Fair Work Commission|2021-11-16

Ausdrill Pty Ltd [2021] FWC 6348 (16 November 2021)

s.185 - Enterprise agreement

Application for approval of the Ausdrill Pty Ltd Black Coal Agreement 2020.

[1] An application has been made for approval of the Ausdrill Pty Ltd Black Coal Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Ausdrill Pty Ltd (Ausdrill). The Agreement is a single enterprise agreement.

[2] A notice of employee representational rights was provided to employees on 13 October 2020 and the notice complied with the regulations. Employees were provided with notice of the time and place and method of voting on 3 August 2021 and were provided with access to the proposed Agreement and information about the effects of the terms of the Agreement in the period from 4-11 August 2021. Voting occurred in the period 12-13 August 2021 and a majority of those who voted approved the Agreement.

[3] Ausdrill filed a statutory declaration in support of the Agreement. The statutory declaration, which was declared by Ausdrill's HR Manager Mr Tony Flynn, noted that the relevant award for the purpose of the better off overall test (BOOT) was the Black Coal Mining Industry Award 2010[1] (the Award).

[4] In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of concerns in relation to the Agreement and supporting documentation. Those concerns included pre-approval requirements, National Employment Standards (NES) compliance and BOOT assessment considerations. The Commission wrote to Ausdrill on 2 September 2021 and identified the following issues requiring its response:

(1) The Form F17 identified the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) as a bargaining representative however, a Form F18 had not been filed.

(2) Copies of emails sent to employees advising them of the ballot details and providing the Agreement and explanatory information were referred to in the F17 but were not provided. Copies of the relevant emails were sought.

(3) National Employment Standard (NES) inconsistencies were identified in respect of compassionate leave and community service leave. Ausdrill was advised that the NES precedence clause at clause 4.3 of the Agreement remedied those deficiencies and would be noted in the decision if the Agreement was approved.

(4) A number of BOOT concerns were identified on which submissions and/or undertakings were sought. The issues raised related to;

part-time employment provisions which lacked the protections found within the Award;

[5] On 7 August 2021 the CFMMEU filed a form F18 in which it objected to approval of the Agreement and set out detailed reasons for its objections. The concerns raised can be summarised as follows;

(1) Clause 6.16 of the Agreement which deals with abandonment of employment contravenes s.55 of the Act.

(2) Ausdrill failed to take all reasonable steps to explain the Agreement in that it;

failed to provide an overarching explanation of the various documents provided to employees;

failed to support the large volume of explanatory materials with verbal communication; and

failed to provide an explanation of the Brandrill Agreement comparative material and which employees that was relevant to.

(3) The Award versus Agreement comparison document was inaccurate and/or misleading in a significant number of respects including with respect to;

ordinary hours of work beyond which penalty payments apply;

personal leave entitlements of fixed or maximum term employees;

inclusion of 'General Duties' (clause 6.4 of Agreement) said to be not less beneficial relative to the Award;

(4) The explanation of the Agreement terms versus the Brandrill Agreement, which applied to certain employees as a transferrable instrument, was said to be inaccurate and/or misleading including with respect to the;

the statement that employees moving from coverage by the Brandrill Agreement to coverage by the proposed Agreement would not be disadvantaged.

(5) The Agreement failed to satisfy the BOOT in a significant number of respects including with respect to the;

classification structure and supporting provisions;

pro-rata personal leave entitlements of fixed and maximum term employees;

casual rates not compounding with other penalty rates;

[6] Having regard to the matters raised by both the Commission and the CFMMEU, the matter was listed for Mention on 10 September 2021 following which directions were issued for the filing of material by both parties in advance of a hearing listed for 13 October 2021.

[7] Ausdrill is part of the Perenti Group, an ASX200 diversified global mining services group with businesses in surface mining, underground mining and mining support services. Ausdrill provides a range of drillings services including in production drill and blast, exploration and geotechnical in both metalliferous and black coal mining.

[8] Clause 2.1(b) of the Agreement states that it will apply to the following employees engaged by Ausdrill;

"(b) employees of the Company engaged in drilling and blasting, exploration and associated maintenance roles in surface operations in the black coal mining industry in the classifications set out in clause 8.8 of this Agreement (Employees)."

[9] At the time of the ballot for approval of the Agreement Ausdrill engaged employees at the following black coal operations where it held contracts;

[10] On 23 October 2020 a notice of employee representational rights was issued by the then HR Manager for Ausdrill Ms Maria Cutt[2].

[11] Between 26-29 October 2020 seven on-site one hour bargaining meetings were held with employees across the BMA, Middlemount, Ensham and Blair Athol sites and were chaired remotely by Ms Cutt on Microsoft Teams (due to Covid restrictions) with the relevant Ausdrill Project Manager and employees at site. The sessions were structured so as to enable attendance of all employees to at least one meeting. Employees who were unable to attend a meeting were subsequently contacted by Ms Cutt[3]. The then draft agreement was used as the basis for discussions in those meetings. A number of changes were made to the draft agreement arising out of feedback from the meetings[4].

[12] On 18 November 2021 the 7-day access period prior to an agreement approval ballot commenced. Employees were provided with an information pack which included a copy of the proposed agreement (the November 2020 Agreement) and other explanatory documents. Included in the information pack was a PowerPoint presentation[5] (the November 2020 Presentation) that summarised the changes from an earlier (October 2020) draft agreement.

[13] On 27 November 2020 a ballot was conducted for approval of the November 2020 Agreement but was unsuccessful[6]. Employees who were eligible to participate in the ballot were those employees who at the time, were employed at the BMA, Middlemount, Ensham and Blair Athol sites and numbered approximately 40.

[14] During December 2020 the Respondent mobilised employees for a new production drill and blast contract that it had secured at Boggabri. The number of employees required was approximately 20[7].

