C2015/3717, Transcript of Proceedings [2015] FWCTrans 416 (17 July 2015)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1052109

---

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER ROBERTS

C2015/3717

s.604 - Appeal of decisions

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)

v

Sustaining Works Pty Limited
(C2015/3717)

Brisbane

12.47 PM, WEDNESDAY, 3 JUNE 2015

PN1

VICE PRESIDENT HATCHER: I ll take appearances. Mr Friend, you appear for the appellant?

PN2

MR FRIEND: I do, thank you, your Honour.

PN3

VICE PRESIDENT HATCHER: Mr Murdoch, you appear for the respondent?

PN4

MR MURDOCH: Yes, thank you.

PN5

VICE PRESIDENT HATCHER: The parties have previously been informed that they have been granted permission to be represented by lawyers. Perhaps can we deal with the issue of the additional evidence first?

PN6

MR FRIEND: There might even be a previous issue from the respondent s submissions, which is standing to appeal.

PN7

VICE PRESIDENT HATCHER: Yes.

PN8

MR FRIEND: And we simply draw the Full Bench s attention to the Full Bench decision in Main People, which sets out the relevant principles and issues at paragraphs 5 to 7 in which they gave my clients standing to appeal. That s [2014] FWCFB 8429 for the transcript.

PN9

VICE PRESIDENT HATCHER: On one view, this is why the evidence perhaps should be dealt with first. The evidence might be relevant to the issue of standing insofar as at least until the most recent affidavit there was a suggestion that the employer was not actually employing anybody under the agreement.

PN10

MR FRIEND: Yes.

PN11

VICE PRESIDENT HATCHER: And that might have implications for the issue of standing if that is the case, although it s been modified slightly now.

PN12

MR FRIEND: Yes, it may. Well, I m sorry, I should not have taken your Honour off the track.

PN13

VICE PRESIDENT HATCHER: The admission of additional evidence is opposed, so perhaps we can firstly hear submissions as to why the evidence should be admitted.

PN14

MR FRIEND: Yes. Does the Full Bench have a copy of the submissions that were filed in relation to that matter yesterday?

PN15

VICE PRESIDENT HATCHER: Yesterday?

PN16

MR FRIEND: I think it was yesterday although they re all running together at the moment 2 June, yes.

PN17

VICE PRESIDENT HATCHER: That s the three-page submission of 2 June?

PN18

MR FRIEND: Yes. We ve set out there the principle from Atkins v National Australia Bank (1994)34 NSWLR 155 at 160 where the Full Court says it is not possible for formulate a test - should be applied in every case; it set out three principles, or three conditions, which in general need to be satisfied - must be shown the evidence could not have been obtained with reasonable diligence for use at the trial, evidence must be such that there must be a high degree of probability that it will be a different verdict, any evidence must be credible. Those principles were applied in the Commission in J.J. Richards and also Power Projects International v ASU and Hobsons Bay City Council. We also point out in paragraph 5 that in J.J. Richards 95 the Full Bench noted that it s permissible in an appropriate case to depart from those principles; they need not be strictly applied. That s also been picked up in Mermaid Marine Vessel Operations Pty Ltd v MUA at the place we ve referred to in paragraph 5.

PN19

Now, there are two affidavits from Mr Ong. I take it that the Full Bench s Members Bench have read them so I won t go through the material in them, but they go to the matters that we ve set out in paragraph 6 the nature of the work performed, the relevant contracts, when the respondent was incorporated, the circumstances in which the agreement was made, and the internal reasoning as explained by the respondent s offices to Mr Ong about why it was created and why it was making a brownfields agreement in the circumstances that they were made. Obviously the evidence could not have been adduced at the first hearing. There was no hearing. The matter was dealt with on the papers, and the present appellants knew nothing about the agreement at that stage. They seek to appeal as persons agreed by the agreement because of their standing as representative bodies in respect of persons who may be employed under them.

PN20

If the evidence is accepted, we submit that it will satisfy the test set out in John Holland, or the broader test if John Holland is not correct, to the effect that the system has been manipulated by the respondent, and in that sense the persons to be covered by the agreement were not fairly chosen when only five concreters were employed.

PN21

We submit that the evidence is credible. It is direct evidence of conversations Mr Ong was a party to, and it is consistent with the timeline and events in Mr Raymond s affidavit, which as I understand it the respondent seek to file if Mr Ong s evidence is admitted.

PN22

If it were said that this material did not satisfy the strict Atkins criteria, we would submit that a more flexible test should be applied in circumstances such as this where we just were not present, and could not be present, at the making of the agreement or any hearing in relation to it. Those are the submissions in relation to further evidence, Commissioner.

PN23

VICE PRESIDENT HATCHER: I take it that if we determine to admit your further evidence you would not oppose the evidence of Mr Raymond being admitted?

PN24

MR FRIEND: We would not, but I would seek to cross-examine him.

PN25

VICE PRESIDENT HATCHER: I see. I thank you. Mr Murdoch?

PN26

MR MURDOCH: If the Commission pleases, a material consideration in whether to admit further evidence of appeal is of course whether the evidence is relevant to any of the matters to be agitated on the appeal. So far as the grounds of appeal are concerned - I refer to them without reading them but it s abundantly clear that they re quite narrowly based; specifically, it said that pursuant to section 186 subsection (3) of the Fair Work Act that the group of employees covered by the agreement was not fairly chosen. So far as that s concerned, the criticism would appear to go to the question of the scope of the classifications which are dealt with in the agreement and the fact that the number of persons who participated in the making of the agreement was five.

PN27

The evidence that sought to be put in through Mr Ong has, in our submission, no bearing on the grounds which are included in the notice of appeal. Let us go quickly to Mr Ong s first affidavit. The evidence in relation to Sustaining Works being a wholly owned subsidiary of Leighton s is non-contentious, it s date of incorporation is non-contentious, the fact that it has been engaged in particular works in relation to the project on the Lauren Gas Field compressor job is non-contentious.

PN28

So far as the material going to the content of the agreement is concerned, that appears on the face of the agreement itself. By that I m referring to the elucidation of the classifications in (7). So far as paragraph 8 is concerned as to the awareness of the CEPU of the application, that, in my submission, is again irrelevant to the grounds of appeal.

PN29

VICE PRESIDENT HATCHER: It may be relevant for standing.

PN30

MR MURDOCH: It might be relevant to standing, but only to standing. Again, the material at the top of sheet 3 that goes to the fact that five employees were involved, that is a matter of record, and there s no dispute that the persons concerned were concreters.

PN31

The balance of that paragraph which is the assertion that the employer has engaged boilermakers, civil plant operators and other tradespeople is contentious, and it would involve having to put before the Full Bench a dispute on matters of fact. In our submission, there is no justification for involving the Full Bench in having to determine such a dispute as to matters of fact, because ultimately, we would submit, it matters not whether further employees have been engaged since the agreement was approved. There is an abundance of authority, I would submit with respect, that it s permissible for there to be an enlargement of a workforce after an agreement is made; indeed it frequently happens in the normal course of industry. Additionally, there is authority to the effect that the inclusion in an agreement of classifications which go beyond the classifications covered by the group who happen to be employed when the agreement is made is permissible. So that establishing that persons in other classifications have been employed would take the debate nowhere, and I emphasise that if it is sought to be put that evidence forward, the union would first have to overcome the fact that it s denied that such trades are employed, and the Commission would be put in the invidious situation on appeal of having to determine disputed matters of fact.

