AG2018/2477, Transcript of Proceedings [2018] FWCTrans 343 (19 September 2018)

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PN1

THE COMMISSIONER: All right. Can I have the appearances list?

PN2

MR MARSHALL: Good morning, Commissioner. Marshall initial R, solicitor of FCB Workplace Law with permission for the applicant, Endacom Pty Ltd.

PN3

THE COMMISSIONER: Thank you, Mr Marshall.

PN4

MR SAGE: Commissioner, Sage with my colleague Mr Ferraro for the Australian Workers Union. It please the commissioner.

PN5

THE COMMISSIONER: Thank you, Mr Sage. Mr Marshall.

PN6

MR MARSHALL: Thank you, commissioner. The application before you today is for approval of the Endacom - - -

PN7

THE COMMISSIONER: (Indistinct) leave to appear yet?

PN8

MR MARSHALL: Good question, Commissioner. I'm not sure whether we addressed that issue in previous conferences.

PN9

THE COMMISSIONER: I don't think you have. Any objection to Mr Marshall?

PN10

MR SAGE: No.

PN11

THE COMMISSIONER: You happy, Mr Sage? I think this matter's sufficiently complex, Mr Marshall, to satisfy Section 596 (indistinct) granted.

PN12

MR MARSHALL: Thank you, Commissioner. Commissioner, the application before you is for approval of the Endacom Pty Ltd enterprise agreement 2018. Commissioner, as you're of course aware, the parties have filed submissions in relation to issues raised both by the Commission and by the union in objection to the application for approval. What we were proposing this morning is that we probably give some short submissions following the evidence. I won't necessarily take the Commission through the submissions that we filed in writing already. I know that the Commissioner's seen those, as my friends at the Bar table have as well.

PN13

Commissioner, the applicant has provided two witness statements in support of the application for approval, one from Mr Enda Flannery, who is the company's managing director and involved in the pre-approval process closely through every step of that process; also a witness statement from an employee of the company, Mr Kevin Fahy, who was also involved in the approval process and attended the relevant meetings the company held in the lead-up to the agreement approval. So Commissioner, we'd probably start this morning by calling Mr Fahy to give evidence first, and I understand that the Commission has questions for both of our witnesses, so we'll hand them over to you. So we'll call Mr Fahy first.

PN14

THE COMMISSIONER: Thank you. I wonder if Mr Flannery might wait outside.

<KEVIN FAHY, AFFIRMED [8.06 AM]

EXAMINATION-IN-CHIEF BY MR MARSHALL [8.06 AM]

PN15

MR MARSHALL: Mr Fahy, could you state your full name for the record, please?‑‑‑Kevin Fahy.

PN16

And you've prepared a statement for the purpose of these proceedings. Is that correct?‑‑‑Yes.

PN17

And do you have a copy of that statement with you?‑‑‑Yes.

PN18

And that statement is signed and dated by yourself on 2 August 2018. Is that correct?‑‑‑Yes.

PN19

Thank you, Commissioner; we'd seek to tender that statement of Mr Fahy.

PN20

THE COMMISSIONER: Any issues at all, Mr Sage?

PN21

MR SAGE: No, no, Commissioner.

EXHIBIT #1 STATEMENT OF KEVIN FAHY, 02/08/2018

PN22

MR MARSHALL: Commissioner, I don't have any questions for the witness. Obviously his information's in his statement just for your benefit and for my friend's here as well. I have a copy of the enterprise agreement and the award in the witness box, in case Mr Fahy needs to refer to it, so those materials are there with him.

*** KEVIN FAHY XN MR MARSHALL

PN23

THE COMMISSIONER: Thank you. Mr Sage, do you have any questions for Mr Fahy?

PN24

MR SAGE: Don't think so, Commissioner. I'd perhaps just - - -

PN25

THE COMMISSIONER: You'll have to speak up, I'm sorry.

PN26

MR SAGE: No, Commissioner, not at this stage. Although perhaps just reserving a right if anything rises.

PN27

THE COMMISSIONER: Mr Fahy, I have just got a few questions. First of all, what is your rate of pay?‑‑‑My rate is $40 an hour, plus my - - -

PN28

So $40 an hour?‑‑‑Yes. And then I have my time and a half after eight hours, double time after 10, double time nightshift weekends et cetera.

PN29

So you've got the enterprise agreement, a copy of the enterprise agreement with you. Is that right?‑‑‑Yes.

PN30

MR MARSHALL: Sorry, it's tab 3 of that folder.

PN31

THE COMMISSIONER: So if I could ask you to turn to page 3 of the agreement; so you're a carpenter by trade?‑‑‑Yes.

PN32

So carpenter I think is classified as a construction worker 5. Is that correct?‑‑‑To my knowledge, yes. Yes, to my knowledge.

PN33

So you'll see construction worker 5 there, the rate of pay's $23.08 an hour?‑‑‑Yes. I don't know. Just the agreements I made with Endacom when I started those, my rate of pay.

PN34

So were you told during the enterprise agreement explanation that you'd maintain your current rate of pay?‑‑‑I was told that this was the minimum and I could make excess of that. It was - - -

PN35

Sorry, you need to repeat that?‑‑‑That this was the minimum hourly rate and there was no – like, I could have earned more per hour, dependant on experience.

*** KEVIN FAHY XN MR MARSHALL

PN36

All right. If I could take you back to Clause 1.3B, which is on page 1?‑‑‑Sorry, what?

PN37

Can you read 1.3B for me?‑‑‑"Subject - - -"

PN38

Don't read it out. You just read it to yourself?‑‑‑Yes.

PN39

What do you think that means?‑‑‑That previous agreements were stopped and there was – new agreements were met.

PN40

So do you accept that this agreement overcomes any other discussions or agreements you have in place with your employer?‑‑‑Yes.

PN41

Sorry?‑‑‑I think – yes, yes.

PN42

Yes. And what did – Mr Flannery explained the agreement to the employees, didn't he?‑‑‑Yes, he went over all of it, yes.

PN43

Okay. And what did he say about Clause 1.3B?‑‑‑I can't remember. It was a while ago. There was a lot in it.

PN44

If you were of the understanding that your rate of pay could go from $40 an hour down to $23.08 an hour, would you have voted for the agreement?‑‑‑Yes, I know the rates of pay, but I would – Endacom would have looked after me. Endacom pay us well above the average – the minimum rates.

PN45

Yes, but do you understand though or did Mr Flannery explain to the meeting that once the Fair Work Commission approves his agreement, he's only obligated to pay you the $23?‑‑‑Yes, I understood that.

PN46

He did explain that to you?‑‑‑Yes. Everything was explained. So I understood what was happening.

PN47

So you're happy to lose $17 an hour?‑‑‑Well, I don't think I probably would have, but then I'd go back, I'd make another agreement, sort of some things out with Endacom for my pay.

