AMENDMENT: The original Notice of appeal, filed on 18 September 2023, is amended to include a further ground of appeal that the FWC erred in concluding that the APTS Agreement passed the better off overall test, in accordance with ss 186(2)(d) and 193 of the FW Act. This ground relates to the provision for annualised salaries at clause 1.2.4 of the APTS Agreement.

The AWU may seek leave to raise additional grounds after receiving further information concerning bargaining for, and approval of, the APTS Agreement.

(Note that the amendments to Part 2-4 of the FW Act, which commenced on 6 June 2023, do not apply to this matter.)"[3]

[12] We have dealt with the appeal grounds on the basis that in substance, they identify two grounds by which it is contended that the Deputy President erred in her decision to approve the Agreement:

1. The Deputy President erred in concluding that the FWC was satisfied the Agreement was genuinely agreed to by the relevant employees, in accordance with ss. 186(2)(a) and 188 of the FW Act (Appeal Ground One).

2. The Deputy President erred in concluding that the Agreement passed the better off overall test, in accordance with ss. 186(2)(d) and 193 of the FW Act (Appeal Ground Two).

[13] The items listed as grounds 2 - 4 in the amended Notice of Appeal are, in substance, reasons relied on by the AWU in support of Appeal Ground One and we have dealt with those grounds accordingly.

[14] The AWU sought to advance its case in the appeal, including for an extension of time and permission to appeal, on the basis of evidence it adduced in the appeal. This evidence consisted of:

a. A witness statement made by Mr Ross Kumeroa (Mr Kumeroa), an AWU Organiser, on 31 October 2023.[4] This statement annexed a number of documents. Mr Kumeroa was not required for cross-examination.

b. A witness statement made by Mr Alex Giordano (Mr Giordano), an AWU National Legal Officer, on 31 October 2023.[5] This statement also annexed a number of documents. Mr Giordano was not required for cross-examination and his statement was tendered without objection.

c. A bundle of documents produced to the FWC pursuant to orders to produce issued at the AWU's request, including emails regarding the purpose and process in relation to the making of the Agreement, contracts of employment, job descriptions and meeting minutes, tendered as a bundle with an index.[6]

[15] Altrad APTS did not oppose the AWU's application to rely on new evidence and sought to call its own evidence in response. Altrad APTS sought to rely on the following additional evidence:

a. A witness statement made by Mr Adam Barry (Mr Barry) on 10 November 2023.[7] Mr Barry was one of three employees who voted in relation to the approval of the Agreement. This statement annexed a number of documents. Mr Barry was not cross examined at the Hearing.

b. A witness statement made by Mr Aaron Bellingham (Mr Bellingham) on 10 November 2023.[8] Mr Bellingham was one of three employees who voted in relation to the approval of the Agreement. This statement annexed a number of documents. Mr Bellingham was cross examined by Mr Mackenzie at the hearing.

c. A witness statement made by Mr Peter Woodard (Mr Woodard) on 10 November 2023.[9] Mr Woodard was one of three employees who voted in relation to the approval of the Agreement. This statement annexed a number of documents. Mr Woodard was cross examined by Mr Mackenzie at the hearing.

d. A witness statement made by Mr Jon Lord (Mr Lord) on 10 November 2023.[10] Mr Lord is the HR/IR Manager of Altrad Services Pty Ltd. Mr Lord was not required for cross-examination and his statement was tendered without objection.

e. A witness statement made by Mr Deon McLaughlin (Mr McLaughlin) on 10 November 2023.[11] This statement annexed a number of documents. Mr McLaughlin is the Health, Safety and Environment (HSE) Manager for Altrad Services Pty Ltd. Mr McLaughlin was cross examined by Mr Mackenzie at the hearing.

[16] A witness statement made by Mr Andre Van Daele was not read by Altrad APTS as Mr Van Daele was not available for cross-examination.[12]

[17] The FWC may admit further evidence on an appeal where the following three conditions set out in Lacherdis v Mercer (Australia) Pty Ltd[13] are satisfied:

1. The evidence was not able to be obtained or adduced with reasonable diligence at first instance.

2. The evidence must be of such probative value that there is a probability that there would have been a different result at first instance.

3. The evidence must be credible.

[18] We are satisfied that it is appropriate in the circumstances to admit the new evidence sought to be tendered by both parties and that the evidence sought to be tendered by the AWU meets these conditions. Further, we note that Altrad APTS also seeks to adduce evidence responsive to the new evidence adduced by the AWU.

[19] The evidence before us establishes the following facts. APTS Pty Ltd was a small privately owned company primarily providing pressure testing services when it was acquired by the Valmec Group in 2018.[14]

[20] At that time, the Valmec Group also included:[15]

1. Valmec Pty Limited (previously named Valmec Limited), which provided the Group's corporate functions including payroll and human resources;

2. Valmec Australia Pty Limited, which employed workers involved in construction operations nationally;

3. Valmec Services Pty Limited, which employed workers involved in maintaining and repairing rotating and reciprocating equipment (for example, gas engines).

[21] The Valmec Group, including APTS Pty Ltd, was acquired by Altrad Group in or around November 2021. As we have noted, APTS Pty Ltd changed name to Altrad APTS Pty Ltd on 19 July 2023.

[22] Since November 2021, the Altrad Group in Australia includes the following companies:

1. Altrad APTS Pty Ltd;

2. AusGroup Companies Pty Ltd (known as "AGC"); and

c. Valmec Pty Ltd.[16]

[23] At the time the Valmec Group acquired APTS Pty Ltd that Company employed approximately 50-70 employees mainly in Western Australia and a small number in Queensland. In or about December 2020, Mr Mushfiq Rahman (then Executive General Manager of the Valmec Group) (Mr Rahman) presented a document (Strategy Document) referring to an "Asset Services employment Strategy"[17] (Strategy) to promote discussion about how to employ "new skills" not covered under existing enterprise agreements and the establishment of a new entity to "consider the opportunity to create a competitive agreement that could, in turn, provide employees to support existing Valmec Group entities". At that time, as identified and discussed in the Strategy Document, the following enterprise agreements were held by the Group:

• Valmec Australia Enterprise Agreement 2021 having a nominal expiry date of 23 February 2025, underpinned by an award described in the Strategy as the "Building, metal and civil construction award";

• Valmec Services Enterprise Agreement 2017 having a nominal expiry date of 20 August 2021, underpinned by the Manufacturing and Associated Industries Award; and

• APTS Workshop Enterprise Agreement 2017 - 2021 (Workshop Agreement) having a nominal expiry date of 1 February 2022, underpinned by the Manufacturing and Associated Industries Award.

[24] The Strategy that was adopted was consistent with the Strategy Document and involved proceeding with the establishment of a new enterprise agreement with a different scope to the Workshop Agreement, for the purpose of supplying labour to any of the subsidiaries of Valmec Limited. A recommendation that a new legal entity be created for the purpose of establishing the agreement was not implemented. According to the evidence of Mr McLaughlin, in early 2021, Mr Rahman had decided to expand the suite of services offered by the Valmec Group and identified servicing and maintenance of client facilities in the field as an area of potential growth. We assume that these are the "new skills" discussed in the Strategy Document. In order to be competitive in securing work in that area, a decision was made that APTS Pty Ltd would establish a new "condition monitoring department". Mr McLaughlin said that at this point, APTS did not employ any condition monitoring technicians.[18]

[25] As set out in the Strategy Document, it was intended that the new enterprise agreement would facilitate the engagement by APTS Pty Ltd of a cost competitive labour pool across a broad range of classifications, including classifications not covered by its existing enterprise agreements, which could then be provided to companies within the Valmec Group working on various projects. The Strategy was encapsulated in a document forwarded by Mr Ben Cooper (Mr Cooper) to Mr Mark Hudston (Mr Hudston), which was prepared by Mr Rahman. The document was referred to by Mr Cooper as "Mushfiq's musings about what he would like to achieve under the agreement".[19] The document included the following statement:

"Strategy: Create agreement based on better (higher terms) between Hydrocarbons and MAIO awards (including rates, OT etc.). We can then use the partial exemption salary clause to offer annual salaries which are all encompassing, and we can move conditions to suit market. Having minimum wages in-line with award provides flexibility in paying higher."