[15] On 15 May 2021, Mr Flynn who commenced as the Respondent's new HR Manager on 24 March 2021, sent an email[8] to employees advising them that the Respondent wished to resume bargaining. The proposed recommencement of bargaining followed a bargaining pause during which period there were some informal discussions with various employees[9]. One of the reasons for the hiatus in bargaining was that of the 'kick-off' of the Boggabri contract in December 2020, which management wanted to see settle in after its commencement before recommencing bargaining[10]. The starting point for the resumed bargaining was the rejected November 2020 Agreement[11].

[16] On 21 May 2021 Mr Flynn received an email from the CFMMEU advising that they wished to be involved in bargaining as they were the default bargaining representative for those employees that were members and who had not nominated any other bargaining representative. It is noted that no other bargaining representatives had been nominated by employees following the NERR distribution[12]. Mr Flynn responded to the CFMMEU email on 24 May 2021 and then exchanged various emails with the CFMMEU between then and 1 June 2021 which led to a meeting being arranged for 3 June 2021 between Ausdrill and the CFMMEU.

[17] Between 24-28 May 2021 Mr Flynn and Ausdrill's General Manager of Exploration Mr Eric Gobbert travelled to site and held five bargaining sessions with employees located at the Boggabri and BMA sites. The Boggabri meeting was held as part of the normal one hour pre-start meeting while the BMA meetings were held as separate meetings[13]. A PowerPoint presentation[14] (April 2021 Presentation) was used to facilitate the meetings during which employees were;

provided with an outline of key terms of the proposed agreement;

provided an opportunity to discuss various terms;

taken through the proposed agreement and given an opportunity to ask questions and provide feedback; and

• were advised that any questions or concerns raised during bargaining sessions would be considered and responded to.[15]

[18] Mr Flynn was asked questions during cross examination in relation to the April 2021 Presentation which was used during the May 2021 bargaining meetings with employees. In response to various questions Mr Flynn stated that;

• In respect of the explanation on the Composite Rate (Clause 8.5 & 8.6 of the Agreement) slide[16], he was unsure whether employees were told that there was a distinction between those employees on a Composite Rate who would receive a 1.5% increase on commencement of the Agreement and those who were not on Composite Rates and would not receive that increase[17].

• In respect of the explanation on the Exploration Payment (Clause 11.1-11.3 of Agreement) slide[18], he confirmed that it was only employees engaged in exploration drilling that would be entitled to these payments, those being approximately 40 employees engaged at the Ensham, Middlemount, BMA and Blair Athol sites which were exploration contracts. Apprentices, tradespeople and employees at the Boggabrri site (which was a drill and blast production contract) would not receive payments under clauses 11.1-11.3[19].

• In respect of the explanation on the Annual Leave (clause 17.1-17.5 in the Agreement) slide[20] which states that Ausdrill has provided "One week's additional leave", he was unable to clarify which employees were "Eligible site employees", where that term appears at clause 17.5, that would be entitled to the additional week of annual leave[21].

• In respect of the explanation on the Annual Leave slide that employees would receive an increased leave loading at 20%, he conceded that the Award in fact provided for a 20% leave loading[22].

[19] On 25, 26 & 27 May 2021 Ausdrill's Project Manager Mr Keith Pollard conducted bargaining sessions with employees at the remaining sites, Ensham, Middlemount and Blair Athol. Mr Flynn spoke with Mr Pollard prior to these meetings to discuss how the bargaining sessions were to be held. Mr Pollard was also provided with a copy of the April 2021 Presentation and guidance materials which briefly set out the terms of the proposed agreement[23]. While lists of attending employees were kept of these meetings and provided to Mr Flynn, no minutes of the meeting were provided[24].

[20] On 3 June 2021 Mr Flynn and the Boggabri Project Manager Mr Greg Kitchen met via Microsoft Teams with CFMMEU representatives Mr Jeff Drayton and Mr Keenan Endacott along with two employees of Ausdrill who were CFMMEU members. During the meeting a number of concerns were raised by Messrs Drayton and Endacott regarding the terms of the draft agreement. At the conclusion of the meeting Mr Flynn requested that the CFMMEU set out their concerns in writing[25].

[21] On 9 June 2021 Mr Drayton sent an email to Mr Flynn setting out some fifteen concerns held by the CFMMEU regarding the draft agreement. After considering the matters raised by the CFMMEU Mr Flynn responded on 22 June 2021[26].

[22] Between 23 June and 22 July 2021 Ausdrill management considered feedback received from employees during and following the May 2021 bargaining sessions. In doing so, management continued to engage with employees regarding the agreement terms and agreed to make a number of further changes to clauses in the draft agreement[27].

[23] On 23 July 2021 Mr Flynn sent a revised draft agreement to employees at their personal email addresses which included changes made as a result of negotiations. In doing so, Mr Flynn requested that employees provide any further feedback to their respective Project Managers by no later than 30 July 2021. Feedback was subsequently received from employees including that there was no reference to "metre bore drilling" in the metre bonus structure. This feedback led to the draft agreement being amended to include such reference[28].

[24] On or around 2 August 2021 Mr Flynn contacted Ausdrill's Project Managers Mr Pollard, Mr Kitchen and Mr Keenan and asked them to familiarise themselves with the material in the Access Period Kit that was to be sent to employees prior to the commencement of the access period. Mr Flynn instructed and encouraged the Project Managers to hold meetings and discussions with employees throughout the access period, to draw attention of employees to the explanatory material and show employees a PowerPoint presentation with a voice over (August 2021 Presentation) that was provided as part of the Access Period Kit which summarised the key changes from the November 2020 Agreement to the proposed Agreement[29].