*** KEVIN FAHY XN MR MARSHALL

PN48

I don't understand. What are you saying?‑‑‑I understand that it was – my rate would drop. But Endacom could put me back onto that rate again afterwards.

PN49

So where does it say that?‑‑‑Well, it would be an agreement between myself and Endacom.

PN50

So is that in writing somewhere?‑‑‑I'm not sure. I don't know.

PN51

Well, do you have it in writing between you and Mr Flannery?‑‑‑No.

PN52

Did Mr Flannery explain that if there was an issue about the rates of pay that he would only be obligated to pay the $23.08?‑‑‑I don't – sorry - - -

PN53

Let's say, for example, you have a dispute with Mr Flannery about your overtime rate or something along those lines, and you take Endacom for the Fair Work Ombudsman and try and get paid what you regard to be your appropriate rate?‑‑‑Yes.

PN54

Did Mr Flannery explain that because the agreement says $23.08 for a tradesman, that's all he has to pay, that's all the Fair Work Ombudsman - - -?‑‑‑It was all explained. Everything was read through. I believe he'd (indistinct) my rate.

PN55

All right. When you say everything was read through, what do you mean?‑‑‑He read everything, explained everything and opened everyone up, answer any questions anyone had or if anyone had any queries about it, he would explain everything.

PN56

And he explained that once this agreement comes in, that he can drop everybody back to the rates of pay that are contained in this agreement?‑‑‑To my knowledge, he would have said that, yes, but I don't think he would.

PN57

That's not the question I asked?‑‑‑Sorry.

PN58

He explained that he could drop your rate by probably 45 per cent?‑‑‑This was – that was explained.

PN59

And you voted for him?‑‑‑Yes.

*** KEVIN FAHY XN MR MARSHALL

PN60

Okay, all right. I have no further questions. Mr Sage, do you have any questions as a result of - - -

PN61

MR SAGE: Perhaps just briefly, Commissioner, just briefly.

CROSS-EXAMINATION BY MR SAGE [8.17 AM]

PN62

Mr Faye, my name's Alistair Sage, I work with the Australian Workers Union. I just had a couple of quick questions for you. Just during that information session with Mr Flannery around the terms of the agreement, what was your understanding from that of what the length of the agreement or how long it would go for would be?‑‑‑I can't remember.

PN63

Can't remember?‑‑‑I genuinely can't remember.

PN64

But did Mr Flannery go through to you about the rates, the minimum rates under the agreement?‑‑‑Yes.

PN65

And did he explain to you how – what did he say about any wage increases that you might receive? Did you talk about that at all?‑‑‑I didn't have any issues with the wages.

PN66

Did you recall if Mr Flannery spoke about minimum wage increases to the rates at all?‑‑‑Yes, he said everyone would be paid a fair rate, the proper rate.

PN67

Everyone would be paid a fair rate?‑‑‑Yes, a good rate. Like, everyone – and an agreement that was everyone was happy with everyone.

PN68

Right. So a good rate or a fair rate?‑‑‑It was going to be a good rate.

PN69

That's all.

PN70

THE COMMISSIONER: Mr Sage. Sorry, Mr Faye, there's one other question in had in relation to the process. Were there any negotiations?‑‑‑Can't remember.

*** KEVIN FAHY XXN MR SAGE

PN71

You can't remember, all right. Look at paragraph 5 of your statement. All right. And you were handed a document in early May which probably said "Notice Employee Representational Rights", or "NERR", it's called, and would have said, "(Indistinct) enterprise agreement. It's an opportunity for you to appoint yourself as a bargaining rep. If you're a member of union, the union becomes your default bargaining rep." Do you remember a document along those lines?‑‑‑There was lots of documents. I have lots of paperwork. I didn't read any of it. Everything that I got was explained at the yard on a (indistinct).

PN72

Right. So what, you weren't interested in your rate of pay moving forward?‑‑‑I was, yes, but - - -

PN73

Or you didn't bother reading the document?‑‑‑I was – I didn't reading the document.

PN74

So is it simply a case of you just didn't look (indistinct) Mr Flannery (indistinct) you thought, "Well, if he's going to put an enterprise agreement in front of me, I'll just (indistinct) what's in front of me"?‑‑‑No. From everything I heard that day, I understood – from what I can remember, I was happy with everything, happy with all the explanation I got. I was happy with everything.

PN75

Yes, but I'm talking about the process now. Early May, Mr Flannery gives you a document?‑‑‑Yes.

PN76

Says, "We want to have an enterprise bargaining, want to have an agreement." So what's your understanding of what (indistinct)?‑‑‑I'm not sure. I don't know.

PN77

All right. Maybe you can tell me; so early May you're handed a document and then late May you're handed another document, which is your enterprise agreement, the proposed enterprise agreement, and then Mr Flannery asks if there's any questions in relation to it then you wrote on it a week later?‑‑‑Yes. I didn't ask any questions. Some people were talking to him afterwards.

PN78

All right, thank you. Mr Sage, anything from what I've just - - -

PN79

MR SAGE: Just one last question. Just Mr Fahy, so when Mr Flannery explained the agreement to the staff, you said you didn't ask any questions. Is that right?‑‑‑Yes.

PN80

But you said afterwards people asked some questions of Mr Flannery?‑‑‑I think there was certain people talking to him afterwards. Whether they were asking him questions or not, I don't know.

*** KEVIN FAHY XXN MR SAGE

PN81

Okay. But there weren't questions asked of him during the meeting where he explained the terms, it was afterwards?‑‑‑I think some people asked questions. I can't remember exactly.

PN82

Yes, okay. That's all, Commissioner.

PN83

THE COMMISSIONER: Mr Marshall, anything in re-examination?

PN84

MR MARSHALL: I don't think anything turns on it, Commissioner, it just – perhaps a point of clarification.

RE-EXAMINATION BY MR MARSHALL [8.22 AM]

PN85

Following the question that Mr Sage just asked you, Mr Fahy. So in the meeting where Mr Flannery explained the agreement to you, you said to Mr Sage that people were asking – well, talking to Mr Flannery after the meeting; but just for clarification, is it your recollection that – did any employees ask Mr Flannery questions when he was explaining the agreement during the course of that explanation?‑‑‑Yes, I think there was, yes.

PN86

Okay, thank you. Nothing further from me, Commissioner. Thank you.

PN87

THE COMMISSIONER: Thank you. Thank you very much, Mr Fahy, you may step down.

<THE WITNESS WITHDREW [8.22 AM]

<ENDA FLANNERY, SWORN [8.23 AM]

EXAMINATION-IN-CHIEF BY MR MARSHALL [8.23 AM]

PN88

MR MARSHALL: Thank you. Could you state your name for the record, please?‑‑‑Enda Flannery.

PN89

And Mr Flannery, you're the managing director of Endacom Pty Ltd. Is that correct?‑‑‑Yes.

PN90

And you've prepared a statement for these proceedings?‑‑‑Yes.