PN32

VICE PRESIDENT HATCHER: I had the impression reading the further affidavit in response to Mr Raymond s first affidavit that the facts debate might have moved on from that paragraph, that is, I thought there was at least some degree of acceptance that in fact persons were being engaged by a labour hire agency in Mr Ong s second affidavit. Perhaps I ve read it too generously.

PN33

MR MURDOCH: We re unsure what s sought to be explained there, but it further illustrates the dilemma that the Bench would face if it gets unnecessarily into matters of fact that aren t pertinent to the grounds. Going further, paragraphs 10, 11, 12 and 13 seek to introduce comparisons between the content of the agreement, in particular the pay rates, with other enterprise agreements. The comparative data is of no bearing on the question as to whether the group of employees who made the agreement was fairly chosen. The statutory scheme is very specific in relation to the comparison that the Commission is required to make between the agreements sought to be approved and a benchmark instrument, and the benchmark instrument is the modern award, and the comparison is done under the regime of the statutory boot test. Comparisons with other enterprise agreements are entirely irrelevant.

PN34

So far as the further affidavit of Mr Ong is concerned, the discussions which he is alleged to have had with certain company personnel again go no more than introducing material related only to the motivation for the negotiation of the agreement, the motivation being to get an industrial instrument which was acceptable to the employees and which enabled the employer to be competitive in the tendering process. Now, that matter in our submission has nothing to do with whether the group who made the agreement was fairly chosen. So whilst we have put evidence in response, that agreement has been put on on a provisional basis lest you be against us in our objection. But whilst there is authority that in particular circumstances fresh evidence can be led on appeal, it is, we respectfully submit, quite a significant step for the Bench to take, and where there s no relevance in the material sought to be admitted, the discretion is one that should clearly be exercised against the applicant seeking to lead the further evidence. It goes without saying that if the evidence sought to be led by the appellant is not accepted, we would not press the material that has been filed on behalf of the respondent.

PN35

VICE PRESIDENT HATCHER: Mr Murdoch, in the event that we decided to admit Mr Ong s evidence on some basis, would you require him for cross‑examination?

PN36

MR MURDOCH: Yes I would, but I m particularly concerned about the apparent assertion that there s a large workforce on the project, when clearly on the evidence there was five and there s now two, and two for only a couple of weeks. I think his assertion is there s a workforce of over 100, and that would have to be challenged.

PN37

DEPUTY PRESIDENT GOSTENCNIK: That s assuming the assertion is that those people on the project are employed by your client, as I read at least one reading of it is that there are a number of people employed on the project, only some of whom are employed by your client.

PN38

MR MURDOCH: It s unclear, but if it be they re employed by others on the project or they re labour hire, those factors are entirely irrelevant to the matters that go to whether the group is fairly chosen.

PN39

VICE PRESIDENT HATCHER: The course the Full Bench proposes is to admit the evidence on a provisional basis only, principally to save any double handling in the event that there needs to be a re-hearing of the application upon any identification of error, but we will not make a final decision about whether we admit the evidence until we issue our final decision on the appeal. What we propose now is to adjourn for lunch, to resume at 2 o clock. We will mark the affidavits on that occasion and we ll deal with any cross-examination that is required. Mr Friend, can you clarify whether your client maintains the position that the 105 or so on the project are directly employed by the respondent or are ‑ ‑ ‑?

PN40

MR FRIEND: Engaged. It wasn t clear. We ve seen Mr Raymond s affidavit, and we accept that they re not directly employed, apart from the two that we ve found out about this morning. There are 110 engaged , and the word was used deliberately in the affidavit because that was the extent of his knowledge.

PN41

VICE PRESIDENT HATCHER: All right. Well, you might confer with Mr Murdoch over lunch adjournment whether in the light of that concession or a further appropriate concession whether any cross-examination of the witnesses is required beyond that.

PN42

MR FRIEND: Yes, we ll see if we can avoid that.

PN43

VICE PRESIDENT HATCHER: All right. We ll adjourn now and we ll resume at 2 o clock.

LUNCHEON ADJOURNMENT [1.07 PM]

RESUMED [2.04 PM]

PN44

VICE PRESIDENT HATCHER: So is there any requirement for witnesses to be cross-examined?

PN45

MR FRIEND: No. We accept that the respondent has two employees listed on - that was referring to the people who were engaged at the site not necessarily by the respondent, so there s no desire on our part to cross-examine Mr Raymont and ‑ ‑ ‑

PN46

VICE PRESIDENT HATCHER: Well, I might just give a provisional marking to the affidavits in accordance with our earlier ruling.

PN47

MR FRIEND: Yes.

PN48

VICE PRESIDENT HATCHER: So the affidavit of Mr Peter Ong, which was affirmed on 15 May will be marked exhibit 1.

EXHIBIT #1 AFFIDAVIT OF PETER ONG DATED 15/05/2015

PN49

MR FRIEND: The second one is 2 June, your Honour.

PN50

VICE PRESIDENT HATCHER: Yes. The supplementary affidavit of Peter Ong affirmed on 2 June will be exhibit 2.

EXHIBIT #2 SUPPLEMENTARY AFFIDAVIT OF PETER ONG DATED 02/06/2015

PN51

VICE PRESIDENT HATCHER: The affidavit of Martin Raymont affirmed on 28 May 2015 will be exhibit 3.

EXHIBIT #3 AFFIDAVIT OF MARTIN RAYMONT DATED 28/05/2015

PN52

VICE PRESIDENT HATCHER: And the supplementary affidavit of Martin Raymont affirmed on 3 June 2015 will be exhibit 4.

EXHIBIT #4 SUPPLEMENTARY AFFIDAVIT OF MARTIN RAYMONT DATED 03/06/2015

PN53

VICE PRESIDENT HATCHER: Again, I repeat, they re only provisional markings pending our final ruling.

PN54

MR FRIEND: Thank you, your Honour.

PN55

VICE PRESIDENT HATCHER: Mr Friend?

PN56

MR FRIEND: Thank you. This matter raises important issues relevant to the fairly chosen test. It s been the subject, and I m sorry, but I m going to have to go through what I went through this morning again.

PN57

VICE PRESIDENT HATCHER: This is for Mr Murdoch s benefit?

PN58

MR FRIEND: Yes. To put it on the transcript, so I apologise if it s boring. Hopefully it ll be better. Subject to the recent Full Court decision in John Holland v CFMEU, and there are important issues in relation to the facts of this matter, and the application of that decision which need to be considered. That decision, so far as we can tell, was not considered by the Commissioner when he approved this agreement. As we understand it, the agreement was approved on the papers. There are no reasons in relation to the approval, other than it satisfies the statement the bald statement that it satisfies the relevant test.

PN59

Given that new evidence may be introduced, I m going to address the Commission on the basis that the evidence is received, and if it is received, then what s been conducted today is a re-hearing. Well, even if it s not received, it s a re-hearing, but it s a re-hearing on all of the material including the additional evidence, if it s received.

PN60

Can I then move directly to the factual scenario and ask the Members of the Bench to turn to the appeal book. We learn from the appeal book at page 40 that the agreement was made on that s the wrong page. On 27 March 2015 and I ve got some problems with my pagination, I m afraid.

PN61

DEPUTY PRESIDENT GOSTENCNIK: Page 42.

