C2018/2635, Transcript of Proceedings [2018] FWCTrans 272 (19 July 2018)

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PN1

VICE PRESIDENT HATCHER: Yes, can I take the appearances? Mr Boncardo, you appear for the appellant?

PN2

MR BONCARDO: I do, I seek permission to appear for the appellant.

PN3

VICE PRESIDENT HATCHER: And Mr Rauf for the respondent?

PN4

MR RAUF: If it please. I seek permission of the Full Bench to appear for the respondent.

PN5

VICE PRESIDENT HATCHER: I grant permission for the parties to be represented by lawyers.

PN6

MR RAUF: Thank you.

PN7

VICE PRESIDENT HATCHER: Mr Boncardo?

PN8

MR BONCARDO: Your Honour, there are two preliminary matters, the first of which is that we have provided an amended notice of appeal to the Commission, and to my learned friend, this morning, which I seek leave to rely upon. The amended notice deals with the grounds of appeal concerning the last portion of clause 3.3 and makes clear that the appellant's objection to it is that it is an unlawful term, for the purposes of 194(ba) of the Act.

PN9

VICE PRESIDENT HATCHER: Are those amendments opposed?

PN10

MR RAUF: Your Honour, as my friend noted we received the document this morning, in the limited time that we've had I've had a brief look through them and I must confess I haven't had an opportunity to really consider how they read into the other grounds, and we've obviously prepared on the basis of the third iteration of the appeal document. But if I can perhaps advocate for this position, that the respondent be permitted to reserve its right such that if there is any prejudice arising as the argument is developed and there's something which flows which we haven't had the opportunity of considering we can then seek some redress in respect of that. I don't want to hold up things but if that's acceptable to the Bench then we don't oppose, subject to the right to make an application, if there's any prejudice arising, once we've had the chance to properly consider.

PN11

VICE PRESIDENT HATCHER: Does that sound appropriate, Mr Boncardo?

PN12

MR BONCARDO: Yes, your Honour.

PN13

VICE PRESIDENT HATCHER: All right. I will allow the amended appeal notice on that basis.

PN14

MR BONCARDO: Certainly. The other preliminary issue is this, your Honours and Commissioner, at paragraph 3.10 of my learned friend's submissions it is asserted that the appellant is not an agreed person, for the purposes of section 604 of the Act. That is a proposition which is a surprising one, given the authority of this or of any various authorities in relation to aggrieved persons, in the context of agreement approval matters. If that submission is seriously pressed, then I have a statement to read, of my instructing solicitor, setting out the classes of workers covered by the agreement that the appellant is able to represent under its rules, which has been taken for some time now to be sufficient to enable a union, not a bargaining representative, to be a person aggrieved by an agreement approval decision.

PN15

VICE PRESIDENT HATCHER: Mr Rauf, would it be in dispute that the appellant organisation would have rules coverage of at least some of the classifications in the agreement?

PN16

MR RAUF: No, we don't take issue with that, your Honour, and perhaps if I can clarify? In respect of the point made at paragraph 3.10 really the issue of what a concern flagged there is that we accept that the union here, the appellant, is an aggrieved person, in respect of the decision which was made refusing it leave to intervene at first instance. Really it's a word of caution that - and highlighting grounds 1 and 2 we start, in our outline of submissions, in focussing on those grounds. That, we say, is the proper way to approach it because that's critical, we say, and in circumstances where if it would be, in my submission, a curious outcome if the appellant, not having a basis to intervene at first instance and if it isn't successful in demonstrating some House v King type error in respect of grounds 1 and 2 could, nonetheless, intervene as a third party and make the very same submissions, in opposition, which it otherwise would have not been able to make at first instance. So it's really a word of caution how it might proceed.

PN17

VICE PRESIDENT HATCHER: All right. Let's be clear, insofar as the appeal of the substantive decision is concerned, do you say the appeal is complement or not?

PN18

MR RAUF: We don't take issue with the appellant being an approved person.

PN19

VICE PRESIDENT HATCHER: All right, thank you. So we don't need to admit the statement, Mr Boncardo.

PN20

MR BONCARDO: Thank you, your Honour. Your Honours and Commissioner, I'm going to deal with five issues in my oral submission. The first concerns the last portion of clause 3.3 of the agreement. I'm then going to move on to deal with the undertaking about clause 3.3 that was accepted by the Commissioner. I will then address two issues in respect to the national employment standards and then move on to genuine agreement issues and conclude by dealing with the undertaking given, in respect to the redundancy clause.

PN21

If I can commence by taking members of the Full Bench to clause 3.3 of the agreement? It is contained in two places in the appeal book but perhaps it's best to go to the Commissioner's decision, which is contained behind tab 12, and turn, firstly, to page 151 of the appeal book. Clause 3.3 is entitled Application, and the first paragraph of that clause determines that the agreement covers the classifications set out in appendix A and operates in New South Wales, in respect to the respondent's civil engineering projects and related works and then carves out tunnelling excavation works.

PN22

The portion of clause 3.3 that we take issue with is the final paragraph, which is on page 152 of the appeal book which provides, relevantly, that:

PN23

Any greenfields or projects specific agreement that CPB or a joint venture of which is it part and which is approved by the Commission will cover CPB and its employees at that particular project or site to the exclusion of this agreement.

PN24

Now, it's worthwhile noticing a couple of things about that final paragraph. The first is that it deals with both greenfield agreements and agreements made between CPB and its employees. The second is, and this is, I must confess, not pointed out in my submissions, that it deals with coverage. It uses the word "will cover", and I have referred, in my written submissions, to TR Constructions, Abigroup and Perth Access Scaffolding and my learned friend has referred, in his submissions, to the well-known John Holland case in the Federal Court. Those agreements had a similar clause in them but they provided that the project specific site agreement will cover and apply, they use the language of application as well as coverage.

PN25

This uses the language of coverage. It appears, in my submission, that it's open to two interpretations, probably the one most consistent with the language is that it deals only with coverage and if it deals only with coverage then the argument will be limited to it being an unlawful term, for the purposes of section 194(ba). In the event that it deals with both coverage and application and read in light of the title to clause 3, that is a reading which, in my submission, is certainly open, then the issues in respect to its divergence from the position expressed in section 58 of the Act remain alive.

PN26

If I can deal with the - - -

PN27

VICE PRESIDENT HATCHER: Does it make much difference? That is, if a project agreement is made this will effectively contract the coverage of this agreement and the project will then just apply according to its terms under the Act. There'd be no - - -

PN28

MR BONCARDO: It probably makes no difference of any substance, Vice President, but I need to draw that to you attention because it's not set out with the clarity that should be in the written submissions.

PN29

My learned friend says that this clause, or a clause similar to this was dealt with in the John Holland decision and that has been considered recently, by the Full Bench, in the decision of TR Constructions, which is decision your Honour the Vice President will be aware of, given you were the presiding member. That is a decision contained in the smaller bunch of authorities, at tab 4, and the clause in that agreement is set out at paragraph 29. Your Honours and Commissioner will see that it is in almost identical terms to the clause that's under consideration here, save that it uses the phrase "will cover and apply."

PN30

The Full Bench there noted that whilst the clause mirrored the John Holland clause, this is at paragraphs 30 to 31, it was not considered in John Holland for the very reason that section 194(ba) of the Act had not been included in the Fair Work Act at the time that John Holland was decided.

PN31

The Full Bench goes on, at paragraph 32, to note, relevantly, that:

PN32

The clause was drafted in terms of that clarity and the respondent's submissions appear to be that the reference in the clause to any future project or site specific arrangement entered into under the Fair Work Act is to be understood as meaning a future enterprise agreement entered into under the Fair Work Act so that the clause, in effect, restates what the legal effect of the approval of any such future enterprise agreement would be. If so the clause does not accurately state the effect of section 58, which identifies when two enterprise agreements cover an employee which agreement applies to the employee. Section 58(2)(d) provides that the earlier of the two agreements applies until it's nominal expiry date has passed. Accordingly, on one view, the clause does purport to allow an opt out contrary to the provisions of the Fair Work Act. As submitted by the CFMEU this issue did not arise for consideration in John Holland.

PN33

At paragraph 33 the Full Bench determined not to grant permission on that basis, the agreement being set aside by reason of its failure to comply with the BOOT. The issue with clauses such as the final paragraph of clause 3.3 is a matter that has not been the subject of a definitive statement by the Full Bench, it is a matter that, in my submission, enlivens the public interest and a clause of this nature, we say, is, in effect, an opt out clause, for the purposes of section 194AB, for the reasons enunciated by the Vice President previously, in the sense that it operates to contract the coverage of the agreement and have employees, in effect, opt out of the coverage of the agreement at particular sites.

PN34

There is nothing objectionable about an enterprise agreement providing, explicitly, that it will not apply or cover site A, site B, site C. What we have here is a term that provides for that result, but in relation to future known sites. And it, in those circumstances, is, we say, in effect, a clause that provides the method by which employees will cease being covered by this agreement and is objectionable, for the purposes of section 194AB, for that reason.

PN35

If it is objectionable for that reason, then it is an unlawful term.

PN36

VICE PRESIDENT HATCHER: So what did the John Holland clause actually say?

PN37

MR BONCARDO: My learned friend has put the John Holland decision in his authorities, at tab 3, and the relevant clause is extracted - - -

PN38

MR RAUF: Paragraph 9, if that assists, of the decision.

PN39

VICE PRESIDENT HATCHER: What paragraph?

PN40

MR BONCARDO: Paragraph 9, your Honour.

PN41

MR RAUF: Paragraph 9 of the decision.

PN42

MR BONCARDO: Paragraph 9, clause 1.2. It's in slightly different terms because it refers to a similar business arrangement and it uses, again, the language of coverage and application. But it's exclusionary in nature, similar to this provision.

PN43

Buchanan J analyses the clause to some extent, albeit in the context of section 186(3), at paragraphs 60 through to 65, where he agrees with the primary judge that the Full Bench had committed jurisdictional error, in respect to its application of section 186(3). The relevant paragraph is paragraph 64 where the approach, or the former approach of the Full Bench is canvassed and said to be in error. His Honour, about halfway down the page says:

PN44

The criticism made by the Full Bench would apply with equal force to any agreement with the capacity to operate at future sites or projects not in existence or actual contemplation when the agreement was made.

PN45

That appears to be a reference to what was clause 1.2, or 1.1(2), as set out in paragraph 9 of that decision. But in any event, we say that the situation here is a new one, given the addition of section 194(ba) of the Act and it's a matter that the Full Bench has made some reference to in the TR Construction Services case and I think my learned friend says, in his submissions, this is a clause that has some prominence in some agreements, I'm not sure which agreements he's referring to, but if that is right then it is a matter that would benefit from some analysis by the Full Bench.

PN46

Similar clauses have been analysed by members of the Commission previously. If I can take your Honours and Commissioner to the decision of Gooley C, as she then was, which is at tab 14 to the - in the union's larger bundle of authorities? It's a decision of Abigroup Contractors Pty Ltd [2012] FWA 9755, at tab 14 - - -

PN47

VICE PRESIDENT HATCHER: It's actually tab 15.

PN48

MR BONCARDO: I apologise. The relevant clause is set out in paragraph 3 and if your Honours and Commissioner scroll down to the third paragraph, second sentence provides that:

PN49

The agreement does not apply -

PN50

Again, using the language of application, not of coverage:

PN51

to construction projects where a specific agreement is made as an enterprise agreement.

PN52

The now Deputy President analysed the clause in a way similar to the John Holland Full Bench, in the context of section 186(3), from about paragraph 28 to paragraph 38. And then from paragraph 39 onwards she analysed the clause, in the context of its operation with section 58 of the Act, noting at paragraph 39 that section 58 posed a significant barrier to the agreement's approval.

PN53

Section 58 is then set out at paragraph 40 and the clause is analysed by the Commissioner, from paragraph 44 through to 49. She gives an example, at paragraph 44, which we say is germane to the clause under the consideration here.

PN54

If Abigroup obtains a contract to work in Victoria on project X and wants to move some of its existing employees to work on project X without the making of a new agreement, the work on project X would be covered by the agreement. If the employees and Abigroup wish to negotiate a new agreement for project X, then on the day before the new agreement was made the work would be covered by the agreement and once the new agreement is made, project X would be covered by the new agreement, despite the fact the agreement has not passed its nominal expiry date.

PN55

That's the problem that a clause like this poses, given the terms of section 58 of the Act. The Commissioner then goes on to say:

PN56

I do not accept that the parties are able to, by agreement, override the provisions of section 58 of the Act in the manner proposed by Abigroup.

PN57

VICE PRESIDENT HATCHER: But this clause is different because it doesn't operate by reference to coverage.

PN58

MR BONCARDO: That's right. That's right, your Honour.

PN59

VICE PRESIDENT HATCHER: Because if you've got a clause which purports to contract coverage, and it might be a question about whether you can do that, then section 58 doesn't become a problem because there's no competing coverage which section 58 needs to resile.

PN60

MR BONCARDO: Quite. But the point of the analysis probably goes more to the implications if a clause like this is impermissible, in respect to genuine agreement, which the Commissioner goes on to consider, at paragraphs 46 to 49, where she sets out that in this case the employees voted for this agreement with the clear understanding that project specific agreements could still be negotiated and would apply to them at those particular projects and she concludes that there are reasonable grounds for believing the agreement was not genuinely agreed because employees were given information about application of the agreement, which was a mistake.

PN61

There's no evidence that any information was given to the employees that voted for this agreement about this particular clause and how it operated and whether or not it was an unlawful term, which the respondent clearly did not conceive. But, nonetheless, employees entered into this agreement, and indicated their assent to this agreement, on the assumption that it applied according to its terms, i.e. that it was capable of - or its coverage was capable of contracting and a project or site agreement applying to them at particular sites during the course of operation of the agreement.

PN62

The other decision where a clause of this nature has been considered is Perth Access Scaffolding. It's a decision of Roe C [2016] FWC 8042, it's at tab 17 to the union's bundle of authorities.

PN63

VICE PRESIDENT HATCHER: Tab 18.

PN64

MR BONCARDO: My tab 17. Mine seem to be different to the ones your Honour has. It should be tab 17.

PN65

The relevant clause in that case is at paragraph 16 of the decision, on page 5. The carve out portion is extracted at (c) and your Honours and Commissioner will note that it uses the language of coverage and application. The Commissioner goes on to analyse it in two respects. He notes two problems with it, firstly, at paragraph 17 it says this:

PN66

There is nothing more fundamental in an agreement than its coverage. A provision in an agreement which allows the employer to vary the coverage of the agreement without the safeguards provided for in the provisions of the Act concerning variation renders the agreement uncertain. It is an opting out clause which is an unlawful term.

PN67

That is what we say here:

PN68

The Commission cannot approve an Agreement unless it is satisfied that the agreement does not include any unlawful terms.

PN69

VICE PRESIDENT HATCHER: That paragraph is based on the assumption that the agreement did not have to be approved as an enterprise agreement.

PN70

MR BONCARDO: Premised on the assumption that - yes, but the Commissioner goes on, in paragraph 18, to say that even in the event that the agreement was not limited, or the agreements were not limited to common law contracts or other agreements that weren't enterprise agreements, that the analysis still holds. Albeit he says that in the context of section 58.

PN71

He goes on to say, even if the provision is interpreted as being about existing or future project or sites to the specific agreement approved by the Commissioner, he doubts the provision can stand. And he goes on and makes some comments about section 58 of the Act. He makes the point, towards the end of paragraph 18, that the provision renders the coverage of the agreement uncertain and the coverage clause is not something that can be generally rectified by the provision of an undertaking because it will generally result in a substantial change.

PN72

The Commissioner's analysis in that case raises an issue of importance in the context of a clause, which is in very similar terms, albeit explicitly limited to enterprise agreements that have been made by the Commission, but the Commissioner's analysis, in my submission, is applicable and I think he conceived it as being applicable to both enterprise agreements made and approved under the Act and agreements or arrangements generally.

PN73

The other issue with the clause, we say, is that it, by allowing the agreement's coverage to contract, permits a variation in terms to the agreement that is not effected by the provisions of division 7 of part 2(4) of the Act.

