BGC Contracting Pty Ltd [2018] FWC 1466 | Case summary

BGC Contracting Pty Ltd [2018] FWC 1466 | Case summary | Zoe

[6]

[1] BGC Contracting Pty Ltd (BGC) applied under s.185 of the Fair Work Act 2009 (Act) for approval of an enterprise agreement titled the Mining Enterprise Agreement 2016 (Agreement). The Agreement was made on 14 June 2016. The application was lodged on 21 June 2016. The Construction, Forestry, Mining and Energy Union, now named the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) and the Australian Workers' Union (AWU) (collectively "the Unions") were bargaining representatives for the proposed enterprise agreement concerned. Each gave notice pursuant to s.183 of the Act that it wants the Agreement to cover it, but did not support its approval.

[2] On 28 February 2017, Deputy President Binet issued a decision[1] dismissing BGC's application for approval of the Agreement (Decision). The Deputy President determined that she was not satisfied that the Agreement had been genuinely agreed to by the employees covered by the Agreement as required by s.186(2)(a) of the Act. The Deputy President also was not satisfied that the Agreement passed the better off overall test (BOOT) as required by s.186(2)(d) or that its deficiencies could be cured by undertakings.

[3] On 21 March 2017, BGC lodged a Notice of Appeal against the Decision. The Notice of Appeal was amended on 15 and 16 May 2017. On 5 July 2017, a Full Bench of the Commission granted BGC permission to appeal, upheld the appeal, quashed the Decision and remitted the matter to me for rehearing (Appeal Decision).[2]

[4] Following the conclusion of the hearing of the matter before me on 16 November 2017, judgments in Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [3] (One Key Workforce (No 1)) and Construction, Forestry, Mining and Energy Union v Thiess Pty Ltd[4] (Thiess) were delivered. I allowed further submissions by BGC and the Unions addressing the effect of the judgments on issues that I am required to determine. The Unions also lodged an application pursuant to s.603 of the Act for revocation of the Appeal Decision consequent on the judgment in Thiess. The application was dismissed by the Full Bench.[5] This was unfortunate since on a plain reading of the Appeal Decision, the Full Bench did not deal with the "genuinely agreed" issues determined by the Deputy President, which quite separately from the ground on which the appeal was upheld, provided a sufficient and separate basis for the Decision not to approve the Agreement. I would observe that although concerns about these issues could be the subject of undertakings, no opportunity was given to BGC by the Deputy President to provide any undertakings in respect of a concern about s.186(2)(a). Be that as it may, it falls to me to determine the application to approve the Agreement.

[5] BGC is currently covered by two enterprise agreements that apply to its employees engaged in metalliferous mining. These agreements are the BGC Contracting Mining Employees Enterprise Agreement 2012 and the BGC Contracting Maintenance Employees Enterprise Agreement 2012 (2012 Enterprise Agreements). The nominal expiry date of both agreements, namely 31 August 2016, has passed.

[6] In an effort to position itself for continuing mining operation contracts in the face of an industry downturn, BGC proposed a broadly-scoped enterprise agreement with significantly lower rates and conditions than those set out in its 2012 Enterprise Agreements. To persuade employees to approve the Agreement, BGC says that it explained the business case and provided assurances to existing employees who would be covered by the Agreement that if the Commission approved the Agreement, BGC would preserve the existing wages and most of the conditions of employment of relevant employees in new common law contracts.[6] Around 800 employees at BGC's existing mining operations in Western Australia and South Australia were eligible to vote to approve the Agreement. BGC says that the South Australian employee representatives mounted a "vote no" campaign, chiefly because they wanted all terms and conditions of employment to be included in the Agreement. Approximately 90% of employees who would be covered by the Agreement participated in the ballot, and a valid majority of approximately 60% of those participating who cast a valid vote, voted to approve the Agreement.[7] A valid majority of employees approved the Agreement on 14 June 2016.

[7] For completeness, the following background matters derived from the Decision and the material before the Deputy President are not controversial:

If the Agreement is approved and in operation, its effect would be to establish a two-tiered remuneration arrangement -one relating to existing employees covered by the Agreement and one relating to prospective employees who become employees covered by the Agreement.

Existing employees who are employed at the time the Agreement is approved who would be entitled to the preserved wages and conditions contained in a contractual instrument (Preserved Conditions Contracts); and

Prospective employees who become employed after the Agreement is approved who would be entitled to the lower rates and conditions contained in the Agreement, although plainly the terms of the Agreement would apply to all relevant employees falling within the coverage of the Agreement.

The coverage of the existing agreement is confined to metalliferous mining. The coverage of the Agreement is as to metalliferous mining and black coal mining. The Agreement contains a schedule providing for rates and conditions for employees engaged in black coal mining (Coal Mining Employees).

BGC was not, at the time the Agreement was made involved in, and consequently did not employ any employees in the black coal mining industry. Except for a short time in 2004, BGC has not undertaken work in the black coal mining industry.