*** KEVIN FAHY RXN MR MARSHALL

*** ENDA FLANNERY XN MR MARSHALL

PN91

Do you have a copy of that with you?‑‑‑Yes, it should be here.

PN92

Is that statement signed and dated by you on 3 August 2018?‑‑‑Yes.

PN93

Thank you. Commissioner, we'd seek to tender that statement of Mr Flannery.

PN94

THE COMMISSIONER: Thank you, Mr Marshall. Mr Sage, any issues?

PN95

MR SAGE: No issues, Commissioner.

EXHIBIT #2 STATEMENT OF MR ENDA FLANNERY, 03/08/2018

PN96

MR MARSHALL: No questions from me, Commissioner. Mr Flannery, if you need to refer to the enterprise agreement, the award or the notice of representational rights, there's a folder on the table there with those documents.

PN97

THE COMMISSIONER: Mr Sage, any questions?

PN98

MR SAGE: No, Commissioner, not at this stage.

PN99

THE COMMISSIONER: Mr Flannery, if I could ask you to turn to the enterprise agreement that you have in front of you?‑‑‑Yes.

PN100

MR MARSHALL: Tab 3 of that folder?‑‑‑Tab 3?

PN101

Tab 3?‑‑‑Tab 3, yes, yes, yes.

PN102

THE COMMISSIONER: Now, Mr Fahy has testified that he gets paid $40 an hour as a carpenter currently. Page 3 of the enterprise agreement has a table of wage rates; and you made this comment to me in conference some time ago, but I need to get it into evidence so I can refer to it in any decision. A level 5 construction worker is a trade's rate, right, so that rate's $23.08, and you've previously made comment to me that the – you pay above the agreement rates?‑‑‑(Indistinct reply)

PN103

Confirm that?‑‑‑Yes, yes.

*** ENDA FLANNERY XN MR MARSHALL

PN104

SO you'll that from the evidence of Mr Fahy that there's a – basically a $17 margin per hour between his over award payment rate or over agreement rate and the proposed enterprise agreement?‑‑‑Yes.

PN105

So if we then take you back to Clause 1.3B on page 1 of the agreement – just give you a chance to – you read that to yourself?‑‑‑Yes.

PN106

How did you explain that clause to the employees?‑‑‑Well, that – I just wrote it out. I mean, nothing – nothing changes; I told them that. So that clause is the same as any other clause. It's not – the rates didn't change. None of the rates changed, so I'm not - - -

PN107

But that clause allows you to pay people the enterprise agreement rate of pay, which is some $17, almost $17 an hour less than Mr Fahy. Now, what my question is: did you explain to him and to the other workers that once this enterprise agreement is approved by the Fair Work Commission that you can drop their rate of pay by some 40 to 45 per cent?‑‑‑Well, to be honest with you, I didn't, because they know it to be – they wouldn't work with that.

PN108

I'm not - - -?‑‑‑Yes.

PN109

I'm not talking about the practicalities of the construction industry?‑‑‑Yes.

PN110

I'm talking about the wording; and what you're saying is to me is that you didn't explain it?‑‑‑I read it to them. Yes, I read everything to them.

PN111

Yes, but did you explain it to them though?‑‑‑Well, it's self-explanatory.

PN112

Well, the self-explanatory provision or interpretation of that clause is that they can be dropped back forty to forty-five per cent of their rate of pay?‑‑‑Yes, yes, but I've told them that nothing will change, the rates of pay wouldn't change. I explained that to every one of them.

PN113

Yes. And I have no doubt that's right, and I have no doubt that - - -?‑‑‑Yes. Well, that clause, Your Honour, is there, yes, but I think if you go somewhere else you'll see that I explain that nothing will change.

*** ENDA FLANNERY XN MR MARSHALL

PN114

Yes. The problem is though that whilst that may be the case whilst you own the company, if you sold the company to another employer and they came in and saw that provision then they could apply that provision?‑‑‑Well, if I saw that I'd make, I'd have it at the understanding which I wouldn't sell it anyway, but that nothing would change – I mean, that the rates – the rates are there, the government rates are good. If you start robbing people, you won't get – you won't get men.

PN115

No. Once again, you're talking about the practicality to the construction industry, and I accept that you're not going to get good people to come and work for award rates of pay in the Sydney construction industry, I accept all of that. But unfortunately that provision there allows you or a future employer to drop them back to award rate of pay and they have no recourse. For example if you entered in - if you had a dispute with your employees about an overtime rate, for example, the Fair Work Ombudsman could only apply the rates of pay contained in this enterprise agreement. Did you explain that to the employees?‑‑‑Yes, we went into a lot of it in detail, your Honour, but I couldn't tell you word for word what I explained to them. You know, this is two, three, four months ago.

PN116

Yes. All right, in relation to the bargaining process the way that it has been explained is, from what Mr Fahy can recall, was that he was handed a document some time in early May. Not sure what it was, he didn't read it. Then in late May he attended another meeting. There was other documents handed out and then there was a third meeting and they voted the agreement up. Did any employee fill out the NERR? Page 8 of your - sorry, not page 8, clause 8?‑‑‑Clause 8.

PN117

Paragraph 8 of your statement. Right, you've handed out hour notice of employee representational rights which you've got to do that. But did any employee fill it out and send it back?‑‑‑Not to my recollection, no. They've got every bit of the paperwork.

PN118

Right?‑‑‑If it's there it will be on file. If they have it - if they sent it back.

PN119

The obvious question is were there any negotiations in relation to the enterprise agreement?‑‑‑Well, no there were - - -

PN120

That's on 9 May. You then have another meeting on 25 May where you hand out a copy of an agreement and I assume it's the agreement which is contained in the - - -?‑‑‑Yes.

PN121

- - - folder here?‑‑‑ Yes.

PN122

So that's two weeks later?‑‑‑Yes.

*** ENDA FLANNERY XN MR MARSHALL

PN123

Were there any discussions between management and any of the employees in that 14 days about the provisions of the agreement?‑‑‑Well, not really. They all seemed happy enough. I mean you talk to people, they're happy with the rates of pay, they're happy with their hours. They're all, you know - no one - - -

PN124

Right, so it wasn't actually - - -?‑‑‑No one has ever said anything to me as bits and pieces.

PN125

Yes. So there was no actually bargaining take place for the agreement?‑‑‑Well, there's no one - they were - they got everything. No one wished to - they had plenty of time to put their input in and everything. Yes.

PN126

Yes?‑‑‑Everyone was happy I think, yes.

PN127

Right, and then on the meeting on the 25th you've said "Look, here's the proposed agreement the company wants. We're giving you the notice and we're going to meet back again on" - I think it was 4 June - "and have a vote". Is that right?‑‑‑Yes.

PN128

All right.

PN129

All right, Mr Sage, do you have any questions now?

PN130

MR SAGE: No, Commissioner.

PN131

THE COMMISSIONER: Thank you.

PN132

Mr Marshall, anything in re‑examination?