PN74

In the Full Court decision, which is in the smaller bundle of authorities, of Teys Australia Beenleigh Pty Ltd v The Australasian Meat Industry Employees Union [2016] FCAFC 122; [2016] 247 FCR 394 a Full Court of the Federal Court determined, in circumstances that were far removed from this matter, but we say that the principle applies nonetheless to this matter, that to the extent an agreement provided for variation to it, in a manner not set out by division 7 of part 2(4), that that was impermissible.

PN75

VICE PRESIDENT HATCHER: Where's that?

PN76

MR BONCARDO: It's Teys v AMIEU and it's at tab 7 of the smaller - it's at tab 5, my instructor tells me. I apologise, your Honour, my - - -

PN77

VICE PRESIDENT HATCHER: I have it, it is tab 7.

PN78

MR BONCARDO: It is tab 7. I was right the first time. Tab 7 of the smaller bundle of authorities. And if I can take your Honours and Commissioner, briefly, to paragraph 15, there is analysis there of the nature of an enterprise agreement and the Full Court points out that, consistent with what was said in Toyota Motor Corporation v Marmara, that a variation - that an enterprise agreement, firstly, is a statutory artefact and they go on to conclude that it cannot be varied by means for which the Fair Work Act does not provide, and they say:

PN79

Subject to the matter of timing, division 7 is a comprehensive code with respect to the variation of an enterprise agreement.

PN80

And, at paragraph 16:

PN81

It is the matter of timing with which the second of the submissions referred to above is concerned the union accepts that section 207(3) operates in the context of an enterprise agreement which has been approved, under section 186, as this enterprise agreement was, but submits, as we understand it, that amendments are permissible and would be effective if made before approval. This submission requires some brief consideration.

PN82

They then go on to deal with that submission and conclude, at paragraph 19 that, and this is at the top of page 400:

PN83

As an enterprise agreement is a statutory artefact the only way that an enterprise agreement might be varied was in compliance with the specific provisions of the legislation which permitted and regulated a variation, i.e. division 7 of part 2(4).

PN84

They go on to conclude that:

PN85

Subject to the union's reliance upon section 257 of the Fair Work Act, a variation to an enterprise agreement cannot be made unless it is by operation of the variation provisions.

PN86

We submit here, in addition to this clause being an unlawful term for the purposes of 194(ba), it also purports to vary the agreement by contracting its coverage. As the Full Court points out, in Teys Australia, any variation to an agreement that is contrary to or doesn't occur in accordance with the procedure proscribed by section 207 through to 214 of the Act is not permissible. The variation requirements of the Act operate, in effect, as a code. We say that this provision is bad for that reason as well.

PN87

VICE PRESIDENT HATCHER: Leaving aside the 194(ba) argument, if the relevant part of clause 3.3 is ineffective, in accordance with this decision, for the reasons you've contended, what implication does that have for the approval of the agreement with that clause in it?

PN88

MR BONCARDO: It means it's an unlawful term. Section 186(4) requires the Commission to be satisfied there are no unlawful terms. The Commissioner could not have been satisfied - - -

PN89

VICE PRESIDENT HATCHER: Why is it an unlawful term?

PN90

MR BONCARDO: It's an unlawful term because it's a term that falls within section 194(ba), which - - -

PN91

VICE PRESIDENT HATCHER: No, no, leaving aside 194(ba) - - -

PN92

MR BONCARDO: I apologise, I misunderstood your question, Vice President. In the event that it's not a term that falls within 194(ba) - - -

PN93

VICE PRESIDENT HATCHER: But it's ineffective because it contravenes the scheme for varying agreements. What's the consequence for approval?

PN94

MR BONCARDO: Two implications. Firstly, the employees were not alerted to it and they assented to an agreement that contained a clause that was not operable, and that has implications in relation to the genuineness of their consent. It wasn't pointed out to them, it wasn't explained to them.

PN95

The second consequence is that the coverage of the agreement is, in effect, uncertain and the coverage of the agreement was something that the respondent selected, based on a false premise and that false premise being that it was permissible to carve out bits of coverage in relation to future project and site agreements. That is a matter, we say, is relevant to whether or not the coverage of the agreement was fairly chosen. Because we say it cannot have been an objective and rational basis to delineate coverage, in the manner that it's been delineated, in circumstances where the provision wasn't effective.

PN96

So it has implications for general agreement and it's a relevant matter, I'm not saying it's a determinative matter for fairly chosen, but it is certainly a relevant matter in considering whether or not there's an objective business rationale. That's the submission in relation to the two points.

PN97

VICE PRESIDENT HATCHER: One other alternative, if you're right about this argument, is for us simply to say it's ineffective but otherwise not interfere with the approval of the agreement. I mean if it's not effective it's not effective.

PN98

MR BONCARDO: That is an alternative but it's a matter that, in our submission, would require further investigation, in terms of what the employees were told or not told about it and would require a rehearing of it. In the event that your Honours and Commissioner find in accordance with the first Commission, that it is an unlawful term, then 186(4) can't be satisfied and the approval decision must be set aside.

PN99

VICE PRESIDENT HATCHER: Are you going to address us more about the meaning of 194(ba)? That is, what's it actually intended to - - -

PN100

MR BONCARDO: What does it actually mean? I am, and I am going to do so in the context of this agreement. The term was inserted, likely, in response to the decision of Katzmann J, in the CFMEU v Hamburger, where the decision thereunder consideration was one which allowed employees to opt in and out. The clause, in my submission, isn't confined to clauses of that nature, it is broad in terms and captures any clause providing a method by which employees, and CPB in this case, may elect not to be covered by the agreement. The word "elect" is interesting, in the sense that it conveys some sort of agency, on its face. But, in my submission, it should not be confined to an employee or the employer entering into an agreement that they're not going to be covered by a particular agreement. It would capture any method at all which results in an employee ceasing to be covered by the agreement. That is conveyed by the fact that it refers to unilateral elections. And we say that, in the context of clause 3.3, that clause effects a unilateral election for the employee and this employer to cease being covered by the agreement, in relation to particular sites and projects. It's a clause that, on my research, with the exception of TR Constructions, has not been given any consideration by a Full Bench or, for that matter, by a Commissioner. It's a broad clause and it's a clause that deals with coverage, not application, and captures, in my submission, the method that is prescribed here for employees to no longer be covered by the agreement. It's broad in it's terms, that is conveyed by the bracketed words "unilaterally or otherwise." So any method at all that restricts or removes coverage by an agreement would be captured by 194(ba).

PN101

It can be demonstrated by an example in the present matter. If CPB is performing work, civil construction work, on the WestConnex project it then goes and makes a greenfields agreement with a union, in relation to work at a particular part of the WestConnex agreement, leave aside for one moment whether or not that's a genuine new enterprise, but for the sake of argument assume that it is, it's employees who then go and work at that particular segment of WestConnex, who would otherwise be covered by this agreement because it applies throughout New South Wales, cease to be covered by this agreement and are covered, instead, by this new greenfields agreement. That is the effect of the last paragraph of clause 3.3 and showcases that it is a method by which employees cease to be covered by the agreement.

PN102

There's an issue, also, about whether 194(ba) relates to coverage in total, i.e. that the employee would cease to be covered by the agreement completely or coverage in relation to particular sites or projects, as in this case. In my submission, the latter result is the preferable one because otherwise you would have a situation where an employee would be dropping in and out of coverage. 194(ba), we say, properly construed, deals with employees who drop out of coverage completely and drop out of coverage from time to time. Any method that results in coverage being restricted is one that falls within 194(ba).

PN103

I did look at the explanatory memorandum that accompanied the amending Act and it effectively just says what the provision says, so I don't need to draw it to the Full Bench's attention because it is, unfortunately unhelpful. But, again, it's a matter that would benefit from Full Bench consideration.

PN104

VICE PRESIDENT HATCHER: This amendment didn't arise from that review that was conducted?

PN105

MR BONCARDO: It did. But, again, it's a matter that would benefit from Full Bench consideration.

PN106

VICE PRESIDENT HATCHER: This amendment didn't arise from that review that was conducted in - - -

PN107

MR BONCARDO: It did.

PN108

VICE PRESIDENT HATCHER: Does the review report say anything about this?

PN109

MR BONCARDO: Not of any great assistance. I can tell your Honours and Commissioner that the committee's recommendation 23 of the review. And, if it's convenient, I can have my instructor provide to your Honours and Commissioner a copy of the report and the relevant references are to it.

PN110

VICE PRESIDENT HATCHER: Just the relevant page would be sufficient, I think.

PN111

MR BONCARDO: Certainly. We'll follow that up. That's all I wish to say about that aspect of clause 3.3.

PN112

The next aspect of clause 3.3, which we take issue with, it's not an aspect of clause 3.3 but it's an undertaking which was given and accepted, is in relation to the second paragraph of clause 3.3. The Commissioner accepted an undertaking, and it's undertaking 1, which is contained in appeal book 145, that the second paragraph of clause 3.3 would not have any effect. The second paragraph provides, in terms, that the agreement is to cover any other construction related classifications not expressly referred to in the agreement, other than classifications involved in tunnelling work.

PN113

So, on its face, it purports to rope in classifications other than those set out in appendix A to the agreement. The undertaking removed that aspect of clause 3.3 and said it would have no effect. We say that that type of undertaking was impermissible for two reasons. Those are set out in the MAIN People decision which is contained - I'm told it should be at eight of your bundle.

PN114

VICE PRESIDENT HATCHER: In the big bundle?

PN115

MR BONCARDO: In the big bundle, yes.

PN116

VICE PRESIDENT HATCHER: No. Tab 7.

PN117

MR BONCARDO: Tab 7, thank you. The relevant analysis by the Full Bench is at paragraphs 34 and 35. Now, I accept that the undertakings considered in MAIN People were different to the undertaking under consideration here, in the sense that they limited coverage, in relation to a particular award. The undertaking here is not - deals with a coverage clause that is unusual but, in any event, the Full Bench points out, at paragraph 35:

PN118

The scope of an enterprise agreement is one of its fundamental features. Coverage provision serves to identify the class of persons who will be entitled to the benefits while in operation.

PN119

And goes on to conclude that:

PN120

An undertaking that purports to alter the coverage of an agreement by excluding classes of persons who, on the face of the agreement, would be covered by it will always be likely to be a significant change.

PN121

I'm tracking back to paragraph 34, the Full Bench notes, at about halfway down:

PN122

It may be accepted that an undertaking which clarifies an ambiguous provision of an agreement for which approval is sought and in accordance with the intention of the parties will not be likely to cause a significant change in that agreement, however this was not a case of ambiguity.

PN123

We say that this is certainly not an undertaking that clarifies an ambiguous provision in the agreement and doesn't deal with an ambiguity, per se, it carves out an important provision of the agreement that purports to rope in other construction related classifications and is not, therefore, an undertaking that is permissible because it would result in a substantial change, for the purposes of section 193(b) of the Act.

PN124

VICE PRESIDENT HATCHER: It removes a form of words going to coverage which doesn't permit you to identify anybody as actually being covered by those words.

PN125

MR BONCARDO: It doesn't identify anyone specifically but it purports to rope in any other construction related classifications. Now, the classifications set out in appendix A are lengthy - - -

PN126

VICE PRESIDENT HATCHER: Exhaustive one might say.

PN127

MR BONCARDO: Potentially so.

PN128

VICE PRESIDENT HATCHER: It's difficult to imagine what else there could be.

PN129

MR BONCARDO: Steel fixers aren't mentioned, bob cat drivers, forepersons, leading hands are some of the notes that I made, but I take your Honour, the Vice President's point, it is reasonably exhaustive. But, in any event, we say it offends 193(b) because it deals with coverage. It deals with coverage and it purports to limit coverage and that, we say, results in a substantial change, in accordance with the reasoning in MAIN People. That's the submission in relation to the first undertaking.

PN130

If I can move on now to deal with two NES points. The first is in respect to clause 9.1 and the undertakings set out in - or undertaking 2, and I need to moderate what I have said in the written submissions. Clause 9 read with undertaking 2 is not, and I make this concession, an automatic termination clause. To the extent that that is suggested I withdraw that suggestion.

PN131

Clause 9, read with the undertaking, we say is bad for reasons that the Full Bench explained in the abandonment of employment case. But before I take your Honours and the Full Bench to that case, it's important to appreciate what clause 9, read with the second undertaking, does. Clause 9.1, which is at page 153 of the appeal book, provides that:

PN132

The absence of an employee from work for a continuous period, without notification exceeding three days and without the consent of CPB or a reasonable explanation shall be prima facie evidence that the employee has abandoned their employment.

PN133

I no longer cavil with that clause as being a clause that detracts or derogates from section 117.

PN134

The second prong of clause 9 determines that:

PN135

If an employee is absent from work for three working days, as described above, the employee will have taken a period of seven working days from their last attendance at work and they're required to establish, to the respondent's satisfaction, that they were absent with reasonable cause. If they're not so able to do so then they will be deemed to have abandoned their employment. Having regard to the reasoning in the abandonment employment case - - -

PN136

VICE PRESIDENT HATCHER: Sorry, this is the same as the Manufacturing Award clause?

PN137

MR BONCARDO: Effectively. And the issue - - -

PN138

VICE PRESIDENT HATCHER: That was held to be, notwithstanding its title, a clause which required a termination, that is, a dismissal?

PN139

MR BONCARDO: In effect. And that was the last prong of the clause, which is reflected in clause 9.3, which is modified somewhat by the undertaking that the Commissioner accepted, and that undertaking, which is at page 145, it's the second paragraph of the second undertaking, requires:

PN140

CPB to advise the employee of any decision by the company to deem the employee to have abandoned their employment.

PN141

This is the offensive part, we say:

PN142

The date of termination shall be the date this decision is communicated, that is, no less than seven days after the employee missed their last shift.

PN143

That clause operates, we contend, to backdate the date of termination and therefore contravenes section 117(1) of the Act, which prohibits termination unless written notice has been given of the day of termination which cannot be before the date notice is given. Clause 9.3, read with the latter portion of the Commission's undertaking, backdates termination, contrary to section 117.

PN144

The abandonment of employment decision, which is, at least in my bundle, at tab 6, and I am reliably informed is in your Honours and Commissioner's bundle at tab 6 as well, the relevant clauses, as your Honour the Vice Present pointed out, is contained on the first page of then clause 21 of the Manufacturing Award and ends in like terms to the clause under consideration here. It's tab 6.

PN145

VICE PRESIDENT HATCHER: Of which bundle?

PN146

MR BONCARDO: The larger bundle. I apologise, I should have made that clear.

PN147

VICE PRESIDENT HATCHER: Yes?

PN148

MR BONCARDO: The clause is contained on the first page, at paragraph 1. Clause 21.3 is the provision that the Full Bench found objectionable. It is in like term, we say, to clause 9.3 here, even after clause 9.3 was modified by the undertaking accepted by the Commissioner. Paragraph 27, on page 10, is the relevant analysis of the clause and the Full Bench there says that clause 21.3 is plainly a provision that is rendered of no effect by section 56 or 137. The Full Bench go on to say:

PN149

Section 117(1) prohibit the termination of employment by the employer unless written notice has been given of the day of termination, which cannot be before the day the notice is given. That is consistent with the common law provision described earlier. The employer cannot terminate the employment with a retrospective date of effect. Therefore, because clause 21.3 of the award provides for a retrospective date of termination it clearly excludes section 117(1) where the subsection is applicable.

PN150

VICE PRESIDENT HATCHER: Doesn't the undertaking resolve that problem?

PN151

MR BONCARDO: No, because the undertaking operates to backdate the date of termination.

PN152

VICE PRESIDENT HATCHER: It says, "The date this decision is communicated." So how is it backdated?

PN153

MR BONCARDO: Because it provides for that day to be no less than the day after seven days after the employee last missed their shift.

PN154

VICE PRESIDENT HATCHER: "Will be no less than seven days", but it shall be the date the decision is communicated.

PN155

MR BONCARDO: Yes.

PN156

VICE PRESIDENT HATCHER: That's consistent with the section, isn't it?

PN157

MR BONCARDO: It isn't because section 117(1) requires periods of notice to be given.

PN158

VICE PRESIDENT HATCHER: That's a different point. I thought you were raising the point that it made it retrospective, contrary to section 117, which is the point that comes out of the abandonment of employment decision. But it seems to me, just dealing with that point, that the undertaking which says, "It shall be the date the decision is communicated", would ensure that it's never retrospective.