[26] Mr McLaughlin was tasked with implementing the Strategy and securing the new agreement.[20]

[27] Mr Hudston was involved in implementing the Strategy and was a participant in a range of email correspondence tendered by the AWU relating to the negotiation and making of the Agreement. Mr Hudston is an industrial relations consultant and was until recently, a Director of Mapien Workplace Strategists. That organisation provided advice on the development and implementation of the Strategy. Mr Cooper is an Associate Director of Mapien. In relation to Mr Hudston, the Appellant pointed to the following facts said to be relevant in the present appeal. Mr Hudston was involved in the negotiation and making of an enterprise agreement known as the Workforce Logistics Enterprise Agreement 2022 (Workforce Logistics Agreement), the approval of which was quashed by a differently constituted Full Bench of the FWC in a decision issued on 6 September 2023.[21]

[28] The Workforce Logistics Agreement was made with six employees, one month after the employer party was registered as a company. Also, shortly after the Workforce Logistics Agreement came into effect the Company was sold to AusGroup Companies and AusGroup was subsequently acquired by the Altrad Group. The Full Bench in that case found inter alia that the approval process was ingenuine and fake and that the Workforce Logistics Agreement was not genuinely agreed.[22]

[29] The appeal in relation to the approval of the Workforce Logistics Agreement was heard on 29 and 30 August 2023. The decision of the Full Bench in that matter was released on 6 September 2023. On 28 August 2023, while that appeal was on foot, the Altrad Group made an application pursuant to ss. 318 and 319 of the FW Act for orders to transfer the employees covered by the Workforce Logistics Agreement to the Services Agreement (Transfer Application). In the course of the FWC considering the Transfer Application, the AWU was notified of the Transfer Application and thereby became aware of the approval of the Services Agreement.

[30] In contrast to the approval process for the Workforce Logistics Agreement it appears that Mr Hudston had only limited involvement in the Services Agreement approval process and that it was Mr Cooper who was chiefly responsible for assisting and advising APTS Pty Ltd in relation to the Strategy. We note that the documents in the AWU tender bundle indicate that Mr Hudston was included in some email chains by way of being copied in, rather than as an active participant. The evidence also establishes that Mr Hudston facilitated the introduction of Valmec to Mapien.[23]

[31] The Strategy was implemented in the following way. From mid-April 2021, the Valmec Group arranged to make the Services Agreement with three individuals (Voting Employees):

1. Mr Woodard;

2. Mr Bellingham; and

3. Mr Barry.

[32] Mr Barry and Mr Bellingham were both Queensland based long term employees of APTS Pty Ltd. Mr Barry had been employed in various roles performing work as a Pressure Safety Valve (PVS) Technician on various projects and from February 2018, as a Leading Hand at the APTS Tingalpa Workshop. Mr Barry tendered correspondence from APTS received during the course of his employment indicating that he was covered either by an agreement made by Altrad APTS to cover work on a particular LNG project or the Workshop Agreement, depending on his work location at the relevant time.

[33] Mr Bellingham commenced employment with APTS on 23 May 2018. Mr Bellingham was also employed as a PSV Technician and stated in his evidence his understanding that he was at all times covered by the Workshop Agreement until the Services Agreement was made.

[34] Mr Woodard was a new employee who commenced employment with APTS on 10 May 2021, having signed an employment agreement on 10 April 2021[24]. Mr Woodard's evidence was that his employment with APTS was pursuant to an employment contract and was not covered by an enterprise agreement. That evidence was not challenged in cross-examination. However, given the broad scope of the Workshop Agreement, the range of classifications it describes and the areas in which it operates, it is at least arguable that Mr Woodard's employment was also covered by that Agreement. In the circumstances where this matter was not argued, we do not determine it, and nothing turns on this matter in any event given our conclusions in the appeal.

[35] According to the Form F17 Employer's declaration in support of the application for approval of the Services Agreement, the Notice of Employee Representative Rights (NERR) was given to employees, who would be covered by the Agreement on 1 June 2021, by email sent to the Voting Employees. The Form F17 also states that the access period commenced on 21 July 2021 and voting for the Agreement commenced on 29 July 2021, with the Services Agreement being made on that date. The Services Agreement was approved by the FWC on 23 August 2021.

[36] The three Voting Employees were offered new common law contracts of employment with APTS Pty Ltd shortly before the Agreement was approved. The evidence about those contracts and when they were offered can be summarised as follows:

a. Mr Bellingham signed an employment contract on 6 July 2021, which does not state whether the employment subject of the contract was covered by an enterprise agreement. The contract states that Mr Bellingham was engaged as a PSV Technician on a base salary of $110,000 per annum working 40 hours per week with overtime paid at $52.88 per hour. The contract does not specify a commencement date.[25] On 2 September 2021, Mr Bellingham signed a further contract said to commence on 30 August 2021.[26] That contract states that Mr Bellingham's employment as a PSV Technician is covered by the Services Agreement.

b. Mr Woodard was engaged as a Condition Monitoring Technician under a written contract of employment commencing 10 May 2021 on a base salary of $125,000 per annum working 40 hours per week with overtime paid at $60.09 per hour.[27] Mr Woodard's employment contract makes no reference to an award or an enterprise agreement covering his employment. The contract also provides for Mr Woodard to be provided with a car and a fuel card, capped at $7,500. Mr Woodard signed a second employment contract on 29 August 2021, in virtually identical terms, but stating that the Services Agreement was the relevant industrial instrument, with a proviso that on accepting salaried terms, employees are exempt from the Agreement provisions listed in clause 1.2.4.[28]

1. While no contract from 2021 for Mr Barry was tendered in the appeal, it is implicit from the evidence that he entered into a common law contract during the negotiations for the Services Agreement and prior to it being made by the Voting Employees and its approval by the Deputy President.

[37] Altrad APTS asserts that the three Voting Employees were the only employees that APTS Pty Ltd employed during bargaining who fell within the scope of the proposed Services Agreement.[29]

[38] Once the NERR had been issued, APTS Pty Ltd held three meetings with the three Voting Employees. The three Voting Employees represented only a narrow set of the occupations and classifications that would come to be covered by the Agreement. The base salaries and overtime rates specified in the common law contracts offered to Mr Bellingham and Mr Woodard were in excess of the rates in the Agreement for the highest classification level. The rates in the common law contracts of Mr Bellingham and Mr Woodard are also based on a 40 hour week while the rates in the Agreement that the contract rates exceed, are for FIFO work based on a compressed roster. We assume from Mr Barry's evidence that the rates in his contract of employment also exceeded those in the Services Agreement. If each of the Voting Employees was working a compressed roster on site but was being paid on the basis of a 40 hour week with overtime in accordance with their employment contracts, the amount by which the remuneration under their contracts would exceed the rates in the Services Agreement would be significant.

[39] As the AWU submitted, it is not clear what level the Voting Employees were entitled to be classified at under the Services Agreement. All three of the Voting Employees have a single trade qualification, rather than a dual trade qualification and as such, would appear to be appropriately classified at Level 4 or 5 of the Services Agreement. Even assuming that the Voting Employees are entitled to be classified at the highest level in the Agreement (a matter which is not clear) the margin by which their common law contract rates exceed those in the Agreement was significant.