[25] On 3 August 2021 Mr Flynn sent an email to employees advising them that the 7-day access period prior to the ballot for approval of the Agreement would commence on 4 August 2021 (the Access Period Email)[30]. Employees were also sent an email on 3 August 2021 advising them of the ballot details[31]. The introductory paragraphs of the Access Period Email relevantly stated as follows;

We confirm that tomorrow, 4th August 2021, is the commencement of the access period for the proposed Ausdrill Pty Ltd Back Coal Agreement 2020 (Agreement). The access period will operate from tomorrow, 4th August 2021, until immediately before the commencement of the voting process on 12 August 2021.

Set out below is a secure link to access relevant documentation and a video which will assist in the explanation of the proposed Agreement and how it differs from the previous version of the Agreement which was provided to employees in November last year. The link can be accessed now and is a source of information for you to consider the proposed Agreement in order to make an informed decision prior to the ballot on 12 August 2021.

[26] The Access Period Email then provided a secure link to a number of documents including the;

November 2020 Agreement that had been voted down by employees;

Brandrill East Coast Coal Agreement 2009 (the Brandrill Agreement);

Comparison of the Agreement versus the Award (Award Comparison Document);

• Comparison of the Agreement versus the Brandrill Agreement (Brandrill Agreement Comparison Document)[32];

[27] Inclusion of the Brandrill Agreement along with the Brandrill Agreement Comparison Document was said to be because of a transmission of business that had occurred some years previously. That transmission of business was said to have occurred in 2016 resulting in the transfer of the Brandrill Agreement to Ausdrill and which had continued to apply to employees at the BMA, Ensham, Middlemount and Blair Athol sites. When pressed during cross-examination on the detail of that transfer of business Mr Flynn was unable to confirm the circumstances that led to the asserted transfer of business and when that transfer of business had occurred. Mr Flynn was also unable to confirm which Ausdrill employees were covered by the Brandrill Agreement at the Ensham, Middlemount, Blair Athol and BMA sites although he was clear in his evidence that it did not apply to any employees at the Boggabri site[33].

[28] The Brandrill Agreement Comparison Document[34], which was included as part of the Access Period Kit, is 75 pages in length. It is laid out in a table form with each clause of the Brandrill Agreement set out in the first column with the comparable clause of the Agreement in the adjacent column with comments provided in the third column explaining the Agreement clauses relative to the comparable Brandrill Agreement clause. The Award Comparison Document[35] is in a similar table format and runs to some 90 pages in length with each clause of the Award set out in the first column with the comparable Agreement clause adjacent in the second column and in the third column some commentary on relevant differences between the two are provided.

[29] The August 2021 Presentation[36], which was sent out in the Access Period Kit, set out differences between the Agreement and the November 2020 Agreement.

[30] Between 4-11 August 2021, pre-start toolbox meetings and discussions were held by Project Managers with employees at each of the sites.

[31] On 6 August 2021 Mr Flynn received an email from one employee stating among other things that employees were not able to access a lot of the information that had been sent out in the Access Period Email. Mr Flynn responded to the employee on 9 August 2021[37].

[32] The ballot for approval of the Agreement was conducted on 12-13 August 2021. At the time of the ballot there were 63 employees eligible to participate in the ballot. Of that number, 60 voted and 43 voted in support of approval of the Agreement[38].

[33] After reviewing submissions and undertakings filed by Ausdrill in advance of the hearing on 13 October 2021the CFMMEU pressed three broad grounds of objection to approval of the Agreement, those being that the Commission could not be satisfied that;

(i) the Agreement has been genuinely agreed to, taking into account that all reasonable steps were taken to explain the terms and effect of the terms of the Agreement as required by s.180(5) and s.188(1)(a)(i) of the Act;

(ii) the Agreement has been genuinely agreed to, taking into account that there are other reasonable grounds for believing the Agreement has not been genuinely agreed to by employees: s.188(1)(c); and

[34] The CFMMEU did not press its objection at the hearing in respect of clause 6.16 of the Agreement which deals with abandonment of employment and which they contended in their F18 contravenes s.55 of the Act.

Whether genuinely agreed (s.180(5) & s.188(1)(a)(i))

[35] The CFMMEU contend that Ausdrill failed to take all reasonable steps to explain the terms and effects of the terms of the Agreement as required by s.180(5) of the Act. That submission is based on the following;

The large volume of material sent to employees via the Access Period Email appears to have been the primary step taken by Ausdrill to explain the terms of the Agreement, yet the email did not have an overarching document explaining which parts of the kit might be relevant to employees.

While Ausdrill refer to toolbox meetings having been conducted during the access period there is no evidence of the content of those meetings, therefore it appears likely that the substantive explanation provided was in the written material provided in the Access Period Email.

Given the large volume of written material sent to employees, the apparent lack of verbal communication as part of the explanation and the lack of a clear document being provided to assist employees navigate the large volume of material that was linked in the Access Period Email is a relevant consideration that weighs against the Commission being satisfied as to compliance with s.180(5).

Outside of the brief summation of differences provided in the third columns of the Award Comparison Document and the Brandrill Agreement Comparison Document, there appears to have been little explanation of the differences between the Agreement and the Award and Brandrill Agreement.

The Access Period Email fails to provide any explanation as to why two comparison documents (the Award Comparison Document and Brandrill Agreement Comparison Document) were included in the explanatory material and to which employees those respective documents were relevant.

The material contained in the Award Comparison Document and the Brandrill Agreement Comparison Document was, as an explanation of the terms and effects of the terms of the Agreement, inadequate and misleading with respect to significant terms of the Agreement.

[36] The CFMMEU submit that the explanation of the terms and effect of the terms of the Agreement in the Award Comparison Document was misleading in the following respects;

The ordinary hours of work provisions (clause 15 Hours of Work) are said to be 'consistent' with the Award but in fact do not provide for payment of penalty rates for ordinary hours of work undertaken on a weekend.