PN159

MR BONCARDO: I appreciate your Honour's point and I agree with it. The offence is that it provides for - does not provide for the benefit of the notice provisions in 117(2) and (3), which is what the Full Bench, at paragraph 27, goes on to state, in the second last paragraph.

PN160

The effect of the undertaking would have the effect of denying the employee the benefit of the notice provisions in 117(2) and (3).

PN161

VICE PRESIDENT HATCHER: So there's an exception for serious misconduct somewhere?

PN162

MR BONCARDO: There is, and that's dealt with at paragraph 30 of the decision in the abandonment of employment case, where the Full Bench notes:

PN163

It may be accepted that termination by abandonment could usually be characterised as a dismissal for serious misconduct, in accordance with regulation 1.01(2)(a).

PN164

And it goes on to say:

PN165

However, it may not be every case in which a dismissal, under clause 21.2, to which 21.3 applies, will be a termination for serious misconduct. For example, if the absence is caused by an incapacity such as an injury to attend work for the requisite period and the employer does not accept that this constitutes a reasonable cause for the absence termination for such an absence may not be able to be characterised as being for serious misconduct. If the clause is capable of operating in a way which denies employees a benefit of an entitlement under the NES and then excludes the NES for the purpose of section 55(1).

PN166

That, we say, deals with the concern about serious misconduct.

PN167

VICE PRESIDENT HATCHER: That last sentence is expressed in a contingent way, but is there anything in the agreement clause which, by itself, says the employer will never have to pay an amount in lieu of notice?

PN168

MR BONCARDO: Not in the agreement clause, but the effect of, we say, the undertaking is that because termination takes effect on the date the decision is communicated, that means that no notice is payable.

PN169

VICE PRESIDENT HATCHER: No, but it doesn't exclude the payment in lieu of notice, does it, in terms? I mean the termination is - if you make a payment in lieu of notice the termination takes effect immediately and the employee receives a sum of money and that would comply with section 117. So is that possibility excluded by the clause?

PN170

MR BONCARDO: We say that it is.

PN171

VICE PRESIDENT HATCHER: Why is that?

PN172

MR BONCARDO: We say that it is because clause 9.3 does not in terms, read with the undertaking, provide that any notice is payable in the event that termination is in accordance with the procedures proscribed by clause 9.

PN173

COMMISSIONER SIMPSON: Doesn't clause 6 pick up the NES anyway?

PN174

MR BONCARDO: That is a point that I wanted to come to. Clause 6 incorporates entitlements that are more beneficial to employees under the NES. It doesn't incorporate the NEC to the extent that there are clauses under the agreement that are less beneficial than the NES. It's poorly drafted, it doesn't make, on its face, any sense to incorporate entitlements that are more beneficial to employees under the NES. It's effectively saying that it will only incorporate - to the extent that it offers provisions that are more beneficial, then that is the only circumstance in which the NES will be incorporated but that does not, we say, pick up the NES. In any event, as I understand it, the NES was not said to be incorporated into the agreement in the form F17 that was filed by CPB.

PN175

VICE PRESIDENT HATCHER: So that clause says - I don't understand what the first sentence of that clause is meant to mean. It can't mean what it actually says, can it? I mean, read literally it seems to say that the NES is incorporated to the extent the agreement has more beneficial terms but is excluded if it has less beneficial terms, is that what it means?

PN176

MR BONCARDO: In my submission that's not what it says. It's probably what it should say, but in terms that's not what it, with respect, says.

PN177

The other NES point that I wanted to raise in oral submissions concerns notice and evidence requirements in respect to personal leave. Again I need to moderate what is set out in the written submissions.

PN178

The relevant clause is clause 26.10 of the agreement. Clause 26.10(a) deals with personal leave. (i) and (iii) are provisions that deal with types of evidence and the nature of evidence to be given by an employee, they therefore fall within 1.07(5), and I don't take issue with them. What we do take issue with is (ii), which provides that:

PN179

Where an employee takes personal leave the employee must, if required, prove to the respondent's satisfaction that the employee is unable to attend for work because of a personal illness or injury.

PN180

The difficulty with that clause is that section 107(3) of the Act determines that:

PN181

An employee is required to give evidence - - -

PN182

VICE PRESIDENT HATCHER: So what was the section provision number?

PN183

MR BONCARDO: 107(3):

PN184

give evidence if required by the employer that would satisfy a reasonable person that leave is taken for a specified reason, for instance, personal leave.

PN185

The provision, under the agreement, provides for CPB to have - provides that the relevant state of satisfaction is not what would satisfy a reasonable person but what would satisfy CPB. So it confers, we say, a discretion on CPB that is not set out in 107(3), where the litmus test of a reasonable person is prescribed. That is the submission in relation to clause 26.10(a)(ii).

PN186

The next point that I'll just touch on briefly is in relation to the fifth undertaking given by the Commissioner, or accepted by the Commissioner, set out at appeal book 146, and it provides that:

PN187

Clause 17 redundancy does not undermine any rights or entitlements as proscribed by the Acts or National Employment Standards.

PN188

We say that that undertaking is bad for the reasons described in MAIN People. And if I can take your Honours and Commissioner back to MAIN People, at tab 8 of the bundle, the big bundle, I should say, consistently with what is set out at paragraph 39 in respect to what is described as paragraph 2 of the undertakings, which are extracted at paragraph 13, the relevant undertaking there is, when it was considered in MAIN People, was that:

PN189

All employees would be paid more under the agreement than they would have been paid under the award if it applied to the work carried out by them, from time to time.

PN190

The Full Bench analysed that undertaking and said that:

PN191

It is expressed in terms which make it unclear whether it is intended to give rise to an entitlement or is merely an assertion about the effect of the agreement, if approved.

PN192

The undertaking here is, we contend, merely an assertion about the intended effect of the agreement. It does not create and cannot create an entitlement and even it is read as being intended to create such an entitlement it is unclear what that entitlement is. We say it lacks sufficient clarity to be enforceable as an undertaking.

PN193

VICE PRESIDENT HATCHER: Isn't it effectively that you'll get at least what the NES prescribes? It needs to be better drafted but that's what it intends to do with it.

PN194

MR BONCARDO: It asserts what the effect of clause 17 is. Clause 17 provides for payment of redundancy contributions to (indistinct). An undertaking of this nature doesn't do anything or add anything to it, it merely states what it's intended effect is, in effect and is bad, for the reasons set out in MAIN People.

PN195

VICE PRESIDENT HATCHER: This is work covered by the Building and General Construction Onsite Award?

PN196

MR BONCARDO: Yes.

PN197

VICE PRESIDENT HATCHER: Which has an industry specific scheme.

PN198

MR BONCARDO: It does.

PN199

VICE PRESIDENT HATCHER: So there is no NES entitlement, is there?

PN200

MR BONCARDO: That's one of the reasons why the undertaking doesn't do anything and doesn't make any sense.

PN201

VICE PRESIDENT HATCHER: Well, it might have no effect.

PN202

MR BONCARDO: Correct.

PN203

VICE PRESIDENT HATCHER: But that doesn't diminish, by itself, the capacity to approve the agreement. It might have been totally unnecessary.

PN204

MR BONCARDO: It's an error in the application of section 190 by the Commissioner.

PN205

VICE PRESIDENT HATCHER: And that - - -

PN206

MR BONCARDO: The answer to your Honour's question is yes. The answer to your Honour's question is it does not diminish the capacity to approve the agreement but it is, nonetheless, an error in the application of section 190 of the Act.

PN207

VICE PRESIDENT HATCHER: All right.

PN208

MR BONCARDO: I'm going to deal, quickly, with two final subject matters. The first concerns section 188(c), and I just want to raise one issue, in relation to that, and that is the information that was provided to employees about the capacity of unions to be parties to the agreement. I don't think it is controversial that CPB told employees that the unions could be invited to be parties to the agreement when the agreement was lodged for approval with the Commission and that there was an agreement reached between CPB and the employees for to occur. Mr Carpenter sets that out in his submissions that were before the Commissioner, at 132 to 133 of the appeal book where he says, and this is at the base of 132:

PN209

CPB discussed with employees and had the agreement of employees that the CFMEU and AWU if not nominated as a bargaining representative could be given the opportunity to be a party.

PN210

It, in fact, wrote to the CFMEU asking the CFMEU to be a party to the agreement. Then at page 133 Mr Carpenter goes on to say:

PN211

The union can be a party to an agreement, despite not being a bargaining representative.

PN212

That obviously is not the case and it is conceded, quite properly, that that is not the case.

PN213

We say that the implications arising from the provision of that information to employees are twofold. Firstly, that information was wrong, it was information that was misleading and, in addition, employees were not told that unions weren't able to be parties to the agreement or, otherwise, participate in the process of approval of the agreement, after it was lodged with the Commission, unless they were bargaining representatives for the employees.

PN214

The materiality of that disclosure arises in this way; the employees were previously covered by an agreement that the CFMEU, the AWU and the AMWU were covered by. No unions were, at least in accordance with the form F16 and the F17 filed by the respondent, bargaining representatives for the agreement. How the AWU came to be covered by the agreement is an interesting question but one we need not go into here. But this was a circumstance where employees were going to use the old terminology from a union agreement to a non-union agreement and they were told that the unions could still be parties to it and we'd tell the unions about it before we went off to the Commission and they could involve themselves in approval of the agreement.

PN215

We say that that disclosure or that provision of misleading information was material in circumstances where employees had not appointed a bargaining representative and had been assured by the company that the unions could remain parties to the agreement. That constitutes, we say, a matter that ought to have been taken into account for the purposes of section 188(c), given that it was information that was incorrect and employees did not have the correct position disclosed to them. It's something that can logically bear, we say, on the authenticity of the agreement that was ultimately reached.

PN216

VICE PRESIDENT HATCHER: So insofar as the submission, in paragraph 8, referred to the Collinsville decision, is there anything in that decision which supports the proposition?

PN217

MR BONCARDO: In which decision?

PN218

VICE PRESIDENT HATCHER: The Collinsville decision, the one referred to in paragraph 8 of the submission which you just took us to?

PN219

MR BONCARDO: No. Copper Collinsville says the opposite. That's in Mr Carpenter's submission:

PN220

The union can be a party to an agreement despite not being a bargaining representative, as per Collinsville.

PN221

That's just the opposite of what Collinsville said.

PN222

VICE PRESIDENT HATCHER: Is that the only material? Does it specify when that representation was made or what point of the - - -

PN223

MR BONCARDO: I can take your Honours and Commissioner to page 85 of the appeal book. The short answer to your Honour the Vice President's question is, it's not clear from the material when that representation was made, but page 85 of the appeal book appears to shed some light on it. If your Honours and Commissioner look about a third of the way down there's a reference to follow up meetings and then at the conclusion of the 26 October session employees received the final clean version of the agreement for their consideration and vote. It goes on to say that no bargaining representatives were nominated:

PN224

However, verbally, in the abovementioned employee meetings -

PN225

Plural:

PN226

the company and employees agreed to invite unions to be a party when lodging the agreement for approval.

PN227

To the extent that anything can be inferred from that, it seems that this issue of the unions being parties to the agreement was a subject that was discussed at the five meetings set out in - that are dot pointed on that page. The 26th being the last meeting before the agreement was voted upon.

PN228

To the extent there's any doubt about the 26th being the last meeting employees had with CPB before the vote occurred, page 86 of the appeal book, which sets out the chronology of bargaining leading to the vote, makes that clear. That was a matter we say could, in accordance with what the Full Court has said in One Key Workforce:

PN229

Logically thereupon genuine agreement it was not something noticed or taken into account by the Commission.

PN230

VICE PRESIDENT HATCHER: Why do you assume that? If he had the submission before him, about the very question?

PN231

MR BONCARDO: Because if he had taken it into account it ought to have provoked further investigation from him, in relation to exactly what was said and when.

PN232

VICE PRESIDENT HATCHER: I mean the submission which you took us to was presumably responsive to something which the CFMEU said at some stage?

PN233

MR BONCARDO: It was.

PN234

VICE PRESIDENT HATCHER: So the Commissioner had, before him, your point and the company's response.

PN235

MR BONCARDO: Yes.

PN236

VICE PRESIDENT HATCHER: Why shouldn't we conclude that, in expressing satisfaction about approval requirements, he took that into account?

PN237

MR BONCARDO: Because it was something that brought on 188(c). If the Commissioner had taken it into account he would have said so. Unless your Honours and Commissioner have any question that's all I wish to say.

PN238

VICE PRESIDENT HATCHER: Just going back to the starting point about clause 3.3, the project exclusion, if I can call it that. I would have thought it was in the CFMEUs interest to have a clause like that because it means that if you get a deal for a new project it gets rid of this agreement.

PN239

MR BONCARDO: The way to do it properly, we say, would be to vary the agreement to carve out the relevant project. So if you get a new deal on WestConnex you vary this agreement, in accordance with division 7 of part 2(4), to carve out WestConnex from the scope of the agreement.

PN240

VICE PRESIDENT HATCHER: All right, thank you.

PN241

COMMISSIONER SIMPSON: Just on that, excuse me if I'm wrong, it's my understanding that for decades there's been a practice in the industry where major contractors have had agreements that are below their workforce generally and then the workforce has then moved to other project type agreements that are more beneficial. This has been a practice that's been in the construction industry, across the country, for many decades.

PN242

MR BONCARDO: It's certainly a practice. I can't take you to Commissioner, any particular decisions or enterprise agreements which provide for how that operates. But the appropriate way to do it, we say - - -

PN243

COMMISSIONER SIMPSON: But it seems to me that everyone benefitted from that because you've had a default set of conditions under an agreement which is clearly more beneficial than the awards and then a more beneficial again project arrangements have been entered into between unions and construction companies for many years but then there's another set up when that occurs, which seems to be what the Vice President was alluding to, and this seems to have been an accepted arrangement.

PN244

MR BONCARDO: Can I take that point on notice and come back to you after my learned friend has made his submissions?

PN245

COMMISSIONER SIMPSON: Yes.

PN246

VICE PRESIDENT HATCHER: Mr Rauf?

PN247

MR RAUF: Thank you. Your Honour - - -

PN248

VICE PRESIDENT HATCHER: We might just take a short morning tea adjournment and then we'll hear your submissions.

PN249

MR RAUF: If it please, thank you.

SHORT ADJOURNMENT [11.21 AM]

RESUMED [11.36 AM]

PN250

VICE PRESIDENT HATCHER: Mr Rauf?

PN251

MR RAUF: Thank you, Vice President, Senior Deputy President, Commissioner, can I confirm, at the outset, that you have - there was the outline of submissions which we sent, I think, on the Saturday and this morning we have also handed up a folder containing various cases, but also other documents, by way of reference. I'll go to not all but some of those.

PN252

Now, the appeal advances a multitude of grounds, many of which are overlapping and raise similar issues. As I averted to earlier this morning, in attempt to deal with them efficiently we have sought to categorise them, in terms of similar issues, such that there are five categories, as we can discern and as indicated in our outline of submissions. I propose to really just address the issues as they arise in that thematic order.

PN253

Before doing so, one thing which my learned friend did not do was say much of the circumstances of the employer, the approval of the agreement and then the consideration or the circumstances relating to the consideration of it by Riordan C, at first instance, and I do want to spend a little bit of time just going to that context because it's important to the resolution of some of the issues that have been raised and by going to the key contextual matters at the outset I can then simply advert to it as I address the specific appeal grounds. I propose to do that but just really referring back to the appeal book.

PN254

As the Full Bench knows, this relates to the CPB contract, as New South Wales Civil Works Enterprise Agreement 2017/2021. Now, as it stands, that agreement was approved by Riordan C on 9 May and, in accordance with that decision, commenced operating on 16 May 2018. The decision is at appeal book 143.

PN255

It seeks to replace and replaces the Leighton Contractors New South Wales/ACT Civil Projects CFMEU, AWU, AMWU Enterprise Agreement 2012-2016, which had a nominal expiry date of 30 September 2016. Now, we've set that out at tab 13 of the folder of documents and in due course I do want to just touch upon that particular document.

PN256

Of course also relevant is the interlocutory decision of Riordan C refusing the appellant's application to intervene in the proceedings and make submissions relating to the approval of the agreement, and that's at appeal book 137.