PN133

MR MARSHALL: No thank you, Commissioner.

PN134

THE COMMISSIONER: All right.

PN135

Mr Flannery, thank you for your evidence. You may step down?‑‑‑Thank you.

<THE WITNESS WITHDREW [8.33 AM]

*** ENDA FLANNERY XN MR MARSHALL

PN136

THE COMMISSIONER: All right, Mr Marshall?

PN137

MR MARSHALL: Thank you, Commissioner. So, Commissioner, as I mentioned earlier we've already filed some submissions in relation to this matter. We certainly think those submissions substantively address the matters that the union have raised in terms of agreement content and concerns that the union raised with the better off overall test. We've also prepared - sorry, my client has also prepared an undertaking on 24 July and at your request, Commissioner, I've now provided your associate with a copy of that on company letterhead.

PN138

Commissioner, we understand that the undertaking addresses all of the issues I think that, Commissioner, you raised that you had a concern with, a potential concern with, and also some of the issues, but not all of the issues, that the union had raised. In the context of the union's submission that I think was made in their supplementary submissions that the undertaking represents a substantial change to the terms of the agreement, as we've noted in our submissions, Commissioner, that's quite simply not the case. If I can take you through those items in the undertaking first. The first point in the undertaking - - -

PN139

THE COMMISSIONER: It's probably appropriate to mark this undertaking.

PN140

MR MARSHALL: Of course.

PN141

THE COMMISSIONER: All right, we'll do that.

PN142

Any issues, Mr Sage, with me marking it?

PN143

MR SAGE: No. No, Commissioner.

PN144

THE COMMISSIONER: I'll mark the undertaking from Endacom Pty Ltd dated 24 July 2018 signed by Mr Derek Callaghan, who's a senior project manager, as exhibit 3.

EXHIBIT #3 UNDERTAKING FROM ENDACOM PTY LTD DATED 24/07/2018 SIGNED BY MR DEREK CALLAGHAN

PN145

MR MARSHALL: Thank you. Now, Commissioner, the amendments in point 1 of the undertaking to clause 5, the hours' clause of the agreement, clause 5.1 the only amendment there was an acknowledgement, a specific acknowledgement, that clause 33.1 paragraphs (c) to (e) of the award specifically would be incorporated into the agreement. I understand that there was a concern that there may have been some terms in those particular provisions of the award that could have affected or intersected with the hours of work regime in the agreement.

PN146

In the absence of any specific evidence as to what the effect might have been in that regard, that undertaking was given purely on the understanding that there would be no disadvantage to employees if those terms were to apply in the employees' day to day to work. In the context of the hours of work scheme in the agreement, Commissioner, we certainly submit that that is not a major or substantial change. In relation to clause 5.2 where an additional provision was inserted around employees requesting to take a rostered day off and the default position being included that a rostered day off should be taken once in every four week's cycle, Commissioner, we would still maintain and my client's position has always been that the rostered day off provision in the agreement as it was first drafted provided for more flexibility for employees to take RDOs and allowed them to build up a bank of RDOs should they choose to do so.

PN147

As we say we don't accept the extent or range of the concerns that the union had with that provision as was set out in their initial objections. Commissioner, I understand that your concern was perhaps more of a common sense or a practical outcome type concern in that the way the clause was drafted could have on an interpretation allowed employees to go for a significant length of time without taking an RDO, hence why the company has given that undertaking that the default position will be that it will be regular and there can be agreement for that to be delayed and banked up over time. That is the amendment that's in clause 5.5, and the not unreasonable standard for refusing requests to take RDOs has been included in that regard as well.

PN148

THE COMMISSIONER: There was an issue I thought, Mr Marshall, in relation to the quantum that could be banked. From memory the agreement has 10 RDOs can be banked? I think that was my recollection.

PN149

MR SAGE: I think that's right.

PN150

MR MARSHALL: Yes, that's correct.

PN151

THE COMMISSIONER: That was the concern that I had.

PN152

MR MARSHALL: Yes, clause 5.5(b).

PN153

THE COMMISSIONER: That employees could go 10 months working a 40 hour week.

PN154

MR MARSHALL: Yes.

PN155

THE COMMISSIONER: With no RDOs. This undertaking still allows that to occur if a majority of employees agree.

PN156

MR MARSHALL: Sorry, but the last provision I just mentioned, Commissioner, the 5.5(a) amendment in undertaking 2.

PN157

THE COMMISSIONER: Yes.

PN158

MR MARSHALL: That includes the additional provision that a request to take an RDO will not be unreasonably refused. So we say that alleviates that potential concern.

PN159

THE COMMISSIONER: It still allows for the banking of 10 RDOs though.

PN160

MR MARSHALL: It does, and we maintain our submission, Commissioner, that that may be employees' preference to do that, to bank the RDOs.

PN161

THE COMMISSIONER: All right. Thank you.

PN162

MR MARSHALL: In terms of point 3 of the undertaking, Commissioner, that is purely a point of clarification. The agreement included the wording - sorry, the wording was "including any applicable allowances set out in the award." As we have maintained and, Commissioner, this was an issue - sorry, I should add it was I think raised initially by Colman DP when the agreement came before him in the first instance, the change of wording was just from "including" to "plus" in the second line there. We say that's no actual change from the original terms of the agreement. It was always the intent on my instructions that employees would be paid allowances as per the award in addition to hourly rates.

PN163

Colman DP did raise a concern that it could be interpreted as incorporating allowances. That was never the company's intent, so that wording was just by way of clarification. In terms of point 4, Commissioner, the deletion of clause 6.3 from the agreement allowing for - which facilitated all-purpose rates of pay or other alternate pay arrangements. I understand the concern that was raised by yourself in that regard, Commissioner, so the company is prepared to not apply that term so that there won't be alternate pay arrangements sanctioned by the agreement. Undertaking 5, Commissioner, the annual leave provisions in clause 7.2, that just provides the clarification that excessive leave accruals will be dealt with specifically and completely in accordance with the terms of the award rather than the more brief terms of the agreement as originally drafted.

PN164

Undertaking 6, Commissioner, we say - and the union as I understand maintains their objection to this provision - but it is just a straightforward provision around when and under what circumstances employers(sic) would be required to provide medical certificates or statutory declarations. As I'm sure you're aware, Commissioner, the combination of the standard award term and the National Employment Standards doesn't actually provide specific clarification around those terms, so we say it provides guidance and clarity both to employees and the company as to when those provisions will be applied and when notification and - sorry, when the appropriate documentation will need to be supplied.

PN165

Undertaking 7, Commissioner, again is a clarification issue. The interesting interaction, if I can put it that way, between this agreement which obviously incorporates the Building and Construction Award which contains an industry‑specific redundancy scheme in the award, but the agreement referring to the National Employment Standards certainly on one argument would represent no actual difference as the National Employment Standards contains an exception for industry-specific redundancy schemes within the payment provisions in the National Employment Standards.