On 30 March 2016 BGC distributed a Notice of Employee Representational Rights (NERR). A separate pack of information was provided to employees at the same time as the NERR, in a separate envelope.

During the bargaining process, BGC issued a series of documents on the following dates containing that which is described as frequently asked questions and answers (FAQ). These were intended by BGC to address questions by employees in relation to the Agreement and the Preserved Conditions Contracts:

29 March 2016 (First FAQ);

12 April 2016 (Second FAQ);

17 April 2016 (Third FAQ); and

2 May 2016 (Fourth FAQ),

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[8] The Unions submit that the application to approve the Agreement should be dismissed for a number of reasons. I will return to these shortly.

[9] BGC submits that the Commission can be satisfied that all relevant approval requirements have been met, save perhaps for s.186(2)(d) in relation to which BGC says that appropriate undertakings could satisfy any particular concerns that the Commission may have about the Agreement passing the BOOT. If concerns are identified, BGC seeks the opportunity to provide undertakings.[8]

[10] BGC contends that the Commission's appellate jurisdiction in relation to the matter is not exhausted until the rehearing. It says that it follows that any ruling by the Commission in the appeal is carried through in the rehearing. Relevantly, the following findings of the Full Bench adhere to the rehearing: (i) the employees' approval of the Agreement did not lack authenticity as, in contrast to KCL Industries Pty Ltd[9] (KCL) the employees had a stake in the Agreement; (ii) BGC had explained to the employees the competitive market pressures, the unsustainability of the wages and conditions in the 2012 Enterprise Agreements, and the benefits of approving the Agreement; and (iii) the Unions had abandoned the misleading information argument at the hearing before Deputy President Binet.[10] BGC says that the Unions' submissions seek to re-agitate each of these points, each of which are not open at the rehearing.[11]

[11] Further, BGC submits that the finality principle on appeal means that unless leave is applied for and granted on proper grounds, the Commission should not generally entertain the Unions' grounds that were not raised or were abandoned at the hearing before Deputy President Binet. BGC submits that in the Unions' submissions they seek to agitate many such points, without seeking the Commission's leave and without offering any reasons why leave should be granted.[12]

[12] BGC says that the same approach should apply even if the rehearing were properly viewed as an exercise of original jurisdiction (that is, by way of remitter) rather than appellate jurisdiction. It says that to allow the Unions to re-run previously abandoned or rejected arguments, or to run new arguments that could have been raised earlier, would expose the Commission's processes to abuse.[13]

[13] The Unions say that the Full Bench did not task me with engaging in any appellate rehearing under s.607(3)(b) of the Act. The Unions say the result of the Full Bench quashing the Decision was that BGC's application for approval of the Agreement had to be re-determined. They say the Full Bench referred BGC's application for rehearing to me to determine BGC's application afresh. The Unions submit that contrary to BGC's submission, the rehearing is not limited in any particular way.[14]

[14] In the Appeal Decision, the Full Bench, inter alia, quashed the Decision dismissing BGC's application for approval of the Agreement and referred "the matter" to me for a rehearing. The "matter" is the application under s.185 for approval of the Agreement. In considering whether to approve the Agreement, I must be satisfied as to the matters set out in ss.186 and 187 of the Act. Plainly, appropriate regard must be had to any matters determined by the Full Bench in respect of ss.186 and 187 considerations, but ultimately, the matter before me is an application under s.185 for approval of the Agreement. The Full Bench did not deal with the application other than to quash the Decision and dismiss it. I intend therefore to deal with each matter raised by the Unions so far as they touch upon a consideration relevant to ss.186 and 187 of the Act. I will deal with each in turn below.

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[25] Absent s.257, the effect of s 46AA(2) of the AI Act would be that an enterprise agreement could not make provision in relation to a matter by applying, adopting or incorporating any matter contained in an instrument or other writing as in force or existing from time to time. That would constitute a very severe restriction upon the terms which employers and their employees might choose to include in an enterprise agreement in circumstances where no variation, or possible future variation, was involved. It was to qualify - although not completely to exclude - the operation of that rule that s.257 of the Act was enacted.[17]

[26] The words "material contained in an instrument or other writing" in s.257 of the Act suggests that the material that may be incorporated must exist when incorporated, albeit that the content of the material may change during the life of the Agreement if it is incorporated "as in force from time to time". However, s.257(a) appears to allow incorporation of material as in force at a particular time, which seems to include a time after the agreement is made, and including a time after the agreement is approved by the Commission. BGC and the Unions agree that the incorporation provisions of the Agreement engage with s.257(a) and is a permissible incorporation.[18] The incorporated material referenced in the Agreement is to be distinguished with that found in Teys Australia Beenleigh Pty Ltd v The Australasian Meat Industry Employees Union[19](Teys) in which the purported incorporated material had the effect of later varying that agreement in a manner contrary to Divisions 4 and 7 of Part 2 - 4 of the Act.