PN62

MR FRIEND: Forty-two. Yes, that s what I had. Forty-two, yes. Thank you, your Honour. Employed at that time, turning over the page, we see there are five employees, and we know that they are all employees who were employed as concreters. If one then turns to the agreement itself, which is at the beginning of the appeal book, it s coverage application clause, which is, I think, at page 12, is clause 2.3. So it applies to:

PN63

The employer and employees engaged in classifications contained in this agreement on the construction, installation, operations, maintenance and/or miscellaneous service works of coal seam gas pipelines and associated facilities

PN64

And it goes on. To find the classifications we turn to clause 5 where you will see that there are six classifications. It s page 14 of the agreement, if I can do it that way. Six classifications starting from new entrant through level 2, which includes concreters, and then right through level 3, 4 and 5 including special class trades persons. So it s a very broad coverage in the agreement. Many of those classifications, we submit, would be persons, eligible members of the two unions that I represent.

PN65

The negotiation for the agreement was undertaken on behalf of the employer by Kirsty Augustine, who is the IR manager, and IR manager for Leightons Contractors. That can be found firstly I ve got 56, where you ll see that Ms Augustine is named and the organisation, which acted as the bargaining representative for the employer was Leighton Contractors Proprietary Limited. Her position, as IR manager, appears earlier at 57. In fact, it s also there at 57, so I don t need to fiddle around with the pages there.

PN66

On behalf of the employees there was one bargaining agent, who also appears on page 57, Mr Craig Faber, who is a concreter leading hand. You will see that he there gives his address as Thiess Proprietary Limited, 226 Aerodrome Road, Chinchilla. I don t think it will be disputed that Thiess is a member of the same group of companies as Leightons. He also gives his address at AB pardon me one moment 30 ‑ ‑ ‑

PN67

DEPUTY PRESIDENT GOSTENCNIK: Page 30.

PN68

MR FRIEND: Thirty. Well, that s what I ve got. I m sorry, it s just the numbering has been as Leightons Chinchilla. And you will see that the witness is a Mr Keith Johnson of Leighton Contractors. Now, the agreement was approved by Simpson C on 7 April.

PN69

VICE PRESIDENT HATCHER: So do we know if Mr Faber is an employee of the respondent?

PN70

MR FRIEND: Well, we rather assumed that he was, but he may not be. He s the employee bargaining representative. And I am reminded that he doesn t have to be an employee to do that. But he has signed the agreement on behalf of the employees, but that s all we know about him. We know there were five votes cast and they were all in favour of the agreement. As I ve indicated, the agreement was approved by Simpson C on 7 April, which is found at AB8.

PN71

Now, Mr Ong has given some evidence in the first affidavit which has been received. Bear with me just one moment. Firstly, that Sustaining Work is a wholly owned subsidiary of Leighton Contractors, that s at paragraph 2. It was incorporated in late November of last year. We understand from what Mr Murdoch said this morning that none of this is contentious. That Leighton Contractors has been engaged by Queensland Gas Corporation to construct the Lauren Field Compressor Station, and the contract for the early works package involving clearing, grubbing and civil preparation was awarded to Leighton in early November 2014.

PN72

VICE PRESIDENT HATCHER: What s a compressor station?

PN73

MR FRIEND: The gas comes out of the gas field, your Honour, and then ‑ ‑ ‑

PN74

VICE PRESIDENT HATCHER: This is coal seam gas, is it?

PN75

MR FRIEND: Yes. And then, as it s compressed to take it through the pipeline to the processing plant.

PN76

VICE PRESIDENT HATCHER: Right.

PN77

MR FRIEND: He then describes the agreement in 7 and 8 and what interest the CEPU has. He gives the evidence at the first part of 9:

PN78

The only employees who participated in the ballot to approve the agreement were five concreters.

PN79

Then we obviously accept that in the second sentence the boilermakers, civil plant operators and other trades people engaged at the plant are not directly employed, apart from two of them, by Sustaining Works, but there are obviously also a number of people employed at the construction site.

PN80

Now, he s then deposed to a comparison between the Sustaining Works agreement and the APLNG upstream project project agreement. That agreement, the APLNG agreement, is a Leighton s agreement, but it would not apply to this work because it s a project specific agreement. Mr Ong has given evidence about that agreement because it establishes the type of market rates that are applicable to the type of work that s being done.

PN81

VICE PRESIDENT HATCHER: Well, what s the relevance of that fact?

PN82

MR FRIEND: Because, as we say, and as we demonstrate in Mr Ong s second affidavit, the whole purpose of incorporating Sustaining Works, getting a few employees on board and doing an agreement with all these broad classification structures, was to achieve an agreement which undercut those market rates in circumstances where, if they had either waited until all employees came on board, or entered in a greenfields agreement with the union, they would be dealing with a situation where they would be asked to match those rates.

PN83

VICE PRESIDENT HATCHER: That might all be true, but what s improper about that? That is if a company doesn t want to pay market rates, thinks they re commercially unviable, what s the difficulty in ‑ ‑ ‑

PN84

MR FRIEND: What s improper about that?

PN85

VICE PRESIDENT HATCHER: Yes.

PN86

MR FRIEND: Is that the group to be covered by the agreement, which was chosen by the five concreters, was not fairly chosen. In other words, if they want to choose a group fairly when what they re doing is going in for this work knowing that these are the normal rates paid, you don t set up a new company, employ a few people, negotiate with one of your leading hands, and get five of them in one classification to vote and bind everyone else at the low rates.

PN87

VICE PRESIDENT HATCHER: So there was no enterprise agreement applying to Leightons at this site?

PN88

MR FRIEND: No. Not at this site.

PN89

VICE PRESIDENT HATCHER: So, on your case there, why was it necessary to set up a subsidiary to do this? I mean, Leightons could have done this itself at the site.

PN90

MR FRIEND: Well, perhaps it could have, but it didn t choose to. It does have other agreements that might apply to some work, but not with the unions that I represent, some construction work.

PN91

VICE PRESIDENT HATCHER: So were the five engaged at this site, or another site?

PN92

MR FRIEND: We don t know. We don t know, and it s not even a remotely transparent process. If one then looks at what Mr Raymont says ‑ ‑ ‑

PN93

VICE PRESIDENT HATCHER: But the agreement has Queensland state-wide coverage in the area in which it operates?

PN94

MR FRIEND: No, it s just Surat Basin, I think, your Honour.

PN95

VICE PRESIDENT HATCHER: Is it?

PN96

MR FRIEND: Mr Raymont s affidavit talks about a desire to reduce costs.

PN97

VICE PRESIDENT HATCHER: Yes.

PN98

MR FRIEND: The fact that Leightons has entered into bits and that there was a strategy to have a Sustaining Works company formed in late 2014 to meet this is paragraph 16 to meet those trends that he refers to previously. And the trends are the fact that there are other, or that Sustaining operations works, as he describes it needs to be done, but there are other competitors in the market, and that it s cost sensitive. So that, at least, is the admitted reason for incorporating Sustaining Works coming from the employer. He says, at 21, that Leighton did not have an EBA that covered all of the work in the packages, so that indicates that it had EBA that covered some of the work, and that s another reason, no doubt, why a separate company was formed.

PN99

If one then looks at Mr Ong s reply affidavit ‑ ‑ ‑

PN100

DEPUTY PRESIDENT GOSTENCNIK: Is Chinchilla in the Surat Basin?