PN166

There was a point raised by the union which my client certainly understands could be an interpretation point which is on a plain reading of the agreement someone could then just refer to the table in the National Employment Standards and think that is the redundancy payment scale that applies. So as to avoid any confusion and so as to ensure that there is absolutely no disadvantage to employees the undertaking has been provided to ensure that the redundancy payments are either in accordance with the NES scale or the award, whichever is greater at any particular point in time.

PN167

The final point, point 8 of the undertaking, Commissioner, yes is an issue that we say is of otherwise limited application. Only something that applies to employees who are incapacitated, in receipt of workers compensation payments and in receipt of workers compensation payments for a period in excess of 26 weeks. The agreement as originally drafted only provided for a maximum period of 26 weeks for superannuation payments to be maintained. The award contains a period of 52 weeks. The union has picked up on that differential and my instructions are that the company is prepared to increase the agreement to meet the award term so there is no disadvantage to employees in that regard.

PN168

With that in mind, Commissioner, we say that the undertaking provided, as I've explained, either provides clarity around certain agreement terms in relation to interpretation issues that have been raised by Colman DP, by yourself and by the union, and in certain instances certainly like the last point there, the undertaking about superannuation payments on workers compensation, certainly addresses a potential difference between the agreement as originally drafted and the award. I don't think there is any suggestion, and as I understand it none has been made by the union, that the terms of the undertaking leaves employees worse off. But we would say, Commissioner, certainly on an overall basis the undertaking does not result in substantial changes to the terms of the agreement.

PN169

Now, Commissioner, if we look at the issues that have arisen this morning, and I understand the questions that you've asked of the company's witnesses in the context of the approval process and pre-approval steps and the manner of explanation of the agreement to the employees. I guess the first point that is made, and it's probably fair to say that in many aspects, Commissioner, the scheme of enterprise bargaining under the Act is - there are a number of statutory requirements, as I'm sure we all know, that have to be followed and applied by an employer undertaking an enterprise bargaining process.

PN170

Now in terms of providing information, timeframes for which employees need to consider information and timeframes for which employees need to have access to the agreement prior to an approval vote being held and a timeframe by which the employer needs to give employees notice of their representational rights before being asked to vote on the agreement, we submit and we say it's clear from the form 17 as we've highlighted in our submissions, that the company has complied with those time periods that are required in relation to the agreement approval.

PN171

Having said that and having complied with those requirements, Commissioner, I understand that you've asked questions of our witnesses about negotiation or whether there was bargaining required - or whether bargaining occurred between the company and the employees in relation to this particular agreement, and certainly the evidence confirms that there were no substantive negotiations or bargaining as I'm sure my friends at the Bar table and yourself, Commissioner, often does occur in circumstances where an enterprise agreement is being made.

PN172

The point that we would make there, Commissioner, is the Act doesn't require negotiation or bargaining to occur as a mandatory prerequisite for an agreement to be made. Certainly in the timeframes that were adhered to in this process, and Mr Flannery gave evidence before that there was ample opportunity for employees to talk to him about the agreement and to raise any issues that they may otherwise have had, as he said it's his understanding that employees were happy with what was presented to them. Mr Fahy as well gave evidence that - and certainly if I can say, Commissioner, Mr Fahy gave every indication that he was perhaps somewhat apathetic about the information that was presented to him at certain points. Again the message that I think was quite clear from his evidence was that he was happy with what was described to him and he was happy with the process and what he was agreeing to.

PN173

THE COMMISSIONER: I think his evidence was, Mr Marshall, that he didn't read a document.

PN174

MR MARSHALL: Commissioner, that's my comment perhaps he was a bit apathetic about that but there's certainly no suggestion that the document wasn't provided to him.

PN175

THE COMMISSIONER: No, there's not.

PN176

MR MARSHALL: And he had opportunity to consider it, and that is all the Act requires, Commissioner, in that regard.

PN177

THE COMMISSIONER: Yes.

PN178

MR MARSHALL: So it is not uncommon, it is not unusual we submit in these circumstances that there may be very little active involvement, negotiation, back and forth discussion between employees and a company in circumstances where the evidence indicates there wasn't confusion, there was no uncertainty and the employees were certainly on Mr Fahy's evidence and Mr Flannery's evidence happy with the information that was provided to them. We also need to look at this agreement in the broader context of Endacom's operations and perhaps the industry in which it operates. Now, Commissioner, this is an agreement which is not by any means we would submit complex or comprehensive in its terms.

PN179

As far as enterprise agreements go it is relatively brief and simple. It incorporates the award in its entirety subject to those terms of the agreement, specific terms of the agreement, which vary or modify the conditions in the award. This is not - and sorry, I should also add on that point Mr Fahy's evidence, Commissioner, was that he was familiar with the terms of the award not only from working with Endacom but also from working in construction since he has been in Australia on other jobs. He obviously from his evidence is comfortable with the terms of the award. This is an agreement that only incorporates one award. We're talking about a company that just does construction work in classifications otherwise covered by the award.

PN180

This isn't a situation, Commissioner, where a group of employees is being asked to vote on or approve an enterprise agreement which incorporates other awards that perhaps have very little or nothing to do with the work that they're doing. The evidence is very clear that we're talking about construction workers voting on an agreement that covers construction work, and in that respect the way in which the agreement has been presented to the employees, the level of explanation given we say is appropriate and sufficient in the circumstances taking into account the size of this business and as I said the nature of the work and the relatively limited compass of the agreement, in terms of the scope of the agreement covering just one award and construction work.

PN181

In terms of the fact that there was a meeting where Mr Flannery explained the terms of the agreement to the employees - some of the employees, and Mr Flannery's evidence is that some of the employees asked questions about the terms of the agreement and he answered them when in the context of that meeting and provided them with the information. In our submission, Commissioner, we say that's entirely appropriate again for the size of the company and the nature of this agreement, that all of the employees were involved in that discussion, they all had the opportunity to ask questions and where questions were asked, Mr Flannery answered them.

PN182

There are other recent agreement approval decisions, Commissioner, as I'm sure you're aware, where the necessary elements of section 180 of the Act, specifically section 180(5), haven't been found to have been met because an employer has fallen short on the explanation provided or the opportunity for the employees to ask questions about the agreement. Now in those sort of processes there are agreements which come before the Commission where there has been no opportunity or very, very limited opportunity for any face to face interaction between a company and employees and there has been very limited or no explanation, no meaningful explanation provided to employees about the terms of the agreement.

PN183

In our submission, Commissioner, again given this is a relatively small company and small workforce we think it is entirely appropriate and credible that the company has had that face to face interaction with the employees, allowed them the opportunity to ask questions and have that explanation provided to them in person. And we say with a further submission, Commissioner, that there really is no one size fits all solution in terms of how an agreement needs to be explained to employees, what level of explanation or information needs to be given to employees. It all needs to be considered in context and for the reasons I've just given, Commissioner, we think what occurred in this instance was entirely appropriate.