[27] The controversy concerning whether BGC complied with its obligation under ss.180(2) and (5) of the Act turns in part on a proper construction of the Agreement and that which the Agreement purports to incorporate. Until the matter was remitted to me by the Full Bench, the parties appear to have proceeded on the common assumption that the provisions of the Coal Award applicable at or around the time the relevant employees were asked to vote to approve the Agreement were incorporated. Presumably that is why BGC provided relevant employees with the URL link to the Modern Awards list webpage of the Commission's website to enable access to a copy of the Coal Award. That which would be accessed would be the operative award at that time. One could plainly not access a copy of the Coal Award in operation at some future date. As will later be clear, the Unions now advance an alternative construction to that underpinning the common assumption. For my own part, I consider the clear and express effect of the incorporation provisions of the Agreement to be that the identified provisions of the Coal Award in Schedule A as in force on the date the Agreement commences to operate are (or are to be) the operative relevant terms of the Agreement. However, as the consequence of the formerly held common assumption was also fully argued, that which follows below deals with BGC's compliance with ss.180(2) and (5) based on the previously held common assumption. I will later deal with the proper construction of the incorporation provisions of the Agreement and its consequences.

[28] It is uncontroversial that BGC provided relevant employees with a copy of the Agreement but did not provide these employees with a copy of the Coal Award[20] or copies of any of the relevant provisions of the Coal Award which are incorporated into the Agreement pursuant to Schedule A. Before the start of the access period,[21] BGC provided the employees with a Final Information Pack comprising the Agreement and various documents, including a Reference Document setting out the title of each of the underpinning awards and the URL link to the Modern Awards list web page of the Commission's website to access a copy of the awards.[22]

[29] The Unions contend, in summary, that:

• the sole step BGC took to discharge its obligation under s.180(2)(b) in respect of the Coal Award was to provide relevant employees with a piece of paper containing the link to the modern award list on the Commission's website;[23]

• s.180(2) imposes an obligation to take all reasonable steps and that the ordinary meaning of the phrase "all reasonable steps" means "every step it would have been logical or rational for an employer to take in the circumstances";[24]

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• BGC's lack of efforts is exemplified by the evidence of its employees, who did not access or obtain a copy of the Coal Award;[30]

• employees did not know what the content of the entitlements and obligations imposed by the Coal Award were when they considered whether to approve the Agreement;[31]

• BGC did not proffer any evidence that it would have been economically onerous or practically difficult for it to print off copies of the Coal Award and provide these to employees in the Final Information Pack it distributed to employees containing the Agreement or that it would be problematic for BGC to make copies available to employees in crib rooms or at other locations at its worksites[32] and says that these would have been simple, straightforward and manifestly reasonable steps for BGC to have taken;[33]and

• consequently, the Agreement was not genuinely agreed to for the purposes of s.186(2)(a) and s.188(a)(i) and cannot be approved.[34]

[30] BGC says that it provided employees with a Final Information Pack comprising of the Agreement and various documents including a Reference Document setting out the title of each of the underpinning awards and the URL link to the Modern Awards list webpage of the Commission's website to access a copy of the awards.[35] It contends that the Unions' submissions summarised above are wrong.

[31] First, BGC contends that its obligation under s.180(2) of the Act by reason of the steps it took amply meets the standard articulated by the Full Bench in McDonalds in which the relevant materials are public documents. BGC contends that despite the Union's submissions, the Full Bench observed in Construction, Forestry, Mining and Energy Union v Lendlease Engineering Pty Ltd[36] that neither the Sparta [37] case nor National Tertiary Education Industry Union v University of New South Wales[38] (NTEIU) case overruled the finding in McDonalds.[39]

[32] Secondly, BGC contends that the Unions have not demonstrated that there were any workplace characteristics to warrant a higher standard than that outlined in McDonalds. BGC says that all the Unions have pointed to is the so called "blue collar" nature of BGC's workforce, and the alleged limited access to computers at the workplaces.[40] BGC says that neither of these warrant the imposition on BGC of a higher standard than that outlined in McDonalds. This, according to BGC is so because:

• the Unions' submission is based on a vague, generalised, highly paternalistic and unrealistic assumption about the lack of technological literacy of "blue collar'' workers. BGC says that ordinary people all over Australia use the internet every day on smartphones, other portable devices and computers. BGC says that it is notorious that internet browsing is a relatively simple intuitive task that even children can perform. There is no reason why the Commission should depart from reasonable and obvious assumptions about the ability of ordinary working people to browse the internet. That conclusion is only reinforced by the high participation rate in BGC's voting process, which utilised online, SMS and phone voting methods;[41]

• similarly, there is no satisfactory evidence to cast doubt on whether the employees had reasonable access to the internet via computers, smartphones or other personal electronic devices during the access period, at least during breaks and/or outside of work hours;[42] and