The classification structure in the Agreement (clause 8.8) is said to be 'consistent' with the Award but makes significant changes to the Award including removal of definitions and conferring much greater control over the allocation of work and the work appropriately expected of an employee.

No explanation is provided of the difference between the Award and the Agreement in respect of personal leave entitlements for fixed-term and maximum term employees which are pro-rated under the Agreement (clauses 7.1(c) & 18), this being less beneficial than the Award.

The terms of the Award with respect to Apprentices are said to be 'incorporated' however contrary to this representation, the Agreement provision for Apprentices (clause 9.1) does not incorporate the Award nor provide the same entitlements.

Employees are said not to be disadvantaged relative to the Award in respect of the general duties and prohibition on other employment (clause 6) however the Award contains no such provision.

Employees were not provided with an accurate explanation as to the effect of the Agreement provisions regarding notice of termination, which are said to be 'consistent' with the NES. The Agreement requires employees to provide the same notice of termination on resignation as that required on the employer side when giving notice to an employee (clause 25). That is to be contrasted with the Award requirement, that of one week's notice on the employee's side and where the NES does not impose a notice obligation on employees.

Employees are said to be entitled to the same overtime penalties as provided by the Award however this is inaccurate in respect of certain shiftworkers (clause 15) who appear only entitled to lower penalty rates.

The shiftwork provisions in the Agreement are said to be the same as the Award however under the Agreement shift loadings are applied to the 'base hourly rate' (clause 15.8) whereas under the Award the penalty rates are applied in a compounding manner with respect to weekend work. The Award also provides a more expansive definition of permanent night shift.

Employees were misled in respect of meal break entitlements (clauses 15.21 & 15.22). The Agreement provisions were said to be 'consistent' with the Award whereas the Agreement omits the Award entitlement to payment at overtime rates where an employee works by agreement beyond 5 hours without a meal break.

[37] The CFMMEU also submit that the explanation of the terms and effect of the terms of the Agreement in the Brandrill Agreement Comparison Document were also misleading in the following respects;

The explanation of the coverage of the Agreement is inadequate in that it is not explained which employees are presently covered by the Brandrill Agreement.

The explanation suggests that the Agreement goes further than the Brandrill Agreement in that it includes an NES precedence clause (clause 4.3) which infers that the absence of such a clause would leave an employee in some way unprotected, whereas s.56 of the Act protects employees without the need for an NES precedence clause.

It is suggested that the Agreement has the same shift definitions as the Award which as set out above in [36] is contended by the CFMMEU to be inaccurate.

The explanation of the Agreement states that it (the Agreement) "provides Employees with the potential to receive greater benefits" which infers (incorrectly) that the Brandrill Agreement prevented employees from receiving entitlements in excess of those provided by that agreement.

It is said in the explanation that the Agreement has no equivalent provision to that of clause 9 in the Brandrill Agreement which prohibits an employee from working for another company without Ausdrill's approval. The statement is misleading as clause 6.4(c) of the Agreement contains a similar prohibition.

It is said that the Agreement contains the same overtime provisions as that of the Award which is inaccurate for the reasons set out above at [37].

The explanation of the personal leave entitlements are, according to the CFMMEU, confusing and unclear to the point where the intention of the Agreement entitlement is unclear.

Employees were advised that they would not be financially disadvantaged by the Agreement. While this statement appears correct for some classes of employees it appears that employees may be potentially disadvantaged in for example the scenario of an employee working 35 ordinary hours Monday to Friday, that being due to the higher flat rates paid under the Brandrill Agreement.

[38] The CFMMEU further submit that inaccurate explanations extended to information provided by Ausdrill in the April 2021 Presentation as follows;

The explanation failed to distinguish the pay rise entitlement of employees on a Composite Rate (of 1.5% on commencement of the Agreement) from that of employees on a Base Rate who would not be entitled to the 1.5% increase on commencement of operation of the Agreement.

The slide on annual leave stated that employees would receive an additional week's annual leave in circumstances where the Agreement did not specify which employees were eligible for that additional week. The explanation also inferred that employees would get a higher leave loading of 20% when the Award actually provided a 20% leave loading.

[39] The CFMMEU submit that the flaws in the explanation of the Agreement are such that the Commission would have reasonable grounds to believe that employees did not genuinely agree to the Agreement because the employees were provided with misleading information.

[40] The CFMMEU contend that the Commission cannot be satisfied that the Agreement passes the BOOT in respect of a significant number of provisions within the Agreement which are set out below.

[41] A key feature of the Agreement is that of Composite Hourly Rates (clause 8) which permits Ausdrill at its discretion to implement composite hourly rates instead of base hourly rates, where such composite rates are intended to compensate and roll-up various foregone penalties, loadings and allowances that would be otherwise payable. The CFMMEU contend that the Agreement itself provides no actual composite rate and that in the absence of specified rates the Commission is not in a position to assess whether employees are better off overall.

[42] The CFMMEU further submit that the commitment at clause 8.13 that Ausdrill will ensure employees are better off overall than if they were employed under the Award is a poor substitute for enforceable entitlements in respect of composite rates. The CFMMEU also contend that the Commission should not accept a reconciliation provision in the circumstances as it would delegate the BOOT task to Ausdrill or where such a reconciliation provision provides for no enforceable entitlements or firm dates when any reconciliation should occur or the period over which the payments might be averaged for the purpose of comparison and reconciliation.

[43] The CFMMEU also submit that there are multiple other provisions in the Agreement that are less beneficial than the Award including;

Classifications (clause 8) in the Agreement, while stated to be 'referable' to the Award, do not contain the same definitions or protections found within the Award.