PN184

THE COMMISSIONER: Mr Marshall, are you satisfied that the explanation complies with the One Key test as a result of the Full Court of the Federal Court decision?

PN185

MR MARSHALL: Well, I guess that's the point that I just raised, Commissioner. I mean the - - -

PN186

THE COMMISSIONER: I understand that and - - -

PN187

MR MARSHALL: The Full Court said in One Key that it is something that needs to be considered in the context of any particular situation, and One Key of course was the situation where I think it was only three employees involved in the vote.

PN188

THE COMMISSIONER: Yes.

PN189

MR MARSHALL: An agreement that by the time it reached the Federal Court potentially applied to thousands of employees. I think it was 11 awards that it covered, and in that instance One Key did have an internal HR resource that explained - well, the HR - - -

PN190

THE COMMISSIONER: I'm not suggesting that Endacom are in the One Key phase here in relation to a wide gamut of issues.

PN191

MR MARSHALL: No.

PN192

THE COMMISSIONER: I'm just suggesting it in relation to the explanation of the agreement, whether or not you believe the requirements set out by the Full Court have been satisfied in this circumstance?

PN193

MR MARSHALL: Well, yes I do, Commissioner, for the reasons I gave earlier.

PN194

THE COMMISSIONER: Okay.

PN195

MR MARSHALL: It's one award, it's all construction work, it's the same classifications the employees have been working in and again there was no - and I understand what the Full Court said, as I think indeed Flick J did at first instance. In circumstances like One Key there was perhaps - and yes, the Full Court was very clear on this - perhaps a heightened expectation that I guess a significant level of detail and explanation would be provided to those employees about the effects of the agreement beyond perhaps just what may be applied to those three employees and their particular classifications.

PN196

But again, Commissioner, the other issue I think which certainly went against One Key in that instance was that there was some information provided to employees by email when that agreement was disseminated. I understood the HR officer from One Key in that instance followed it up very soon after that with a phone call to the three employees in question. Unlike in this instance with my client, Commissioner, there was no real opportunity for the employees to have that face to face interaction or discussion with the employer.

PN197

THE COMMISSIONER: Yes.

PN198

MR MARSHALL: Which has been afforded to the employees in this case. So, Commissioner, perhaps if I could leave it there for the moment. I understand that my friend would also like to probably make some comments about that and again in addition to any other matters raised, we'd rely on the written submissions that we've already filed for the substantive matters of the agreement. Thank you, Commissioner.

PN199

THE COMMISSIONER: Thank you, Mr Marshall.

PN200

Mr Sage?

PN201

MR SAGE: Commissioner, as we've stated in our correspondence we continue to rely on our original objection document which I believe is dated in July, and we also provided two further written outlines of submission. Just briefly on the better off overall test issues in the context of the revised undertaking provided by the company, the union - so, Commissioner, we maintain our position that in relation to the - there's a couple of discrete issues I'll just go to. Firstly in terms of the individual flexibility arrangement we maintain the position that as I understand the company's position is that because the Act sets out specific rules as to how a flexibility - the model term will be taken to be a term if the agreement itself doesn't have one in the first place, because of that then the flexibility term isn't part of the BOOT.

PN202

Our view is that it is part of the BOOT and if the model term is slightly worse than the award term it's still relevant. Obviously it's not a fundamental term of the agreement in one sense, Commissioner, but we do maintain our position that the model term does have some detriment relative to the award term in the Building Award. I think, Commissioner, they're probably especially relevant in an industry like the construction industry. As stated in our written submissions there's references to the need for any individual - IFA to be generally agreed to without coercion or duress, and there's an obligation that the written IFA be provided to the employee at the time that it's entered into and in fact beforehand.

PN203

I understand my friend has said in their written submissions that obviously the IFA still needs to be signed under the model term but then the company has up to 14 days to actually give a written copy to the employee for their records. So we say that is a detriment when the award makes clear that you need to have the written copy in front of you. So we do maintain that, Commissioner. I appreciate it's not perhaps the most significant issue we're dealing with today. Just on the undertaking provided by Endacom we raised in our objection, Commissioner, some concerns around the notice and evidence requirements from a BOOT perspective, not from an NES perspective; obviously the NES allowing agreements and awards to contain specific notice and evidence requirements.

PN204

So the undertaking provided by the company is paragraph 6 of the revised undertaking. Commissioner, that partly addresses our concern but from a BOOT perspective, Commissioner, there were a few parts of the agreement clause which is at clause 7.3 which we did have a concern about. The undertaking addresses the situation where there's an absence adjacent to a weekend or a public holiday or an RDO or single day absences. It doesn't go to absences of two days or more which the agreement says requires a medical certificate if reasonably practicable. So all I want to say on that, Commissioner, really is that the test on the Act is that it would be evidence that satisfies a reasonable person.

PN205

What the agreement still does even with this undertaking is tells you what a reasonable person would accept, and it may be that a reasonable person would not require certain evidence in light of the manner in which the leave was taken. So that discretion is robbed from the company and from the employees if it may be - there may be cases in which it's not necessary to go to the level of a statutory declaration or a medical certificate, and that's foreclosed by the agreement. But as I said, Commissioner, that's a fairly minor point. We do still maintain that point though, Commissioner.

PN206

If I could just turn now - look, Commissioner, I suppose just briefly on the RDOs point as you pointed out before, the agreement provides for banking up to 10 RDOs rather than five. We do say that could be understood as a detriment to employees given that the purpose of the RDO arrangement is to ensure a work life balance, Commissioner. So if we do have people just banking a large number of RDOs rather than taking their days off that could be perceived as a detriment as well.

PN207

So, Commissioner, I think it's agreed or it's not in dispute that there are no wage increases payable under the agreement. So I think, Commissioner, probably the key issue that I want to just touch on now is the question of whether the agreement was genuinely agreed to by the employees. Commissioner, from Mr Flannery's evidence both in his statement and his oral evidence today, in our submission it's very clear that the employees were all advised there would be no loss for pay or any pay related arrangements if the agreement were to be approved. I think that comes across fairly clearly both from paragraph 16 and 17 of Mr Flannery's statement but also from Mr Flannery's answers to your questions.

PN208

And in our view, Commissioner, Mr Flannery's explanation to the employees that there would be no loss of conditions contradicts and is not consistent with the real - the very clear meaning of clause 1.3 of the agreement. So I think, Commissioner, what can be drawn from Mr Flannery's evidence was really two parts to it. One was that he certainly stressed that there was no intention to reduce pay rates and there was no suggestion to employees that there would be a reduction in pay going forward; and the other part to his evidence in relation to clause 1.3 was that it was self‑explanatory.

PN209

So I think, Commissioner, there's really no warrant to draw from his evidence that employees were put on notice, employees such as Mr Fahy were put on notice that by agreeing to the agreement that they were facing the very real possibility in a legal sense, accepting that Mr Flannery didn't actually intend to cut their pay rates but from a legal perspective that the company now had the ability to cut their pay rates from in Mr Fahy's case $40 an hour to around $23 an hour.