• the Unions' submission defies reasonable assumptions about internet access and usage, and wrongly places a practical evidentiary onus on BGC to adduce evidence to prove the obvious. There is no authority to support the proposition that BGC had to lead evidence positively that the employees could access computers.[43]

[33] Thirdly, BGC says that even if the present circumstances required more than that which McDonalds found was adequate, BGC met that higher standard by providing the link in the Reference Document which provided a straightforward means of access. It submits that it gave employees the title of each of the relevant awards and the URL link to the Commission's Modern Award list webpage.[44]

[34] Lastly, BGC says that the Unions' argument places too much significance on the expression "all reasonable steps". A step must be a "reasonable step" to fall within "all reasonable steps". Whether a step is "reasonable" is not to be assessed in a theoretical vacuum. It is to be assessed in full context. That context logically must include consideration of the other steps being taken by the employer. The provision of hardcopy documents may be a reasonable step considered in isolation but BGC says that it may be superfluous where the employer has already taken reasonable steps to ensure access by electronic means to copies of those documents. It otherwise submits that s.180(2) would place a too burdensome onus on employers. Given the Reference Document had been provided, the provision of a hardcopy of the Coal Award to 800 employees in mining locations in two states, or to post around the workplaces, would have been superfluous and an unnecessary additional administrative burden. BGC says that providing hard copies was not a reasonable step.[45]

[35] I share the reservations expressed by the Full Bench in Sparta as to the universality of the view expressed in McDonalds. For my own part, I consider that McDonalds may be confined to the facts and circumstances of that case. There, the Full Bench was considering the extent to which the reasonable steps were taken in relation to incorporation of legislation (the NES and the Long Service Leave Act 1987 (SA)).

[36] It seems to me that the evident purpose of the preapproval step in s.180(2) is to give relevant employees the opportunity to review an enterprise agreement and material incorporated by reference in the agreement before being asked to vote to approve the it. This purpose is given effect by placing an obligation on an employer to take "all reasonable steps to ensure" that employees have this opportunity through one of two means, or through a combination of those means. First, by taking all reasonable steps to ensure that during the access period for the agreement, the relevant employees are given a copy of the written text of the agreement and any other material incorporated by reference in the agreement. BGC did not, during the access period, give relevant employees a physical copy of the material incorporated by reference in the Agreement. Nor has BGC identified any step beyond the provision of a URL link to the Modern Awards list web page of the Commission's website, as a "reasonable step" it took to "ensure" that "during the access period" the relevant employees were given a copy of the written text of the material incorporated by reference in the Agreement.

[37] "Given" in s.180(2)(a) is used as a verb and is the past participle of give. To give something to someone may involve the physical transfer of that thing to someone but that is not the only way in which the thing might be given. A thing might be given to someone by causing or allowing or facilitating someone to have or experience the thing or by providing someone with the capacity to obtain the thing and experience it without physically giving the thing to that person. Understood in this way, the provision by BGC to relevant employees of a Final Information Pack containing relevantly, the Agreement, a Reference Document setting out the title of each of the underpinning awards (including the Coal Award) and a URL link to the Modern Awards list web page of the Commission's website to access a copy of the awards, might be a "reasonable step" to ensure that relevant employees are "given" a copy of the material incorporated by reference in the Agreement. But the additional step of downloading the document would probably be required before an employee might be said to have been given a copy of the material. The capacity to view a document seems to me to relate more correctly to access than to giving.

[38] It is uncontroversial that the URL link to the Modern Awards list web page of the Commission's website was provided to relevant employees before the start of the access period. Section 180(2)(a) requires the reasonable steps that are taken to be directed to ensuring that "during the access period" the material is given to relevant employees. The step taken on its own, is thus unlikely to satisfy s.180(2)(a) in respect of each employee. In any event, there is no evidence which would support such a conclusion. There is also no evidence about when or if relevant employees accessed the Coal Award, downloaded a copy, or any instruction about navigating the Awards webpage once accessed. The provision of the URL link is more likely to be a reasonable step for the purpose comprehended by s.180(2)(b). Indeed as I apprehend BGC's position, it says the steps taken were directed to complying with s.180(2)(b).

[39] Section 180(2)(b) is the second means by which s.180(2) might be satisfied and requires an employer to take all reasonable steps to ensure that the relevant employees have access, throughout the access period to a copy of the agreement and materials incorporated by reference in the agreement.

[40] The difference between the two methods of complying with the preapproval step in s.180(2) is that the first is concerned with each employee having possession of a copy of an enterprise agreement and any incorporated material. The giving may occur at any time during the access period, although the reasonable steps directed to ensuring that relevant employees are "given" the materials may be taken both before and during the access period. The second is concerned with enabling each employee to have access to an enterprise agreement and any incorporated material. Access to an enterprise agreement and any incorporated material need not involve physical possession of the documents and so would encompass for example, an employer leaving copies of such documents in a staff room or other area where employees are able to gather and can review the documents. In these circumstances, the access must be arranged by the start of the access period and employees must have access to the documents throughout the period. It seems to follow that the reasonable steps directed to achieving the end in s.180(2)(b) must be taken before the access period begins.

