The attached document wholly replaces the document previously issued with the code [2019] FWCA 3962 on 12 June 2019.

[2019] FWC 4042

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Application for approval of the Bachy Soletanche Australia Pty Ltd & Employees Enterprise Agreement (NSW) 2018-2020.

[1] An application has been made for the approval of an enterprise agreement known as the Bachy Soletanche Australia Pty Ltd & Employees Enterprise Agreement (NSW) 2018-2020 ("the Agreement"). The application was made by Bachy Soletanche Australia Pty Ltd ("the Applicant") pursuant to s.185 of the Fair Work Act 2009 ("the Act"). The Agreement is a single-enterprise agreement.

[2] The Construction, Forestry, Maritime, Mining and Energy Union ("the CFMMEU") was a union bargaining representative involved in the Agreement making process. The CFMMEU has not filed a Form F18 in the matter.

[3] On 10 April, 2019, I issued Directions for the filing and service of Submissions and evidentiary materials by both the Applicant and the CFMMEU. Pursuant to those Directions, the following documents were filed:

(a) The CFMMEU filed an outline of Submissions on 10 April, 2019 ("the CFMMEU Submission"); and

(b) The Applicant filed an outline of Submissions on 18 April, 2019 ("the Applicant's Submission"), together with a witness statement of Mr. Laurent Delonca dated 18 April, 2019 ("the Delonca Statement").

[4] The Directions of 10 April, 2019, allowed for the CFMMEU to file a reply Submission and any documentary material by 23 April, 2019. The CFMMEU confirmed by email dated 1 May, 2019, that it did not intend to file reply Submissions.

[5] On 10 April, 2019, at the Hearing when the Directions for the filing and service of Submissions and evidentiary materials were made, it was agreed that I should determine the application on the papers without a Hearing. There has since been no suggestion that that was not the appropriate course.

[6] The CFMMEU opposes the approval of the Agreement on the grounds that the employees covered by the Agreement have not genuinely agreed to the Agreement. The CFMMEU asserts that the company has failed to comply with s.180(2) of the Act, and that non-compliance cannot be cured by the operation of s.188(2) of the Act.

[7] The particular reason for the asserted lack of genuine agreement was that the Applicant had failed to provide the relevant employees with copies of the Building and Construction General On-Site Award 2010 ("the Award"), being materials incorporated by reference into the Agreement, and described at Clause 2 of the Agreement as the "Parent Award".

[8] The Applicant specialises in foundation engineering works for building and infrastructure projects, such as piling. In or around April, 2018, the Applicant became aware that the rates of pay under their existing enterprise agreement, the Advanced Foundation Solutions (Aust) Pty Ltd & Employees Enterprise Agreement (NSW) 2015- 2019 ("the AFS Agreement"), were less than the rates of pay being paid by its competitors. The Applicant addressed that issue by commencing negotiations for a new enterprise agreement well in advance of the nominal expiry date under the AFS Agreement of 10 April, 2019.[1]

[9] The most significant changes in the Agreement are the rates of pay, which are approximately 13% higher than the AFS Agreement. The rates of pay in the Agreement are also significantly higher than the rates of pay under the Award.[2]

[10] On 25 September, 2018, the Applicant gave to each employee to be covered by the Agreement a copy of the Agreement. The Applicant, however, did not give the employees a copy of the Award. Mr. Delonca deposed that if any employee had requested a copy of the Award from the Applicant, the Applicant would have provided that employee with a copy. To his knowledge, no employee had asked for a copy of the Award.[3]

[11] The Applicant held meetings with the relevant employees on 25 and 26 September, 2018 to explain the contents of the Agreement and the proposed changes, followed by a "question and answer" session. The Agreement was put to vote on 4 October, 2018 and was approved by employees. However, the Applicant was advised by the Australian Building and Construction Commission that the Agreement did not meet the requirements of the Code for Tendering and Performance of Building Work 2016 because it used the term "shutdown weekend". The Applicant therefore amended the Agreement and put it to another vote.[4]

[12] On 24 October, 2018, the Applicant, again, gave to each employee to be covered by the Agreement a copy of the Agreement. The Applicant, again, did not give the employees a copy of the Award. However, Mr. Delonca deposed that, again, if any employee had requested a copy of the Award from the Applicant, the Applicant would have provided that employee with a copy. To his knowledge, no employee asked for a copy of the Award.[5]