PN101

MR FRIEND: Yes. In his supplementary affidavit Mr Ong reveals what occurred in relation to discussions between the union and Leightons when the union discovered that this agreement had been made. There was a meeting on 8 April to discuss the Lauren Field Compressor Station project and this purported agreement. He said this, this is paragraph 6:

PN102

Ms Augustine said the clients told us to reduce our costs by 30 per cent. We ve decided to reduce labour costs to assist with this. Sustaining Works has been created and has an agreement which reflects how we are going to reduce our costs.

PN103

Now, there s nothing wrong with trying to reduce costs, but by negotiation with your employees, and not with a selected group of employees, who are going to bind everyone else that might come to be employed in the future. That s our point in relation to that.

PN104

VICE PRESIDENT HATCHER: But they ve got the job now. They had five employees when the agreement was negotiated.

PN105

MR FRIEND: Yes.

PN106

VICE PRESIDENT HATCHER: They only have two now.

PN107

MR FRIEND: Yes.

PN108

VICE PRESIDENT HATCHER: And apparently they ll have none in the near future.

PN109

MR FRIEND: Well, as we ‑ ‑ ‑

PN110

VICE PRESIDENT HATCHER: So when was the wider negotiation meant to happen, since, on the evidence, there s no reasonably foreseeable prospect that they ll have any number of employees in excess of five?

PN111

MR FRIEND: Well, maybe there never needed to be a wider negotiation. Maybe there never should have been an agreement, because what the evidence also discloses, and what s disclosed later in this affidavit, is that this agreement has been used to set the rate for the subcontractors who come on to the site. So it s the creation of an instrument, in a highly artificial way, to set rates which bind people which are used by Leightons to bind people, but without there ever having been involvement by the relevant employees or the unions.

PN112

VICE PRESIDENT HATCHER: But who are the relevant employees for the purpose of that proposition?

PN113

MR FRIEND: Well, the employees who are doing the work, who Leightons insist be paid under this agreement, in the terms of this agreements.

PN114

VICE PRESIDENT HATCHER: But they re under a different agreement sorry, I ll withdraw that. They re employed by a different employer?

PN115

MR FRIEND: They re employed by labour hire companies, no doubt, as contractors, as casuals.

PN116

VICE PRESIDENT HATCHER: But they re in a position, if they want to, and if they re not already covered by an agreement, to negotiate their own agreement.

PN117

MR FRIEND: Well, maybe that s so. One then has to ask what is the purpose of this agreement? We re seeking a purpose in the agreement. Why have they done it? Why have they gone to the trouble of making this agreement covering all this broad range of people, in order, as they say, to reduce costs? This isn t challenged, this evidence of Mr Ong. In order to reduce costs they do this. But why would you do that if you re not going to employ anyone? Because they can use the agreement to do that industrially. Now, they achieved it by using a group of employees to vote on it, who weren t fairly chosen.

PN118

Mr Ong said:

PN119

Why are you coming to us now?

PN120

This is paragraph 7

PN121

Why didn t you sit down with us and try and negotiate an agreement?

PN122

And then Ms Augustine says that the union wouldn t have agreed. And then Mr Toll, who voted on the agreement and then Mr Bradley asked who was going to employ the electricians, and Ms Augustine said words to the effect, We re employing them through labour hire. The labour hire employees will be paid in accordance with the Sustaining Works agreement.

PN123

The whole situation is confected to create an instrument which Leightons can rely on and say needs to be complied with. If that s done in an appropriate way, either through negotiation with the union, or negotiation with an appropriate group of employees, no-one can complain. But if you employ a couple of people in civil, get the leading hand to negotiate on their behalf, and then sign up to an agreement which is substantially below market rates in that area on this type of project, something smells fishy.

PN124

COMMISSIONER ROBERTS: But who else would they negotiate with?

PN125

MR FRIEND: Well, they don t need an agreement is probably the point. They can negotiate with those five for an agreement covering them or people substantially like them, but once they start extending it out to try and use the document in this type of way, you have to ask, well, was that group fairly chosen? Was that group of employees fairly chosen to set these rates for the electricians, for all the fitters, and all of the other classifications?

PN126

COMMISSIONER ROBERTS: Who are contractors.

PN127

MR FRIEND: Who are, but the point is that the agreement is being used in a particular way, and that s our complaint.

PN128

COMMISSIONER ROBERTS: I take it your argument is it s a scheme to set an artificial base?

PN129

MR FRIEND: Yes.

PN130

DEPUTY PRESIDENT GOSTENCNIK: Why is that any different to the CEPU having a template agreement and wandering around from workplace to workplace seeking that that agreement be signed up to by various contractors?

PN131

MR FRIEND: Well, in each of those cases, the contractors have to agree. They re given an opportunity.

PN132

DEPUTY PRESIDENT GOSTENCNIK: But, in this case, where you say that these rates are used to determine the rates in other agreements, surely those employers and employees also have to agree.

PN133

MR FRIEND: Well, we don t know if they ve got other agreements, or how they re operating.

PN134

DEPUTY PRESIDENT GOSTENCNIK: But that s what I ‑ ‑ ‑

PN135

MR FRIEND: We re not given that information.

PN136

DEPUTY PRESIDENT GOSTENCNIK: But that s what I understood your proposition to be, that this is an agreement which is sought by Leightons to be effectively the standard for other contractors.

PN137

MR FRIEND: Yes. But all that we re told, by Ms Augustine, is that the labour hire employees will be paid in accordance with the Sustaining Works agreement. And that s repeated again at paragraph 13. And then there s some evidence about a meeting between Mr Ong and electrical construction and maintenance representatives on 8 April, and they do have a project agreement. And they re not employing any electricians because they ve got to pay at the Sustaining Works rate. Now, there doesn t seem to be a legitimate reason to make the agreement with the five concreters. That s what really needs to be established, in our submission, to demonstrate that this group was fairly chosen.

PN138

I ve gone perhaps a bit more in to the argument in answering questions, that I intended, because I haven t yet covered the law which I need to do at least briefly. That starts at about paragraph 20 of our outline of submissions which the Full Bench should have. Can I hand up copies of the cases so that they re in bundles, they can be put on the files. So we make the point, in paragraph 20, that the fairly chosen requirement is necessary to ‑ ‑ ‑

PN139

DEPUTY PRESIDENT GOSTENCNIK: Sorry, did you say you handed up three cases or two?

PN140

MR FRIEND: Two, I hope. I m only going to go to two. We say that those sections are designed to ensure that the agreement making is not undertaken in a manner which permits agreements to be used as instruments of oppression and we refer to some of the historical decisions under previous versions of the legislation, and I wish to take Members of the Full Bench to the first of those, the CFMEU v AIRC [1999] FCA 847; (1999) 93 FCR 317, and in particular we ve given references to paragraph 118 to paragraph 128, to paragraph 126. And I won t read the preliminary parts of it, but the first part of the paragraph is based on the provision in the Workplace Relations Act, as it was then, which required a valid majority of persons to genuinely make the agreement. Now, that s the question of casting a valid vote, under section 182. And then there s reference to the objects of the Act in (d) and (e), and we would refer the Full Bench to the objects contained in paragraph (f) of section 3 and section 171. And then the last part of the paragraph is one which we say is important to bear in mind in dealing with instruments such as collective agreements:

PN141

There can hardly be fair agreement-making between employer and employees about wages and employment conditions in a workplace before both sets of parties have actual experience of the work and its place of performance. Without that, cooperative workplace relations are unlikely to be achieved. An agreement prematurely made is unlikely to be effective; measuring effectiveness in this context by such matters as durability, aptness and comprehensiveness. Established "safety net" standards are less likely to be respected and maintained, because the range of conditions in relation to which such standards exist may not have been fully comprehended.