While base rates in the Agreement (clause 8) may appear higher than the comparable Award base rates, there are a range of penalties in the Award discussed above at [36] not provided by the Agreement. This includes the absence of penalty rates for ordinary hours of work undertaken on a weekend and shift loadings for night shift are applied more narrowly under the Agreement than the Award.

Clause 7.1(c) of the Agreement provides for pro-rata personal leave entitlements for fixed-term or maximum term employees whereas the Award does not provide for a pro-rata entitlement, but rather confers an entitlement of 105 hours personal leave per annum on commencement of full-time employment and on each anniversary thereafter.

The Agreement omits a range of apprentice entitlements found within the Award and only states at clause 9.1 of the Agreement that apprentices will be "paid no less" than the minimum rates in the Award.

The prohibition at clause 6.4(c) of the Agreement on Ausdrill employees working for other employers without Ausdrill's consent imposes a restriction not found in the Award.

Overtime rates at clause 15.10 of the Agreement are lower than the Award for particular shiftworkers.

The Agreement provides for casual employees and payment of a casual loading of 25% at clauses 7.1(d)-(g) however does not provide for the compounding effect of application of other penalty rates (weekend, shift and overtime) to the ordinary hourly rate (inclusive of the 25% loading) as applies to persons covered by Schedule B of the Award. The CFMMEU acknowledge that Schedule B of the Award may be taken as the proxy for the BOOT in circumstances where the Award does not provide for casual employment in respect of persons covered by Schedule A.

Part-time employment provisions are less favourable than the Award.

Clause 6.9 of the Agreement which deals with stand-down is wider in scope than s.524 of the Act. That is because the Agreement which provides for the stand-down of employees due to stoppages of work for any cause also covers "any other limitation of work" for any cause.

Notice of resignation required to be given by employees pursuant to clause 25.1 of the Agreement (up to 4 weeks depending on length of service) exceeds the 1 weeks' notice required under the Award.

Clause 15.21 of the Agreement which deals with meal breaks does not provide a right to overtime payments when an employee works beyond 5 hours by agreement without a meal break.

Whether genuinely agreed (s.180(5) & s.188(1)(a)(i))

[44] Ausdrill submit that it took all reasonable steps to explain the terms and effects of the terms of the Agreement to employees, thus complying with the requirements of s.180(5) & s.188(1)(a)(i) of the Act. In support of that submission, it points to the following;

Negotiations for the Agreement occurred with each of the employees to be covered involved in bargaining. This resulted in employees having greater involvement, oversight and understanding of the Agreement well before the access period.

The explanation of the Agreement was provided in written terms as well as by way of a verbal pre-recorded presentation (the August 2021 Presentation) and all Project Managers were equipped to discuss the terms of the Agreement during toolbox meetings and at other times.

In the Access Period Email employees were expressly invited to ask any questions they had about the terms of the Agreement or the explanatory information.

The circumstances of the Covid pandemic in terms of staff movement and border closures limited the opportunity of conducting mass meetings during the access period. In those circumstances a pre-recorded presentation was a reasonable step in the alternative.

As part of the written explanation employees were also provided with a copy of the November 2020 Agreement which had been rejected in the November 2020 ballot. This allowed employees to compare the terms of the Agreement with those of the previously rejected draft agreement.

[45] Ausdrill submit that the explanations provided to employees in respect of the relevant industrial instrument were not misleading for the following reasons;

Both the Brandrill Agreement Comparison and Award Comparison Documents were relevant regardless of which instrument applied to which employee and formed part of the reasonable steps taken by Ausdrill.

For employees not covered by the Brandrill Agreement it was not misleading or inaccurate to provide employees with a comparison of the terms of employment applying to their colleagues.

As to the CFMMEU's complaint that the explanatory material did not make clear which comparison document was relevant to which employees, Ausdrill submit that employees are well informed about the instrument applying to their employment.

[46] Responding to the concern that Ausdrill failed to explain to employees that it was only employees on a Composite Rate of Pay who would receive a 1.5% increase on commencement of the Agreement, Ausdrill have proposed an undertaking that would result in all employees receiving a 1.5% increase on commencement of the Agreement (Undertaking 5).

[47] In respect of the alleged misleading or inaccurate explanation provided in the Award Comparison Document, Ausdrill submit the following;

The document sets out the exact wording of the Award and compares it to the equivalent provision in the Agreement, such direct comparison allowing employees to determine the differences on a clause by clause basis. The third column provides Ausdrill's commentary and explanation.

It is not misleading or inaccurate not to explain that certain Award terms do not appear in the Agreement, especially so in circumstances where the terms of the Award are clearly set out alongside the equivalent terms in the Agreement.

The ordinary hours of work under the Agreement and the Award are both 35 hours per week and there is no misrepresentation to employees on its face. An undertaking was however proposed to address the concern that the explanation provided did not highlight the absence of weekend penalties for ordinary hours of work (Undertaking 16).

The classification structure is consistent with the Award. Simply because the descriptions of each classification in the Agreement are not as detailed as they are in the Award does not mean the classifications are not consistent.

Ausdrill disagree with the CFMMEU's interpretation of the personal leave clause under the Award as it applies to fixed or maximum term employees. An absence of the union's explanation of the relative entitlement does not render the explanation misleading. Ausdrill did however offer an undertaking that aligned the personal leave entitlement in the Agreement with the Award (Undertaking 20).

The intention of the parties was to ensure that apprentice rates in the Award apply to employees of Ausdrill. Undertakings confirming that intention have been proposed (Undertakings 6, 7 & 8).

The CFMMEU's complaint regarding an inadequate explanation of the general duties of employees under the Agreement should be given no weight. That is because the Act provides that an employee who has engaged in conduct that causes serious and imminent risk to the reputation of their employer has engaged in serious misconduct. Ausdrill have however proposed an undertaking removing the prohibition on obtaining other employment (Undertaking 3).