PN257

Just in terms of the circumstances, briefly. So up until, as it stands, 16 May 2017 the employment of the relevant employees, which is 12 in number, was covered by the former agreement, which is at tab 13. That was approved by Bull C on 1 February 2013 and that's included at tab 12 of the folder. At the time the appellant today opposed the agreement applying to employees working in the Australian Capital Territory and, accordingly, the agreement was approved subject to certain undertakings, including that it doesn't apply to employees in the ACT. That's reflected in Bull C's decision at tab 13. Relevantly, the appellant, AMWU and the AWU are covered by the agreement.

PN258

Now, as to the present agreement, the bargaining for it commenced in September of last year when the notice of employee representative rights was handed out to employees at a meeting, that's at appeal book 86. And employees were also invited by the employer to include a union or nominate a bargaining representative to facilitate the bargaining. That's set out in the form F17 subsequently filed by the employer, at appeal book 85. Then, as it transpired, the employer had cause to put on further submissions in response to the appellant's submissions, in which it again flagged that - sorry, this is in the stat dec as well, that it made repeated invitations to employees during the course, if they wished, to have a union become involved. I'll come back to the issue of the AWU, if I may.

PN259

Now, there were a number of meetings which occurred during September and October and a final document was distributed on 26 October. When one looks at the new agreement and the old agreement, what's immediately apparent is that there is a very close resemblance. The old agreement was used as a basis, one can readily infer, for the new agreement, so much so that the index contents is identical in the list and, indeed, a number of the clauses which the appellant takes issue with were in identical terms in the former agreement, to which, of course, the appellant was covered by.

PN260

If I can just briefly go to that agreement and, for the information of the Full Bench, just to give some context as to the former agreement, just point out those clauses. So I noted, for instance, that the clause numbers was identical save - - -

PN261

VICE PRESIDENT HATCHER: What page of the appeal book was this, again?

PN262

MR RAUF: This is tab 13 of the folder of documents of the respondent, in which we have provided a copy of that former agreement. If I can just preface, before I look at that, these are matters which were before Riordan C and are important, in terms of resolving some of the questions that have been raised. But just turning to that document, the contents or the clause number is identical, save for clause 40, Apprentices, which was taken out and placed elsewhere. Clause 6, relating to the interaction with the relevant award, but also the NES, is in identical terms and that can be compared against the current agreement clause at appeal book 31.

PN263

VICE PRESIDENT HATCHER: So the old agreement applied in New South Wales and the ACT, according to 3.3, then the ACT was just taken out by an undertaking?

PN264

MR RAUF: Correct.

PN265

VICE PRESIDENT HATCHER: How does that work?

PN266

MR RAUF: That's the way it was approved in 2013. Clause 9, relating to abandonment of employment, again that's - so this is still the old agreement, that's something which is, again, in identical terms, other than some modification to refer to the correct entity.

PN267

I should note, sorry, clause 3.3, of course, in the old agreement, again was in similar terms in the corresponding provision in the new agreement is at appeal book 30, but, of course, the numbering is slightly different but 3.3 has there three paragraphs and you'll see that the second paragraph was the one which in the new agreement was subsequently taken out but, nonetheless, at 3.4 there, there was what your Honour described, in brief terms, as the project provision, in terms of carving out.

PN268

Then if one travels further on - - -

PN269

VICE PRESIDENT HATCHER: Who are the parties?

PN270

MR RAUF: Sorry?

PN271

VICE PRESIDENT HATCHER: Who are the parties to the agreement?

PN272

MR RAUF: Yes, so the parties are, if I can go back to the definitions, they are, at 3.2 is Leighton and its employees, it also notes the unions but, of course, there's a technical issue query whether the union can be a party, but 3.2 deals with the parties.

PN273

If I can then skip to clause 17, which is the redundancy provision. Again, this is in similar terms, in as much as it prescribes the relevant payment to a fund and, of course, as was noted I think earlier, there is, behind it, the industry scheme which operates, but this is something again which is picked up. Similarly, clause 22 Overtime, and that continues over the page, so to clause 26.10 Notice and Evidence Requirements. Clause 33.3 Representation, of course, also remains the same, other than the modifications again to reflect the new employer name, rather than Leighton. Then, of course, there is the appendix, Worker Classifications, which as your Honour noted is comprehensive.

PN274

So when one glances through that, the starting point for the parties was the agreement which had applied since 2013. Really the significance of that is that we are not talking about a new agreement, it's an agreement which had applied to the employees and they were familiar with, given that it applied to their employment, and that then formed the basis of what became the new agreement.

PN275

VICE PRESIDENT HATCHER: What was the point of all of that?

PN276

MR RAUF: Well, this suggestion, when we get to the appeal grounds, of there being some misleading conduct, on the part of the employer, or some capacity for the employees to be misled or mistaken, as though they were nave participants in this process, unfamiliar with the provisions which are now raised as being the cause of such alleged confusion.

PN277

VICE PRESIDENT HATCHER: That submission wasn't raised at that level of generality, it was about a specific proposition about the unions becoming parties to the agreement.

PN278

MR RAUF: Yes, but also in respect of, for instance, the interaction between the agreement and, for instance, the NES and noted provisions and the like.

PN279

VICE PRESIDENT HATCHER: That's not about genuine agreement, that's about whether they exclude the NES.

PN280

MR RAUF: Yes. But I really provide it as a matter of context, in terms of to put some perspective as to the employees and the employer and where they were starting from and their familiarity with the provisions of the agreement.

PN281

Of course, part of the exercise was going through the new agreement, if I can call it that, to compare it will ensure or achieve compliance with the Building Code 2016, as adverted to in the statutory declaration at appeal book 83.

PN282

But if I can just go to that statutory declaration for a moment, so this the form F17 filed by the employer. In respect of the better off overall test, which is at appeal book page 90, the employer there noted the reference instrument as being the Building and Construction General Onsite Award and then over the page gave a summary of the beneficial provisions and, relevantly, for instance in respect of rates of pay, that they were almost 72 per cent higher than the award rate and that there was a guaranteed 4 per cent wage increase, with a six-monthly 2 per cent instalments, and so forth, and a number of other monetary benefits, as noted below and also, of course, clause 20.1 relating to the 36 hour week as opposed to the 38 hour ordinary week, which has flow on effects for overtime and other allowances.

PN283

VICE PRESIDENT HATCHER: So what's the relevance of that?

PN284

MR RAUF: Again, just some initial context, your Honour, before I go onto the specific appeal grounds. In circumstances where these are the matters that were before the Commissioner at first instance, and so there are submissions made that the Commissioner didn't have the basis to express certain views or reach certain states of satisfaction without any reference to some of the information that I'm now going to so I just want to provide some of that context and then go to those grounds.

PN285

I think the Full Bench is aware that once the agreement had been approved and filed for approval there followed involvement of the appellant, by way of submissions which were sent by email, and they are at appeal book page 100. A clear focus of those, of course, was also clause 3.3 and, for instance, issues relating to the NES. So they were flagged before the Commissioner, in particular clause 3.3 and the concerns relating to that.

PN286

There were other matters raised, for instance, relating to clause 9, Abandonment of Employment, at clause 22, clause 24 and so forth. It's apparent there was also a conference held by the Commissioner on 6 March, at which the appellant attended, and then on 7 March there was a communication by the appellant confirming that it had no members who were covered by the agreement at the time that it was approved, falling within the scope of that agreement. Then, of course, in respect of the issues raised by the appellant, the employer also responded, at appeal book page 124.

PN287

As a matter going to the operation of clause 3.3 and the NES, one thing which I do want to just highlight in the employer response is at appeal book page 130, to the extent that there's any question now about it, but the employer there, at appeal book 130, at paragraph (r), confirmed its intention that the NES was, in effect, incorporated and there wasn't any suggestion or provision sought to otherwise exclude it.

PN288

VICE PRESIDENT HATCHER: Except that clause doesn't say anything of the sort, does it?

PN289

MR RAUF: Well, in my submission it is clumsily drafted but it can be read to indicate that intent because - - -

PN290

VICE PRESIDENT HATCHER: Well, as read literally it incorporates the NES only to the extent that the agreement provides a more favourable outcome than the NES. It seems to me to be a complete nonsense but that's what it says, isn't it?

PN291

MR RAUF: Perhaps if I can just go to that provision, so that's at clause 6. So the agreement is really at that first sentence:

PN292

The agreement stands alone and covers all terms and conditions of employment for the employees except to the extent that it incorporates various entitlements that are more beneficial to employees under the NES.

PN293

So if there is something in the NES which, as a matter of the law, applies in any event, but this makes clear, well, it also applies as an aspect of this agreement.

PN294

VICE PRESIDENT HATCHER: But it doesn't say that. How does it say that? It excludes everything except where the agreement provides something more beneficial than the NES.

PN295

MR RAUF: Under the NES.

PN296

VICE PRESIDENT HATCHER: Yes, something more beneficial for employees - - -

PN297

MR RAUF: Under the NES. So, in my submission, I accept that it's somewhat clumsy, it's a provision we just picked up from the former agreement, but as made clear by the employer, in its submission to Riordan C, in response to the appellant's submissions, that ought to be understood as picking up the NES where the NES provides something more as compared to the agreement, which would operate, as a matter of law, in any event.

PN298

VICE PRESIDENT HATCHER: Well, the problem is that the Act specifically deals with exclusions of the NES. That is, it doesn't proceed on the basis that the NES - it's sufficient that the NES operates as a matter of law. It renders unlawful terms which purport to exclude the NES.

PN299

MR RAUF: In my submission this doesn't exclude the NES, it's simply making clear that not only does the NES, where it's more beneficial, apply, as a matter of law, but it applies as a term of this agreement. So, conceivably, there could be a contravention not of just the Act but also the agreement if that beneficial provision is not afforded to an employee. To that extent, the Fair Work Act allows for the NES to be incorporated in that way, and that's what this does. It doesn't, in my submission, have the effect of excluding, it's simply making clear that if there's something better in the NES that's a part of this agreement. That's a term of this agreement and hence incorporated.

PN300

VICE PRESIDENT HATCHER: So if there's an entitlement of the NES that's more beneficial it's incorporated, is that the way you read that?

PN301

MR RAUF: Yes, in my submission.

PN302

VICE PRESIDENT HATCHER: All right, thank you.

PN303

MR RAUF: So there was that process of submissions by parties, the conference by Riordan C and then the email from the appellant confirming that it had no member. But can I then just go to the interlocutory decision? There are some important observations to draw out of that which, again, indicate some of the matters which Riordan C was informed about, bearing in mind that he did have conferences with the parties and it was a process which extended from November through to, ultimately, May, with a bit of activity in between. But if I can just go to, in the appeal book, the interlocutory decision is at appeal book 137.

PN304

Now, there, at paragraph 3, firstly, the Commissioner noted the involvement of the Australian Workers' Union, in that it had members employed by the respondent and wished to be heard in relation to the approval process. Relevantly, at this time, the AWU was opposed to the agreement as well. At four, of course, the appellant - there was confirmation of the appellant's position that it had no members employed by the respondent during the negotiation or approval of the agreement. Then at paragraph 10 and 11 of that decision, at appeal book 138, Riordan C makes his observations as to the AWU and, of course, it's position of opposing the approval of the agreement at that point in time. Then there followed a process of hearing those concerns and, subsequently, at appeal book 140, dated 8 May of this year, the AWU submitted its statutory declaration finally supporting the approval of the agreement and it set out, at section 5, the relevant concerns which one can confer it raised and which it would appears precipitated the relevant undertakings and the AWU expressing its satisfaction, from its perspective, that its concerns were addressed.

PN305

Now, it's apparent that there was a process that was followed to get to that point and then, of course, at appeal book 143, Riordan C issued his decision finally approving the agreement, commencing seven days after the date of approval, being 16 May. The Full Bench have been taken to the undertakings, of course, but they are at appeal book 145, and I will come back to those.

PN306

Can I then come to the grounds of appeal? One of the focus grounds has been in relation to clause 3.3 but before I do come to that I just want to address grounds 1 and 2, relating to the interlocutory decision because these were matters that arose for the appellant as a threshold issue at first instance.

PN307

At ground 1 it seems that the appellant is arguing for some common law type of right of intervention and then ground 2 with reference to section 590 that the Commissioner had miscarried or improperly exercised the discretion, having regard to, for instance, erroneous considerations. Now, that hasn't been raised this morning but it's on the appeal, it's in the grounds for appealing and also the outline of submissions so, for abundant caution, it's not something I wish to gloss over.

PN308

In that sense, there's no dispute that the appellant was not involved in the bargaining and was not a bargaining representative and, as a consequence, it didn't have the capacity to seek to be covered by the agreement.

PN309

Can I just take your Honours to two decisions in that folder? Firstly, the decision, at tab 6, MGI Piling, which is a Full Bench decision. There are certain passages that I just wanted to briefly touch upon, where this decision considered, for instance, the ability of the union of the appellant now to be involved in relation to the agreements that are subject to this decision. At paragraph 16 the Full Bench contrasted the circumstances in MGI Pilings with Collinsville, in as much as in that matter MGI Piling did have members who were covered by the enterprise agreement so there was a connection, if you like, and that the CFMEU was also covered by the existing agreements and asserted rights under those enterprise agreements. That was then considered, at 21.

PN310

The Full Bench provided its analysis as to this issue of whether there was, if you like, some right, interest or legitimate expectation flowing from the agreement and having regard to the statutory framework, at 23 it said:

PN311

Existing enterprise agreements do not confirm the CFMEU any of the rights for which it contends. The CFMEU would only be able to use its standing under section 539 of the Act to sue any of the Piling contractors in respect of any contravention of the term.

PN312

Et cetera.

PN313

As the Commissioner pointed out, such issues pertain to the protection of the employees, not the union. The approval of a new enterprise agreement will not have any impact on the CFMEU's right to represent any of its members in proceedings against any of the Piling contractors, in respect of any contravention of the term of a new enterprise agreement.

PN314

Then at paragraph 31, finally, on that decision, the Full Bench again had regard to the statutory framework for enterprise bargaining and agreement making and it expressed its view that:

PN315

The CFMEU was not a person whose rights, interests or general expectations would be directly affected by any decision to approve the new enterprise agreements. Taking the CFMEU's case at its highest, including the fact that the CFMEU will not have standing, in its own capacity, to sue for a breach of the new enterprise agreements, assuming they are approved, the most that could be fairly said is that the CFMEU may be affected, indirectly or consequentially, by a decision to approve the new enterprise agreements. Such an impact is not sufficient to give the CFMEU right to be heard in the application for the new agreement.

PN316

The Full Bench there, of course, did refer to and, in effect, adopt the analysis of Collinsville.

PN317

But if I can just then also quickly, for completeness, go to that Collinsville Full Bench decision? It's at tab 8 of the respondent folder of document.

PN318

VICE PRESIDENT HATCHER: Paragraph 31, is that a correct statement of the current law?

PN319

MR RAUF: Sorry, paragraph 31 of?

PN320

VICE PRESIDENT HATCHER: MGI Piling, about the CFMEU not having standing to sue for future new enterprise agreements, is that right?

PN321

MR RAUF: I'll just go back to that. Well, the Full Bench there looked at some of the clauses which were relied upon to assert or make this assertion that existing rights were affected and, on analysis, expressed the view that, properly read, those clauses inferred certain rights on employees to have representative, et cetera, and they didn't constitute direct interest or rights of the union.

PN322

VICE PRESIDENT HATCHER: No, it's the sentence in 31:

PN323

The CFMEU will not have standing, in its own right, to sue for breach of the new enterprise agreements.

PN324

Is that right?

PN325

MR RAUF: In respect of the new agreement, as I understand that, to sue for breach of the new enterprise agreements. Sorry, what was your Honour's question, whether that's?

PN326

VICE PRESIDENT HATCHER: Is it correct that the CFMEU would not have standing to sue, under those new enterprise agreements, for breach?

PN327

MR RAUF: In circumstances where it's not covered that will be quite correct, I suppose. Having regard to the standing provisions in the Fair Work Act, I understood that a relevant employee organisation won't have the capacity to pursue a claim as well, so I'll have to look at that more closely, but I note your Honour's question it may not be so, even that right that the Full Bench says may be extinguished in fact probably isn't.

PN328

VICE PRESIDENT HATCHER: All right, thank you.