PN142

We also refer to the CFMEU v Pilbara Iron Company Services at paragraphs 38 to 39 but I don t read those. And we note in paragraph 21 in relation to scope test there have been cases which talk about the scope of an agreement having the effect of undermining bargaining because it s been unfairly chosen and the two cases there referred to, Semico and New Oakleigh Coal are relied upon at the passages referred to.

PN143

Then we come to John Holland. If I can very quickly draw the Commission s attention, without reading things, to the background of that case which is succinctly summarised by quoting from the primary Judge, at paragraph 8. Paragraph 20 in which his Honour Buchanan J observes:

PN144

The questions may arise about the extent to which it s fair for a very small group of employees to fix the terms and conditions of a larger group of employees, who may be engaged during a period of years into the future.

PN145

And then, at 29, his Honour observes:

PN146

Where only a small group of employees is involved, in my respectful view, it does follow from a legislative scheme a group of employees referred to will have been chosen by the employer.

PN147

Which was obviously the case here. At 33, it s the crucial paragraph, starting from the second sentence:

PN148

Presumably the presently employed members of such a group will act from self-interest rather than many particular concerned with the interests of future employees. The potential for manipulation of the agreement making procedures is accordingly a real one.

PN149

It s manipulation of the procedures that his Honour is referring to.

PN150

However no suggestion of that kind is made in the present case and the possibility may therefore be put to one side for the purposes of the discussion.

PN151

That s an important consideration because it suggests, as the primary Judge thought, that determination of whether the group of employees was fairly chosen in the present case needed to bring to account the business rationales of the choice as well as to deal with any possibility of unfair exploitation. It was not irrelevant in that assessment to bear in mind, as the primary Judge did, that the agreement provided benefits not detriments.

PN152

Now, in the present case, we submit that this is the type of circumstance involving manipulation of the agreement making process, which gives rise to a conclusion that the group to be covered by the agreement, the broad group of classifications of employees was not fairly chosen. I think I probably, in the course of argument over the facts, made clear what our position is, but we say that Leightons was behind the design; they incorporated a company because they already had some agreements which covered some of the work, but not all of it. So far so good, but then the process goes on, and they establish an agreement which is lower than the rates that are generally payable; they don t do it as a greenfields agreement, they do it as a brownfields agreement; they do it with five employees in one classification, at least three of whom are no longer there; they do it with a leading hand and they do it to cover a very broad range of classifications, and then use the agreement to require their contractors to apply those rates to the jobs that they wish to undertake.

PN153

VICE PRESIDENT HATCHER: Does the APLNG agreement contain rates for concreters?

PN154

MR FRIEND: It wouldn t apply to this site, your Honour.

PN155

VICE PRESIDENT HATCHER: No, but does it that is, have you done a comparison of electricians under this agreement to electricians under that agreement?

PN156

MR FRIEND: I see. Yes.

PN157

VICE PRESIDENT HATCHER: I m just wondering what the comparison of concreters, if it can be made, would show.

PN158

MR FRIEND: We think it might, and we will investigate that. Ultimately our submission is that this is a question of, as so many of these things are, a fact of degree. Was the group, the broad group, fairly chosen or should it have been a narrower group more like the concreters, in the particular circumstances of the case? We say this case is on the wrong end of the line. We will find out about the concreters in the APLNG agreement in a moment, and I ll deal with that in reply. Unless there s anything further I can assist?

PN159

VICE PRESIDENT HATCHER: Mr Friend, earlier you referred us to page 30 of the appeal book, which is the page which contains the signature of one employee.

PN160

MR FRIEND: Yes, of Mr Faber. Yes.

PN161

VICE PRESIDENT HATCHER: Do you want to say anything about whether or not that meets the signature requirements under the Act for agreements? I ll ask Mr Murdoch the same question, so you might deal with it in reply.

PN162

MR FRIEND: I will deal with it in reply if that s ‑ ‑ ‑

PN163

VICE PRESIDENT HATCHER: This is the Peabody Moorvale decision.

PN164

MR FRIEND: Yes. I ll ‑ ‑ ‑

PN165

DEPUTY PRESIDENT GOSTENCNIK: Well, it goes to the question of whether or not an application was made.

PN166

MR FRIEND: Yes. I follow that and I ll look at that while Mr Murdoch is on his feet. Thank you, your Honour.

PN167

VICE PRESIDENT HATCHER: Right, Mr Murdoch?

PN168

MR MURDOCH: Might I take as read the written submissions.

PN169

VICE PRESIDENT HATCHER: Okay. Thank you.

PN170

MR MURDOCH: The factual proposition which seems to underpin the case that s been advanced on the part of the union appellants is one that s based in very general, indeed, abstract terms on the allegation that there was in existence a suite of market rates. If the Bench is in any way inclined to regard that as relevant, I want to make it very clear that there s no acceptance, on our part, that there was in existence a standard of market rates, and in relation to that, if you need to, I d ask you to have regard to Mr Raymont s affidavit, insofar as it s relevant to the market rates issue, to the explanation which he gives as to the history of work in the coal seam gas industry in Southeast Queensland. In short, there were billion dollar projects related to the establishment of the infrastructure at Curtis Island, and on the Surat gas fields, and in the establishment of the trunk pipelines to convey the gas from the Surat Basin to Curtis Island.

PN171

In short, there were billion dollar projects related to the establishment of the infrastructure at Curtis Island, and on the Surat gas fields, and in the establishment of the trunk pipelines to convey the gas from the Surat Basin to Curtis Island.

PN172

He explains in his affidavit that that phase is virtually completed, the gas now being produced at Curtis Island and exported. What he conveys is that long term there will be what's categorised as sustaining work. In other words, relatively minor work whereby from time to time new wells will have to be plugged into replace wells that are exhausted and other supplementary work will be undertaken. To put it bluntly, it's low league work contrasted with the massive capital investment project which was undertaken to establish the industry.

PN173

He goes on in paragraph 13 of his affidavit to explain how the principles on the gas fields have now the opportunity not just to use the giants of the construction industry but also the smaller contractors like MDS, Murphy Pipe & Civil, Wasco et cetera. The affidavit goes on and demonstrates that from - this is paragraph 14:

PN174

From midnight 2014, the gas proponents began testing the market for Sustaining Works with smaller, specialised contractors.

PN175

He then leads into explaining that the company which is the respondent was established and it was part of a strategy to be competitive in seeking Sustaining Works going forward.

PN176

Paragraph 21, he explains that Leighton did not have an EBA that covered all the work in the packages and he was uncertain as to which work would be successfully won.

PN177

VICE PRESIDENT HATCHER: That work packages, what does that contain?

PN178

MR MURDOCH: The work packages were the work for various compressor stations, as part of the initial phase of Sustaining Works. So there was a tender submitted for each of those components and there was success in relation to Lauren. They're small packages of work which have been and we understand will be let from time to time and as has emerged so far as the employment of the five employees goes, as their work completes their employment will end. But if the company is successful in winning packages in the future, the instrument will be there and it will be used. We don't want to give the impression that the agreement was there just for that one job, our clients are very open about - our client is very open about the fact that it is in the market for these small packages of work and wishes to be competitive with the smaller contractors, who are in the market for these small packages of work.