[40] The AWU says that, in the bargaining meetings, APTS Pty Ltd misled the employees, did not explain key aspects of the proposed agreement and encouraged the employees to vote without regard to the effect of the terms on future employees.

[41] The three meetings with the three Voting Employees were held on:

a. 14 June 2021. At this meeting the process for approval and the key terms of the proposed Agreement were discussed. The Voting Employees were shown the proposed Agreement and told that they would receive a copy of the proposed Agreement the following day.[30]

b. 28 June 2021. At this meeting the discussions focused on the scope of the Agreement, meal allowances, training, rates of pay and travel.[31]

c. 26 July 2021. At this meeting the minutes record that changes to the proposed Agreement were discussed but does not record what those changes were. The process for voting on the agreement was also discussed.[32]

[42] The witnesses' memories of the meetings are limited and imprecise. The meeting minutes provide the most contemporaneous record of what was discussed but are themselves limited in detail.

[43] The meetings were held online, and the participants included Mr McLaughlin and Mr David Wong (Valmec Australia Pty Ltd HR Advisor), Mr Van Daele, Mr Kevin Hyde (Operations Manager for APTS), Mr Rahman, Ashley Carroll (who took the minutes) and the three Voting Employees.[33]

[44] Mr Woodard gave evidence that the Voting Employees also held some discussions directly among themselves.[34]

[45] After the Agreement was made by the three Voting Employees and approved by the FWC:

a. Mr Woodard resigned on 31 December 2021.[35]

b. Mr Barry moved to a role in Queensland as a Lead PSV Technician commencing on 23 March 2022 pursuant to a common law contract underpinned by the Hydrocarbons (Upstream) Award 2020.[36]

c. Mr Bellingham moved to a role with Valmec Services Pty Ltd effective 7 November 2022 covered by a common law contract.[37]

[46] The provisions of the Agreement relevant to this appeal are as follows. Clause 1.3 provides that the Agreement has a nominal expiry date of 4 years after the date of approval.

[47] Clause 1.2 deals with the application of the Agreement in the following terms:

"1.2.1 This Agreement will apply to APTS Pty Ltd and to its Employees for whom a classification is specified in Schedule A.

1.2.2 The Agreement will not apply to Inspectors and NDT technicians operating from the APTS Henderson facility (or any such facility that replaces it) to whom the APTS Pty Ltd Workshop Agreement 2017 - 2021 applies.

1.2.3 This Agreement excludes the operation of all modern Awards including the following:

(a) Manufacturing and Associated Industries and Occupations Award 2020 [MA000010];

(b) Hydrocarbons Industry (Upstream) Award 2020 [MA000062]; or

(c) any Modern Award which replaces an Award specified above.

1.2.4 To more efficiently support the performance of certain types of working arrangements, Employees may be offered and may accept salaried terms, in writing. The annual salary will be no less than the applicable amounts set out in Schedule B of this Agreement. Employees who accept salaried terms will continue to be covered by this Agreement but will be exempt from the provisions in the following clauses:

(f) Clause 4.3 Ordinary hours of work-continuous shiftworkers

(g) Clause 4.4 Ordinary hours of work- non-continuous shiftworkers

(l) Schedule A: A.2 Supervisor/Trainer/Coordinator"

[48] Clause 3.1 is headed "Classification Structure" which provides as follows:

"3.1.1 Employees will be engaged and appointed to the relevant classification grade descriptors in accordance with the classification structure in Schedule A of this Agreement.

3.1.2 The Company at its discretion may assign job titles or functions to a classification grade descriptor. Such titles or functions are not necessarily complete and are indicative only.

3.1.3 Job titles may be classified and added provided that the competency levels required to carry out the functions are commensurate with the descriptors for each grade classification.

3.1.4 Progression to a higher classification grade will be at the discretion of the Company, subject to the availability of positions at the higher level and that the Employee has successfully completed the appropriate training and/or has achieved the level of competency required for appointment to the higher classification."

[49] Schedule A sets out the classifications of employees covered by the Agreement and, pursuant to clause 3.3.1, Schedule B provides for minimum rates of pay for each classification level. Both Schedules are reproduced below.

A1. Employees will be classified in accordance with the following matrix and the classification schedules applying under the Manufacturing and Associated Industries and Occupations Award 2020 [MA000010] and the Hydrocarbons Industry (Upstream) Award 2020 [MA000062].

Manufacturing and Associated Industries and Occupations Award Classification Description

Hydrocarbons Industry (Upstream) Award Classification Description

Electrical Tradesperson, Welder Special Class; Inspector (Pressure Equipment/Tanks/Coatings/Welding);

Where an employee is performing supervisory responsibilities, the employee is to be classified as a:

1. Supervisor/Trainer/Coordinator-Level I: 122% of the minimum rate paid to the highest technically qualified employee supervised or trained.

2. Supervisor/Trainer/Coordinator-Level II: 115% of the minimum rate paid to the highest paid employee supervised or trained.

1. Supervisor/Trainer/Coordinator-Technical: 107% of the minimum rate applicable to the employee's technical classification."

B.1 The minimum hourly rates applicable under this Agreement are:

B.2 The above hourly rates are not inclusive of the all purpose allowance.

B.3 For the purposes of Clause 1.2.4 of this Agreement, the applicable salary amounts are:

[50] Section 604 of the FW Act permits a person who is aggrieved by a decision to appeal the decision. The AWU submits that it is a person aggrieved within the meaning of section 604 because:[38]

1. the AWU has members employed by Altrad APTS who are covered by the Agreement;

2. there is a prospect that Altrad APTS will employ AWU members in the future who will be covered by the Agreement;

3. the Agreement undermines the job security of its members employed by other employers because it encourages head contractors to prefer Altrad APTS for maintenance contracts ahead of other employers who employ AWU members under more favourable agreements negotiated with the AWU; and

4. the Agreement undercuts the conditions of AWU members in the offshore hydrocarbons industry more broadly.

[51] The evidence is that Altrad APTS employs members of the AWU including in roles covered by the Agreement.[39] Altrad APTS did not dispute that the AWU has standing to appeal. In the circumstances, we are satisfied that the AWU has standing to appeal.

[52] Rule 56(2) of the FWC Rules provides that a notice of appeal under s. 604 of the FW Act must be filed within 21 calendar days after the date of the decision the subject of the appeal, or within such further time as may be allowed by the FWC on application by the appellant. The Appeal was lodged more than 21 calendar days after the Decision the subject of this appeal. The AWU therefore must seek an extension of time to lodge the Appeal.