PN329

MR RAUF: Now, back to the Full Bench decision in Collinsville, which will be, no doubt, well known, so I don't want to linger long on that, but just to again note certain paragraphs which go to the issue of the union's capacity to become involved.

PN330

At 15 the Full Bench noted the gravamen of the CFMEU's complaint, as it was known then, namely, that it was a bargaining representative and therefore had standing to be heard in relation to the application for approval of the agreement and, of course, that was found to be the case. But notwithstanding that, the Full Bench said this, at paragraph 38:

PN331

It does not follow, however, that the capacity of an employee organisation, which is no longer a bargaining representative, to give notice under section 183 results in the organisation having standing to make submissions or to otherwise be heard in opposition to an application approval of an agreement. Section 183 is of limited utility, it serves only to alert the Commission to the fact that an employee organisation that was a bargaining rep, for the proposed agreement now wishes to be covered by the agreement. The result of a ballot notice, under section 183, is that the employee organisation will be noted in the decision.

PN332

Et cetera. Then further, towards the end of 39:

PN333

It strains both the language and apparent purpose of section 183 to construe the provision as providing a right to be heard in opposition to the approval of the agreement. Consequently the CFMEU did not obtain any right to be heard before the Senior Deputy President, by reason of its notice given under section 183 of the Fair Work Act.

PN334

So, of course, that was in circumstances where the union there was a bargaining representative, here, of course, it never was.

PN335

Then at 49 the Full Bench dealt with this argument about some right, interest or legitimate expectation that might be affected by the proceeding, noting, of course, that this is at first instance how that operated. At 54, the rights that were said to be affected are as summarised there, right to represent employees, et cetera, capacity to protect terms and conditions and then, at the beginning of 55:

PN336

This argument has no substance.

PN337

Then the Full Bench gives its reasons for that.

PN338

Then at 64 of that decision it says:

PN339

We are not persuaded that having an interest or expectation articulated by the CFMEU, by reference to the Smart affidavit, gave rise to a right to be heard in the application for the approval of the agreement.

PN340

As to this issue of right, interest or legitimate expectation it, importantly, again construes this basis within the statute framework of enterprise bargaining:

PN341

It is not enough, without more, to appoint the status the CFMEU as an employee organisation with a history of representation at the workplace or in the industry. Moreover, this is not a case where some of the members of the CFMEU voted against the approval of the agreement or did not vote at all, all of the employees covered by the agreement voted and all of those employees, including employee 2, voted in favour of approving the agreement.

PN342

Employee 2 being a member of the union. Then if I can just note 66 as well, as to the statutory framework and, again, how that relates back to the issue of right, interest, legitimate expectation, et cetera.

PN343

Then at 68 the Full Bench makes it clear that:

PN344

There is no express right to be heard in the FW Act and the role of organisations of employees in the bargaining and approval provisions under the Fair Work Act is very different to that provided under the IR Act.

PN345

The previous regime.

PN346

In the appellant's submissions, of course, something is made of paragraph 71 of the Collinsville Full Bench decision, about account being taken of the fact that enterprise agreements may confer or deal with the rights and obligations of an employee organisation. That's something which might depend on the circumstances as to whether it confers a right.

PN347

Coming then back to the present matter, so really what it boils down to is this; that the only basis in which the appellant could seek to intervene was on reliance on the Commission exercising its discretion, in favour of the appellant, under section 590. Riordan C gave his decision and we say that he properly exercised his discretion, for the reasons stated, including in circumstances in contrast, for instance, to MGI Piling where here the appellant, on its own admission, was not even a bargaining representative had nothing to do with the bargaining process, was, for all intents and purposes, an outside, in respect of this employer and its employees, a number of whom were members of the AWU.

PN348

In that respect, we submit that there is no House v King error, in the exercise of that discretion. Riordan C, quite properly, considered the AWU's role as a union in the industry, that it had members covered by the former and new agreement. It had been involved in the process relating to the agreement before the Commission, had indicated concerns and initial opposition which, relevantly, overlapped with the issues raised by the appellant and that there were then the undertakings provided.

PN349

So it's not a decision that the Commissioner made in any vacuum, there were circumstances that he had regard to. And that's important because grounds 1 and 2 are, as I submitted earlier, critical, they were the only basis in which the appellant could appear, at first instance. And not being able to do so, we submit, that it would be a curious outcome if the appellant could, nonetheless, as a third party, maintain or raise opposition which it otherwise couldn't do, quite properly in our submission, at first instance, sets a dangerous precedent in that regard, in respect of the making and approval of agreements between parties, having regard to the objects of part 2.4 of the Act and facilitating efficiency and ease of making such agreements.

PN350

Just, finally, before I move of grounds 1 and 2, can I just take the Full Bench to one other decision, and I simply point to that at tab 10, which is McMahon Contractors Pty Ltd [2018] FWC 869, that being an example, of course, where, not dissimilar to the circumstances which the appellant was confronted with here, and post Collinsville, Williams C, in that matter, considered, on an interlocutory basis, the request by the CFMEU, in that matter, to also be heard on the application. Noting there that they did not have any members employed by the applicant, were not a bargaining representative and relied on section 590.

PN351

Of course, in that matter, there was the absence of a contradictor which, at 32 of the decision, the CFMEU relied on as, in effect, warranting a grant of leave, which was not accepted. At 34, importantly, the Commissioner noted the difficulty of envisaging how granting leave to a third party to appear and make submissions in matters which the Commission is compelled, by the Act, to consider for itself and which the Commission is plainly able to adequately address on its own motion, could be said to be either simple, flexible and fair.

PN352

Nor could such an approach be said to facilitate the making of the agreement by ensuring that the approval application is dealt without delay. Any grant of leave will necessarily, and for the reasons set out about, needlessly prolong the approval process.

PN353

And ultimately the Commissioner refused leave for the appellant, or the union there, sorry, to be involved. So that's, we say, an example of, again, the application of discretion, under 590, in similar circumstances. Again, in summary, we say that there was no error, in respect of the interlocutory decision made here and Riordan C had a proper basis to make the decision that he did do.

PN354

The next category of grounds relate to clause 3.3 and the further submission that that clause is, firstly, contrary to section 58 and also unlawful, under section 194(ba).

PN355

VICE PRESIDENT HATCHER: Also the submission that it permits a variation of the agreement, other than in accordance with the procedure prescribed by the Act.

PN356

MR RAUF: Yes, and I think that's one of the new grounds, or new variations, that emerges from the fourth iteration of the appeal this morning.

PN357

In respect of - your Honour asked a question earlier about section 194(ba) and its genesis; can I note these matters? It was a provision, which was correctly recognised, emanated from a review of the Act and took effect in 2013. Importantly, the transitional provisions provided that the amendment relating to opt out clauses applied in relation to all enterprise agreements, including those made before the commencement of the amendment. The explanatory memorandum stated that:

PN358

While any such terms in existing agreements will become unlawful terms that are of no effect.

PN359

The provision applied generally to all enterprise agreements. Of course, it was a provision which came about as a result of or subsequent to the Newlands Coal Federal Court decision, which was reflected in the review. My learned friend noted it culminated in recommendation 23. I don't, unfortunately, have copies to hand up, but I have a copy of the review itself and it's at page 161, but for the benefit of the Full Bench if I can just read certain parts of it. Recommendation 23 is in the following terms:

PN360

The panel recommends that the FW Act be amended to prohibit enterprise agreement clauses which permit employees to opt out of the agreement.

PN361

In the commentary preceding that recommendation the review panel noted the Newlands Coal decision, and the history relating to that litigation. It then said this:

PN362

Opt out clauses are relevantly novel and we are unaware that they have been a feature of more than a small under of agreements. However, we are concerned that as a result of Newlands Coal they may become more common. In the view of the panel, these clauses undermine the collective nature of an enterprise agreement. The panel is concerned by the potential for opt out clauses to be used to manipulate agreement making by allowing a range of employees to approve an agreement only to have a number of them opt out at a later stage. Likewise, operational agreements could be despatched by employees opting out, possibly reopening bargaining. Also concerning is the potential for new and existing employees to feel pressured to opt out of such agreements, thereby relinquishing legitimate rights and entitlements.

PN363

Of course Newlands Coal is a matter in which the agreement facilitated employees the ability to opt out and move onto common law contracts and, in effect, out of the statutory instrument regime, in the absence of individual statutory instruments, such as the former AWAs. It was, as I recollect, designed to provide an alternative clause to achieve that outcome and thereby put to one side collective agreements. That was a mischief which section 194(ba) was directed at. As I noted, it's in a provision which took effect from 1 January 2013 and applied retrospectively.

PN364

Now, as to clause 3.3, the Full Bench has been taken to that. As I noted earlier, that's a provision that has existed or was picked up from the former agreement in 2013, so it's not anything new and I think, as noted by Simpson C, it's - - -

PN365

VICE PRESIDENT HATCHER: I thought it was quite different from the previous clause.

PN366

MR RAUF: Sorry, it was?

PN367

VICE PRESIDENT HATCHER: The impugned part of the clause was, in fact, quite different.

PN368

MR RAUF: Well, there are similarities between what is now 3.3 and 3.3, as far as the project carve out provision that was in the former agreement. So the substance or the effect of it was the same.

PN369

VICE PRESIDENT HATCHER: So the first paragraph of clause 3.3 means that the agreement, at the time it was made, covered any project which your client was undertaking, is that right?

PN370

MR RAUF: If I can just turn up - so if I just go to that, your Honour. So it's expressed to cover all classifications in respect of New South Wales and civil engineering projects and related works, other than in relation to tunnelling excavation works on any such project.

PN371

VICE PRESIDENT HATCHER: So, on its terms, the first sentence includes, in the coverage, any projects which were being undertaken by your client at the time the agreement was made?

PN372

MR RAUF: Yes.

PN373

VICE PRESIDENT HATCHER: Then the last sentence would allow, even in respect of a current project, that after the agreement took effect if you make a new enterprise agreement to cover that project, this agreement no longer covers it?

PN374

MR RAUF: Well, the agreement, on its terms, applies such that it covers, generally, subject to site specific or project specific agreements. But the effect of that is that at any one time there will only be the one agreement applying to a particular employee, in respect of that particular employment.

PN375

VICE PRESIDENT HATCHER: Well, section 58 deals with that.

PN376

MR RAUF: It does.

PN377

VICE PRESIDENT HATCHER: But just staying with my question, if you've got a current project at the time the agreement was made the agreement covers it?

PN378

MR RAUF: Yes.

PN379

VICE PRESIDENT HATCHER: It's within the coverage of the agreement which was known to the employees when they voted upon it?

PN380

MR RAUF: That's so, yes.

PN381

VICE PRESIDENT HATCHER: Then, say, a week after the agreement is approved you make an enterprise agreement to cover one of your existing projects and if that's approved this agreement ceases to cover that?

PN382

MR RAUF: Well, only in respect of that particular location but not generally though.

PN383

VICE PRESIDENT HATCHER: Yes, that project.

PN384

MR RAUF: Not generally other works in the state, bearing in mind that - - -

PN385

VICE PRESIDENT HATCHER: No, just stay with my question. It ceases to cover that project.

PN386

MR RAUF: It's a little unclear whether - it's the application, so it doesn't apply to an employee in respect of that project. In my submission, that's the way it has operated in the industry, that there's an underlying general agreement, which covers and applies, but then if there's a particular site specific or project specific agreement at a particular project, then that latter agreement applies and the general agreement doesn't apply, in respect of that particular project.

PN387

VICE PRESIDENT HATCHER: That would potentially operate directly contrary to section 58, if it's read the way you've just said.

PN388

MR RAUF: Perhaps I'm being a little bit clumsy, your Honour, in addressing the question, but - - -

PN389

VICE PRESIDENT HATCHER: Well, let's start off with the basics. Is the provision concerned with coverage or application?

PN390

MR RAUF: Well, on its terms it's concerned with coverage.

PN391

VICE PRESIDENT HATCHER: So shall we read "coverage" as meaning "coverage" in the way that word is used in the Act?

PN392

MR RAUF: It would appear so, yes, your Honour.

PN393

VICE PRESIDENT HATCHER: All right. So let's go back to my scenario. You have a current project of your client. At the time the agreement is made and approved, the agreement covers that project, correct?

PN394

MR RAUF: Yes, subject to the last paragraph.

PN395

VICE PRESIDENT HATCHER: Well, I'll come to that. So at the time the agreement is approved it's covering all the projects which the company currently has, and the employees working on those projects?

PN396

MR RAUF: Yes.

PN397

VICE PRESIDENT HATCHER: Then if a week or a month or six months later, on that same project, your client reaches a new enterprise agreement to cover that project only and that is approved. At that point in time the agreement ceases to cover that project.

PN398

MR RAUF: If your Honour could just give me a moment, I just want to confirm one thing. Yes, your Honour, I agree with that proposition.

PN399

VICE PRESIDENT HATCHER: So doesn't that mean the coverage of the agreement changes at the time that the new agreement takes effect? There's a variation to the coverage of the agreement at the time that you enter into and have approved a new agreement for a specific project?

PN400

MR RAUF: Sorry, I'm just taking a moment just to digest. It would appear that - so the existing agreement would not cover the employee, in respect of that project, because there'd be a site specific agreement which covered and applied.

PN401

VICE PRESIDENT HATCHER: That previously covered then it would no longer cover?

PN402

MR RAUF: On the way it reads, yes.

PN403

VICE PRESIDENT HATCHER: That is a change or a variation to the coverage of the agreement at that point, isn't it?

PN404

MR RAUF: Yes, your Honour, it would appear that that's so.

PN405

VICE PRESIDENT HATCHER: So what the appellant says is that that's contrary to the scheme of the Act, which requires variations to terms of agreements during their life to occur in accordance with the procedure set out in the Act, and not otherwise.

PN406

MR RAUF: In answering that, though, can I just come back to, I think your Honour, as you described the basics, in terms of the section which regulate issues of coverage and application, and in that respect section 53, I (indistinct) refer to that, that it - - -

PN407

VICE PRESIDENT HATCHER: Just wait, I'll turn that up.

PN408

MR RAUF: So:

PN409

An enterprise agreement covers an employee or employer if the agreement is expressed to cover the employee or the employer.

PN410

Importantly, subsection (6) of that:

PN411

A reference in this Act to an enterprise agreement covering an employee is a reference to agreement covering the employee in relation to particular employment.

PN412

Now, it's not unusual for whether it's mining or construction industries, or in contracting type scenarios, that the particular or employment or the aspect of it might change. That's just the nature of - - -

PN413

SENIOR DEPUTY PRESIDENT HAMBERGER: Isn't that a reference to people who might have two jobs at the same time? Isn't that what subsection (6) means? It's about people might have two jobs. So you are covered, but only in relation to that job, under that agreement, you're not covered in some other way. That's what it means, isn't it?

PN414

MR RAUF: But I think, consistently, that there could be more than one agreement operating in respect of a particular employee at a particular - and in terms of which one applies, that's when one turns to section 52, as to which agreement applies and dictates the terms and conditions.

PN415

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes, you can be covered by more than one agreement.

PN416

MR RAUF: Yes.

PN417

VICE PRESIDENT HATCHER: So what support do you derive from that?

PN418

MR RAUF: That, in a broad sense, the employee here isn't opting out, they are still covered, broadly covered, by the original agreement that is, in effect, the base or underlying agreement, because they could be moved to another project, for instance, and that commonly happens. Employees - - -

PN419

VICE PRESIDENT HATCHER: That might be something different. On the scenario I was dealing with there's no change to the employment, they're on a specific project and are still on it, it's just that there's new agreement for that project entered into. Clause 3.3 seems to say, at that point, they were previously covered by this agreement and now they're not anymore.

PN420

MR RAUF: Perhaps I need to just revisit how I responded to your Honour. In my submission clause 3.3 ought to operate there such that the two agreements continue to cover, including in respect to that project, but one applies.

PN421

VICE PRESIDENT HATCHER: I understand the point and the Act deals with how that works out, but that's not what the clause says.

PN422

MR RAUF: Well, perhaps it could have been worded more clearly, but bearing in mind this isn't a document necessarily prepared by lawyers who understand the intricacies of the complex provisions of the Fair Work Act. But the effect - - -

PN423

VICE PRESIDENT HATCHER: We don't know who prepared it, do we?

