or part‑time, they have much more job security.

PN141.

Your Honour, the agreement contains a very broad hours of workforce, it basically says you can work up to 12 hours a day in terms of the rosters and that's the end of it. Under the Black Coal Award for example, we say that the employer has the right to roster shifts up to 10 hours, any shift length beyond that up to 12 hours must be by agreement. That is denied the employees under this agreement and we say that that leaves them worse off than they would be if they were under the award. Other provisions that are left out, provisions going to starting and finishing places, notices of rostered changes, the operation of an RDO system, all of those are, in effect, overridden by this agreement and the employees are worse off for that.

PN142.

And finally, your Honour, on the issue of remuneration, your Honour had this discussion with Mr Nance. In point 47 of our submission of 22 December we state the agreement makes it clear that the minimums are provided in the agreement, the employer will determine anything in excess and it may well be nothing. As such the agreement does not make the employee better off than the Black Coal Mining Industry Award in remuneration terms. The only guarantee they have, as you have said yourself, your Honour, is the award rate, nothing more, nothing less as the Act won't allow it.

PN143.

Our submission, your Honour, is that the agreement does not contain any terms and conditions that are more beneficial than the Black Coal Award, and whilst the employer argued to the contrary in its F17, we point out at paragraph 48 the employer interestingly enough openly supports our position, within the F17 it states:

Clause 13.1 outlines that (market conditions and commercial arrangements with employees supporting) we may pay higher rates of pay and more attractive conditions than the relevant modern award. This would apply to all employees, circumstances being equal.

PN144.

That is in the affidavit and statutory declaration. Now, you can read that for what it's worth, but it essentially says that we will pay the award and anything above that at our whim we'll pay it if we want to, we won't if we don't want to, and we'll pay it to whoever we feel like. That is the reality with this agreement, your Honour.

PN145.

Further, it was question 3.4 of Form F17 also addresses the comparison with the reference instruments, the employer does not address that issue, that point at all, so by comparative references, I don’t (indistinct) to these with Black Coal. Your Honour, there's another four awards to be gone through there, God only knows what's likely to come out of that. In answer to question 3.5 in Form F17 the employer states that the agreement does not contain any terms that are less beneficial than the reference instruments which included Black Coal Mining Industry Award, with respect, we'd say that is simply incorrect.

PN146.

Finally, your Honour, on the BOOT test there is always this notion of the giving or undertakings, and Mr Nance suggested before that they might oppose an undertaking that we increase the wage rates above the award. We say, your Honour, that not only is that a bit late, but what it will do is result in a substantial change to the agreement. In the past, and in my experience, undertakings have generally been given to fix up inconsistencies with the awards where the Commission has deemed it necessary and where it needed to satisfy the BOOT. We say that to remedy this agreement would involve going to a point where the agreement would run into a problem with section 190(3)(b) which provides that undertakings cannot be such as to constitute a substantial change in the agreement, and we would say that once you start fooling with wages and all of the other relative matters, that that would be the case.

PN147.

In any event, your Honour, we say that even if you could, the agreement cannot be approved for the reasons that it wasn't genuinely - the employees - sorry, the Commission cannot be satisfied that the employees genuinely agreed because of the notice of employee rights in the voting process, not to mention the failure to follow the provisions of section 180. The agreement breaches section 180(2), the agreement breaches - or the process breaches section 180(5), the agreement is inconsistent with section 186(6)(b), and the agreement doesn't meet the better off overall test.

PN148.

But in any event, from the access difficulties alone, we would strongly submit the Commission reject, for confusion, this agreement. If the Commission pleases.

PN149.

THE DEPUTY PRESIDENT: Thanks, Mr Thomas. Mr Nance, did you have anything you wanted to say in response?

PN150.

MR NANCE: Look, your Honour, we can dispute the access period where we believe that it commenced on Thursday the 28th, we believe that the information was given to the employees after the two meetings, we believe that the agreement was given, the terms of the voting process was explained to them. We don't rescind from the fact that during the access period we did go out and talk to the employees again, and that's why we then proceeded with the ballot because the ballot was already told to them on those dates, after we had further discussion we felt confident that the employees understood, we then proceeded with the ballot.

PN151.

There are other issues, Commissioner, in respect to the BOOT test. I don’t agree with Mr Thomas's submissions regarding the fixed term is disadvantaged because a fixed term contract can be entered into whether it's in an agreement or not. The issue of abandonment of employment, by putting that provision in there it at least puts some structure into what people can understand about that, if not then the employer has got that in writing anyway. In respect to the six months probationary period, that's just an issue that can go into an agreement, it doesn't mean that the employees are going to be any worse off or disadvantage. If they are terminated after the six months or 12 months, whatever the period is, they can still access the unfair dismissal provisions.

But I think more importantly of the two issues is the representational notice, whether that conforms with the requirements of the Act, and the second section that has to be determined really is section 180, and that is the steps that went through to leading up to the making of the proposed agreement. We would submit that we have satisfied that, there may have been areas that we could have improved but we don't believe that it was genuinely done in a way that would disadvantage the employees based on the numbers of employees involved.

PN152.

If the Commission pleases.

PN153.

THE DEPUTY PRESIDENT: Thank you. Well, I'll indicate to the parties that I will reserve my decision and issue it in due course. On that basis I'll adjourn.

ADJOURNED INDEFINITELY [12.45 PM]

Fair Work Commission Transcripts

AG2014/10717, Transcript of Proceedings [2015] FWCTrans 120 (16 March 2015)