AREEA reviews a recent Fair Work Commission decision where the Full Bench supported a construction company’s appeal for its EBA to be approved.

MINING contractor Thiess has successfully appealed a single-member decision by Commissioner Roe to dismiss an enterprise agreement for its Mount Pleasant Mine Project.

A Full Bench comprising of Deputy President Gostencnik, Deputy President Clancy and Commissioner Lee decided Commissioner Roe erred in his February decision to refuse approval of the agreement, when he concluded the three employees who voted to approve the agreement were not covered by it.

The decision also highlights that employers need to plan their agreement making strategy, particularly scope and coverage consistent with a bona-fide business rationale.

The agreement-making process is often onerous and ridden with delays, compromising productivity and readiness once a contract is awarded.

Background

Commissioner Roe found the three employees were ‘unfairly chosen’ because they were not engaged in “work connected… with the Mount Pleasant Mine Project”.

At the time, Thiess did not have a contract to perform any work at the Mount Pleasant Mine and none of the employees who voted to approve the agreement were working at the coal mine.

Thiess decided to undertake planning and maintenance work to be in the best position to deliver on the Mount Pleasant Mine Project for which they were seeking preferred contractor status.

The three employees were employed to perform, scope and schedule maintenance work on heavy machinery utilising their trade skills as boilermakers and diesel fitters.

Thiess subsequently lodged an appeal, which was upheld by the Full Bench on 23 May, 2017.

Thiess described the associated work as normal tradesperson tasks relating to training or familiarisation and planning and scheduling.

The Full Bench agreed with Thiess, submitting that it made little difference to the employees what particular mine or civil construction project the equipment was to be used for.

“Tradespeople need to apply their skills to different equipment and different requirements,” the Full Bench stated.

Thiess has since won a contract to perform work at Mt Pleasant Mine.

Decision

Thiess appealed commissioner Roe’s decision on seven grounds, focussing mainly on his  conclusion that the employees who voted for the agreement were not fairly chosen, or were not covered by the agreement at the time, and had not been genuinely agreed to by the employees.

The Full Bench agreed Commissioner Roe decided to dismiss the application solely on the basis that the employees who voted for the Agreement were not covered by it.

“Once (Commissioner Row) had dismissed the application… there was nothing more to consider so far as the application was concerned. It ended there,” the Full Bench stated.

The Full Bench then decided to deal with the ground of appeal raised by Thiess relating to the ‘coverage’ issue within the agreement.

“I am satisfied that the work would fall within the scope of the Agreement should Thiess obtain the contract but given all of the factors described above it would be more accurate to say that the employees who made the Agreement may be covered by the Agreement at some date in the future,” the Full Bench stated.

The Full Bench found Commissioner Roe incorrectly asserted that a clause of the Agreement suggested that work “in connection with, the Mt Pleasant Mine Project” required Thiess to have entered into a contract to carry out work at the Mt Pleasant Mine.

“If work at the Mt Pleasant Mine had been secured, the pre-mobilisation work in which the three employees were then engaged would fall within the scope of clause 3 of the Agreement with the consequence that the three employees would be covered by the Agreement,” the Full Bench stated.

The Full Bench made mention that the description in the Agreement of the Mount Pleasant Mine Project was capable of including the work ‘associated with winning work, work undertaken in anticipation of winning work and work in readying or preparing for the commencement of work at Mt Pleasant Mine in the event that work for which a tender was submitted, is awarded’.

But, added, ‘Work necessary for or preparatory to work at the Mt Pleasant Mine Project is not limited to work that it is necessary for or preparatory to, work at the project in relation to which Thiess has a contract’.

Preparatory work included that carried out before primary work occurs, and work in anticipation or expectation of that work (or in anticipation or expectation of entering into a contract to perform work), the Full Bench stated.

The Full Bench approved the appeal and proposed to remit the application for the approval of the Agreement to Commissioner Lee.

Implications

AREEA welcomes the decision as it adds more clarification to the Fair Work Act’s ‘fairly chosen’ test.

The critical question of whether employees who voted to approve the agreement are ‘employees who are employed at the time the agreement is made and those who will be covered by the agreement’ is also highlighted.

In this case, while the voting employees had not yet started work specifically at the new operation, they were considered to be employed to undertake important preparatory work.

It’s also important to note that the contents of an agreement should be watertight, with the Mount Pleasant Mine Project outlining capabilities including the work associated with winning work, work undertaken in anticipation of winning work and work in readying or preparing for the commencement of work at the mine, in the event that work for which a tender was submitted, was awarded.

It’s important for employers to have the opportunity to be prepared when tendering for contracts, especially in this case where Thiess were working towards preferred contractor status and were subsequently awarded a contract to perform work at the smine.

The three employees involved in this agreement-making process were employed to perform, scope and schedule maintenance work on heavy machinery utilising their skills. It’s reasonable to expect the preparatory work at Mount Pleasant Mine Project may have influenced the timing of this particular maintenance but other business reasons could have arisen from time to time leading to the maintenance of the equipment.

For more information on interpretation of your enterprise agreement, managing disputes in your workplace, or Fair Work Commission representation, contact your local AREEA office.