PN424

MR RAUF: Well, having regard to the statutory declaration the employer and the employees. They directly negotiated and formulated this document, as the stat dec deposes to. That's what we do know.

PN425

VICE PRESIDENT HATCHER: If we read "coverage" as meaning "application", is that what you're submitting now?

PN426

MR RAUF: Sorry, your Honour, I just want to get this right, in terms of reflecting the instructions, that's all. Could I just clarify that point?

PN427

VICE PRESIDENT HATCHER: Yes, go on.

PN428

MR RAUF: Yes, thank you, your Honour. That's right, the word "cover" is used somewhat colloquially or clumsily, but it ought to be understood as the agreement continuing to cover an employee, in respect of a project but not, at that point in time, applying.

PN429

VICE PRESIDENT HATCHER: Okay, then you run into section 58, don't you?

PN430

MR RAUF: Well, if I can go to section 58, we do and we say that that scenario doesn't offend section 58, for this reason. Section 58 contemplates that there may be more than one agreement covering an employee, indeed as noted by the High Court in the Aldi decision. But, importantly, subsection (1):

PN431

Only one agreement can apply to an employee at a particular time.

PN432

SENIOR DEPUTY PRESIDENT HAMBERGER: But if you make a later agreement, then it can't override the earlier agreement unless the earlier agreement is past it's NED.

PN433

MR RAUF: If I can just, that's subsection (2) that I think your Honour is adverting to, is it, of section 58. If the earlier agreement applies and then another agreement comes into operation - it's not subsection - yes, it is, if the earlier agreement has not passed its nominal expiry date - now, can I just note this, subsection (2)(a) uses the language of:

PN434

Applies to an employee in relation to particular employment.

PN435

In terms of (b) then. another agreement that covers the employee, in relation to the same employee in relation to the same employment, comes into operation.

PN436

In my submission, this is resolved in this say, that the first agreement, on its terms, has the coverage as qualified. So when the second agreement comes into operation, in relation to that particular project, it then applies to the employee consistently, because the other agreement continues to be there in the background.

PN437

VICE PRESIDENT HATCHER: That's not what section 58 says. If the first agreement's within it's nominal term it's the first agreement that applies, not the second agreement, until the nominal expiry date is reached. That's what it says, isn't it?

PN438

MR RAUF: Yes. I suppose that needs to be, in my submission, read in the light of 2(a), which talks about the enterprise agreement applying to an employee, in relation to a particular employment. But at the point that there is site specific agreement, the earlier agreement does not apply, in relation to a particular employment.

PN439

VICE PRESIDENT HATCHER: But it doesn't negate the effect of the whole section. I mean section 58(2) gives you a fairly straightforward answer as to what happens when you have two agreements covering an employment as to which one applies at a specific time and insofar as the first agreement is within its nominal term, clause 3.3 gives the opposite answer.

PN440

MR RAUF: Well, accepting, your Honour, this, that the application - - -

PN441

VICE PRESIDENT HATCHER: When you say "accept", does that mean you're accepting what I've just said, subject to some qualification, or do you reject it?

PN442

MR RAUF: Well, I'm challenging that, your Honour, in this sense, that, again, subsection (2)(a) talks about application, in relation to a particular employment. The way clause 3.3 reads, very consistently with other such provisions in many agreements in the relevant industry, it continues to cover but at that point in time, on its own terms, won't apply because there happens to be a site specific agreement which applies.

PN443

VICE PRESIDENT HATCHER: Yes, that's what 3.3 says and 58(2) says the opposite, does it not?

PN444

MR RAUF: Yes, well, perhaps I can - I've made my submissions on that point, your Honour, but - - -

PN445

VICE PRESIDENT HATCHER: Let's assume, without conceding it, that the last sentence of 3.3, as you've now interpreted it, is contrary to section 58(2), that is it renders the opposite result when the first agreement is within its nominal term, what, if anything, do you want to say about what the effect of that would be, in terms of the approval of the agreement?

PN446

MR RAUF: Well, we say that section 253 readily deals with that, and it says - - -

PN447

VICE PRESIDENT HATCHER: Sorry, section?

PN448

MR RAUF: 253, your Honour, as to a particular term not having effect if, for instance, 253(1)(b) is an unlawful term but, importantly subsection (2):

PN449

However, if an enterprise agreement includes a term that has no effect because of subsection (1) or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement.

PN450

So it's readily dealt with by the Act and it's not something which otherwise vitiates or renders the agreement invalid or, for that matter, uncertain. All it really does it, if one can, for instance, and without conceding, but for a moment accept that part of a clause is contrary to section 58 then it simply falls away and the agreement operates without law.

PN451

But if I can just, in answering, but I do want to just go back to the John Holland decision, if I may, because that , of course, and then the High Court decision in Aldi shed some light on section 58, and I want to refer to those. They're at tabs 1 and 3, respectively, of the respondent's bundle.

PN452

If I might start with the High Court's decision, for the record it's citation [2017] HCA 53, it's at paragraph 9.

PN453

VICE PRESIDENT HATCHER: What tab's that at?

PN454

MR RAUF: That's at tab 1, your Honour, of the respondent's bundle. So earlier the Full Bench was taken to the relevant clause, which was included in this agreement and set out at paragraph - sorry, I withdraw that.

PN455

VICE PRESIDENT HATCHER: How's that going to - - -

PN456

MR RAUF: Yes, I withdraw that. But can I just come to - in this particular case, the High Court made observations as to the operation of section 58 and, relevantly, at paragraph 30, it said this:

PN457

Because an employee may be covered by more than one agreement at one time, section 58(1) of the Act provides that only one enterprise agreement can apply to an employee at a particular time. That is because only one set of rights and obligations can be in operation in relation to the work actually performed by the employee at that time in relation to particular employment. Given the terms of sections 52 and 53, it is apparent that an employee may be covered by an agreement that applies to him or her, and by an agreement that does not, at that time, apply to him or her. Furthermore, an employee may be covered by more than one agreement at any one time. To speak of an employee being covered by an agreement is to speak of the agreement providing terms and conditions for the job performed by, or to be performed by, the employee.

PN458

Then at 31:

PN459

In this context, the natural meaning of the reference in section 53(6) to "particular employment" of an employee is to the description of the employee's job in the agreement. In this regard, the terms of clause 5 of the agreement refer to the job descriptions of employees whose employment the agreement will regulate when it comes into operation.

PN460

Just if I go to 32, the High Court there refers to the John Holland decision and notes the possibility of more than one agreement covering.

PN461

Then if I just go to the - then at 48 and 49 of the Aldi decision, at 49 the High Court endorsed, in effect, the Full Bench's decision in that matter to the extent that:

PN462

In determining whether, for the purposes of section 186(2), the employees will be covered by the agreement after it is made, application of the agreement is not relevant.

PN463

If I can then just to the John Holland - - -

PN464

VICE PRESIDENT HATCHER: What did we get out of all that?

PN465

MR RAUF: Firstly, that the notion that there can be more than one agreement applying to an employee at any particular time, in relation to the particular employment.

PN466

VICE PRESIDENT HATCHER: More than one agreement can cover them but only one can apply.

PN467

MR RAUF: Yes, correct. And really endorsing the Full Court in, in particular, Buchanan J's analysis in the John Holland decision, and if I just go to that, briefly, so that was the decision which the Full Bench was taken to earlier, as to the relevant clause, at paragraph 9. Admittedly that was expressed such that:

PN468

The relevant project agreement will cover and apply to the company and any employees, to the exclusion of this agreement.

PN469

Bearing in mind, of course, I think, that mention was made earlier that section 194 was run in application at the time that the agreement may have been approved, I think, was the comment made but, nonetheless, it was in operation and it applied to all enterprise agreements.

PN470

Then if I can, just in that John Holland decision, come to paragraph 50 where the Full Court here endorsed, if you like, McCarthy DP's rejection of the challenge raised by the union. The clause relevantly reads:

PN471

As the CFMEU's arguments accepted, it may not safely be assumed that there would be a proposal for a site project agreement at any particular place which would, in future, displace the agreement under consideration. However, if there was to be such a proposal there was no fetter on the operation of the Fair Work Act or upon the ability of negotiating parties to make a bargain at a further site or project specific agreement approved. In that process a union might be a bargaining representative for any of its members, unless they appointed a different bargaining representative. In my respectful view, the argument which McCarthy DP rejected involved fallacious reasoning and a basic misconception to the effect of clause 1 of the agreement would frustrate the operation of the Fair Work Act or interfere with the prospect of collective bargaining.

PN472

One needs to go back to the summary of McCarthy DP's but, in summary, in my submission, this was an acceptance that there was the capacity for parties covered by the particular agreement and applying, at a particular point in time then in future, to negotiate the site specific or project specific agreements.

PN473

VICE PRESIDENT HATCHER: That's uncontroversial. But it's the effect of purporting to agree something contrary to section 58 is the issue.

PN474

MR RAUF: Well, in my submission, if it's expressed - if the first agreement is express to apply generally and to the exclusion of certain other agreements which may come to be in the future, in relation to a particular project, and then that does occur, it's in relation to that particular employment that the - - -

PN475

VICE PRESIDENT HATCHER: I understand that scenario. If the agreement says this agreement shall not apply to future projects which may be covered by a project specific agreement, that means it never applied to them in the first place. But here it can apply to a particular project that's in existence, not a future one, and then you can enter into an agreement for that same project. And your clause says, the new agreement applies even if the first agreement is in its nominal term.

PN476

MR RAUF: Yes, but that's in accordance with the terms of the first agreement, which contemplates that type of a carve out though.

PN477

VICE PRESIDENT HATCHER: I think we're going in circles, but that's directly contrary to section 58.

PN478

MR RAUF: It might be and I've made my submission. I suppose the only point I can say is that if that was something which was contrary to 58, then the very point of negotiating future or site specific agreements ahead, and not necessarily being able to foresee that and hence the general carve out provision, as it is framed, if one can't see that in the future and if the point is, "Well, look, the very ability to do that and applying it to what might have been an existing project, in my submission, with respect, it would really go, more fundamentally, to the whole notion of having a future or project specific agreement.

PN479

Now, whether that applies to an existing or a future, the point is that the existing clause contemplates that in the future there may be a site specific project, it doesn't limit that to something which doesn't exist now. It's a broad notion that precisely because, at that point in time, it's not though. That was the effect, in my submission, of the observations of Buchanan J as to the utility or the way in which section 58 operates, that the coverage is to be understood in terms of how it is expressed in the agreement. And if there is a qualification to that, having regard to future site specific agreements, then that qualification is an aspect of that coverage.

PN480

VICE PRESIDENT HATCHER: But now you've gone back to coverage.

PN481

MR RAUF: Well, an aspect of the application, rather, such that it doesn't apply and only the one agreement applies, in respect of the employee. But, as I say, in the alternative, if there was to be some concern as to that aspect, then section 253 operates and, in any event, we say that it's something that can be readily addressed by way of an undertaking, which, in effect, crystallises the coverage, as expressed broadly, in clause 3.3.

PN482

VICE PRESIDENT HATCHER: Just a moment, where's the definition of unlawful term again?

PN483

MR RAUF: Section 194, I think. Yes, section 194.

PN484

VICE PRESIDENT HATCHER: Why would it be an unlawful term?

PN485

MR RAUF: Sorry, your Honour?

PN486

VICE PRESIDENT HATCHER: Why would it be an unlawful term?

PN487

MR RAUF: Why would it be, or wouldn't it be?

PN488

VICE PRESIDENT HATCHER: If you have a provision which is inconsistent with section 58 why does it become an unlawful term, such that it will be dealt with by 253?

PN489

MR RAUF: Well, if it's construed I suppose that goes to the point of section 194(ba) if it's characterised, which we don't agree with, but if it's characterised as falling within the scope of section 194(ba), which was the earlier discussion as to the ability of employees to opt out. As I understood, while the submissions raised by the appellant have been about 58 and 194(ba) and, certainly, in light of the amendments this morning, the two have travelled hand in hand, so that's how I've understood and addressed those arguments.

PN490

VICE PRESIDENT HATCHER: All right, thank you.

PN491

MR RAUF: Perhaps if I can just pause while the Full Bench still has section 194 turned up, I've discussed the premises and the background to that clause coming to apply, with effect, in January 2013, in my submission, clause 3.3, and in particular the last paragraph, does not operate as an opt out clause and certainly not in the manner of that or the mischief which section 194(ba) was directed at, namely, the ability of an employee or an employer, in effect, to opt out entirely of the agreement and, of course, as in the Newlands Coal example, by going on to a common law contract and thereby creating a quasi-individual employment arrangement, outside of the statutory regime. Clause 3.3 very clearly refers to site specific or project agreements, as approved by the Fair Work Commission, so it maintains employment in the context of the statutory regime and does not facilitate, at any level, employees moving outside of that.

PN492

VICE PRESIDENT HATCHER: I understand that submission fully, but that then contemplates the outcome where clause 3.3 may contradict section 58 but may not be an unlawful term because it's not the type of term to which 194(ba) was addressed. In which case it still begs the question, what do we do about it?

PN493

MR RAUF: Your Honour, I've made my submissions on that, I'm not sure that I can add much more.

PN494

VICE PRESIDENT HATCHER: How much further do you have to do, Mr Rauf? I'm not intending to rush you, I just want to know when to take the luncheon adjournment.

PN495

MR RAUF: Sure. Probably about an hour, I would have thought, at most.

PN496

VICE PRESIDENT HATCHER: We might adjourn for lunch now and we'll resume at 2 pm.

LUNCHEON ADJOURNMENT [12.55 PM]

RESUMED [2.01 PM]

PN497

VICE PRESIDENT HATCHER: Mr Rauf?

PN498

MR RAUF: Thank you, your Honour. Just before the break there was a discussion about clause 3.3. Can I just get a final point on that? That's really drawing in the practical industrial context as to how this type of provision which is, as I've submitted earlier, is common place in the industry has worked. It is that it's a clause which is in effect, directed at providing flexibility for the parties to tender for and engage in future projects and so forth. Consistently to meet tender requirements and apply or secure future work in that regard.

PN499

There was the example that your Honour gave about the existing - how it might play out on existing projects. That's not something that the clause, in my submission, is directed at. It's more in respect of the flexibility to deal with future projects so that the company can continue to tender for those and have source employees to work at those projects under an agreement to meet the requirements of the relevant principle or the person seeking - the organisation seeking tenders.

PN500

As to coming back to the existing project scenario, if I'm wrong on my construction of that section, having regard to the provisions and, as your Honour noted, well that's readily resolved with reference to section 58, inasmuch as if there happens to be a project where there are existing employees and this agreement applies to that project and there happens to be a new agreement come in place at that project, then depending upon how one construes the provisions and the coverage, then 58 may readily resolve such that the current agreement continues to operate.

PN501

But, really, having regard to the manner in which these types of provisions have operated for quite some time in industry, it's really directed at future projects and that's how the respondent or retained it to maintain that flexibility so that it is not prevented from sourcing and securing future work. For instance, the airport work that might come up and there's an opportunity to tender for that and meet certain requirements in respect of industrial arrangements and there's the ability to do that.

PN502

Following on from that, obviously if there's concern raised with respect to that particular approach or practice, then that is a matter which will no doubt impact on a multitude of agreements in operation and a practice which has endured for some time in terms of, or at least certainly in this industry.

PN503

Just finally on the issue of appeal grounds for 46 and 7.3 which are directed at 3.3. The other point that my learned friend raised was that well, by virtue of clause 3.3 it has the implication that there isn't a legitimate business rationale for the agreement as to its coverage and fairly chosen was I think how it was couched. Of course, I think this has made it clear that it was predicated on a view about the validity or otherwise of clause 3.3 which is a little different to how it was initially arranged before Riordan C, because if one looks at the submissions of the appellant at appeal book 105, it was raised in the context of, well there may be other employees of the respondent who are affected.

PN504

Just by way of background to that, so it's been an evolving argument, but originally in the way it was couched at paragraph nine for instance, the CFMEU understands that the applicant employs workers in other related civil works projects including the M7 and M2 et cetera. Then at 11, the CFMEU understands that the applicant intends to apply the proposed agreement to a large number of employees, possibly as many as a hundred to be engaged at other projects. Then refers to correspondence where another completely independent entity at that project. In responding to that, the employer of course, in its reply, clearly disavows or states that well, for instance at appeal book 126, in effect for instance that at point (d) and (e) as to the suggestion of, or an accusation that the company has somehow manipulated the employees to be covered, is rejected as being false.