PN179

Rounding off on that, we dispute that the rates which were applicable to the major infrastructure projects that were necessary to set up the gas field and the pipelines that convey the gas to Curtis Island, and the projects on Curtis Island. We dispute that they are the same market as the market in which the respondent company will compete with small contractors for the small packages of work now and long into the future, in relation to this augmentation work that's known as the sustaining phase.

PN180

There's nothing secret about what the respondent's about, nothing secret or surprising about the market that it's in but in our submission, it would be a mistake for the Bench to embark upon a comparison with so-called market rates. The only relevant comparison that the legislature requires is the comparison that's undertaken per medium of the BOOT test, and there is no suggestion on the part of the appellant that Simpson C was in error in being satisfied that the BOOT test was met.

PN181

In relation to some of the other factual matters that emerged during the appellant's case, Craig Faber, I'm instructed, was one of the five employees who was employed on the project and who negotiated the agreement. I'm instructed that his work concluded and he left on 19 May. I'm instructed that he was employed on this site and that it is in the Surat Basin.

PN182

VICE PRESIDENT HATCHER: On this project there's a large number of workers engaged, or relatively large, who aren't employed by your client?

PN183

MR MURDOCH: Correct.

PN184

VICE PRESIDENT HATCHER: Can you explain anything about that? That is Mr Friend's put it that this is all part of what he's called a manipulation of the system. Is there any reason why they've been engaged through labour hire as distinct from engaged directly under this agreement?

PN185

MR MURDOCH: I'm instructed that it's a mixture of subcontractors and labour hire, which is not unusual on modern day construction projects.

PN186

VICE PRESIDENT HATCHER: Does that mean the sustained works are acting as the head contract on the site?

PN187

MR MURDOCH: No, it doesn't. It's simply one of the contractors on the site.

PN188

VICE PRESIDENT HATCHER: So do these contracts or labour hire contract with Leighton Contractors not Sustaining Works. Is that what happens?

PN189

MR MURDOCH: The respondent, he has not subcontracted I'm instructed.

PN190

VICE PRESIDENT HATCHER: So Mr Murdoch, is it the case that in relation to the packages of work on which the labour hire employees are being used or packages that have been awarded to Leighton not to your client. Is that right?

PN191

MR MURDOCH: Yes. The ground of appeal is narrowly framed on the basis that the group was not fairly chosen but the way the case has been argued on behalf of the appellants is by advancing the proposition on two prongs. Firstly, that there should have been no agreement at all and that's an argument that doesn't go to whether the group was fairly chosen. It's an argument which is not part of the statutory checklist which has to be undertaken by the Commission when it's considering whether the agreement should be proved.

PN192

It was also argued that the agreement should have been negotiated with the union, and it's informative to spend some time considering that because that proposition runs counter to the statutory scheme under the Fair Work Act, because the provisions of section 172 of the Act in subsection (2)(a) clearly contemplate that enterprise agreements are to be negotiated with employees. It's the case that the statutory provision for negotiation of an enterprise agreement with a union or unions is in relation to Greenfield agreements, but in a case such as this where there are employees at the relevant time, it is within the clear contemplation of the agreement of the Act that the negotiation of the agreement be conducted with the employees.

PN193

That's not to say, of course, that in particular instances a union may be involved as a bargaining representative or a default bargaining representative, but that was not the case here. When one comes to consider the orthodoxy of this particular agreement, it's our submission that there is no express or implied provision in the Act that an employer desiring an agreement has to go to a union or unions. In the context of current employees, the legislative scheme very clearly is directed towards negotiations with those employees.

PN194

So far as purpose is concerned, it in my submission is a legitimate purpose on the part of an employer to desire to negotiate an agreement which meets the tests of the Fair Work Act and which provides a competitive agreement for the purpose of winning tenders.

PN195

VICE PRESIDENT HATCHER: Do I take it that Sustaining Works is effectively a labour hire provider to Leighton? That is it doesn't have - does it have equipment of its own by which it carries out the work or does it simply supply the labour and Leighton as it were does the rest of the planning and capital - provision of capital equipment for the job.

PN196

MR MURDOCH: I'm instructed that on this job the respondent supplied labour but the intent I'm instructed is that going forward it will seek work in which if the contract requires it will entail it utilising plant and equipment, as well as labour.

PN197

VICE PRESIDENT HATCHER: That means seeking work in its own right, not through - not Leighton seeking work and using ‑ ‑ ‑

PN198

MR MURDOCH: Well it can be either. The intent is that the company will have an existence going forward but the work is very much - I'll use the expression rats and mice work, so that the nature of the work that's tendered for will no doubt dictate the way in which the work's planned and if successfully tendered for, executed.

PN199

We've referred in our written submissions to authorities which have I'd submit clearly established that agreements negotiated by small groups of employees are consistent with the legislative scheme. There is a recognition that provided there's two or more employees that it's proper for them to negotiate an agreement and that an agreement which they negotiate is valid. So far as the point that my learned friend raises in relation to classifications, which go beyond the classifications of the individuals who are the persons who negotiated the agreement, might I hand up the authorities that we rely on and take you to the decision in CEPU v Main People Pty Ltd, decision of the Full Bench of the Commission, and to paragraphs 17, 18 and 19. In paragraph 18 on that particular point you'll see that the last sentence reads, and I quote:

PN200

Nor is there anything in the Fair Work Act to prevent employees voting to approve an agreement that will affect employees in classifications or geographic locations, other than their own unless a relevant scope order has been made.

PN201

It goes on in 19:

PN202

There is nothing unusual or necessarily untoward in a relatively new business making an enterprise agreement early in its life with a small number of employees, with an expectation that the business will grow and eventually employ a much larger number of employees who would then be covered by the agreement. The evidence suggests that the respondent is a start-up venture.

PN203

Reference was made by my learned friend to the decision ‑ ‑ ‑

PN204

VICE PRESIDENT HATCHER: Before you move onto that decision, I think on the issue of standing in this decision, this is paragraphs 5 to 7 that the Full Bench found that the unions had standing on the basis of their eligibility to represent persons irrespective of whether they had actual membership.

PN205

MR MURDOCH: That was the finding.

PN206

VICE PRESIDENT HATCHER: Is there any reason why we would take a different conclusion here?

PN207

MR MURDOCH: None that I can presently advance. In the Full Federal Court decision in the Mine Management case ‑ ‑ ‑

PN208

VICE PRESIDENT HATCHER: Which one is that?

PN209

MR MURDOCH: The Mine Management case that my learned friend took you to - sorry, AIRC ex parte Construction Forestry, Mining and Energy Union.

PN210

VICE PRESIDENT HATCHER: Yes.

PN211

MR MURDOCH: It's in my learned friend's bundle. The passage that my learned friend read needs to be, we'd submit, considered in the rather unusual factual context of that particular case. The rather unusual factual context was that the agreement was negotiated with a group of persons who'd been employed but had not yet been put to work. That explains the reference in paragraph 126 of that decision to an agreement prematurely made. The situation there was that the employer had not yet commenced mining operations and paragraph 121 of the reasons rather succinctly deals with that particular quirk of timing. I'll read it out:

PN212

The question is therefore whether an agreement regulating terms and conditions of employment in a proposed single business made with employees who may in the future be employed in that business but are not yet so employed, qualifies as an agreement that may be certified under the Act. In our view, the preferable conclusion as a matter of both textual and purpose of interpretation of the Act is that it does not.