[53] The principles to be applied when considering whether an extension of time to lodge an appeal should be granted pursuant to rule 56(2)(c) of the FWC Rules are set out in Jobs Australia v Eland.[40]

[54] The principal considerations are whether there is a satisfactory reason for the delay in filing the appeal, the length of the delay, the nature of the grounds of appeal and their prospects of success, and any prejudice to the respondent if time were extended. The question to be answered by reference to these considerations is whether, in all the circumstances, the interests of justice favour an extension of the time within which to lodge the appeal.[41]

[55] Altrad APTS opposes the granting of an extension of time to lodge the appeal on the following grounds:

1. The impact of the delay on witness recollections.

2. The commercial and industrial uncertainty which would arise if the Agreement is displaced at this point in time.

3. Real time review of agreement applications are available via the FWC website portal.

4. The Appeal lacks merit.

[56] We accept that the AWU had no involvement in the FWC's approval process because it was not aware of any bargaining for the Services Agreement or that an application for approval had been filed. The evidence is that the AWU first became aware of the Services Agreement when it received correspondence on 28 August 2023 for a now discontinued application under ss. 318 and 319 of the FW Act (Form F40) for orders in relation to a transfer of business between Workforce Logistics Pty Ltd and Altrad APTS. The application included references to the Services Agreement. On 7 September 2023, the AWU requested copies of the documents filed in the approval application from the FWC's Library. On 8 September 2023, the FWC's Library & Records Team provided those documents. On the same day, the AWU wrote to the Associate to the President, requesting that the Agreement be included in the Schedule of matters being referred to the General Manager of the FWC for an inquiry into whether there has been a wider-scale abuse of the enterprise agreement-making framework in the FW Act. The Associate responded by email, indicating that the AWU's request would be brought to the President's attention. On 18 September 2023, the AWU lodged its Application to appeal.[42]

[57] We consider that the AWU clearly has a satisfactory explanation for its delay in filing the appeal. Monitoring of the FWC portal would not have revealed the number or identity of the voting cohort or key elements of the Appeal. We accept the evidence of the AWU that it did not become aware of the existence of the Services Agreement until 28 August 2023. The AWU filed its appeal 10 calendar days after receipt of relevant documentation from the FWC disclosing the circumstances in which the Services Agreement was made. We consider, in the circumstances described in the witness statement of Mr Giordano,[43] that the AWU acted as quickly as reasonably practicable in initiating its appeal. Overall, we therefore consider that there was a satisfactory reason for the delay.

[58] Altrad APTS has not filed any evidence detailing any commercial and industrial uncertainty that would arise if time were extended and the appeal allowed. We have taken into account the impact of the delay on witness recollections. However much of the relevant evidence is contained in documents and can be ascertained from the material filed in the first instance proceedings or in the appeal. It is also the case that the appeal raises important issues around the integrity of the enterprise bargaining framework.

[59] Accordingly, on balance, we allow the AWU an extension of time until 18 September 2023 to lodge its appeal.

The statutory framework, permission to appeal and the approach to the appeal generally

[60] It is not in dispute that the provisions of the FW Act concerning the approval of enterprise agreements as they were prior to 6 June 2023 were applicable at the time of the decision under appeal and remain applicable to the determination of this appeal. The relevant provisions of s. 186 are as follows:

"186 When the FWC must approve an enterprise agreement - general requirements

(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

(a) if the agreement is not a greenfields agreement - the agreement has been genuinely agreed to by the employees covered by the agreement; and

(d) the agreement passes the better off overall test."

[61] In relation to the requirement in s. 186(2)(a) for genuine agreement, s. 188 of the FW Act as it was before 6 June 2023 provided:

"188 When employees have genuinely agreed to an enterprise agreement

(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.

(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and

(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174."

[62] In respect of the requirement in s. 186(2)(b) for the agreement to pass the better off overall test (BOOT), s. 193 as it was before 6 June 2023 relevantly provided:

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

(4) An award covered employee for an enterprise agreement is an employee who:

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(b) would be covered by a modern award (the relevant modern award) that:

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(6) The test time is the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee."

[63] Also relevant to this appeal are the provisions of the FW Act concerning coverage and application of an enterprise agreement. Subdivision D of Division 2 of Part 2-1 contains the following provisions:

A person must not contravene a term of an enterprise agreement.

Note 1: This section is a civil remedy provision (see Part 4-1).

Note 2: A person does not contravene a term of an enterprise agreement unless the agreement applies to the person: see subsection 51(1).

51 The significance of an enterprise agreement applying to a person

(1) An enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person.

(2) An enterprise agreement does not give a person an entitlement unless the agreement applies to the person.

52 When an enterprise agreement applies to an employer, employee or employee organisation

When an enterprise agreement applies to an employee, employer or organisation

(1) An enterprise agreement applies to an employee, employer or employee organisation if:

(b) the agreement covers the employee, employer or organisation; and

(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.

Enterprise agreements apply to employees in relation to particular employment

(2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.

53 When an enterprise agreement covers an employer, employee or employee organisation

(1) An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer.

(2) An enterprise agreement covers an employee organisation:

(a) for an enterprise agreement that is not a greenfields agreement - if the FWC has noted in its decision to approve the agreement that the agreement covers the organisation (see subsection 201(2)); or

(b) for a greenfields agreement - if the agreement is made by the organisation.

Effect of provisions of this Act, FWC orders and court orders on coverage

(3) An enterprise agreement also covers an employee, employer or employee organisation if any of the following provides, or has the effect, that the agreement covers the employee, employer or organisation:

(a) a provision of this Act or of the Registered Organisations Act;

(b) an FWC order made under a provision of this Act;

(4) Despite subsections (1), (2) and (3), an enterprise agreement does not cover an employee, employer or employee organisation if any of the following provides, or has the effect, that the agreement does not cover the employee, employer or organisation:

(b) an FWC order made under another provision of this Act;

Enterprise agreements that have ceased to operate

(5) Despite subsections (1), (2) and (3), an enterprise agreement that has ceased to operate does not cover an employee, employer or employee organisation.

Enterprise agreements cover employees in relation to particular employment

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

54 When an enterprise agreement is in operation

(1) An enterprise agreement approved by the FWC operates from:

(b) if a later day is specified in the agreement - that later day.

(2) An enterprise agreement ceases to operate on the earlier of the following days:

(a) the day on which a termination of the agreement comes into operation under section 224 or 227;

(b) the day on which section 58 or subsection 278(1A) first has the effect that there is no employee to whom the agreement applies.

Note: Section 58 and subsection 278(1A) deal with when an enterprise agreement ceases to apply to an employee.

(3) An enterprise agreement that has ceased to operate can never operate again."

[64] Section 58 of the FW Act provides as follows:

"58 Only one enterprise agreement can apply to an employee

Only one enterprise agreement can apply to an employee

(1) Only one enterprise agreement can apply to an employee at a particular time.

General rule - later agreement does not apply until earlier agreement passes its nominal expiry date

(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and

(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and

(c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply;

(d) if the earlier agreement has not passed its nominal expiry date:

(i) the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and

(ii) the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or

(e) if the earlier agreement has passed its nominal expiry date - the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.

Special rule - single-enterprise agreement replaces multi-enterprise agreement

(a) a multi-enterprise agreement applies to an employee in relation to particular employment; and

(b) a single-enterprise agreement that covers the employee in relation to the same employment comes into operation;

the multi-enterprise agreement ceases to apply to the employee in relation to that employment when the single-enterprise agreement comes into operation, and can never so apply again."

[65] Section 188(1)(a)(i) relevantly requires the Commission to be satisfied that the employer complied with the pre-approval step in s. 180(5). Section 180(5), as applicable to the application for the approval of the Agreement and this appeal, provides:

"Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the employees employed at the time who will be covered by the agreement; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of those employees."

[66] Whether the above approval requirements are met depends upon the satisfaction of the member of the FWC who hears and determines the application for approval of the relevant agreement. On appeal therefore, it is not sufficient that a Full Bench would form a different view as to the relevant approval requirement for an appeal to succeed. Rather, because the requirement for the member's satisfaction as to the approval criteria indicates that the statute allows a degree of latitude as to the choice of the decision to be made, the House v The King standard of appellate review applies on appeal.[44] This means in this case that the AWU must demonstrate, in order for its appeal to succeed, that the Deputy President acted upon a wrong principle, mistook the facts, took into account an irrelevant consideration or failed to take into account a material consideration, or made a decision which is plainly unreasonable or unjust.