PN505

Similarly, the exclusion of workers on other projects, this is false that these projects have demobilised after M2 completion in 2015 and the M7 completion in 2014 prior to the negotiation of the vote and vote of approval taken place in 2017. So, that's initially how it was couched with reference to other speculative concerns. It's now predicated on clause 3.3 and I've made my submissions on that.

PN506

But in any event, if one steps back and looks at the agreement, having regard to the circumstances, including much of what I outlined earlier on before I turned to the appeal grounds. In my submission there is a very clear and legitimate business rationale which relates to the nature of project work and for instance, the need for flexibility of the parties to tender for and engage in projects. Also, the fact of the employees enjoying increased entitlements and pay. As noted by Riordan C, up to 72 per cent above the award rates.

PN507

The fact of the new agreement which has been applied since 16 May, so other than affording employees the increased entitlements, it is as I noted earlier, an agreement which is familiar to the employees and the employer. So, for all of those reasons in my submission, there is a genuine business rationale. Of course, I think it's noted by this Tribunal one of those can also be constituted by the desire to have in place an in-term agreement to protect from protected action or industrial action. I'll come back to that - it escapes me for the moment.

PN508

In relation to grounds five and seven then, which go to the question of section 188(c), that is any other reasonable grounds for forming a view that there may not have been a genuine agreement. Of course, these are matters which go to the state of satisfaction on the part of the Commission. If I can just very briefly, my friend turned to the decision of One Key. If I can just go to that, but in the bundle of the employer or the respondent bundle at tab two.

PN509

If I can just note three passages there as to the state of satisfaction that relevantly - it's paragraph 103 and about half way down.

PN510

Alternatively, as section 190 provides, the Commission may approve an agreement under section 186 despite having a concern that the agreement does not meet the requirements set out in section 186 and 187 provided that it is satisfied that an undertaking of the kind prescribed in section 190(b) meets that concern. The mere fact of the Act entitles the Commission to approve an agreement even if it is concerned that the employer has not complied with section 180(5). It tells against the conclusion that compliance with section 180(5) is a fact. The objective existence which is a precondition to the Commission's power to approve the agreement.

PN511

Then it referred to the observation of (indistinct) and Independent Commission Against Corruption. Then further, paragraph 105, it has this to say, that:

PN512

Like many of the pre-approval requirements, satisfaction as to whether section 185 has been complied with involves an evaluative judgment including because an assessment is to be made as to whether reasonable steps were taken. Preference is made to the Teys Australia decision.

PN513

But relevantly Bromberg J's quotation that:

PN514

These are difficult questions upon which reasonable minds might sometimes, perhaps often differ. The legislator's intent was evidently that they be dealt with for the benefit of employees and employers alike by independent specialists and experts through the process of Commission scrutiny.

PN515

Then 106 finally, that:

PN516

It should not be supposed that the Parliament will tender that the validity of an enterprise agreement should be open to collateral attack on the basis that the object of existence of the facts required by section 180(5) cannot be established. Parliament should be presumed not to have intended public inconvenience of the kind that would arise if the existence of the pre-approval requirements, the subject of the satisfaction that the Commission is required to form in order to approve an agreement was a jurisdictional fact amenable to authoritative determination by a court.

PN517

Finally, your Honours, if I can just note that the observations of the Full Court commencing at paragraph 227 as to again the state of satisfaction that must be reached. Importantly, the observations at paragraph 230 and onwards to the effect that at 231, reference is made to the decision being said to be logical, irrational if only one conclusion is open on the evidence and the decision-maker does not come to that conclusion or if there is no logical connection between the evidence and the inferences or conclusions drawn or whether reasons given are unintelligible.

PN518

As Gleeson observed:

PN519

To describe reasoning as unreasonable may be no more than an emphatic way of disagreeing with it. This is an apt description of the CFMEU's argument. In effect, the CFMEU is embarking the court to substitute its own opinion for that of the Commissioner.

PN520

VICE PRESIDENT HATCHER: That's all about judicial review. What's the relevance of that to us?

PN521

MR RAUF: It's about judicial review, but it provides the observations as to the state of satisfaction required to be met by the Commission in respect of the pre-approval and approval requirements under the Act, so it gives guidance to those matters. Of course, as your Honour knows, it's confirming that well, it's not for the Federal Court to step in and then second-guess that; it's something for the tribunal.

PN522

But there are really three limbs to the argument that the requirements of section 188(c) and for that matter, section 180(5) were not met. First of those was the reliance on clause 3.3 and it's been characterised as being valid, which I've dealt with. But the other two were these, that it's said that there was erroneous information in the form F17 and a failure to disclose less than official provisions of the award plus exclusion of the NES. Thirdly, that the employee said unions could be covered even though this was something which was not permissible under the Act.

PN523

If I can just deal with those last two, again as to the information contained with the form F17, this is something which recently was commented upon by in the decision of BGC Contracting Pty Ltd [2018] FWC 1466. I don't propose to go to it in any detail, other than to note it and it's at tab nine, the decision of Gostencnik DP. But, there is a few things that can be taken out of that. Firstly, context is very important as to the circumstances of the parties involved.

PN524

Here, as I noted earlier on, well there's two issues. One is, was there the relevant failure and/or misleading information as asserted? But secondly, what was the effect of it for the purposes of considering genuineness of the agreement of the employees? Was it something which may logically impact or affect that? In my submission, there wasn't failure to disclose relevant information, certainly as relating to the NES and/or the reference award.

PN525

As to the union being covered or not, having regard to the circumstances here, in my submission, it's not a matter which can conceivably impact upon the genuineness of agreement for these reasons. That the employees again, were 12 in number, but they were repeatedly invited, if they wished to have a union come in and bargain on their behalf. On the statutory declaration they did not wish to do so. They were familiar and previously covered by the former agreement which had similar provisions, if not in some respects, identical. So, they were well informed and they weren't nave or new to the situation and they resoundingly voted in favour of the new agreement with all the benefits that it entailed.

PN526

While for instance, as to the issue about the employees being informed that well, the union can be covered and it not being made clear that there needs to be bargaining representatives, we accept that wasn't a correct statement in regard to the provision of the Act. But that's not a matter given the industrial circumstances that can conceivably, in my submission, affect the genuineness of the agreement by the employees in this situation.

PN527

More so, given that as the matter progressed, there was a contradictive that became involved in the form of the AWU which then played a role in terms of extracting or eliciting the undertakings which were subsequently provided by the respondent.

PN528

VICE PRESIDENT HATCHER: That's post the agreement?

PN529

MR RAUF: Sorry?

PN530

VICE PRESIDENT HATCHER: That's post the agreement being made?

PN531

MR RAUF: That's so, yes.

PN532

VICE PRESIDENT HATCHER: That can't be relevant to the genuineness of the agreement, can it?

PN533

MR RAUF: Well, I accept that, your Honour. But, I do note the circumstances relating to the employees and as I say, on the statutory declaration of the employer, the transparency in terms of inviting them to involve a union if they so wished and the wish of the employees to directly engage on the terms and conditions.

PN534

To the extent that there's this suggestion made that in the form F17 there was a failure to disclose less beneficial provisions of the agreement as compared to the award. Now, that's not something that's been addressed in any specific terms, either this morning or in the outline of submissions of the appellant. For instance, there isn't any indication of well, which clauses, what analysis are you relying on to prop up that allegation?

PN535

The clue one gets I suppose, is again from the submissions of the union which it provided to Riordan C, at first instance and which again were the focus or came to be reflected in part in the undertakings. But otherwise there's in my submission, no basis to that allegation and certainly no support on the evidence for that suggestion that has been put forward by the appellant.

PN536

The other matter it relies on is at clause - sorry, at ground 7.4 of the appeal notice - I'm presuming also the fourth iteration of it, is that well, the employer didn't discuss the differences between the present, the new agreement and the former. With respect, we don't accept that there are the differences as asserted, but in any event, for the purposes of a better off overall test, it's irrelevant.

PN537

The question is, how does that agreement compare against the reference instrument and so much was confirmed or stated by the Full Bench in Collinsville Coal decision at paragraph 98. I don't go that now, but I note that.

PN538

VICE PRESIDENT HATCHER: If the obligation under 185, I think it is, is to explain the agreement and its effect.

PN539

MR RAUF: Yes.

PN540

VICE PRESIDENT HATCHER: Where there's an existing enterprise agreement. The effect of making the new agreement will be to vary the conditions as compared to the existing agreement. That is the requirement to explain and operates by reference to what was there currently which is the existing agreement and not the award.

PN541

MR RAUF: Yes.

PN542

VICE PRESIDENT HATCHER: It would be different if it was a first agreement. So, does it have any substance in that context?

PN543

MR RAUF: Well, it does, your Honour, in that I accept that it can arise a relevant consideration there, but we say very clearly that that discussion occurred. Again, these are employees that were well familiar with the old agreement and were involved directly, not given through any representative for that matter in terms of reviewing and discussion the provisions of the new agreement and what they were to receive out of it. It can readily be inferred, in my submission, that there would have been such a discussion and understanding.

PN544

VICE PRESIDENT HATCHER: Where's that dealt with in the F17?

PN545

MR RAUF: Just a moment, I'll - so at page 85 and 86 there's the summary, if you like, of what the employer says it did in terms of the dates and discussions. So, Riordan C had this to rely on and of course, as I've noted, and sorry over the page at 86, I'm told by my instructor that for instance, towards the bottom of the page, it says:

PN546

The first full without prejudice draft outlining changes made to previous EBA and changes reflecting agreement in principle was issued and discussed.

PN547

VICE PRESIDENT HATCHER: Where was that, I can't?

PN548

MR RAUF: Sorry, your Honour. That's at appeal book page 87. Your Honour will see under section 2.6 there are the various dates as to meetings and then following that down, the third last paragraph and following.

PN549

VICE PRESIDENT HATCHER: Yes.

PN550

MR RAUF: We say that there isn't any basis for the suggestion that the agreement in some way didn't meet the BOOT, or for that matter, there's an appellable error in respect of Riordan C's state of satisfaction as to that requirement being met and is challenged by the appellants.

PN551

The other relevant issue that arises and is reflected also in appeal ground, I think first of the eight that appears is with respect to the NES. That was the subject of some discussion this morning. I briefly turn to that. It appears that there were three particular aspects of the agreement that were identified. The first of those was clause 9 as to abandonment of employment. I think that the issue that wasn't pursued by my friend.

PN552

Then one comes to clause 22 and 24 which is said - - -

PN553

VICE PRESIDENT HATCHER: Clause nine wasn't pursued?

PN554

MR RAUF: Well, as I understand my learned friend conceded this morning that it did not constitute an abandonment of employment provision. The issue raised in respect of that was notice.

PN555

VICE PRESIDENT HATCHER: Yes. I think the appellant conceded that the undertaking addressed the issue of any retrospective termination, but they persisted with the point that it excluded the notice provisions of section 117.

PN556

MR RAUF: Your Honour asked the question is there anything in the agreement that says as much? The answer to that is no, there is not. To the contrary, I think as Simpson C highlighted, clause 6 which again I accept is clumsily worded, but has the effect the NES, to the extent that it is beneficial applies. Not only applies as a matter of law, but is incorporated into the agreement. On the question of issues as well, the employees might be precluded from, for instance, unclear dismissal rights et cetera, well that's a matter which isn't determined so much by the agreement as the Commission having regard to the statutory framework relating to whether the termination is nonetheless at the initiative of the employer.

PN557

Assuming of course, that the high bar of abandonment employment is met. It is a high bar and the undertaking makes that even more so, because of the reasons I'll come to. But the undertaking when I go to it, it now even makes clear that to the extent that the notice - any termination is communicated, it follows attempts by the employer to engage in no response from the employee. So, in other word, in colloquial terms the employee is AWOL.

PN558

COMMISSIONER RIORDAN: I think I should be clear. On review of the language in clause 6, it's difficult to be clear what it means.

PN559

MR RAUF: Yes, thank you for that clarification Commissioner. And I suppose in response to that I maintain that when one looks at the agreement in terms of the logical interpretation of it all, and perhaps if I can just come back to it briefly.

PN560

VICE PRESIDENT HATCHER: I think you've covered this before, but your argument was that the first sentence means that everything is excluded but, well subject to the proviso that what are incorporated, are those entitlements in the NES that are more beneficial to employees.

PN561

MR RAUF: Correct.

PN562

VICE PRESIDENT HATCHER: Yes.

PN563

MR RAUF: Yes, and in my submission that is the logical reading. Perhaps it's missing certain commas and could be better drafted, but the agreement stands alone and covers all terms and conditions. That's the fundamental proposition except to the extent that it incorporates various entitlements that are more beneficial to employees under the NES. Like I say, there are issues of tense and commas but again, these aren't documents framed by people necessarily equipped with the grammar skills at times.

PN564

That was clause 9, but can I then come to clause 22 and 24. It is said that well, they operate to derive employees of the benefit of section 62 which deals with the maximum weekly hours of work. In effect, permit the employer to direct employees to work overtime, disregarding requirements of reasonableness or reasonable additional time. With respect, that's to strain the language of the agreement and construe it in a literal - in a vacuum in such a way that there's no support for that interpretation. If I can just turn to the relevant clauses.

PN565

So, 22 in the outline of submissions of the appellant, reference is made to 22.2. It first talks about an employee being recalled to work overtime after having left the business and then shall be paid. In other words, it's really stating the entitlement that they get if this circumstance arises. It's not saying that they can be required to come back, but rather, that if this happens, well, this is the entitlement.

PN566

Similarly, 22.8:

PN567

If, on the instructions of CPB such an employee resumes or continues to work without having had a (indistinct) such as 10 consecutive hours of duty, the employee shall be paid at double time, et cetera.

PN568

These are really stating the entitlement is that situation arises. That's not to say it operates or ought to be understood out of context and in a way, which excludes any relevant NES requirement. Indeed, it can't, by virtue of clause 6.

PN569

Then of course, reliance is played on 22.11, except as provided in this clause:

PN570

CPB may require any employee to work reasonable overtime.

PN571

Well, again with respect, this simply states the expectation and it's subject to reasonableness, subject to whatever requirements there are as to what is reasonable. It's not an unusual provision in that regard and so in my submission, one can't read those to in some way exclude the NES.

PN572

26.10 was the other provision which was relied on to suggest that well here's another one that offends the NES. In that regard, it's conceded that 26.10(a)(i) and (iii), they're okay. But (ii) is the issue. Let's carve out (ii), but with respect, as is well rehearsed by this tribunal in terms of the rules of construction, things need to be read in context of the clause and the agreement.

PN573

Roman (i), talks about an employee reasonably being - as soon as reasonably practicable informing of the inability to attend. Roman (iii) states that if there happens to be an absence of one day in circumstances where there have already been two in that relevant year, then the employee must produce a certificate or if they can't attend a medical practitioner, then a statutory declaration.

PN574

Now, (i) and (iii) need to be read together with (ii) such that in my submission, the fear advocated by the appellant that 26.10(a)(ii) can in some way be relied upon by a respondent to make unreasonable demands, just wouldn't fly unless one only looks at that part of your clause. Then of course, ignores the rest of the clause, the rest of the agreement including clause 6.

PN575

In my submission, there is again nothing here, whether expressly or impliedly which supports the contention that the notice provisions - sorry, that the requirements of the NES as to the state of evidence required is in some way excluded. Indeed, - - -

PN576

VICE PRESIDENT HATCHER: How do you say the context assists you with roman (ii) again? The point was about roman (ii) was that I thought it was comparing this, the agreement provision only requires satisfaction to the employer.

PN577

MR RAUF: Yes.

PN578

VICE PRESIDENT HATCHER: Whereas the NES required satisfaction to a reasonable person.

PN579

MR RAUF: Right.

PN580

VICE PRESIDENT HATCHER: So how does the context dispose of that problem?

PN581

MR RAUF: Well, in this way, that if one reads roman (ii) in isolation, one may be worried.

PN582

VICE PRESIDENT HATCHER: Yes.

PN583

MR RAUF: But one in my submission ought not read roman (ii) as a standalone type provision. It needs to be read in the context of the whole of that clause.