[41] In some circumstances it may be necessary for an employer to take reasonable steps directed to both s.180(2)(a) and (b). Thus, some employees might be given a copy of the relevant material (for example, employees on extended leave or those who were not at work for the entire access period). Others might have access to a copy or copies of those materials which by the start of the access period are left in readily accessible locations at the workplace(s).

[42] The word "ensure" in s.180(2) suggests that whichever method is selected by the employer, the reasonable steps that are to be taken should be directed to securing or guaranteeing or making sure or being certain that relevant employees are given a copy of the agreement and any incorporated material during the access period or that they have access to the material throughout the access period. This underscores the difficulty underpinning the analysis in McDonalds. That a document which is incorporated into an agreement is publically available, for example, on a website, in and of itself seems to me to do little to "ensure" that relevant employees who are being asked to vote to approve, inter alia, that the document will be a term of the agreement, have access to it. I do not consider that the word "all" in connection with reasonable steps means that every available or conceivable step that is available must be taken. Rather steps that are reasonable in the circumstances and which are directed to achieving the ends specified in s.180(2)(a) or (b) are to be taken.

[43] A requirement or obligation to take "all reasonable steps" seems to me to require the identification of the steps a reasonable person would regard as reasonable in the circumstances that apply. Whether particular steps are reasonable will depend on the particular circumstances existing at the time the obligation arises. A requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense.[46] The assessment of whether an available step was reasonable must also be judged against the objective that is sought to be achieved by the imposition of the obligation to take "all reasonable steps". In the case of s.180(2), the objective of the reasonable steps is directed to ensuring that all relevant employees are given, or have access to, an enterprise agreement and any incorporated material, during or throughout the identified period. That is, that the employees have the opportunity to review the material before being asked to approve the agreement in order that employees make an informed choice. In some cases, only one step will be required to achieve this objective, for example by the employer giving each relevant employee a copy of an enterprise agreement and any incorporated material during the access period. But absent such a step, and depending on the circumstances, several steps may be required to be taken by the employer in order that the objective is achieved and the obligation is discharged.

[44] It is likely that BGC discharged its obligation under s.180(2) vis-à-vis the Agreement. BGC purported to give each relevant employee a copy of the Agreement as earlier noted via the Final Information Pack. Although, as will be apparent shortly, this step might not have ensured all relevant employees received it. The central issue is whether by providing relevant employees with a Reference Document setting out the title of each of the underpinning awards and the URL link to the Modern Awards list web page of the Commission's website to access a copy of the awards, BGC took all reasonable steps to ensure that those employees were given or had access to the incorporated material (the several provisions of the Coal Award identified in Schedule A of the Agreement), during or throughout the access period.

[45] There seems little doubt that if all relevant employees received the Final Information Pack and document containing the URL link by the start of the access period, had access to computers or other personal devices with internet access throughout the access period, and were able to access the Coal Award, the step taken by BGC would likely have discharged its preapproval obligation under s.180(2) of the Act. The difficulty is that there is no evidence that this was the case. I cannot simply assume or infer that that was the case. It is to be remembered that the relevant employees are large in number and spread across two states. Approximately 800 employees at BGC's existing mining operations in Western Australia and South Australia were eligible to vote to approve the Agreement. Some other employees were at sites when the documents were distributed, some were not. Between 23 and 27 May 2016 the Final Information Pack comprising the Agreement and various documents, including a Reference Document setting out the title of each of the underpinning awards and the URL link to the Modern Awards list web page of the Commission's website to access a copy of the awards, was given to relevant employees who were on site during that period.[47] For those who were not on site, the Final Information Pack was sent by mail.[48] It is notable that email was not used to dispatch the Final Information Pack to these or any of the relevant employees. It would seem to me to be a simple task for BGC to have downloaded a copy of the Coal Award and dispatched it to relevant employees by email; as for those employees without an email address, to have given these employees a copy of the Coal Award or to dispatch the document by post. This would more likely have ensured that even if some employees did not receive the Final Information Pack by the start of the access period, it would likely have been received by them "during the access period" and thus have been given it.

[46] Although I accept, as BGC contends that ordinary people all over Australia use the internet every day on smartphones, other portable devices and computers and that it is notorious that internet browsing is a relatively simple intuitive task that even children can perform, it is another thing altogether that I should infer from these propositions that all relevant employees had such access throughout the relevant period so as to render any other available step not reasonable or, other reasonable steps as not required or unnecessary in the circumstances. I note that the high participation rate in BGC's voting process, which utilised online, SMS and phone voting methods. Approximately 90% of employees who would be covered by the Agreement participated in the ballot. This suggests some technological literacy and high levels of access amongst the cohort of relevant employees. But it leaves unexplained the reasons for the 10% of relevant employees not participating. Apathy might be one explanation. Lack of access or lack of technological literacy might be another. The non-receipt by some employees of the materials might be a third. The point is that I simply do not know.