The explanation provided in respect of employees' notice of termination obligations was not misleading. It specifically confirms that an employee was not required to give one week's notice. Nevertheless, Ausdrill have proposed an undertaking to align the notice obligation of employees with that of the Award (Undertaking 21).

The intention of the parties was to ensure the Agreement provided conditions equivalent to the Award in respect of shift penalties. To remedy any explanation shortcomings Ausdrill have proposed undertakings to align the Agreement terms with that of the Award. (Undertakings 14 & 15).

The timing of meal breaks and the ability to agree on an alternate time are consistent between the Agreement and Award. As regards the penalty of working beyond 5 hours without a meal break, an undertaking has been provided to align the Agreement entitlement with the Award (Undertaking 19).

[48] In respect of the alleged misleading or inaccurate explanation provided in the Brandrill Agreement Comparison Document, Ausdrill submit the following;

The document sets out the exact wording of the Brandrill Agreement and compares it to the equivalent provision in the Agreement, such direct comparison allowing employees to determine the differences on a clause by clause basis. The third column provides Ausdrill's commentary and explanation.

It is not misleading or inaccurate not to explain that certain Brandrill Agreement terms do not appear in the Agreement, especially so in circumstances where the terms of the Brandrill Agreement are clearly set out alongside the equivalent terms in the Agreement.

The explanation of the NES clause is legitimate and not misleading.

The intention of the parties in respect of shift penalties has been reflected in undertakings 14 & 15.

It is not misleading or inaccurate to explain that the Brandrill Agreement did not include an equivalent clause to Clause 5 Project Employment Arrangements in the Agreement or that employees had the potential to receive greater benefits pursuant to that clause.

The intention of the parties with respect to overtime is reflected in undertakings and the explanation was not misleading (undertaking 12).

The union's criticism that the personal leave explanation was confusing is not borne out by the fact that no employees raised any questions or concerns.

The union's assertion that some employees may be potentially disadvantaged in the move from flat rates under the Brandrill Agreement to the Agreement does not establish any misleading explanation as to the financial impact of the Agreement.

[49] Ausdrill submit that the CFMMEU's argument in relation to whether there are other reasonable grounds to believe the Agreement was not genuinely agreed is merely a transposition of its s.180(5) objections through the lens of s.188(1)(c). Ausdrill further contend that the CFMMEU misunderstand what the Federal Court had to say about s.188(1)(c) at [142] in One Key, that is it was intended to pick up anything not otherwise caught by sub-paragraphs (a) & (b) of s.188(1). It was not intended that objections in relation to s.180(5) and 188(1)(a) compliance are able to be re-run under s.188(1)(c).

[50] In relation to the Composite Hourly Rate provided for at clause 8 of the Agreement Ausdrill submits that;

Despite the union's submission, the Commission is able to consider whether the Agreement passes the BOOT because clause 8.4(c) of the Agreement guarantees that the Composite Hourly Rate of Pay is 'greater than would otherwise be payable to employees'.

If the Commission is satisfied that the Agreement passes the BOOT having regard to the Base Hourly Rate of Pay and other monetary entitlements, it follows that the Composite Hourly Rate of Pay must also pass the BOOT.

[51] To address the CFMMEU's concern about the prohibition on obtaining employment with other employers without the employer's consent, Ausdrill have proposed an undertaking to remove the prohibition (Undertaking 3).

[52] In response to the CFMMEU's concern over the stand down provision, an undertaking has been provided that more closely aligns the provision in the Agreement to that found at s.524(1) of the Act (Undertaking 4).

[53] Dealing with the apprentice and trainee rate issues raised by the CFMMEU, Ausdrill have proposed undertakings that would have the effect of incorporating the relevant Award provisions (Undertaking 6, 7 & 8).

[54] Dealing with the casual employee issue raised by the CFMMEU, Ausdrill acknowledges that Schedule A of the Award, which is relevant for the purposes of the BOOT, does not provide conditions of employment for casual employees. Notwithstanding that, Ausdrill have proposed undertakings (undertakings 9, 10 & 11) that would provide benefits in line with Schedule B classifications in the Award.

[55] To address concerns that overtime provisions in the Agreement were detrimental relative to the Award, Ausdrill have provided a number of undertakings that seek to align overtime entitlements in the Agreement with the Award (Undertakings 12 & 17).

[56] Addressing the concern that the Agreement did not include provisions dealing with part-time employment hours of work, Ausdrill have proposed an undertaking to align the Agreement terms with that of the Award (Undertaking 13).

[57] With respect to the CFMMEU's submission that the calculation of certain penalties and loading in the Agreement should be calculated on a compounding basis, Ausdrill have proposed an undertaking to address that issue (Undertaking 14).

[58] To address the concern that the Agreement did not provide for penalty payments for ordinary hours of work performed on a weekend an undertaking was proposed to align the penalty payment with that of the Award (Undertaking 16).

[59] Responding to the concern that the Agreement failed to provide for certain Award allowances, Ausdrill have proposed an undertaking to include certain relevant allowances in the Agreement (Undertaking 18).

[60] Dealing with the CFMMEU meal break concern that employees are not entitled to payment of overtime rates where they work beyond 5 hours without a meal break, Ausdrill have proposed an undertaking to align the Agreement term with that of the Award (Undertaking 19).

[61] As regards the pro-rata personal leave applied to fixed and maximum term employees, Ausdrill have proposed an undertaking to align the entitlement of such employees with that provided in the Award (Undertaking 20).
[62] Ausdrill responded to the notice of termination provision concern by providing an undertaking that aligned the notice required to be provided by an employee with that of the Award (Undertaking 21).