PN584

VICE PRESIDENT HATCHER: Yes, so how does the context in that clause assist?

PN585

MR RAUF: Well, say if roman (iii), the employee on this clause doesn't even have to provide anything if there are two single day absences in a year.

PN586

VICE PRESIDENT HATCHER: What if there are?

PN587

MR RAUF: Well, if there are, then as that clause reads, a medical certificate from a qualified medical practitioner. That states the requirement. To say well, that that's - to carve that out and read roman (ii) in isolation, in my submission, is contrary to the rules of construction and it may then potentially yield the interpretation for which the appellant contends. But in my submission, that's not how one would construe that clause.

PN588

Roman (iii) indicates what the employee can do to meet the requirement in that situation. Of course, as I've noted earlier, clause 6 to the extent if there were to be any concerns in that regard, clause 6 immediately absolves those by extending the benefit of the NES to employees. Does that address your Honour's question?

PN589

VICE PRESIDENT HATCHER: That would involve letting clause 6 saying the NES prevails to the extent of any inconsistency.

PN590

MR RAUF: Sorry, your Honour?

PN591

VICE PRESIDENT HATCHER: That would involve reading clause 6 as saying that the NES prevails to the extent of any inconsistency.

PN592

MR RAUF: If there was any dispute or issue about the employer in some way, for instance, on the hypothetical example that a number of those, but on a hypothetical example, if the employer was making some unreasonable demand, then yes. If that hypothetical scenario arose.

PN593

VICE PRESIDENT HATCHER: All right.

PN594

MR RAUF: Your Honour again, the further caveat is that these things need to be read in the context of the Commission's overall state of satisfaction as to requirements under the pre-approval and approval requirements. If there happens to be some ambiguity or question about one aspect of it, that doesn't necessarily result in the agreement falling or suddenly there being a question mark well the employees would have voted otherwise, or there being, as I submitted earlier, a section 180(c) type of ground to suggest that the employee's genuine agreement has in some way been affected.

PN595

Which then brings me to the undertakings that form the basis of a number of the grounds for appeal. If I can just turn to those. Now again, just putting the undertakings in context, on their own, or the undertaking document on its own doesn't indicate the source or the concern of the issue. One also needs to, for instance, note the statutory declaration of the AWU that at appeal book 140.

PN596

Coupled with of course, Riordan C's finding as expressed in the interlocutory decision at appeal book 137 that a number of the employees were members of the AWU. That then gives them context as to how the undertakings came about and what they seek to address. Bearing in mind of course, that there were again, conferences conducted by the Commissioner during the lengthy period in which this document was being considered. That's not necessarily on the record, but that's not to say that it didn't occur.

PN597

If I can come to the first of those. I think they appear in a number of occasions, but relevantly one of those is appeal book page 145 which sets out the undertakings proffered by the respondent and accepted by the Commission. The first of those relates to the second paragraph in clause 3.3 and yet having no effect.

PN598

Can I say this in respect of that? Reference is made to the decision in CEPU v MAIN People Pty Ltd. That was a decision where it was found that there was a significant change of the scope because, among other things, the proposed scope covered a wide range of employee groups across 17 separate classifications and on its terms, related to work covered by a number of different modern awards. As noted by the Full Bench, the breadth of the classification of the agreement and the geographical scope of its coverage, made it apparent that it had application beyond work covered by the Metals Award in that matter.

PN599

To that extent, the concern or the basis of the concern was that the work travelled beyond the Metals Award into other areas. But here, when one looks again at clause 3.3, the second clause in some ways is akin to the notion of trying to retain flexibility for the future and in case new classifications arise or other things arise. Really, on its intent of words, was intended to capture something which wasn't necessarily known and certainly no employees employed in those relevant or unknown classifications et cetera, schedule A is quite comprehensive.

PN600

So, the effect of this undertaking is really to make clear, to the extent that there was any issue about when you've got something there that says you might be able to agree on including things that might arise in the future or aren't necessarily picked up now, it didn't affect any employee as such. Really, it had operated to crystallise or make clear that look, we won't worry about something unforeseen or unknown in the future as to classifications, giving the parties flexibility to ascribe rates of pay and so that was taken out.

PN601

In my submission, it didn't affect the scope in the way that occurred in the MAIN People decision where there were employees affected in natural classifications in actual work that was covered by the agreement. In my submission, there was no issue of compliance of that part of the undertaking with section 190. I think clause 2, to the extent that there was an issue about retrospective termination that was addressed by the undertaking - clause 9 rather, which makes clear that the date of the decision communicated is seven days after the employee last missed the shift, but sorry - I'll withdraw that. I stated that clumsily, but the last sentence, the date of termination shall be the date of this decision is communicated. That's the key point and that's the issue that it overcomes, the retrospective aspect of it which we understand.

PN602

The other thing I'd noted earlier was that the company acting in the way suggested by undertaking two, is predicated in the second paragraph in this way:

PN603

That further, the company shall in the absence of any response.

PN604

Now, if there has been a response, then the ability of the company to simply send a letter confirming the termination cannot be relied on in the same way as it may have in the absence of the undertaking. But the undertaking further constrains the operation in my submission of that clause.

PN605

Undertaking three is for casual employees. This operates - well, taking it back a step, it relates to an absence of provisions dealing with casual employment under the agreement and for instance, if one goes to the AWU declaration at appeal book page 140, this is raised in a BOOT context, notably that the award includes a minimum. So, page 141 of the appeal book, that the award includes a minimum engagement of four hours casual conversion and an obligation on an employer to provide the actual likely hours to be worked at the commencement of employment. Then of course the AWU - - -

PN606

VICE PRESIDENT HATCHER: Sorry Mr Rauf, I'm lost. What are you taking us to now?

PN607

MR RAUF: Sorry, I was just - in terms of putting the undertaking or the concern it sought to address in context, I was going back to the AWU declaration which reflected the concern raised before the Commission. That's at appeal book page 141 and as it related to casual employees, it was in the context of the BOOT and that clause 14 of the Reference Award provided certain beneficial terms that were not expressed or there was a concern that the agreement overrode those.

PN608

So to address that, undertaking three in effect operated to apply clause 14:

PN609

Shall be applied subject to the agreement prevailing in the event of any inconsistency.

PN610

Now, the issue here of course, is that the agreement didn't have any provisions expressly dealing with casual employment and so the appellant says by way of example, the agreement doesn't have anything on conversion and the award does. Does that mean that the agreement is inconsistent? Well, in my respectful submission, no. Because the agreement, if it is silent as to a matter, the award provision fills in that space and supplements and that's how it ought to be understood. There is no issue of conflict or inconsistency.

PN611

It is then said the attack is made, well look and further on, undertaking three, states further:

PN612

CPB expressly commits.

PN613

Ah ha, commits. That's a bit loose, et cetera, but then in my submission, sorry at appeal book 145, when one looks at undertaking three, there's a clear acceptance by the employer of applying clause 14 and further, expressly commits. That's really just highlighting certain aspects of clause 14 which the employer has otherwise agreed to apply. So, rather than be some aspirational, it's almost a reinforcing comment that look, clause 14 will apply and these particular provisions will highlight these because - so that you don't miss them. But they are there as well and they are highlighted. So, it's running some aspirational statement.

PN614

As to the fourth undertaking, in relation to part time employees engaged under the agreement and the award clause applying, subject to this that substituting 38 hours with 36 ordinary hours, which of course is to the benefit of the employees. Again, that's very clearly picking up the clause of the award which would otherwise have no work to do, so this undertaking picks that up and applies it as an obligation under this agreement with the change as noted. This is to the benefit because it means that for part time employees overtime kicks in sooner and other entitlements kick in sooner once they exceed their ordinary hours.

PN615

Finally, if I can come to undertaking five, clause 17 redundancy does not undermine any rights or entitlements as prescribed by the Fair Work Act or the National Employment Standards. I think it was noted by the Bench that there has been in place in the construction industry a scheme which is operated and which has been applied to give to employees' benefits. But to the extent that this undertaking - it doesn't appear to be a concern raised by the AWU. I can't say any more as to the basis of it other than again note that there were discussions between the parties and the Commissioner.

PN616

But nonetheless, it simply refers back to the National Employment Standards which will apply on their terms, and in particular I highlight rights or entitlements as prescribed by the Act or National Employment Standards. Of course, they will apply on their ordinary terms as prescribed. I think your Honour noted that in some respects clause 5 might be unnecessary; that's probably right. But it certainly doesn't work in a way as relied on by the appellant here and outside a party to this whole process to say ah ha, gotcha! The employees were misled or this is unclear and therefore strike it all down. Put the employees back to the former agreement and let them deal with it.

PN617

If your Honours will just give me one moment. Just very finally, can I come back to the issue that I started with which I got to make one point on that, and that is in respect of this contention or this assertion by the appellant that it had existing rights under the former agreement which were affected and thereby that was a matter that ought to have been taken into account by Riordan C in the interlocutory decision. That's baldly asserted without more.

PN618

There is no reference to any clause in the former agreement and indeed, if one goes to the former agreement and starts looking at some of these clauses, they are in the nature of the types of clauses relied upon in the MGI Piling matter which were found not to confer any right or entitlement on the union, but rather the employees in terms of representatives and employee representatives. Those have all been retained in the new agreement. There is, in my submission, no right, no interest as expressly conferred under the former agreement on the appellant which has been affected.

PN619

I've taken the Full Bench to the former agreement already and I don't want to trouble the Bench further with that, but the agreement can easily be seen and the clauses seen. Indeed, the appellant has made no attempt to point to any clauses and it's in my submission, not surprising.

PN620

Unless there were any further questions, they are my submissions as to the grounds for appeal. We say that there is no appellable error demonstrated and the appeal ought to be dismissed and in the alternative, the extent that there were any concerns arising bearing none that can be - I should frame it without double negatives. But they can readily be addressed by further undertakings if that's the appropriate course. But in my submission that ought not be required and the appeal ought to be dismissed. Thank you.

PN621

VICE PRESIDENT HATCHER: Anything in reply Mr Boncardo?

PN622

MR BONCARDO: My learned friend says that the last section of clause 3.3 deals with application. Your Honours and Commissioner will note that clause 3.4 of the former agreement is in starkly different terms. It refers specifically to applying and it refers to the parties agreeing that the agreement may not apply. It is facilitative rather than prescriptive as compared to clause 3.3 of the current agreement. It is contingent also on the parties reaching consent to such a requirement.

PN623

So, there was a material difference between clause 3.4 of the old agreement and clause 3.3 of the new agreement. My learned friend laboured the point that these agreements are almost exactly the same. There is a significant difference between the new clause 33 and the last portion and the old clause 3.4. That was a matter we say that called for explanation. It was a matter that was relevant in the context of section 180(5) and also relevant in the context of section 188(c).

PN624

My learned friend says that contrary to the plain words of the final paragraph of clause 3.3 that it deals with application rather than coverage. He relies upon that to say well, if it is indeed contrary to section 58 which patently it must be, on his interpretation, then it is an unlawful term for the purposes of 194(ba). 194(ba) deals with the coverage of an agreement. It does not deal with its application. Ditto with section 253.

PN625

VICE PRESIDENT HATCHER: Well, if that's right, then it's a bit like the Toyota and Marmara situation, that is, if the clause does deal with application, it's simply ineffective to oust the operation of section 58 and that's the start and end of it.

PN626

MR BONCARDO: It's not the end of it, with respect, and for the reasons set out by Goolie C in Abi Group. It raises a genuine agreement issue in the sense that employees voted for an agreement with a term that was of no effect. That term provided a representation to them about what the effect of the agreement would be in relation to projects and sites where other agreements may apply. My learned friend has told the Full Bench today that the employees were involved in negotiating the agreement. He even said at one point that they were involved in composing it with the employer.

PN627

That was a representation in the agreement that was wrong, that was not right, and that goes to the authenticity, we say of their assent to it. That is particularly important in circumstances where there was a material change between clause 3.4 which is aspirational, and the former agreement in clause 3.3 of the new agreement which is prescriptive.

PN628

In relation to clause 26.10 - - -

PN629

VICE PRESIDENT HATCHER: And so, if it's not application but coverage, that is if you read 3.3 the way it's worded.

PN630

MR BONCARDO: Yes.

PN631

VICE PRESIDENT HATCHER: And one comes to the conclusion that the - what was it, 194(ba)?

PN632

MR BONCARDO: Yes.

PN633

VICE PRESIDENT HATCHER: Does not apply because that doesn't concern itself with future enterprise agreements, where does that leave us? It's a fundamental question that the employees can agree to a coverage clause which can change the coverage of the agreement - say they can agree in advance to change the coverage of an agreement upon some contingent event.

PN634

MR BONCARDO: We say that employees can't.

PN635

VICE PRESIDENT HATCHER: Why not?

PN636

MR BONCARDO: Because that operates in accordance with 194(ba), because it operates as an election. The entering into a new agreement operates as an election unilaterally or otherwise.

PN637

VICE PRESIDENT HATCHER: But 194V(a) was concerned with future elections.

PN638

MR BONCARDO: Quite.

PN639

VICE PRESIDENT HATCHER: That is, you can elect that some time in the future, whether it's unilateral or bi-lateral, it doesn't matter to opt out of the agreement. But on one view, this clause is really saying that the whole workforce has agreed at the time of making the agreement that the coverage will be X, but it will be Y if some contingent event occurs, which is not quite the same thing, is it?

PN640

MR BONCARDO: In substance, we say that it is. In substance, this is a facility for opting out of the agreement by way of a future event. That future event it's important to note, doesn't necessarily have to have anything to do with the employees. It could be way of a Greenfields agreement that the employer enters into with the union. If that is the case, then there has been an election by, we say, the employer to ensure that the employees and it are not covered by the agreement at a particular site or a particular project.

PN641

194(ba) needs to be read, we say, in such a way that was alluded to by the Full Bench in the TR Constructions matter. That is, that it would capture scenarios dealt with, such as that considered in the final paragraph of clause 3.3.

PN642

In relation to clause 26.10, roman (ii) deals with a very different scenario from roman (iii). Roman (iii) deals with absences for one day in circumstances where the employee has claimed personal leave at least two single days previously. Roman (ii) deals with a situation where employees take a period of personal leave. It's a more general - it captures a more general subject matter and requires that the employee, if required, has to prove to the respondents, satisfaction. Not the satisfaction of a reasonable person. Roman (iii) does not assist, we say, in the construction of roman (ii) because they are dealing with two different subject matters.

PN643

My learned friend also said that we have not identified with any particularity, the clauses we say were in the 2012 agreement, that conferred on us any particular right or interest which were not present in the current agreement. That overlooks what is set out at clause 1 in the public interest section of the notice of appeal where those clauses are set out and are described. Perhaps just for completeness - I'm not going to labour the point; I've said what I need to say in the written submissions on this. But I should draw the Full Bench's attention to the particular clauses.

PN644

In relation to 1.1. This is on page 7 of the amended notice of appeal, the relevant clause is 3.3. In relation to clause 1.2 in the notice of appeal, the relevant clause is - - -

PN645

VICE PRESIDENT HATCHER: These are the clauses in the old agreement?

PN646

MR BONCARDO: In the old agreement, that's right. This is clause 20.2. In relation to 1.3 the relevant clause is clause 30. In relation to 1.4, the relevant clause is clause 33.5. In relation to 1.5, the relevant clause is clause 38. Those are matters that do not appear in the new agreement. They are the kind of matters alluded to at paragraph 71 of Collinsville Coal.

PN647

Unless your Honours have any further - - -

PN648

VICE PRESIDENT HATCHER: Well, just one. On the interlocutory decision, what's the utility of us dealing with that in circumstances where you've now been fully heard as to your objections to the agreement. I mean, does it really add anything to the appeal?

PN649

MR BONCARDO: The short answer is probably not. There's a recent decision SELS, I think it is, that says as much.

PN650

VICE PRESIDENT HATCHER: All right.

PN651

MR BONCARDO: Unless your Honours and Commissioner have any questions, those are the submissions.

PN652

VICE PRESIDENT HATCHER: Right, we thank counsel for their submissions. We will reserve our decision. We will now adjourn.

ADJOURNED INDEFINITELY [3.02 PM]

Fair Work Commission Transcripts

C2018/2635, Transcript of Proceedings [2018] FWCTrans 272 (19 July 2018)