PN210

So, Commissioner, we say that clause 1.3 isn't self‑explanatory. It's actually quite a complicated one and perhaps one of the most complicated terms in the agreement, and it's also not a complicated term which is of marginal importance. It's a complicated term which is of fundamental importance because its effect is to put into context how the agreement interacts with any other industrial arrangements which may have operated at the workplace in the past, and what it makes clear, Commissioner, is that all those previous agreements are rendered ineffective as from the date that the agreement commences to operate.

PN211

So, Commissioner, we say that that's a very important term in the scheme of the agreement and to say it's self‑explanatory while in addition saying pay rates will all be maintained, it cannot amount to the taking of all reasonable steps to explain the effect of the terms of the agreement. Commissioner, we'd also say in terms of Mr Fahy's evidence I think, Commissioner, we - I mean Mr Fahy said I think in response to one of my questions that he was told he'd be paid a good rate or a fair rate. In our submission, Commissioner, Mr Fahy was not on notice of the fact that his pay rates - any lawful entitlement he may have had to a higher pay rate than $23 and a number of cents per hour would be ended by the effect of approving the agreement.

PN212

And we say that Mr Flannery's evidence - and I think it's fair to say that Mr Flannery's evidence was and almost defensively so, and perhaps rightly so, that he wouldn't be seeking to cut his employees' pay rates from $40 an hour to $23 an hour, understanding the industrial context of that, the construction industry in Sydney, and Mr Flannery's own views about what he perhaps should remunerate his employees. But given Mr Flannery's demeanour and approach to that question and given that his answer was that the term was self‑explanatory and the pay rates would be maintained I don't think, Commissioner, there's really anything before you to suggest that Mr Flannery or anyone else at Endacom put or explained to employees the true impact, legal impact of that clause.

PN213

It may be partly because they didn't want to rely on that clause but it was in there and it's, in our submission, an essential term. Because as, Commissioner, you suggested in your questions before, if the company was sold that clause would then mean that people such as Mr Fahy would suffer the very real possibility of a roughly $17 reduction in their real pay rates. So in our submission, Commissioner, I don't think there's anything before the Commission to allow it to be satisfied that Mr Fahy and the other employees in like circumstances wanted to sign up to that and I think partly, Commissioner, that's because Mr Flannery probably doesn't intend to do that. But that's what his document - that's what this agreement may allow him or a successor, were he to sell the business, to do. So I think, Commissioner, that's really the key, the nub of the - - -

PN214

THE COMMISSIONER: Mr Sage, aren't the employees entitled to believe Mr Flannery?

PN215

MR SAGE: Well, Commissioner, I suppose the employees may be entitled to believe Mr Flannery when he says that he himself does not intend to reduce their pay rates. But when there's no explanation of the fact that the agreement gives him that right, we don't say that's sufficient because Mr Flannery - as I said there's no way of knowing what the future holds. I mean we can't operate on the assumption, Commissioner, that management's position will always be to honour a non-legally binding commitment not to reduce pay rates when the agreement says "We can cut your pay rates to these minimum rates if we had a pre‑existing arrangement".

PN216

So we don't think that's adequate, Commissioner. But more importantly, Commissioner, I suppose our submission is that this really goes to the issue of genuine agreement. There was some discussion before about the role of bargaining in the scope of the agreement-making scheme, and I understand my friend's submissions to be that bargaining in one sense is not a pre-approval requirement to file an agreement for approval. But, Commissioner, we would say that the existence or otherwise of bargaining prior to the filing of an agreement is clearly relevant in terms of understanding the test of genuine agreement.

PN217

That's not to say that a typical union employer bargaining process is necessary to be satisfied if a genuine agreement. That certainly wouldn't be warranted based on the words of the Act but section 188 paragraph (c) and section 188 paragraph (a) in terms of how employee - how the Commission can be satisfied of genuine agreement, clearly bargaining in the sense that it allows for clear evidence of an exchange and a discussion around the content of the proposed terms of a document, we say that's its relevance and in a case like this we just have Mr Flannery's explanation to the employees of the terms which were to be put to the vote.

PN218

So, Commissioner, that's really our - on this point our argument is that section 188, both paragraph (a) and paragraph (c) cannot be satisfied. Paragraph (a)(i) - sorry, one, Roman numeral I - cannot be satisfied because the explanation provided by Mr Flannery in his own words was that the term was self‑explanatory and given its importance - and I don't think anything from Mr Fahy's evidence could lead you to conclude that Mr Fahy had in fact through his own inquiries or through Mr Flannery's explanation come to recognise the significance of that clause. So we put the submission as to the taking of reasonable steps and we also say given the importance of the term, that there are - that it provides other sound reason within the meaning of section 188(c) to conclude that the employees didn't genuinely agree. That's all, Commissioner.

PN219

THE COMMISSIONER: Mr Sage, are you still pushing all of the issues that you raised in your submissions of 11 April?

PN220

MR SAGE: Commissioner, is that the eight or nine - - -

PN221

THE COMMISSIONER: In relation to the 21 days for example of the request for the vote?

PN222

MR SAGE: I think that was an issue which I believe one of my friend's colleagues went to and spoke to in the conference and we withdrew that point on the basis that I think - - -

PN223

THE COMMISSIONER: So you're satisfied that the 21 days has been met?

PN224

MR SAGE: The 21 days had been met, yes, Commissioner.

PN225

THE COMMISSIONER: All right. Thank you.

PN226

All right, Mr Marshall, anything in reply?

PN227

MR MARSHALL: Yes, thank you, Commissioner. The issue raised by my friend in relation to the flexibility term and the individual flexibility arrangements in the agreement, I won't take you through our submissions again, Commissioner. We submit we've adequately dealt with that, and also raise the issue that I understand there's a bit of a debate about semantics from my friend but it is just simply not possible under the agreement, which is in accordance with the model term, to enter into a flexibility agreement without that being documented in writing.

PN228

It's impossible for something to be presented to an employee to sign if it's not in writing, so I'm just not quite sure I'm following that line of logic from my friend but I'll leave that there. Just an additional comment in relation to the personal carers leave provision in the agreement, Commissioner, and I think it's important to note in addition to what we've already said in our submissions and my comment earlier about the term in the agreement actually providing clarity where there is a fair bit of uncertainty if it's just the terms of the award and the NES applied, it's important to note that in clause 7.3(b) of the agreement, Commissioner, the ability for the company to request documentary evidence is all predicated on the understanding that an employee may be required to provide evidence in the circumstances that follow.

PN229

It's not as seemed to be contended by my friend in his submissions a mandatory requirement. There is still ability for the company to exercise discretion as to whether they exercise that choice or not. So there is certainly no lack of flexibility or prescription in the terms that my friend would suggest. In relation to the RDO provisions in the agreement we rely on our submissions, Commissioner, and the oral submissions I gave earlier. Now going back to the issue of the rates of pay in the agreement, what was said and understood about clause 1.3 of the agreement and what the intention of the company is practically in relation to rates of pay under the agreement.