[13] On 31 October, 2018, the Agreement was made when fifteen (15) employees cast valid votes and all fifteen (15) employees voted to approve the Agreement.[6]

[14] Clause 4 of the Agreement describes the Agreement's relationship to the Award. Clause 4 states:

a) This Agreement will operate to the exclusion of any award.

b) The express provisions of this Agreement will operate to the exclusion of the Award.

c) Where the award is referred to in the agreement it is not incorporated into the agreement, unless expressly provided for under the clause.

d) The terms and conditions of the Building and Construction General On-site Award 2010, are hereby expressly incorporated as terms of this Agreement as if the same were set out in full herein and shall be binding upon the parties during the currency of the Agreement, by operation of this Agreement.

e) In the event of any inconsistency between the Award and an express provision of this Agreement, the terms of this Agreement shall prevail to the extent of such inconsistency, unless the express provision of the Agreement provides otherwise or unless contrary to law."

[15] Mr. Delonca deposed that he believed that all employees had access to the Internet and could therefore access a copy of the Award quite easily and readily. The basis of his belief was that all employees had smart phones and the Applicant mostly communicates with its employees by way of email. Further, there are a number of employees at various work sites that are issued with a personal laptop or tablet, and so they could have accessed a copy of the Award easily and readily at work.[7]

[16] On 28 March 2019, my Chambers contacted the Applicant in relation to the Agreement and identified a number of issues. One such issue was whether the Award was incorporated into the Agreement. The Applicant was invited to provide an undertaking to the effect that, despite Clause 4 of the Agreement, the Award is incorporated into the Agreement. On 3 April, 2019, after first consulting with the relevant employees, the Applicant provided an undertaking stating that "the Building and Construction General On-site Award 2010 is incorporated into the Agreement despite any clauses in the Agreement to the contrary" ("the Undertaking").

[17] Mr. Delonca deposed that he requested that the employees to be covered by the Agreement complete a survey in relation to their understanding of the Agreement ("the Survey"). The Survey contained the following six (6) questions:

1. Prior to voting on the Agreement (on 31 October 2019), I was aware that the Advanced Foundation Solutions (Aust) Pty Ltd & Employees Enterprise Agreement (NSW) 2015-2019 incorporated (meaning formed part of and is read together with) the Building and Construction General On-Site Award 2010.

2. Prior to voting on the Agreement (on 31 October 2018), I understood that the Building and Construction On-Site Award 2010 was incorporated into the Agreement.

3. Prior to voting on the Agreement (on 31 October 2018), I was aware I could access a copy of the Building and Construction General On-Site Award 2010 on the internet.

4. Prior to voting on the Agreement (on 31 October 2018), I could easily access the internet through my mobile telephone or computer to access a copy of the Building and Construction General On-Site Award 2010.

5. On 1st and 2nd of April Bachy consulted with me about providing an Undertaking to the Fair Work Commission which said "The Building and Construction General On-Site Award 2010 is incorporated into the Agreement despite any clauses in the Agreement to the contrary" (the Undertaking).

6. I agreed to Bachy submitting the Undertaking.

[18] The Survey was provided to all employees covered by the Agreement and who were on site between Monday, 15 April, 2019 to Wednesday, 17 April, 2019, meaning that the Survey was provided to seventeen (17) out of the twenty-five (25) employees covered by the Agreement. All seventeen (17) employees answered "Yes" to all six (6) questions.

[19] The CFMMEU noted that the Agreement simultaneously appears to operate to the exclusion of the Award, and to also incorporate the Award. The clause was inherently confusing leading to an assumption that the employees who will be covered by the Agreement were unaware at the time of the vote whether the Award was incorporated or excluded. The provision of the Undertaking itself raised concerns as to whether the Agreement had been genuinely agreed to within the meaning of s.188(1) of the Act.

[20] Section 180(2) of the Act requires an employer to take "all reasonable steps" to:

1. Ensure that during the access period employees employed at the time who were to be covered by the proposed agreement are given the written text of the proposed agreement and any other material incorporated by reference into the proposed agreement; or

2. Ensure that the employees employed at the time who were to be covered by the proposed agreement have access throughout the access period to a copy of those materials.