[47] BGC did not adduce any evidence about the efficacy of the step it took in achieving the object underpinning s.180(2). I accept that the steps it took were reasonable steps, but I do not accept that these were the only reasonable steps required of it in the circumstances. A simple example to highlight the difficulty will suffice. The employer's statutory declaration filed in support of the application for approval of the Agreement discloses that employees who were on-site between 23 May 2016 and 27 May 2016 were provided with the Final Information Pack which included a copy of the final Agreement and the document containing the URL link. This information was also mailed to employees who were not on-site.[49] There is nothing in the material which discloses how many employees were not on-site in the period between 23 May 2016 and 27 May 2016, how many Final Information Packs were sent by post and when this occurred. The voting for the Agreement commenced on 8 June 2016 and so the access period commenced on 1 June 2016. 27 May 2016 was a Friday. There is no information as to the method of posting utilised. That is whether the posting was effected by regular letter, by priority letter, by parcel post, by express parcel or letter or by courier post. Each of these methods have different expected delivery dates. But if the method chosen was by regular letter, Australia Posts' website tells us that the delivery speed within Australia for that kind of postage is between 2 to 6 business days after posting depending on lodgement and destination location. Thus, if some letters were dispatched on 27 May 2016 to employees who were not on-site between 23 May 2016 and 27 May 2016, the Final Information Pack may not have been received by the start of the access period, which was only four business days after 27 May 2016. Consequently, the receipt by an employee of the URL link to the Commission's modern awards web page a day or two after the day on which the access period had commenced would mean that that employee would not have had access to the incorporated material throughout the access period. There is no evidence from which it might be concluded that this scenario was not likely, at least in respect of some of the employees who were not on-site during the period when the Final Information Pack was handed out. This underscores that the steps taken by BGC were not all the reasonable steps that ought have been taken in the circumstances.

[48] BGC was on notice that this issue was challenged by the Unions. Evidence of the efficacy of the steps taken in achieving relevant access to the incorporated material could have been prepared or adduced.

[49] It seems to me that in addition to the step taken, the following steps were reasonable in the circumstances:

print and give copies of the incorporated material to relevant employees working on-site during the relevant period and dispatch by email and/or by post the materials to those not on site during the relevant period in a time or manner that will likely ensure that those employees received the material at a time contemplated by s.180(2); and

by the start of the access period print and leave several copies of the incorporated materials in lunchrooms and other locations on site at which employees gather and advise employees that the materials may be accessed at those locations

[50] No probative evidence was led as to why these or other available steps could not be taken or were not reasonable steps in the circumstances.

[51] It must also be remembered that the incorporated material did not include the entire Coal Award, but merely those provisions of that award identified in Schedule A of the Agreement. Only those provisions needed to be printed and distributed utilising one of the steps described above. Mr Tariro Ruwiza, Senior Project Manager at the BGC Contracting Whyalla Operations, gave evidence that he had instructed by email certain individuals of the leadership teams to place copies of the Mining Award in crib rooms at the South Middleback Ranges and that "some" of those so instructed had confirmed by email that the instruction had been carried out.[50] However, evidence was not given by those to whom the instruction was directed, and in particular by those who had not confirmed by email, that the instruction had been carried out. Moreover, the evidence of Mr Scot Whitlock, an operator engaged at BGC's South Middleback Ranges site was that although he had been told that a printed copy of the Mining Award was available in his crib hut (the Chieftain) he could not locate it when he looked.[51] Mr Ruwiza's evidence did not deal with the issue of access to the Coal Award at any other mine sites at which BGC operates.

[52] In the circumstances and for the reasons given, I am not satisfied that BGC complied with s.180(2) of the Act in respect of those provisions of the Coal Award incorporated by reference in the Agreement set out in Schedule A thereof. This conclusion is based on the common assumption to which earlier reference was made.

[53] I will later return to the issues of undertakings and also to the issue whether compliance with s.180(2) was required by reason of the nature of the incorporation.