1. However, because a Full Bench of the FWC has a discretionary power to admit further evidence in dealing with a decision under appeal pursuant to s. 607(2) of the Act, the Appeal may be characterised as one which proceeds by way of rehearing. As explained by the High Court in ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees,[45] the Full Bench is not constrained to consider only the evidence that was before the member at first instance and may find appealable error on the basis of new evidence admitted in the appeal. In this regard the Court said:

"[99] Whether the Full Bench was satisfied that an employee was better off overall under the Agreement than under the award required an evaluative assessment after consideration of the provisions of the award and the Agreement that may have been more beneficial to employees and those that may have been less beneficial. This assessment is a matter of the kind which has been described in other contexts as:

'a question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds.'

[100] The appeal to the Full Bench for which the Act provides is an appeal by way of rehearing. Section 607(2) allows the Full Bench to admit further evidence on an appeal to it in order to determine the matter upon that rehearing. Using that further evidence, the Full Bench may find that the decision the subject of appeal was an incorrect decision even though, on the evidence before the Commission, its decision was not demonstrably erroneous. The Full Bench was wrong to approach its task as if it were enough to conclude that Bull DP had "properly considered the BOOT and reached a decision based on a sound analysis"."

[68] The AWU submits that it is in the public interest to grant permission to appeal. According to the AWU, Altrad APTS improperly manipulated the approval of the Agreement using a small unrepresentative voter cohort to secure sub-standard employment conditions for those employees who will be covered by the Agreement. The AWU submits that if the Agreement is allowed to stand it will undermine the working conditions and job security of AWU members throughout the oil and gas industry and the integrity of the enterprise bargaining system more broadly.[46]

[69] Altrad APTS opposes the granting of permission to appeal submitting that:[47]

1. Both of the appeal grounds concern matters specific to the Agreement, and neither raises an issue enlivening the public interest.

2. The AWU has not established that the Decision is attended with sufficient doubt to warrant its reconsideration.

3. The AWU has not demonstrated that it, or any of its members, would suffer any prejudice if permission were refused. This is so in circumstances where the Agreement was one made between an employer and its employees, none of whom have appealed the Decision, and where the appeal grounds concern matters specific to the Agreement (rather than matters of general application).

[70] We are satisfied that to ensure public confidence in the integrity of the enterprise bargaining system it is in the public interest to grant leave to the AWU to appeal the Decision given:

1. the Member at first instance was not assisted in the approval process in the absence of an objector;

2. the nature of the fresh evidence which was not available to the Member at first instance; and

c. the existence of similarities with the factual matrix in Appeal by the Australian Workers Union[48] in which the relevant agreement was found to have been entirely lacking in authenticity and moral authority.[49]

[71] An enterprise agreement is genuinely agreed where the FWC is satisfied that there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees voting for it. Anything that could logically bear on the question of whether the agreement of the relevant employees was genuine must be considered.[50]

[72] The AWU's case is that the Altrad Group implemented the Strategy to make an enterprise agreement that would apply broadly, with only a few employees whose interests did not reflect the interests of the broader cohort of employees to whom the Agreement would apply, in order to avoid bargaining with a larger group of employees or a union. The AWU say that the goal of the Strategy was to secure a workforce available to multiple companies within the Altrad Group with conditions of employment which gave the Altrad Group entities a commercial advantage over its competitors who had negotiated their enterprise agreements with a group of employees or a union with a genuine or vested interest in the agreements.

[73] The AWU says that such a strategy is of itself evidence that the Agreement is inauthentic and lacking in moral authority.

[74] Notwithstanding that Altrad APTS asserts that the purpose of the Agreement was simply to allow it to tender for a broader range of work with the industrial security of an in-term agreement, the evidence supports the AWU's assertion that the purpose of establishing the Agreement in the manner in which it was established was to specifically avoid bargaining collectively, as evidenced by an email from Mr Rahman to Mr Cooper on 22 June 2021 in the following terms:

I hope you're well. I'm hoping we can wrap up the APTS Industrial Services Agreement soon (action on our side). Here's a left-field question. One of our clients is likely to award us a contract for further wellsite work and asked about our IR strategy. I think they're a bit new to it all, but nonetheless, they have a preference to employ on common law vs. the strategy which we're pursuing. I don't think they understand the risk of not having an agreement and then employees can choose to negotiate if they all get together.

Nonetheless, we can work with our client as we will employ under Valmec Services Pty Ltd on Common Law - underpinned by Hydrocarbons Award (so it avoids our Valmec Services Pty Ltd EA). The question is - if employees did want to start negotiating, how difficult would it be to transfer their employing entity to APTS Pty Ltd and have them covered under our new proposed Industrial Services Agreement, assuming we hire then under Valmec Services Pty Ltd under Common Law as above?"[51] [emphasis added]

[75] This exchange provides a context for Altrad APTS's choice of a small cohort of voters and provides reason for greater scrutiny to be applied to the make up of the voting cohort and the genuineness of their agreement.

[76] The AWU submit that when such scrutiny is applied there are multiple reasons why the FWC should find that the Agreement was not genuinely agreed.

[77] A small voter cohort is not automatically indicative of a lack of genuine agreement. For example, a small business will, of course, have a restricted pool of voters. Alternatively, a large business with a specialised business unit might also genuinely have a small voter cohort. However, in other circumstances a small voter cohort is a matter which should trigger greater scrutiny. There are multiple factors of this nature which emerge from such scrutiny in this case.

[78] There were only three Voting Employees in the circumstances in which the Agreement was intended to soon apply, and did apply, to a much larger cohort consistent with its purpose to create an internal labour pool for the Altrad Group. Of all existing Altrad Group employees, only two were selected to form the voting cohort. These two Voting Employees were long term Brisbane based employees who were offered new contracts of employment immediately prior to the ballot. The third Voting Employee only commenced employment shortly before the Agreement was made.

[79] Contrary to what is now said by Altrad APTS, the evidence suggests that the issuing of these contracts was specifically for the purposes of the balloting of the Agreement. See for example the email from Mr Rahman to Mr Cooper on 5 May 2021:[52]

"One final question - we are close to issuing contracts to the 2 x PSV employees in QLD for 2 week on, 2 week off swing in APTS. We also have our condition monitoring person starting this week in Perth (contract already issued). These will be the three people who vote on the agreement. Do we need to have anything specific for the 2 PSV technician contracts knowing that they will transition to this?"

[80] Altrad APTS say that the selection of the Voting Employees is innocently explained by the explanation that they were the only three APTS Ltd Pty employees eligible to vote. However the evidence suggests that the scope of the Agreement was specifically moulded to make sure the selected employees would be the only APTS Ltd Pty employees eligible to vote. See for example Mr McLaughlin's email to Mr Cooper requesting that he:[53]

"Please check the draft wording within the attached creates no conflict with existing APTS agreement; per earlier comment we do have one person to be covered under this "new" agreement based at Henderson. I also want a double check about excluding Inspection and NDT, but no mention Hydrotesting covered in existing agree."

[81] Mr Mclaughlin made clear that he wanted to ensure that the "right" employees were eligible because he wanted to "...make sure there are no conflicts which could derail the vote or at the commission."[54]

[82] There is no evidence to suggest that the Altrad Group did not employ other employees in the other classifications contained in the Agreement which they could have also included in the voting cohort. Rather it would appear that the absolute minimum number of voters was selected consistent with the strategy to have the Agreement established without genuine bargaining.

[83] Of the three Voting Employees, Mr Woodard was engaged as a Condition Monitoring Technician, Mr Bellingham and Mr Barry were engaged as PSV Technicians. Together they occupy only two of eight classifications in an Agreement which covers 18 different award classifications over two separate different industry awards.