PN213

So it was a very different case to this, and I'd submit that caution needs to be exercised when one extracts small quotes from that decision, particularly when it's done for the purpose of extrapolating them into quite different factual scenarios. Unless I can assist further, they're our submissions.

PN214

DEPUTY PRESIDENT GOSTENCNIK: I'll ask you the same question. The signatory requirements of the agreement, page 30 of the appeal book, seems to me at least on its face that there's neither an address nor a full name, and whether that has any bearing on the application that was made to include the agreement.

PN215

MR MURDOCH: Well so far as the address is concerned, the question of whether it needed to be a home address or some other address was dealt with by ‑ ‑ ‑

PN216

DEPUTY PRESIDENT GOSTENCNIK: I accept that, except that I'm not sure that that qualifies as an address at all. Put that to one side, there's a question of the full name.

PN217

MR MURDOCH: Well it suffices to - there's a signature there and there's a surname and an initial.

PN218

DEPUTY PRESIDENT GOSTENCNIK: Yes, and I understand that. The regulations require, for the purposes of section 185(5) that each person signs who the agreement, (indistinct) the agreement contain a full name and address of each person who signs the agreement. That makes the - for the purposes of paragraph 185(2)(a) which is:

PN219

Providing a signed copy of the agreement. An agreement will only be a signed copy of the agreement if those requirements are met.

PN220

So my question is whether or not in fact there was a signed agreement which accompanied the application in order to make a valid application for approval of the agreement.

PN221

Mr Murdoch, I've caught you on the hop and I've only looked it when Mr Friend took me to that page, so subject to the presiding members' view it might be appropriate that we hear from Mr Friend first and you can chew over that issue.

PN222

MR MURDOCH: Yes, well we weren't aware there was any issue over it and ‑ ‑ ‑

PN223

DEPUTY PRESIDENT GOSTENCNIK: I wasn't until it turned the page, Mr Murdoch.

PN224

VICE PRESIDENT HATCHER: Is there a statutory declaration from Mr Faber in the appeal book?

PN225

MR MURDOCH: There was somewhere. Yes, 57, page 57.

PN226

VICE PRESIDENT HATCHER: That's the company's statutory declaration isn't it? It's its application, sorry, that's the application.

PN227

MR MURDOCH: I'll have to make inquiries about that.

PN228

COMMISSIONER ROBERTS: How is Faber spelt, Mr Friend? It's spelt - in the application it's F-a-b-e-r ‑ ‑ ‑

PN229

MR FRIEND: We know no more than what's in these documents, Commissioner, which are all - when we requested the file from the Commission this is all we got. He's obviously spelt his name ‑ ‑ ‑

PN230

COMMISSIONER ROBERTS: Yes, but at 5.3 of the application ‑ ‑ ‑

PN231

MR FRIEND: Yes, that's the employer's declaration.

PN232

COMMISSIONER ROBERTS: The employer's declaration ‑ ‑ ‑

PN233

MR FRIEND: Or application.

PN234

COMMISSIONER ROBERTS: ‑ ‑ ‑ it's F-a-b-e-r.

PN235

MR FRIEND: Yes.

PN236

COMMISSIONER ROBERTS: On the document that his Honour just referred to, I think the printed name is F-a-b-a-r.

PN237

MR FRIEND: Yes.

PN238

COMMISSIONER ROBERTS: So we really need to see his affidavit, wherever that is.

PN239

MR FRIEND: His stat dec.

PN240

VICE PRESIDENT HATCHER: This appeal book, was this prepared on the basis of ‑ ‑ ‑

PN241

MR FRIEND: I'm instructed that we asked for all the material from the Commission and it's all there.

PN242

VICE PRESIDENT HATCHER: This is all the Commission has.

PN243

MR FRIEND: This is all the Commission gave us. It doesn't mean there isn't something else on the Commission file but it's all we were given.

PN244

MR MURDOCH: I wonder if we might have a short adjournment so we can just ascertain whether there is further relevant material that might ‑ ‑ ‑

PN245

VICE PRESIDENT HATCHER: We might make our inquiries about what's on the Commission's file to see if there's something missing from the appeal book which is of relevance. So we'll adjourn and resume in not less than 20 minutes.

PN246

MR MURDOCH: Thank you.

SHORT ADJOURNMENT [3.08 PM]

RESUMED [3.45 PM]

PN247

VICE PRESIDENT HATCHER: Just for the record we have located and provided to the parties two additional documents which we have located in a file. One was the notice of employee representational rights which was apparently issued, and the second was an instrument of appointment of a bargaining representative for a proposed enterprise agreement which appears to be in the standard form, but has no details filled out. Mr Murdoch.

PN248

MR MURDOCH: Could I take you please to section 185 of the Fair Work Act. In subsection (1) we see that:

PN249

If an enterprise agreement is made a bargaining representative for the agreement must apply to the Fair Work Commission for approval of the agreement.

PN250

Then in subsection (2):

PN251

The application must be accompanied by; a) a signed copy of the agreement, and b) any declarations that are required by the procedural rules to accompany the application.

PN252

Then if one goes to the Fair Work Regulations (2009), regulation 2.06A ‑ ‑ ‑

PN253

VICE PRESIDENT HATCHER: Sorry, can you just wait for a second, Mr Murdoch, while I find that.

PN254

MR MURDOCH: Yes.

PN255

VICE PRESIDENT HATCHER: Yes.

PN256

MR MURDOCH: So that in sub-rule (2) for paragraph 185(2)(a) of the Act:

PN257

A copy of an enterprise agreement is a signed copy only if; a) it is signed by (i) the employer covered by the agreement, and (ii) at least one representative of the employees covered by the agreement.

PN258

Then it says:

PN259

And b) it includes the full name and address of each person who signs the agreement, and (ii) an explanation of a person's authority to sign an agreement.

PN260

When we go to the documents that were signed here, if we go to the F16 application form, we see that among other things in part 5.3 there's a requirement to provide the names of the employee bargaining representatives, and the name Craig Faber is provided. That's consistent with the earlier provision in 5.1 where an answer to the question:

PN261

Were there any employee bargaining representatives involved in the agreement making process? Yes.

PN262

Then one can refer to F17 which is the employer's statutory declaration in support of the application for approval. If one goes to 2.4 there's again confirmation of the references in three or the line items in that box that Mr Faber was the employee bargaining agent.

PN263

If I could then take you back to the F16 application form, in the instructions as to lodgement and service of the completed form in (1):

PN264

Within 14 calendar days after the agreement is made you must lodge with the Commission the application, copy of the agreement signed in accordance with regulation 2.06A of the Fair Work Regulations, and if the application is being made by a bargaining represented appointed by the employer or an employee, a copy of the written instrument of employment.

PN265

The application was not being made by Mr Faber so there is no requirement for a written instrument of appointment. We can see in (3) under that heading "Lodgement and Service" that there's a note that:

PN266

The following statutory declarations also form part of the application for approval of an enterprise agreement. Each employer which will be covered by the agreement must lodge form F17.