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[55] The Unions contend that:

clause 32.1 of the Agreement requires employees to comply with all relevant site security processes and procedures as determined from time to time. Clause 32.2 requires employees to comply with 'site security protocols' or risk disciplinary action up to and including termination;

these provisions create obligations on employees that operate by reference to documents external to the Agreement and that BGC failed to take any steps to provide employees access to these documents during the access period;

• it follows that BGC failed to comply with s.180(2) in this further respect with the consequence that the Agreement was not genuinely agreed to by employees by reason of s.186(2)(a) and 188(a)(i);[52]

• BGC's failure to take all reasonable steps to ensure employees had access to these security processes and protocols cannot be rectified by an undertaking not to enforce or rely on clause 32.1 and clause 32.2.[53]

[56] BGC submits that:

none of the site security processes or procedures is incorporated by reference in the Agreement;

• clauses 32.1 and 32.2 are not designed to impose wide-ranging obligations on employees, enforceable under the Agreement, by incorporation of an array of unspecified site procedures. By the prefacing words "it is a condition of employment that..." clause 32.1 records and restates the nature of the employees' obligations under their respective contracts of employment.[54] BGC relies on Broadsword Marine Contractors Pty Ltd v MUA and Ors[55](Broadsword) to make good its point.[56]

[57] The Unions contend that:

BGC did not elect to specify in the Agreement (as many agreements do) that the site processes and procedures referred to in clause 32.1 were not to apply as terms of the Agreement. It follows that the policies and procedures to which clause 32.1 refers are incorporated by reference into the Agreement; and

• BGC's submission that clause 32.1 is merely descriptive of BGC's contractual relationship with its employees begs the question why such a term would be included in the Agreement in the first place. Enterprise agreements are intended to establish binding obligations. It is not sustainable to suggest that the term was merely informational.[57]

[58] The question whether the policies referred to in each of the abovementioned clauses of the Agreement are incorporated into the Agreement by reference may, for present purposes, be answered by asking whether the provisions of these clauses of the Agreement impose any obligation on employees who are covered by the Agreement to comply with the policies to which reference is made.

[59] In Broadsword I determined that clause 25.1 of that enterprise agreement there in issue, which provides that 'it is a condition of employment that Employees shall comply with all Occupational Health and Safety policies and procedures' of the employer, did no more than advise employees that compliance with occupational health and safety policies and procedures is a condition of their employment. It did not render the policies and procedures a term of that agreement. The policy was not in my view incorporated by reference.[58]

[60] The full text of that clause is as follows:

[72]

[61] On a plain reading, no obligation to comply with the policy is imposed by the agreement. The provision is advisory. Such employee obligation as to clothing that the agreement imposes is specified in clause 25.2.

[62] Clause 32.1 of the Agreement read in isolation imposes no obligations. As such on its own, it does not incorporate, by reference, the processes and procedures set out therein.

[63] However clause 32.2 is of a different character. It does not create an obligation under the Agreement to comply with the protocols. It provides that disciplinary action may be taken against an employee who breaches the site protocols. The imposition of disciplinary action is sanctioned by the Agreement in relation to a breach of the site security protocols. Under the Agreement a failure to comply with the site security protocols has disciplinary consequences. Moreover, it seems to me that a dispute concerning whether an employee has breached site security protocols or whether the nature of the disciplinary action imposed is commensurate with or proportional to the nature of the breach, are matters which can give rise to a dispute "about the meaning or application of" the Agreement and may be dealt with in accordance with clause 33 of the Agreement. However, it does not follow that if an agreement sanctions the taking of disciplinary action in relation to breach of the document extraneous to the agreement, there is an obligation created by the agreement to comply with the document and the document is thereby incorporated by reference.

[64] A document that is incorporated by reference in an agreement is a term of the agreement and is enforceable as a term. Where a document is incorporated by reference because an agreement creates an obligation to comply with the document, the obligation to comply is enforceable because it is expressed as such in the agreement. There must be an obligation created by the terms of the agreement to comply with the terms of the document mentioned. Here neither is the case. The site security protocols are not expressly incorporated by reference, nor is compliance mandated by a term of the Agreement. If an employee breaches site security protocols, will that employee have breached the Agreement and be liable to the imposition of a pecuniary penalty? The answer must be no as there is no term of the Agreement imposing such an obligation. The Agreement merely sanctions the taking of disciplinary action for breach of a document extraneous to the Agreement. By that reason alone, it cannot be said that the site security protocols are incorporated by reference into the Agreement.

[65] It follows that BGC was not required to comply with s.180(2) in this regard.

[74]

[66] The Unions say that for the reasons set out in [87] of the Decision, a higher than usual bar applied to BGC in relation to its obligations under s.180(5). They submit that the following factors also demonstrate that the Agreement was unusual in the context of BGC's enterprise:[59]

it is complex and contained a raft of provisions vastly different to the current agreements the employees were used to;

it incorporated an award from an industry in which the employees did not work;

it incorporated provisions from an award with which the employees had little, if any, experience;

it contained, for the reasons set out above, a number of indecipherable and ambiguous terms.