[84] Whether a small voting cohort has sufficient appreciation of the appropriateness of the terms and conditions proposed for disparate occupational classifications is a factor relevant to the genuineness of the approval. See for example the findings of the Full Court of the Federal Court in One Key Workforce Pty Ltd v CFMEU:[55]

"It is clear, however, that the Commissioner did not believe he needed to consider whether, in the light of the small number of employees and the large number of awards, he could be satisfied that the three employees had understood the Agreement and its effect before casting their votes. On the face of the material before the Commission there was a vast disparity of occupational classifications as between those held by the three individuals who voted and the classifications covered by the Agreement. How it was that the three employees might be regarded as having had a sufficient appreciation of the appropriateness of the terms and conditions proposed for the disparate occupational classifications covered, including in industries foreign to their own, was not identified by the Commissioner as a factor relevant to the genuineness of the approval and was not the subject of his consideration. Whether the three employees had appreciated the terms and conditions provided for by the Agreement, beyond those of direct interest and relevance to them, and thereby "genuinely agreed" to its terms (not just those that directly affected them) should have been considered. As the primary judge held, the Commissioner's failure to do that evinced jurisdictional error."

[85] Altrad APTS asserts that the voting group were sufficiently experienced to give that informed consent for the following reasons:

1. Each was a senior and experienced tradesperson with experience working in the manufacturing and hydrocarbons industries.

2. Mr Barry and Mr Bellingham each holds a Certificate III in Mechanical Engineering. Between them, they also hold confined space, working at heights, 4WD and crane operator tickets. Each has performed duties ranging from mechanical fitting to pressure testing of gas pipelines, to servicing pressure safety valves.

3. Mr Woodard is also an experienced tradesperson. He completed his apprenticeship as a mechanical technician, and worked in that role for some ten years before moving into condition monitoring. He holds Vibration Analysis Accreditation Certification II and Level 2 Infrared Training qualifications.

[86] Altrad APTS points to evidence that Mr Woodard pressed at the meetings held to discuss the Agreement for the inclusion of a standby clause and amendments to the training and allowances clauses as evidence that the voting cohort were capable of providing informed consent and in fact did so.

[87] Notwithstanding Altrad APTS' description of the Voting Employees as senior and experienced tradespersons with substantial experience working in the manufacturing and hydrocarbons industries across a range of classifications on the evidence, when they voted on the Services Agreement:

1. Mr Woodard had held several positions as a heavy-duty mechanic and a condition monitoring technician.

2. Mr Woodard had limited knowledge of other roles in Altrad APTS given his short tenure prior to voting on the Agreement.

3. Mr Barry had held several positions, Technician, C3 and Leading Hand.

4. There is no evidence to indicate that Mr Bellingham has ever performed any role other than as a C3 or PSV Technician during his employment with Altrad APTS.

[88] With the exception of Mr Woodard's work as a heavy-duty mechanic, there is no evidence any of the voting employees had ever done any work at Altrad APTS other than the technician work they were performing at the time of the vote, or leading people doing that work.

[89] The evidence does not support the assertion that the Voting Employees were familiar with the appropriateness of the terms and conditions for the 18 classifications from two different industry awards covered by the Agreement. Nor that they had any stake in the rates that applied to dual tradespersons, electrical and instrumentation workers, dual qualified operators/maintainers, electrical tradespersons, special class welders, inspectors, commissioning/start-up/testing technicians, boilermakers, welders, sheet metal workers, operators, maintainers, scaffolders, riggers and crane drivers. This is consistent with the minutes of meetings regarding the proposed Agreement which reveal limited changes were proposed by the Voting Employees and that multiple undertakings were required for the Agreement to pass the Better off Overall Test (BOOT).

[90] In any event, regardless of whether the Voting Employees were aware of the appropriateness of the terms and conditions proposed for their own or other classifications, more importantly the evidence reveals that they had no vested personal interest in the terms of the Agreement.

[91] The evidence reveals that the Voting Employees were informed on multiple occasions that they did not have to worry about specific terms of the Agreement because more favourable terms would be contained in their contracts of employment which would override the Agreement. For example, at the first meeting to discuss the proposed terms of the Agreement the Voting Employees were told:[56]

"Schedule B wages I wanted to tough (sic) base on this and Mushfiq will explain this this is just the base but this is not the rate employees will be paid this is the requirement of the award...

We have just mirrored the award and the consultant added some info in but you already have your salary so this is the base what we have to paid anyone but you would see that if it was this rate we wouldn't have anyone employed so just be aware this is the base line."

[92] At the meeting on 28 June 2021, the Voting Employees were told[57]:

"What we agree on the rates we don't pay people, so that if the department were to audit that would see that every abn (sic) are paid way above award we don't always end paying what's in the agreement"

[93] The evidence is that Voting Employees did not press for changes in the Agreement because their concerns were addressed in the common law contracts they entered into before voting to approve the Services Agreement. For example, in his witness statement Mr Bellingham gave evidence that:[58]

"I attended a second bargaining meeting with the other voting employees. At that meeting, we (the voting employees) asked questions about some of the terms of the APTS Industrial Agreement. I remember some discussion about differences between the terms of the Workshop Agreement and the APTS Industrial Agreement, in particular the rates of pay, training terms and allowances. I ended up accepting a salaried contract which addressed my concerns about rates of pay."

[94] Similarly, in his witness statement Mr Barry gave evidence that:[59]

"During the meetings (I cannot remember which one), the employees involved in the bargaining raised concerns that the APTS Industrial EA did not include all of the entitlements in the 2017 Workshop EA. There was discussion about entitlements under that agreement, and what we would be getting under the APTS Industrial EA. I also recall that there were some discussions about the differences between the APTS Industrial EA and the awards (I cannot remember in any detail what was discussed given the time that has passed). The main concerns we had were rates and allowances (particularly travel and away from home allowances). I ended up accepting a salaried contract which met my concerns."

[95] The concerns expressed by Mr Barry and Mr Bellingham reflect the fact that at the time they voted to approve the Services Agreement, they were covered by the Workshop Agreement. The implications of this is a matter to which we will return. Under cross examination both Mr Barry and Mr Bellingham conceded that they would not have voted in favour of the Agreement had they not been offered the contractual incentives.[60] It is also the case that any concerns Mr Woodard may have had about the terms of the Services Agreement were met by the contract that he was offered which provided terms and conditions well in excess of those in the Agreement.

[96] The Voting Employees were encouraged to support the Agreement despite being informed that prospective employees would not necessarily secure the same more beneficial contractual arrangements. See for example the discussion at the meeting held on 28 June 2021:[61]

"Moving on to meal allowances looking through the meal allowances your use (sic) to getting under that EA and the point of thinking that you know if someone takes a salary agreement and it takes away certain provisions and that being a meal allowance and we all discussed that this morning we spoke about a variation of contract. That way you don't miss out on that. And whereas new employees coming no (sic) board the business can discuss if that's something we will do for them."

[97] The lack of any personal vested interest in the outcome of the Agreement and the artifice of their selection to form the voting cohort is reflected in the evidence that the Voting Employees have since left the employment of Altrad or have been offered new common law contracts with Valmec Services Pty Ltd so that they are not covered by the Agreement.

[98] In reality, the Voting Employees simply secured their own terms and conditions of employment in common law contracts for a period of engagement in a role which barely lasted the first year of the Agreement's life and left their future colleagues who would be bound by the Agreement in the future to do the same.