[63] I now turn to consider the various matters raised by both the Commission and the CFMMEU regarding approval of the Agreement, those being pre-approval, NES issues, genuine agreement and BOOT issues.

[64] In its initial correspondence sent to Ausdrill. the Commission requested copies of emails referred to in the F17 that were not provided. The requested emails were those sent by Ausdrill to employees prior to the commencement of the access period notifying them of the ballot details and providing copies of the Agreement, incorporated documents and explanatory materials. Copies of the requested emails were furnished by Ausdrill, addressing the Commission's concern regarding compliance with s.180(2) and s.180(3) of the Act.

[65] The CFMMEU raised a concern in their F18 and in their outline of submissions regarding clause 6.16 which deals with abandonment of employment and whether the term contravenes s.55 of the Act which relevantly states that "A modern award or enterprise agreement must not exclude the National Employment Standard or any provision of the National Employment Standards." While the objection was not pressed at the hearing I will deal with it, nonetheless.

[66] I am satisfied that clause 6.16 of the Agreement purports to enable Ausdrill to treat abandonment of employment (as defined in the Agreement) as at an employee's initiative which would negate the need for notice of termination by the employer. A similar term in an award was dealt with by the Full Bench in Iplex[39] and was found to be contrary to NES notice of termination provisions and where such a termination was held to be at the initiative of the employer. Clause 6.16 similarly purports to permit abandonment of employment to be treated as a termination of employment at an employee's initiative, that being contrary to s.117 of the Act (notice of termination of employment provisions) and consequently contrary to s.55 on its face.

[67] Other minor NES inconsistencies were also identified by the Commission in respect of the standard of proof that may be required to be furnished in support of compassionate leave (clause 19.5) and personal leave (clause 18.9) applications.

[68] Notwithstanding the above referred NES inconsistencies, I am satisfied that the Agreement contains an effective NES precedence clause at clause 4.3 of the Agreement that remedies the identified deficiencies and ensures that the Agreement operates in a manner that is not contrary to s.55 of the Act.

Whether genuinely agreed (s.180(5) & s.188(1)(a)(i))

[69] Before approving an enterprise agreement, s.186(2)(a) of the Act requires the Commission to be satisfied that it has been 'genuinely agreed to' by the employees, as defined in s.188. Section 188(1)(a) states that an agreement will have been 'genuinely agreed to' if, among other things, the employer has complied with the various pre-approval requirements, including s.180(5). Section 180(5)(a) provides that the employer 'must take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees'. Section 180(5)(b) requires that the explanation be provided 'in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees'. I turn now to the steps taken by the employer to explain the terms and effects of the terms of the Agreement.

[70] From the evidence before me it appears that the steps taken by Ausdrill to explain the terms and effects of the terms of the Agreement included the following;

Provision of the Access Period Kit on 3 August 2021 to employees.

The Access Period Kit included links to a significant number of documents as set out above at [26] including copies of the Agreement, the Award and two key comparison documents, that of the Award Comparison Document and the Brandrill Agreement Comparison Document.

The August 2021 Presentation was included in the Access Period Kit and was a voiceover PowerPoint presentation prepared by Mr Flynn which explained the differences/changes from the rejected November 2020 Agreement to the Agreement.

Project Managers were contacted and requested by Mr Flynn on 2 August 2021 to familiarise themselves with the Access Period Kit material and were encouraged to hold meetings with employees and as part of those meetings show employees the August 2021 Presentation.

Pre-start toolbox meetings were held in the period 4-11 August 2021 during which meetings it was said that the Agreement was discussed.

[71] Ausdrill says that the history of bargaining needs to also be taken into account in circumstances where employees were directly engaged in bargaining at each of Ausdrill's sites. It is noted that there were no employee bargaining representatives nominated and the bargaining appears to have taken place through direct discussions with the workforce at each site. Taken at its highest, the bargaining that Ausdrill refers to appears to comprise;

Seven one hour meetings conducted at the BMA, Middlemount, Ensham and Blair Athol sites prior to the first access period and unsuccessful November 2020 ballot. The meetings were structured to ensure all employees were able to attend one meeting.

Several meetings conducted between 24-27 May 2021 at each of the sites mentioned above plus the Boggabri site, some of which meetings were conducted as part of normal pre-start toolbox meetings. The meetings were again structured to ensure all employees were able to attend one meeting.

A meeting held between Ausdrill and the CFMMEU on 3 June 2021 following which Ausdrill and the CFMMEU exchanged correspondence in respect of CFMMEU concerns over the draft agreement.

The circulation by Ausdrill of a draft agreement to employees on 23 July 2021 inviting further feedback from employees.

[72] I discern the essence of Ausdrill's submission to be that because employees were directly involved in bargaining, they were well informed as to the details of their current employment conditions and the proposed agreement. That with respect is not supported by the evidence. The extent of the bargaining appears limited to each employee at the BMA, Middlemount, Ensham and Blair Athol sites attending two meetings over the 9 month period within which bargaining was held. In the case of the Boggabri site which was mobilised in December 2020 there was only one meeting.

[73] Some of the above-referred site bargaining meetings were held as part of the normal pre-start toolbox meetings and there was no indication whether the 'bargaining' conducted during the pre-start toolbox meetings went for 10 minutes or 50 minutes. There were no minutes taken or evidence going to the content of the discussions beyond Mr Flynn's evidence that he used the April 2021 presentation to assist the discussion at the five sessions he attended at the Boggabri and BMA sites in the 24-28 May 2021 period. I accept that some amendments were made to the draft agreement following the unsuccessful November 2020 ballot and in the period from May-August 2021, which indicates Ausdrill responded to employee feedback on the terms of the draft agreement. However, there is no probative evidence that would enable me to conclude that employees were necessarily well informed of their current terms and conditions of employment and how they would be affected were the Agreement approved. It follows from the forgoing that I place limited weight on the history of and role of employees in bargaining in considering Ausdrill's compliance with s.180(5) of the Act.