[21] The CFMMEU submitted that it was clear from the documents filed in support of the application that there had been a lack of compliance with that section, in that the Applicant had failed to provide the employees with any material incorporated by reference, or provide access to those materials. At Question 2.4 of the Form F17, the Applicant listed the documents that were given to employees as the Voting Notice, a hard copy of the Agreement and a Summary Document explaining the differences between the previous agreement and the Agreement. The CFMMEU noted that there was no mention of the Award indicating that the employees were neither given a copy of the Award, nor provided a means by which to access the Award.

[22] The CFMMEU submitted that Clause 4 in its original terms was expressed to both exclude and incorporate the Award. As such, it was inherently likely that there are employees who believed that the Award was incorporated into the Agreement, because the Clause said as much. The giving of the Undertaking, albeit in response to concerns raised by the Commission, seems to imply that the correct interpretation of Clause 4 is that the Award was incorporated.

[23] The CFMMEU referred to the Decisions of the Full Bench in Construction, Forestry, Maritime, Mining and Energy Union v Dawson's Maintenance Contractors Pty Ltd_[8]_ ("Dawson's") and Deputy President Gostencnik in BGC Contracting Pty Ltd_[9]_("BGC Contracting"), and submitted that in order to understand the terms and conditions of employment, given the continual reference to Award conditions in the Agreement, the Company was required to provide copies of the documents or access to the documents, of which it did neither.

[24] The CFMMEU submitted that it was unnecessary to determine whether the steps taken by the Applicant were reasonable in the circumstances, given that the Applicant took no steps to provide copies of the Award to the employees. In failing to take steps to provide copies or access to the Award, the Applicant has failed to comply with s.180(2) of the Act. It followed that the Commission could not be satisfied that the Agreement was genuinely agreed to.

[25] Regarding the application of s.188(2) of the Act, it was put that the failure to provide copies of the Award constituted a procedural error for the purposes of s.188(2) of the Act. Failing to provide a copy of the Award meant employees were only receiving part of their terms and conditions. In particular, the Agreement references the Award elsewhere outside of Clause 4 on six (6) separate occasions:

1. Clause 10.2: Productivity allowance is in lieu of the special rates and multi- storey allowance as contained in the Award.

2. Clause 11.2: Termination pay to be paid by cheque or through electronic funds transfer into the Employee bank account as per the relevant Award provision.

3. Clause 12: Except as provided in the clause, the Award condition regarding payment of wages will apply.

4. Clause 14.6: When engaging in alternate work during inclement weather, an allowance for use of an employee's vehicle will be at rates provided under the Award.

5. Clause 16.1: Pro-rata leave for part time employees will be as per Award.

6. Clause 25.1: Except as provided elsewhere in the Award, the ordinary hours shall be Monday to Friday.

[26] Given the importance of the Award, the CFMMEU submitted that the Commission could not be satisfied that the failure to provide copies or access to the Award was a minor procedural error.

[27] If, however, the Commission found the error to be minor, the CFMMEU submitted that the employees were so disadvantaged by the failure to provide copies or access to the Award that s.188(2)(b) of the Act would not allow a finding of a "genuine agreement." Without access to the Award, employees were unaware of what allowances they are giving up, the process for the payment of wages, the appropriate rates payable when using their vehicle during inclement weather or entitlement to pro-rata annual leave as a part-time employee. The employees were then prevented from making an informed choice as to the terms and conditions of their employment.

[28] While the Applicant conceded that Clause 4 of the Agreement contains contradictory clauses in relation to whether the Award is incorporated into the Agreement, it submitted that Clause 4(d) of the Agreement was so specific about incorporation of the Award that it overrode the more general contents of Clause 4 regarding the Award.

[29] The Applicant did not provide a copy of the Award to the relevant employees, however it still met the requirements of s. 180(2) of the Act, and took "all reasonable steps", by providing the relevant employees with a copy of the Agreement. What amounts to "all reasonable steps" will depend upon the circumstances.