PN230

In terms of that clause being explained to employees and whether there is any uncertainty to the extent that it may give the Commission concern that the agreement wasn't genuinely agreed in the terms that my friend expressed, the requirement - and if we go back to section 180(5), the requirement is that the explanation is in an appropriate manner taking into account the circumstances and needs of the employees, Commissioner. In this instance it is clear, it is unequivocally clear we submit, both from Mr Flannery's evidence and Mr Fahy's evidence, and he was very clear when you asked him this question, Commissioner. He understood the rates of pay in the agreement were the enforceable minimum rates.

PN231

Now as Mr Flannery said and Mr Fahy understood, there was the opportunity for him to continue to be paid above agreement rates going forward. Now going back to I think a point that you made earlier, Commissioner, in the event that there was a dispute about pay rates, overtime rates and that was a matter that an employee raised as a dispute under the dispute terms in the agreement or a complaint to the Fair Work Ombudsman as you mentioned, Commissioner, in my submission if the agreement is approved in this form and then as soon as my client continues an above agreement pay rate with an employee, and it could be as soon as and probably will be as soon as the next pay period, that gives that employee a contractual guarantee of that rate.

PN232

THE COMMISSIONER: Yes, it's a common law right.

PN233

MR MARSHALL: A common law right which is also something that could be agitated by way of a complaint to the Fair Work Ombudsman if there is a common law entitlement to raise.

PN234

THE COMMISSIONER: It's probably an issue for the court I would have thought.

PN235

MR MARSHALL: And it is, Commissioner, but having seen this situation far too many times than I'd care to remember if it unequivocally clear that there is an agreement, whether or not it's in writing, and it will be shown very clearly through pay slips that there is a rate being paid to that employee I wouldn't like to be the person standing in the court trying to defend an employer who, to use the common parlance, tries to weasel out of it by reference to minimum rates in the agreement. You know, the graveyard is full of employers, Commissioner, who've tried that stunt. So in that regard - - -

PN236

THE COMMISSIONER: Could you highlight for me where the term "minimum rates applies" appears in clause 6?

PN237

MR MARSHALL: Clause 6, Commissioner?

PN238

THE COMMISSIONER: Of the agreement.

PN239

MR MARSHALL: Well, Commissioner, I don't think the word "minimum" arises in clause 6. The point I was making was that - - -

PN240

THE COMMISSIONER: I understand the point you're making but also Mr Flannery said that he didn't mention anything to do with a common law right.

PN241

MR MARSHALL: Commissioner, I just mention that - - -

PN242

THE COMMISSIONER: The trouble I've got, Mr Marshall, is that this is a very pragmatic agreement and it's an attempt to meet the requirements of the Fair Work Act whilst maintaining the commercial realities of the construction industry, or trying to meet the commercial realities of the construction industry where none of the players like to divulge the actual costs to their competitors.

PN243

MR MARSHALL: Yes, of course.

PN244

THE COMMISSIONER: And there are obvious reasons for that. What I need to decide is as to whether or not there are deficiencies in the agreement particularly in relation to the One Key decision which made the process involved in reaching this agreement void, and that's where I think there could be a problem. If you're going to talk about minimum rates in an agreement - in fact I'm not sure you can have a minimum rates agreement as such. There used to be minimum rates awards as we all know.

PN245

MR MARSHALL: Yes, of course.

PN246

THE COMMISSIONER: But I've never heard of a minimum rates agreement and the only issues that I really get to - and I'm not trying to cut across what Mr Sage has had to say, and he has raised some pertinent points, but the reason why I wanted to speak to Mr Fahy and Mr Flannery was in relation to get some sense of what was the level of explanation of the agreement.

PN247

MR MARSHALL: Yes.

PN248

THE COMMISSIONER: There's no doubt the One Key decision of the Full Court has changed the way that the agreement process now has to traverse.

PN249

MR MARSHALL: Yes, and even since the Full Court decision in One Key, Commissioner, as I'm sure you're aware there has been subsequent decisions that have put further dimensions and understandings on that. I would certainly concede, Commissioner, in light of the One Key Full Court decision if there hadn't been anything said to employees in the meeting where Mr Flannery provided the explanation that the rates in the agreement were minimum rates and, as I said before, it was certainly very clearly understood by Mr Fahy that that was the case, then I think there would be a very serious question for us to answer if that point had not been addressed under the One Key test. But it has been addressed and as I mentioned just a second ago, Commissioner, it's entirely appropriate that level of explanation given in the context of this business and this agreement and the nature of the workforce.

PN250

THE COMMISSIONER: Sure. I accept your submission on that.

PN251

MR MARSHALL: Thank you. And just a final point, and I think I've already made the submission, Commissioner, but again where One Key certainly fell down to a large extent was the fact that there didn't appear on the evidence of that case to be any genuine opportunity, and to use my friend's words, for any exchange of ideas or discussion over that agreement. As I mentioned in my earlier oral submissions, Commissioner, I think it is you know commendable, if I can use that word in this instance, as I said before that the company had the face to face opportunity to have that discussion with employees. As my friend said himself there was ample opportunity for employees to come back and ask further questions and have discussions with him. We think that's clear and entirely appropriate in these circumstances. So, they're our submissions. Thank you, Commissioner.

PN252

THE COMMISSIONER: Thank you, Mr Marshall. I do understand the timing issues associated with the application. I am due to take annual leave in a fortnight but I'll endeavour to have this decision out before I go, so I'll reserve my decision and advise the parties in due course.

PN253

MR MARSHALL: Thank you.

ADJOURNED INDEFINITELY [9.27 AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

KEVIN FAHY, AFFIRMED................................................................................. PN14

EXAMINATION-IN-CHIEF BY MR MARSHALL.......................................... PN14

EXHIBIT #1 STATEMENT OF KEVIN FAHY, 02/08/2018............................. PN21

CROSS-EXAMINATION BY MR SAGE............................................................ PN61

RE-EXAMINATION BY MR MARSHALL....................................................... PN84

THE WITNESS WITHDREW.............................................................................. PN87

ENDA FLANNERY, SWORN.............................................................................. PN87

EXAMINATION-IN-CHIEF BY MR MARSHALL.......................................... PN87

EXHIBIT #2 STATEMENT OF MR ENDA FLANNERY, 03/08/2018........... PN95

THE WITNESS WITHDREW............................................................................ PN135

EXHIBIT #3 UNDERTAKING FROM ENDACOM PTY LTD DATED 24/07/2018 SIGNED BY MR DEREK CALLAGHAN............................................................................... PN144

Fair Work Commission Transcripts

AG2018/2477, Transcript of Proceedings [2018] FWCTrans 343 (19 September 2018)