PN267

The third dot point deals with employee bargaining representatives but that requirement is optional. It's only if the employee bargaining representative wants to advise the Commission of the matters that are set out there, so I regret that I'm being long-winded about this but what the legislative scheme requires is that there be filed a suite of documents and whilst as has been pointed out the body of the agreement doesn't describe Mr Faber as the bargaining representative, nevertheless the accompanying documents clearly identify him in the statutory declaration as the employee bargaining representative, and they also provide his full name. In our submission, the documentation which is required to be filed as a job lot so to speak ought to be read as one and that would be consistent with the objects of the relevant part of the Fair Work Act, and I'd refer to the objects in section 171 of the Fair Work Act, which deals with - which is the part dealing with enterprise agreements. The objects of this part are:

PN268

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, and (b) to enable the Fair Work Commission to facilitate good faith bargaining and the making of enterprise agreements including through; (iii) ensuring that applications to the Fair Work Commission for approval of enterprise agreements are dealt with without delay.

PN269

VICE PRESIDENT HATCHER: Well dealt with without delay doesn't suggest any particular outcome. It just says we need to deal with them quickly.

PN270

MR MURDOCH: Yes, it does but it does suggest that the process is designed to be one free of unnecessarily complex application of the requirements of the rules. So that in this instance the papers that were filed and in our submission the agreement is part of the application, as also is the statutory declaration filed on behalf of the employer. One finds in the documentation that was filed all of the information which relevantly pertains to the signatory on behalf of the employee's full name and his capacity as bargaining representative. I can't assist any further.

PN271

DEPUTY PRESIDENT GOSTENCNIK: Mr Murdoch, is that a submission that the statutory requirements have been met or is that a submission that to the extent they haven't been met, they should be corrected as a matter of discretion?

PN272

MR MURDOCH: Both.

PN273

VICE PRESIDENT HATCHER: Where does that discretion come from? I'm looking at section 586 which allows the Commission to waive an irregularity in a formal manner in which an application is made to the Commission. That's the general procedural power but it may be a question about whether the manner in which the agreement is signed is covered by that provision.

PN274

MR MURDOCH: Well the explanation that I've given in the last few minutes goes to that, in that the information has all been provided in the suite of documentations that were filed. The only imperfection is one form in that one finds the full name and one finds the status as bargaining representative in the statutory declaration not repeated in the signatory block of the agreement proper. We would submit that it's inconsequential because it goes only to form, but one finds it in the documents that are required to be filed together and the application is made up of the application, supporting declaration and the agreement.

PN275

VICE PRESIDENT HATCHER: You're probably right in saying this wouldn't be perhaps much of an issue if we were hearing it at first instance, but of course we're not. Section 585 requires any application to the Commission to be made in accordance with the procedural rules. Then 586 is the correction power, so if this was raised before the Commissioner well then perhaps he could have readily exercised his powers but what do we do about it once the problem's been identified on appeal?

PN276

MR MURDOCH: If there be a need for an application I'd undertake to have one filed and it is a matter which once filed in the Commission could be dealt with either by this Bench or by the Commission below.

PN277

VICE PRESIDENT HATCHER: It would probably require us to grant permission to appeal and uphold the appeal in some respect to enable us to exercise that sort of power, would it not?

PN278

MR MURDOCH: Well in the narrow respect as identified by the Bench.

PN279

DEPUTY PRESIDENT GOSTENCNIK: If we were to do that, Mr Murdoch, would another course be to invite the applicant to provide a copy of the properly signed agreement?

PN280

MR MURDOCH: Yes, it would.

PN281

VICE PRESIDENT HATCHER: Do you want to say anything about this, Mr Friend?

PN282

MR FRIEND: Briefly. The Act's quite clear in 185 about the requirement for a signed agreement and specifies under subsection (5) that regulations may make the prescription about signing agreements. The regulations say that an agreement is only signed - it's signed only if -

PN283

it's signed by the employer and at least one representative of the employees and includes full name and address and an explanation of the person's authority to sign.

PN284

The agreement doesn't do any of those things, it doesn't have a full name, it doesn't have an address, it doesn't have an explanation of the person's authority to sign.

PN285

The purpose of those provisions as identified in Peabody at paragraph 98 is to enable the Commission to contact the employee representative who's purportedly signed the agreement. The documents as a suite, as my learned friend put it, don't address the problem because of course the name is spelt differently and the address is different. One is Leighton's, one is Thiess insofar as an address is given. We would submit that in those circumstances the application is invalid. Section 585 can't assist because it's not a regularity in formal manner ‑ ‑ ‑

PN286

VICE PRESIDENT HATCHER: 586 you mean.

PN287

MR FRIEND: I'm sorry, 586. I'm sorry, your Honour, yes. Therefore the whole application before the Commission is a nullity.

PN288

VICE PRESIDENT HATCHER: What about 586 (a), that is we can allow a correctional amendment of relevantly any other document before us on any terms we consider appropriate. Why wouldn't that allow the course of saying that the agreement can be re-filed with the signature in the appropriate form?

PN289

MR FRIEND: Well the person who has to make the correction isn't before the Commission. Mr Faber has to make the correction. The employer can't take it away and fill in the right details. Mr Faber's got to do it. That person's not before you, for you to allow them to do anything. Maybe if they come along it would be a different circumstance but in these circumstances they're just not here.

PN290

VICE PRESIDENT HATCHER: Well it's on any terms we consider appropriate, so we can make appropriate terms by which we can ensure that it's resigned by the employer and Mr Faber in some appropriate way, couldn't we?

PN291

MR FRIEND: There are issues about the whole identification of Mr Faber that arise from the agreement. I can't - and of course there's no statutory declaration, not that there was one required. It's rule 24, my learned friend read the summary from the application. Rule 24 says that an employee whose bargaining representative only has to file a statutory declaration if they wish to advise the Commission of various things. So that's in the Commission's rules. That's all I want to say about that point.

PN292

Can I just address one or two other matters that - I think it's only one matter that arose. The question of concreters under the APLNG agreement, there is a - concrete finisher is included in that agreement. It's at level B. I don't think the rates are directly comparable but insofar as we can work it out the rate for level B under the APLNG agreement for a concreter is $45.91 an hour. The rate under the Sustaining Works agreement for a level 2 person who's a concreter is $48.73 an hour. I'm told one's a flat rate and one's all purpose. The APLNG is the all-purpose. The Sustaining Works is a flat rate. It might require a little bit of work to ascertain what the difference is but just looking at the two rates of course, one looks higher than the other. I don't know how much further that takes the matter. Nothing further unless I can assist the Commission further.

PN293

VICE PRESIDENT HATCHER: Do you want to add anything on those last issues, Mr Murdoch?

PN294

MR MURDOCH: No, but at a practical level my clients are willing to give any necessary undertaking to file whatever documentation is required to take advantage of - we're willing to seek the necessary labour to cure that irregularity by whatever means meets the approval of the Commission.

PN295

VICE PRESIDENT HATCHER: Thank you. I thank counsel for their submissions. We propose to reserve our decision and we will now adjourn.

ADJOURNED INDEFINITELY [4.06 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #1 AFFIDAVIT OF PETER ONG DATED 15/05/2015................... PN48

EXHIBIT #2 SUPPLEMENTARY AFFIDAVIT OF PETER ONG DATED 02/06/2015 PN50

EXHIBIT #3 AFFIDAVIT OF MARTIN RAYMONT DATED 28/05/2015.... PN51

EXHIBIT #4 SUPPLEMENTARY AFFIDAVIT OF MARTIN RAYMONT DATED 03/06/2015 PN52