[74] Also relevant to the explanation of the terms and effect of the terms of the Agreement is that of previous explanatory material provided to employees, particularly the April 2021 Presentation which was used in bargaining meetings with employees in May 2021. I will return later to this point when I consider the accuracy of the explanation of the terms and effect of the terms of the Agreement.

[75] Returning to the steps taken, Mr Flynn states that pre-start meetings were held at all sites in the 4-11 August 2021 period and that Project Managers were encouraged by him to familiarise themselves with the Access Period Kit and show employees the August 2021 presentation during these site meetings. There is however no evidence before me as to the content of Agreement explanations provided at those meetings. It follows that I am satisfied that the extent of the explanation of the terms and effects of the terms of the Agreement that may be relied on by Ausdrill in compliance with s.180(5) of the Act is that contained in the written material provided to employees in the Access Period Kit on 3 August 2021.

[76] I regard the provision of the written explanatory material to employees as a reasonable step that was taken by Ausdrill, particularly in circumstances when state border restrictions in place due to the Covid pandemic restricted the ability of Mr Flynn and other senior managers of Ausdrill from travelling to Queensland and NSW sites from WA where Ausdrill's head office is located. In circumstances where the specific information in relation to the explanation of the Agreement was limited to the Access Period Kit it is necessary for me to consider the accuracy and extent of the explanation provided to employees in that material to properly assess whether the requirements of s 180(5) were met. I turn now to the nature and accuracy of the explanation.

[77] Before turning to the specific content of Agreement explanation it is necessary to provide some context that goes to the particular circumstances of the workforce. For the purpose of the Agreement explanation, there are two cohorts of employees, those whose employment is currently underpinned by the Award and those whose terms and conditions of employment are apparently provided by the Brandrill Agreement. The second cohort I have referred to arises from an apparent transfer of business that occurred in 2016 according to Ausdrill. That transfer of business resulted in the Brandrill Agreement transferring to Ausdrill in respect of the BMA, Ensham, Middlemount and Blair Athol sites.

[78] Beyond a submission on the transfer of business, there was no evidence led as to when it occurred, the circumstances in which it occurred, which employees transferred in their employment from Brandrill to Ausdrill, which employees were covered in their employment by the Brandrill Agreement as transferring employees and finally whether any orders were issued by the Commission pursuant to s.318 or s.319 regarding the operation of the transferable instrument in respect of transferring and/or non-transferring employees. Mr Flynn in his evidence was unable to shed any light on the transfer of business and which employees were covered by the Brandrill Agreement. It is consequently unclear which employees at the BMA, Ensham, Middlemount and Blair Athol sites were in fact covered by the Brandrill Agreement. That Ausdrill may have applied the Brandrill Agreement to all employees at those sites does not mean that the agreement actually applied as a matter of law.

[79] What may be said with greater confidence however is that the Boggabri site, as a new operation for Ausdrill, was not covered by the Brandrill Agreement and the currently applying industrial instrument is the Award. It follows that the explanation of the terms and the effects of the terms of the Agreement for the employees at the Boggabri site needed to be by reference to the terms and conditions provided by the Award.

[80] It follows from the above that a reasonable step in explaining the terms and effects of the Agreement was to provide an explanation by reference to the applicable instrument and how the terms and conditions of employment conferred by that applicable instrument would change as a result of approval of the Agreement. This necessitated an approach such that employees who were covered by the Award would receive an Agreement explanation referable to the Award whereas employees covered by the Brandrill Agreement would receive an explanation referable to the Brandrill Agreement.

[81] As stated above at [70] Ausdrill included two comparison documents in the Access Period Kit, the Award Comparison Document and the Brandrill Agreement Comparison Document. Putting aside for the moment the accuracy of the two documents which I will return to shortly, the provision of the two documents in the Access Period Kit is said by Ausdrill to be a reasonable step. I would agree with that submission if there was clarity as to whom the comparison documents were relevant to. There was no overarching explanation in the email sent to employees on 3 August 2021 going to the relevance of the various documents. While many of the linked documents were self-explanatory, the two explanation documents warranted some additional clarification or explanation as to which employees they were relevant to.

[82] In simple terms, for employees to properly consider whether the Agreement represented a 'good deal' worthy of their support, they needed to understand how it compared to the terms and conditions they were entitled to under the instrument that currently applied to them. Absent that clarity it is unclear to me how it could be said that employees were able to make an informed decision based on a clear understanding of the differences between what they were currently entitled to and what the Agreement would provide by comparison. Ausdrill says that employees were familiar with the instrument that applied to them but provided no evidence to support that submission. Moreover, in circumstances where the HR Manager responsible for co-ordinating the bargaining process was unable to identify which employees were covered by which instrument, the submission that employees were familiar with the applicable instrument would be a fragile basis on which to draw such a conclusion. I decline to do so.

[83] It follows from the above that a reasonable step that Ausdrill ought to have taken was to clearly identify which instrument applied to which employees at the various sites so that each employee invited to participate in the ballot was able to consider the relevant comparison document provided. That reasonable step was not taken and as a consequence Ausdrill has failed to comply with the requirements of s.180(5) of the Act. It follows that I cannot be satisfied that the Agreement was genuinely agreed as required by s.188(1)(a) of the Act.

Ausdrill Pty Ltd [2021] FWC 6348 (16 November 2021)

At a glance

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Judgment (440 paragraphs)

Ausdrill Pty Ltd [2021] FWC 6348 (16 November 2021)

Legislation Cited (2)