A DRILLING contractor to the mining sector has had the approval of its new enterprise agreement overturned by a Fair Work Commission Full Bench after it found that the CFMEU’s initial application to intervene was too hastily dismissed, despite the union’s concession that it had no members covered by the agreement.

Given the union’s appeal of the single member’s decision not to hear its arguments uncovered errors in the agreement that were initially missed, the decision is a timely reminder to ensure agreements are watertight prior to lodgement for approval.

AREEA Workplace Relations Lawyer, Lindsay Carroll, reviews the decision.

Background:

 On 21 July 2016, New South Wales-based drilling and boring contractor Ron Southon Pty Ltd (the Company) applied to the FWC for approval of a new enterprise agreement.

On the next day (22 July), an industrial officer of the CFMEU’s NSW branch sent correspondence to the FWC’s generic email address objecting to the ‘certification’ of the agreement and requesting a copy of all documentation related to the Company’s application, including a sworn statutory declaration and the Notice of Representational Rights (NERR) provided to employees.

The FWC’s “triage unit” first responded to the union’s request by advising that as the CFMEU was not listed as a Union Bargaining Representative in the agreement application, it would seek advice from the commission member overseeing the matter.

The CFMEU responded with information that it asserted would ‘assist the Commissioner in their deliberations’, including that the union:

1. Had constitutional coverage of the work proposed under the agreement;
2. Had a long history of industrial representation of the work proposed;
3. Is a party to the relevant modern award (Building and Construction On-site 2010);
4. In the future, would likely have other members of the CFMEU employed in classifications covered by the proposed agreement; and
5. Would have the right to appeal any decision in the proceedings under s.604 of the Fair Work Act.

The union also asserted in its email that the FWC may choose to hear from an employee organisation about the approval of an agreement even though the organisation may not be a party to the agreement.

The FWC’s support team responded with advice that Commissioner Cirkovic had been allocated the matter and that, to determine whether the CFMEU was a bargaining representative for the agreement, she had requested a list of CFMEU members who it would cover.

The CFMEU then advised it had no members to be covered by the proposed agreement, but that it wished to be heard on the matter for the reasons outlined above.

Further, the union then outlined a number of provisions in the agreement that it believed were not compliant with the Fair Work Act, most significantly that some of its terms contravened s.55 of the Act and were not consistent with the National Employment Standards.

The Company’s enterprise agreement was approved by Commissioner Cirkovic on 20 September 2016.

A later email exchange between the FWC and the CFMEU’s industrial officer confirmed that the commissioner considered the union’s correspondence but that the matter was closed.

CFMEU wins appeal

 The union appealed the decision of Commissioner Cirkovic to approve the agreement on several grounds, summarily that the commissioner:

1. Failed to give any reasons for her (implied) decision not to allow the CFMEU to be heard on the company’s application to have the enterprise agreement approved;
2. Failed to give the CFMEU access to the company’s application to have the enterprise agreement approved together with the accompanying material and failed to provide any reasons for that decision; and
3. Erred in concluding that the agreement satisfied the better off overall test and erred in approving the agreement because it included terms that contravened s.55 of the Act.

The Full Bench, comprising Senior Deputy President Hamberger, Deputy President Booth and Commissioner Bissett, considered a number of precedent decisions and came to the following important conclusions:

1. Cirkociv C did not err in not giving the CFMEU the opportunity to be heard or to lead evidence in relation to the application, given the approval of the agreement would not interfere with any right of the CFMEU to represent or protect the interests of the employees in the future. Similarly, the Full Bench considered that Cirkociv C was not required to provide the CFMEU with reasons for her decision not to hear the union’s arguments in the approval proceedings, but that it would have been preferable to do so.
2. Cirkociv C fell into error in declining the CFMEU access to the supporting documentation lodged with the agreement for approval.  The Full Bench expressed the view that such documents should be freely available to the public unless ‘exceptional circumstances’ justify confidentiality, of which in this case there were none.
3. Significantly, that the agreement should not have been approved because its terms contravened s.55 of the FW Act. Specifically, it was found that the agreement’s terms relating to the potential for employees to contract to work in excess of 38 hours per week were not consistent with the National Employment Standards.

That the agreement contravened s.55 of the Act was enough to uphold the union’s appeal and the application for approval of the enterprise agreement has been remitted to Commissioner Bissett.

The full decision can be read here.

Implications for Employers

Despite the outcome of the appeal for Ron Southon, this Full Bench decision actually reinforces that a member of the commission is not compelled to hear arguments from a non-bargaining representative in opposition of an agreement being approved.

However, it should be highly concerning to employers that this decision implies that any external party should be able to freely request and scrutinise any supporting documentation lodged with an application for agreement approval.

This includes documents that may contain sensitive employee information or that relate to the agreement making process.

Further, this decision demonstrates the importance of ensuring an agreement fully complies with the Fair Work Act 2009 at all stages of the bargaining process and prior to its lodgement.  AREEA recommends seeking the advice of an experienced workplace relations practitioner before negotiations commence.

For information about this matter or any other agreement making queries, contact [email protected]