[99] A further issue raised by the AWU in oral submissions at the hearing of the appeal is that on 29 July 2021, when they voted to approve the Services Agreement, the Workshop Agreement applied to at least two of the Voting Employees (Mr Barry and Mr Bellingham) and would continue to apply to them until 22 February 2022, when it reached its nominal expiry date. It is also probable that the Workshop Agreement applied to Mr Woodard given its broad scope and the nature of the work he was performing. The issues associated with the coverage of the Workshop Agreement was specifically canvassed in an email sent by Mr Cooper to Mr McLaughlin on 19 May 2021, in which Mr Cooper stated that he had redrafted the clause setting out the scope of the Services Agreement so that it separates workshop operations from "field operations". The email went on to state:

"I have reviewed the scope of the workshop agreement and although the workshop is referenced in the title, clause 1.2 of the Agreement is sufficiently broad to cover operations both in the workshop and in the field. Because the employer is the same, this means that technically the workshop agreement would continue to apply to the employees already covered by it until its nominal expiration date. You can apply this agreement administratively until that time as it provides for higher conditions. The only way to avoid this would be to create a new legal entity as the employer." [62]

[100] This email indicates that Altrad APTS knew that the Services Agreement could not apply to at least two, and arguably all three of the Voting Employees at the time they voted to approve it, or when it commenced operation, because the Workshop Agreement covered them and would continue to apply consistent with s. 58 of the FW Act, until it reached its nominal expiry date on 22 February 2022. That this was understood by Mr Rahman is also evident from emails he sent to Mr Cooper on 31 May 2021 stating that two Darra employees were currently covered by the Workshop Agreement[63] and on 5 May 2021 where Mr Rahman refers to knowing that two Queensland employees will "transition" to the Services Agreement. Given that Mr Woodard is from Western Australia, it is probable that these employees are Mr Barry and Mr Bellingham. The AWU also submits that the desire to finalise the Services Agreement before the nominal expiry date of the Workshop Agreement was to avoid collective bargaining as there was no other reason for the timing.

[101] In the circumstances of this case, it is not necessary to determine whether it is necessary that an enterprise agreement will apply to employees asked to approve it immediately upon it commencing operation, and the interaction between coverage and application of an enterprise agreement for the purpose of determining eligibility of a ballot to approve the Agreement. It is arguable that at the time the Voting Employees made the Services Agreement, they were employees who "will be covered" by that Agreement, notwithstanding that another Agreement - the Workshop Agreement - already covered them and the Services Agreement would not apply to them until the Workshop Agreement reached its nominal expiry date, over six months after they voted to approve the Services Agreement. Regardless of the legal position, this issue is directly relevant to the genuineness and authenticity of the Services Agreement and to whether it was genuinely agreed. While we do not conclude that arrangement was a sham of the kind that was evident in Workforce Logistics[64], the matters we have identified support a conclusion that the Services Agreement was lacking in authenticity and moral authority in the sense discussed in One Key Workforce Pty Ltd v CFMEU[65] and was therefore not genuinely agreed as required in s. 188(1)(c) of the FW Act.

[102] A further reason why the Voting Employees had no stake in the Services Agreement, is because even if the effect of s. 58 of the FW Act did not prevent the Services Agreement applying to them, the fact that they had accepted salaries meant that they were exempt from most of the terms of the Services Agreement by virtue of clause 1.2.4.

[103] In coming to our conclusions on whether the Voting Employees had a stake in the Services Agreement, we have considered BGC Contracting Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, Australian Workers' Union & Construction, Forestry, Mining and Energy Union,[66] BGC Contracting Pty Ltd,[67] (together, the BGC Decisions) and Appeal by KCL Industries Pty Ltd (KCL).[68]

[104] The factual circumstances of this matter can be distinguished on the facts from the circumstances considered in the BCG Decisions. In the case before us, unlike in the BCG Decisions, there is no evidence that the Strategy was explained in a fulsome way to the Voting Employees. It was also not the case that APTS was experiencing challenges in the market due to an industry downturn or that the approval of the Services Agreement was necessary to ensure that APTS could maintain a successful, viable and profitable enterprise, nor that the ongoing employment of the Voting Employees was predicated on the making of the Services Agreement, such that they might have had the necessary stake. To the contrary, the Strategy was an expansion of APTS's offering and operations.

[105] We consider the factual matrix, as outlined above, to be more analogous to the position considered by the Full Bench in KCL. As was the case in KCL, in this case there is a small voter cohort. That cohort was engaged in a limited number of classifications covered by the Services Agreement. The evidence does not establish that they had sufficient contemporaneous familiarity with the terms and conditions of employment which might apply to the other classifications. As was the case in KCL:

"The employees had no 'stake' in the Agreement's rates of pay, since they were assured that their existing, higher rates of pay would remain in place (subject to 'operational needs and satisfactory performance'), and they could not have given informed consent in relation to occupation and industries in which they did not work and presumably had no experience."

[106] In addition, in order to be satisfied that the Agreement was genuinely agreed, the FWC must be satisfied that APTS Pty Ltd complied with s. 180(5) of the FW Act.[69] Section 180(5) requires the employer to take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees, and that the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

[107] The changes that a proposed enterprise agreement would make to an employee's existing conditions of employment require explanation. An employer need not explain every single difference between the existing agreement and the proposed agreement. But it must explain at least the key differences.[70]

[108] The primary source of the Voting Employees' entitlements was the Workshop Agreement. The AWU relies on three key differences between the Workshop Agreement and the Agreement which the AWU say the evidence suggests were not explained to the Voting Employees:[71]

1. The rates in the Workshop Agreement are higher than in the Services Agreement. Indeed, the highest hourly rate in the Services Agreement ($30.77) is still lower than the lowest rate in the Workshop Agreement ($33.95).

2. The Workshop Agreement and the Services Agreement have different classification and progression structures. Classifications under the Workshop Agreement depend on a points system according to which employees are awarded points for holding different licenses, training and tickets. Under the Services Agreement, classifications are imported from the Hydrocarbons Award and the Manufacturing Award. Those classifications depend on the employee's assessed competence to perform various tasks.

3. Under the Agreement, meal allowances are paid in different circumstances to the circumstances in which they are paid under the Workshop Agreement, and the rate at which meal allowances are paid is lower under the Agreement.

[109] Mr Bellingham gave evidence that during bargaining meetings, the differences between rates of pay and allowances under the Workshop Agreement and the Services Agreement were discussed and that the voting cohort raised questions with Altrad APTS regarding those differences. However, Mr Barry said that he could not remember anyone comparing salaries under the two enterprise agreements and Mr McLaughlin said he could not recall the Workshop Agreement rates being identified or compared with the Services Agreement rates. Mr Woodard said that he could not remember the Workshop Agreement being mentioned at all.[72]

[110] The meeting minutes suggest that a difference in meal allowance entitlement between the Workshop Agreement and the Services Agreement were discussed but it is unclear whether that discussion extended to the circumstances in which the meal allowance is payable.[73]

[111] There is no evidence that the difference in classification structure was properly explained or discussed. Except for the mention of the heading "Part 3 Classification structure", the meeting minutes say nothing about classifications at all. Mr Bellingham does not remember classification structures being mentioned. Mr Barry does not remember classifications being discussed either. Mr McLaughlin equivocated in cross-examination but said that he does not recall them being explained. Mr Woodard says he remembers some classifications being explained but does not remember the Workshop Agreement being mentioned at all.[74]

[112] We also note that Mr Barry and Mr Bellingham believed that the Workshop Agreement ceased to apply to them when the Services Agreement commenced. This was factually incorrect and there is no evidence that these employees were informed that the Workshop Agreement would continue to apply to them until it reached its nominal expiry date on 22 February 2022.

[113] Altrad APTS submits that an employer's explanation of the terms and effect of those terms to employees may not be perfect, but still satisfy the requirement in s. 180(5). Altrad APTS submits that s. 180(5) does not require employers to be totally objective and knowledgeable, and mistakes and omissions will occur.