[30] The Applicant submitted that it took "all reasonable steps" under s. 180(2) of the Act (and was therefore not required to give the relevant employees a copy of the Award) because:

(a) The Agreement contained rates of pay significantly above the Award;

(b) The Award is not required to interpret the important wages and conditions in the Agreement (i.e., the rates of pay and classifications);

(c) The Agreement is similar to the AFS Agreement, and therefore the relevant employees' level of understanding of the Agreement was reasonably high; and

(d) The Award was available in the public domain, and all relevant employees had access to the Internet and could easily access a copy of the Award.

[31] While in both Dawson's and BGC Contracting, the respective employers were found to have failed to meet the requirements of s.180(2) of the Act after not providing the relevant employees with copies of the relevant modern awards, the Applicant submitted that those Decisions could be distinguished from the present application. The basis of that distinction was that, while in Dawson's and BGC Contracting the relevant enterprise agreements reverted to the relevant modern awards for significant matters, that was not the case for the Agreement.

[32] The Applicant asserted that employees of the Applicant do not need a copy of the Award to understand the operation of the Agreement. Most of the clauses that reference the Award were the exact same clauses that appeared in the previous AFS Agreement.

[33] The Applicant submitted that Decisions of the Commission have made it clear that there is no need to take further steps to provide access to materials that are freely available in the public domain, such as modern awards[10].

[34] In the alternative, if it is found that the Applicant did not take "all reasonable steps" in accordance with s.180(2) of the Act, and that consequently, the Agreement was not genuinely agreed to in accordance with s.188(1) of the Act, the Applicant submitted that the Agreement was genuinely agreed to by employees covered by the Agreement in accordance with s.188(2) of the Act.

[35] The Applicant agreed with the CFMMEU that, if error in compliance with s. 180(2) of the Act is found, it constituted a procedural error. It submitted further, however, that such error was minor because the employees were given copies of the primary document, being the Agreement, the Agreement was very similar to the AFS Agreement, which also incorporated by reference the Award in exactly the same terms, and the Award was readily accessible in the public domain.

[36] Further, the employees covered by the Agreement were not likely to have been disadvantaged by the errors because:

(a) The Agreement incorporated the Award in the exact same terms as the Award was incorporated into the AFS Agreement;

(b) The Award was not "...integral to the employees understanding the terms and conditions of their employment...". The references to the Award throughout the Agreement are not significant, and were not necessary to allow understanding of the Agreement; and

(c) The substantive changes to the existing position were contained within the Agreement (i.e., rates of pay under Appendix B of the Agreement).

[37] The Applicant relied on the recent decision of Vice President Hatcher in Greenfreight Logging (NSW) Pty Ltd Albury Depot Enterprise Agreement 2018[11] ("Greenfreight**"**). In Greenfreight, the Vice President found that there was non-compliance with s.180(2) of the Act, as correspondence issued to employees indicating where employees could access a proposed agreement made no reference to incorporated award material. Nonetheless, as the error was a minor procedural error, and employees were not likely to have been disadvantaged, the agreement was "genuinely agreed to" within the meaning of s.188(2) of the Act.

[38] On this basis, the Applicant submitted that the Agreement was genuinely agreed to under s.188(2) of the Act because the Agreement would have been "genuinely agreed to" within the meaning of s.188(1) of the Act, but for the minor procedural error, and the employees covered by the Agreement were not likely to have been disadvantaged by the error.

(a) s 180(2) - Access to Incorporated Material

[39] On 24 October, 2018, the Applicant gave to each employee to be covered by the Agreement a copy of the Agreement. The Applicant did not give the employees a copy of the the Award, nor provided a link to the Award. The Applicant had one (1) month prior given each employee to be covered by the Agreement a copy of a vastly similar agreement. The Agreement was then made on 31 October, 2018, when fifteen (15) employees casted a valid vote and all fifteen (15) employees voted to approve the Agreement.

[40] Section 180(2) of the Act is prescriptive as to the steps that an employer must take. As the Full Bench observed in Dawsons[12] at paragraphs [47] and [48] respectively:

"[47] Notwithstanding the argument that employees were familiar with the classification descriptors under the relevant modern awards, given that the same descriptors were used in the predecessor agreement, there is an obligation that an employer proposing an enterprise agreement takes all reasonable steps to either provide those materials to employees or ensure that they have access to the materials during the agreement access period. The legislation does not require that an employer take some reasonable steps or only those steps that it thinks necessary. Instead the legislation requires that employers must take all reasonable steps to provide the requisite information.

[48] At the least, taking all reasonable steps to provide this information would require no less than providing employees with a hard copy of the descriptors, perhaps in their lunchrooms or pinned to notice boards; or even to provide each person to be covered by the agreement with a hyperlink to the relevant clause of the applicable modern award. In turn, satisfaction on the part of the Commission that all reasonable steps have been taken would logically require cogent evidence on the part of the applicant employer as to the nature and detail of the explanation given. Mere blandishments to the effect that the agreement has been explained or that questions have been answered will inevitably be insufficient, as it is unlikely, if not impossible for the Commission to be satisfied that a genuine agreement has been reached on the basis of such general statements."

[41] While the Applicant took all reasonable steps to ensure the employees were provided with a written text of the Agreement, the same cannot be said for the Award. The height of the Applicant's case as to compliance with s.180(2) of the Act seems to be that the relevant employees had access to the Award throughout the access period for the Agreement because if any employee had requested a copy of the Award from the Applicant, the Applicant would have provided that employee with a copy.[13]

[42] There is no evidence that the Applicant drew to the employees' attention the relevance of the Award. The answers at Questions 2.6 and 2.7 of the Form F17 make no mention of reference to the Award, or its availability. Preparedness to provide a copy of the Award upon request is not sufficient to comply with the obligations of s.180(2) of the Act, particularly where the relevant employees are not advised of the Award's relevance or availability by that means.[14]

(b) s 188(2) - Minor Procedural or Technical Error in the NERR

[43] The Applicant relied in the alternative upon s.188(2) of the Act to cure what it characterised as minor and technical errors in compliance with s.180(2) of the Act. That sub-section applied in relation to the Agreement as the application for approval was made before 12, December, 2018, but had not decided the Application on or before 12 December, 2018[15].

[44] The gravity or lack thereof in the failure to provide, or provide access to, the Award is borne out by a consideration of the terms of the Agreement that incorporate or refer to the Award. Other than Clause 4 that is outlined above, they are listed as follows:

"In return for compliance with the provisions of this Agreement, a company productivity allowance will be paid to all Employees covered by this Agreement working on-site. This allowance will be paid weekly for each hour worked and in accordance with Clause 27 of this Agreement, attracting no premium or penalty. The rate payable will be in accordance with Appendix C of this Agreement.

The productivity allowance shall be paid for all hours worked on-site, attracting no premium or penalty and remain in force for the duration of the Agreement. This allowance will not apply where work is performed at the Company's premises or Yard not specifically related to projects, i.e. general maintenance work.

Any agreed variation will be recorded in correspondence by the parties to this Agreement. This allowance shall be in lieu of Special Rates and Multi-storey allowance as contained in the Award.

The productivity allowance shall also be in lieu of the applicable crib allowance payable after two hours overtime work found in the Award. The piling and productivity allowance will be paid in lieu of any applicable site or project specific allowance."

"When an Employee leaves of their own accord, their termination pay will be banked into their account at the end of the next pay period. Where the Company terminates an Employee, termination pay will be paid by cheque or through electronic funds transfer into the Employee bank account as per the relevant Award provision.

Where employment is terminated by the Company, payment in lieu of notice shall be at the ordinary hourly rate of pay only (as provided in Appendix B of this Agreement). Payment for superannuation, redundancy and / or any other allowances prescribed by this Agreement shall not be applicable for the notice period where notice is not worked."

"Except as provided below the Award conditions shall apply. In lieu of Clause 23.1 of the Award, the following shall apply to all Employees:

All wages, allowances and other monies will be paid by electronic funds transfer

Wages shall be made available no later than 3.30 pm Thursday of each week (weekly). Waiting time shall not be payable where an Employee is kept waiting for their money due to circumstances beyond the control of the Company."

"Employees shall accept transfer to an area or site not affected by inclement weather if, useful work is available in that area or site and that work is within the scope of the Employees skill, competence and training consistent with the classification structure, and the Company provides, where necessary transport, or payment of an allowance for use of an Employees vehicle, at the rates provided in the Award."

"It is agreed that whenever annual leave is to be taken in conjunction with the Christmas/New Year period, it is to be taken in accordance with the following procedure.