[114] Neither pay rates or classification structures can fairly be described as minor or insignificant matters for which mistakes and omissions might reasonably be excused. The classification structure, for example, is integral to determining both duties and wages. The classification structures of the Workshop Agreement and the Services Agreement are not readily mapped to one another. Given the importance of the subject and the lack of ease in which the comparative provisions can be compared, we are of the view that this is a matter which ought to have been clearly explained to employees, was not and that a failure to do so materially impacted on the capacity of the Voting Employees to genuinely agree. The lack of transparency between the existing classifications and the new classification structure and consequently applicable payrates is reflected in the evidence that the Services Agreement was approved by two employees then covered by the Workshop Agreement notwithstanding that the highest hourly rate in the Services Agreement ($30.77) is lower than the lowest rate in the Workshop Agreement ($33.95).

[115] The application of an enterprise agreement is also not an insignificant matter. While Altrad APTS may have decided to administratively apply the Workshop Agreement pending its expiry, this does not equate to explaining the entitlements of the Voting Employees and the effect of the terms of the Services Agreement on those entitlements. In these circumstances, it could not be concluded that APTS Altrad took all reasonable steps to explain the terms of the Agreement and their effect.

[116] Before it may approve an enterprise agreement, the FWC must be satisfied that the agreement passes the BOOT.[75] An agreement relevantly passes the BOOT if the FWC is satisfied, as at the test time, that each prospective award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

[117] The AWU submits that the Deputy President erred in concluding that the Agreement passed the BOOT, in accordance with ss. 186(2)(d) and 193, as the material before the Deputy President did not permit her to be satisfied that employees to be covered by the agreement would be better off overall.

[118] It relies on the example of a full-time Monday to Friday employee classified at Level 2 under the Services Agreement who works away from home and is rostered to work eight hours on one Saturday and one Sunday a fortnight. The AWU says the employee would be entitled to $2,897.96 a fortnight under the Services Agreement but $3,180.40 a fortnight under the Award.[76]

[119] The evidence of Mr Lord is that this example is unlikely to occur in reality, however, there is no evidence to suggest that such a scenario is impossible or so unlikely as to be properly described as improbable. Given our conclusion in relation to Appeal Ground One, it is not necessary that we deal conclusively with Appeal Ground Two.

[120] For the reasons set out above we do not consider that, having regard to the evidence adduced in the Appeal, the FWC could have been satisfied that the Agreement was genuinely agreed by the relevant employees. Accordingly, we consider that the Deputy President erred in being satisfied that the requirement for genuine agreement in s. 186(2)(a) of the FW Act was met. Whilst we have found appealable error in the Deputy President's decision, we have only done so on the basis of the new evidence adduced in the appeal, which disclosed the deficiencies in the employer's explanation of the terms and effect of the Agreement provisions to employees.

[121] In the circumstances, it is not necessary for us to determine Appeal Ground Two. In relation to the items listed as grounds 3 - 4 in the amended Notice of Appeal, these grounds are related to Appeal Ground One. As we have upheld Appeal Ground One, it is also not necessary that we deal with these grounds.

[122] Because we have upheld Appeal Ground One, the decision to approve the Agreement must be quashed. Given the findings we have earlier made, it is clear that the Agreement cannot meet the "genuine agreement" requirement for approval in s. 186(2)(a), and this is not a matter which can be rectified pursuant to ss. 188(2) or 190. Accordingly, the application for approval of the Agreement is dismissed.

[123] We order as follows:

1. Time is extended until 18 September 2023 for the AWU to lodge its appeal.

2. Permission to appeal is granted.

3. Appeal Ground One is upheld.

4. The decision of Deputy President Dean of 23 August 2023 in APTS Pty Ltd [2021] FWCA 5208 is quashed.

5. The application for approval of the APTS Pty Ltd Industrial Services Enterprise Agreement 2021-2025, (matter AG2021/6658) is dismissed.

A Pollock and A Crocker of Counsel for the Respondent.

[1] [2021] FWCA 5208.

[2] Warrell v Walton [2013] FCA 291; (2013) 233 IR 335, 341 [22].

[4] Exhibit A3 - Witness Statement of Ross Kumeroa dated 31 October 2023 - Court Book at pg. 690-736.

[5] Exhibit A2 - Witness Statement of Alex Giordano dated 31 October 2023 - Court Book at pg. 199-689.

[6] Exhibit A1 - AWU List of Documents tendered as a bundle with index - Court Book at pg. 43-198.

[7] Exhibit R2 - Witness Statement of Adam Barry dated 10 November 2023 - Court Book at pg. 818-930.

[8] Exhibit R1 - Witness Statement of Aaron Bellingham dated 10 November 2023 - Court Book at pg. 931-1028.

[9] Exhibit R5 - Witness Statement of Peter Woodard dated 10 November 2023 - Court Book at pg. 1029-1080.

[10] Exhibit R4 - Witness Statement of Jon Lord dated 10 November 2023 - Court Book at pg. 815-817.

[11] Exhibit R3 - Witness Statement of Deon McLaughlin dated 10 November 2023 - Court Book at pg. 755-810.

[12] Transcript of Hearing on 16 November 2023 at PN566.

[13] [2023] FWCFB 31, [23]-[24] citing Akins v National Australia Bank (1994) 34 NSWLR 155.

[17] Exhibit A1 - Court Book at pg. 57.

[18] Exhibit R3 - Court Book at pg. 756-757.

[19] Exhibit A1 - Court Book at pg. 73.

[20] Exhibit R3 - Court Book at pg. 758.

[21] [2023] FWCFB 157.

[23] Exhibit A1 - Court Book at pg. 73.

[24] Exhibit A1 - Court Book at pg. 61-72.

[34] Exhibit R5 at [24]-[25] - Court Book at pg. 1032.

[35] Exhibit R5 at [32] - Court Book at pg. 1033, 168.

[36] Exhibit R2 at Annexure AB1- Court Book at pg. 169-183.

[37] Exhibit R1 - Court Book at pg. 184-195, 931.

[40] [2014] FWCFB 4822 at [5].

[44] [1936] HCA 40, 55 CLR 499 at 504-505; Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47, 203 CLR 194 at [19]- [21] per Gleeson CJ, Gaudron and Hayne JJ; Minister for Immigration and Border Protection v SZVFW [2018] HCA 30, 264 CLR 541 at [35]- [50] per Gageler J; Donnybrook Holdings Pty Ltd v CEPU [2021] FWCFB 1825 at [20]; National Electrical and Communications Association v Electrotechnology Group Training Company Ltd [2021] FWCFB 6073 at [29].

1. [45] [2017] HCA 53, (2017) 262 CLR 593.

[48] [2023] FWCFB 157.

[50] One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77, [142].

[51] Exhibit A1 - Court Book at pg. 115 - 116.

[52] Exhibit A1 - Court Book at pg. 88.

[53] Exhibit A1 - Court Book at pg. 102.

[54] Exhibit A1 - Court Book at pg. 102.

[55] [2018] FCAFC 77, [168].

[60] Transcript of Hearing on 16 November 2023 at PN88-PN91, PN206.

[61] Exhibit A1 - Court Book at pg. 118.

[62] Exhibit A1 - Court Book at pg. 92.

[63] Exhibit A1 - Court Book at pg. 106.

[64] [2023] FWCFB 157 at [81].

[65] [2018] FCAFC 77, (2018) 262 FCR 527 at [131]- [165].

[66] [2017] FWCFB 2741.

[67] [2018] FWC 1466.

[68] [2016] FWCFB 3048.

[69] Fair Work Act 2009 (Cth), s.188(1)(a)(i).

[70] CFMMEU v Mechanical Maintenance Solutions Pty Ltd [2022] FCAFC 15, [171]-[173].

[72] Transcript of Hearing on 16 November 2023 at PN634.

[73] Exhibit A1 - Court Book at pg. 118.

[74] Transcript of Hearing on 16 November 2023 at PN634-PN635.

[75] Fair Work Act 2009 (Cth), s. 186(2)(d).

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