Employees, who have not accrued sufficient pro rata annual leave and or RDO or any combination of prior to commencement of the Christmas/New Year period, shall be granted leave without pay by the Company to give that Employee at least the minimum leave of absence required.

Where the Company decides to close a site over the Christmas/New Year period for any period in excess of the agreed minimum closedown, up to and including 20 annual leave days, then the Company shall give at least 2 months' notice to Employees as per the Award. Employees who have no, or insufficient, accrued annual leave equal to the period of the closure, shall be granted leave without pay for that period.

Where an Employee requests that annual leave be allowed in one continuous period at Christmas, such a request shall not be unreasonably refused.

Subject to clause four (4) of this Agreement all other Award conditions, e.g. pro-rata for part- time Employees shall apply."

"Consistent with the objectives of this Agreement, the parties have agreed to organise the hours of work to suit the requirements of the industry whilst also giving the Company and Employees greater flexibility in organising their rostered days off (RDO's). Except as provided elsewhere in the Award, the ordinary working hours shall be Monday to Friday 8 hours per day 36 hours per week.

Work will be performed between 6.00am and 6.00pm. Where agreement is reached with the relevant Employees, a 5.00am start may be introduced (with subsequent meal and crib time adjustments) to allow for daylight saving and special project requirements."

[45] It can hardly be said that there is extensive incorporation of the Award into the Agreement by the Clauses 10.2, 11.2, 12, 14.6, 16.1 or 25.1, that required actual consideration of the Award for genuine agreement.

[46] Clause 4, however, stands in stark contrast to those other clauses referring to the Award. Both the CFMMEU and the Applicant submitted that it was confusing and contradictory. On a bare reading of that clause, it excludes the Award three (3) times and incorporates the Award once.

[47] It is the terms of paragraph (d) of Clause 4, however, that highlights the need for provision of, or access to, the Award. By that Clause, the terms and conditions of the Award were "expressly incorporated as terms of this Agreement as if the same were set out in full herein and shall be binding upon the parties during the currency of the Agreement, by operation of this Agreement." The Undertaking provided since the making of the Agreement has merely confirmed that provision and highlighted the importance of the provision of, or access to, the Award.

[48] A Full Bench of the Commission considered the proper construction of s.188(2) of the Act in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[16] ('Huntsman'). At paragraph [74] of Huntsman, the Full Bench produced a table titled "Procedural or technical requirements covered by s. 188(2) and potential ways in which employees may be disadvantaged in relation to minor errors". Insofar as that table listed potential errors and disadvantages that arise in this matter, it provided:

Comply with subsection 180(2) - take all reasonable steps to ensure that relevant employees are given the written text of the agreement and any materials incorporated by reference during the access period OR that the relevant employees are given access to these materials throughout the access period

To ensure employees have a reasonable chance to make an informed decision when voting

In the circumstances employees may not have had effective access to materials or insufficient time to consider them to make an informed decision when voting

[49] The employees clearly suffered disadvantage by not being provided with, or being given access to, the Award. In its absence, they cannot be seen to have had effective access to materials to make an informed decision. I am not satisfied that error was minor, nor that the employees were not likely to have been disadvantaged by the error. While the Survey obviously goes some way to addressing and resolving that disadvantage, there can be no certainty that the employees who made the Agreement, were all, part, or any of the employees so surveyed.

[50] Based on the materials provided, I am not satisfied that the statutory requirements of the Act have been met. Specifically, I am not satisfied that the Agreement passes the pre-approval requirements set out in s.180 of the Act. Consequently, I am not satisfied the Agreement has been genuinely agreed to by the employees covered by the Agreement.

[51] The application for approval of the Agreement is dismissed.

[1] Delonca Statement at [2] and [3].

[4] Delonca Statement at [8] and [9].

[8] [2018] FWCFB 2992.

[9] [2018] FWC 1466.

[10] The Applicant referenced Re University of New South Wales [2010] FWAA 9588 at [43]; Re McDonald's Australia Enterprise Agreement 2009 [2010] FWAFB 4602 at [43]; NTEU v University of New South Wales [2011] FWAFB 5163 at [24].

[11] [2019] FWCA 1954.

[12] [2018] FWCFB 2992, at [47] and [48].

[14] See also Greenfreight at [11].

[15] Amending Act Schedule 4, Clause 28.

[16] [2019] FWCFB 318.

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