[67] BGC says in calling for a "higher than usual bar" for compliance with s.180(5) in this case, the Unions seem to be inviting the Commission to scrutinise BGC's compliance with s.180(5) more rigorously than it normally would. BGC submits that such an approach is unwarranted. Further, it says that that which are reasonable steps in a given case will depend on the context and circumstances. BGC says that in the context of s.180(2), there was no evidence that the employees were operating at any peculiar disadvantage in understanding the terms of the Agreement and their effect.[60]

[68] The Unions say that:

the answers to questions 2.6 - 2.7 of BGC's Form F17 do not disclose any effort by BGC to ensure that the terms of the Agreement and their effect were explained to employees;

BGC failed to take all reasonable steps to ensure the terms of the Agreement and their effect were explained to employees; and

• BGC's Form F17 indicates, wrongly, that there are no provisions of the Agreement less beneficial than the Coal Award and the Mining Award. It was conceded that BGC did not draw the employees' attention to any provisions of the Agreement less beneficial than the reference awards.[61]

[69] BGC says that to the extent that any inaccuracy in a Form F17 may impact upon the Commission's assessment of s.180(5), this must be considered in light of all the relevant evidence. BGC says that employers cannot be expected to be totally objective and knowledgeable, and mistakes and omissions will occur.[62]

[70] The Unions say that BGC failed to identify or explain any of the detriments in the Agreement. Having regard to the nature of the Agreement, employees could not have understood its effect without being informed of its numerous detrimental terms.[63] The Unions say as BGC did not comply with s.180(5) of the Act, the Agreement was not genuinely agreed to by the relevant employees and cannot be approved by reason of ss.186(2)(a) and s.188(a)(i).

[71] BGC contends that:

s.180(5) does not cast such an obligation upon an employer. It says that that sort of comparative exercise with the reference award(s) falls properly within the scope of the BOOT;

• the text of s.180(5) requires an explanation of the meaning and effect of the terms themselves and that to imply a requirement of the employer to take steps to explain terms as compared to other things would set an impossible standard as there would be no end to the potentially relevant comparisons;[64] and

• the Unions' submission urges a line by line analysis at the explanation stage and that this would strain the natural and ordinary meaning of the words of s.180(5) and would import an obligation unmanageable for most employers.[65]

[72] Further, BGC submits that it took reasonable steps to explain the terms of the Agreement and their effect. It says it did this through a combination of communications with relevant employees.[66] BGC says that the totality of the explanatory information provided by BGC as described above was a sufficient explanation as to how the wage rate and rate increase provisions in the Agreement operated (and how they compared with to the 2012 Enterprise Agreements).

[73] BGC submits that the Unions do not identify any specific provisions as "unusual", let alone explain why they should be so considered or why that unusual nature would require the "higher than usual bar".[67] That the Agreement incorporated certain provisions from the Coal Award, an award which did not cover those employees employed at the time the Agreement was made does not mean that BGC had a "higher than usual bar" to explain those terms to that group of employees.[68]

[74] The Unions say that:

BGC's submission that its obligation to take all reasonable steps in relation to the provisions of the Coal Award was somehow diminished or removed because these provisions would have no practical application to the employees who voted on the Agreement speaks volumes about the lack of authenticity and moral authority of the Agreement;

• an employer is not relieved of its obligation to take all reasonable steps to explain the terms of an agreement simply because the agreement incorporates terms from an award from an industry that the employees who vote on the agreement do not work in and have no experience with;[69]

• the erroneous assertions by Ms Corrina Tolomei, BGC's General Manager People, in her statutory declaration that employee pay rates would always be better than the Mining Award and that there were no terms of the Agreement less beneficial than those in the reference awards showcases that BGC did not take all reasonable steps to explain the terms and effect of the Agreement to the employees;[70] and

• BGC misapprehends the requirement to explain the effect of an agreement and say that if employees are not told how an agreement operates vis-à-vis a reference award, they have no yardstick against which to assess the effect of the agreement and make an informed choice about whether to vote for it.[71]

[75] In One Key Workforce (No 1) Flick J gave consideration to the scope and substance of an employer's obligation under s.180(5) of the Act.[72]

[76] Without repeating his Honour's analysis it seems to me that the following general propositions may be derived from One Key Workforce (No 1). First, the question whether an employer has complied with the obligation in s.180(5) depends on circumstances of the particular case. Secondly, the focus of the enquiry whether an employer has complied with s.180(5) is on the steps actually taken to comply and then to consider whether:

the steps taken were reasonable in the circumstances; and

these were all the reasonable steps that should have been taken in the circumstances.

[77] Thirdly, the object of the reasonable steps that are to be taken is to ensure that the terms of the agreement and their effect, are explained to relevant employees in a manner that takes into account the particular circumstances and needs of the relevant employees. This requires attention to the content of the explanation given. Fourthly, an employer does not fall short of complying with the obligation in s.180(5) merely because an employee does not understand the explanation provided.[73]

[78] BGC contends that One Key Workforce (No 1) does not stand in the way of the Commission finding that BGC met its obligations under ss.180(5) and 186(2)(a) of the Act.[74]

[79] The Unions argue that consistent with One Key Workforce (No 1), the Commission cannot be satisfied that the relevant employees genuinely agreed to the Agreement in circumstances where employees could not have given their informed consent to the Agreement's incorporation of the Coal Award and where the bulk of terms and conditions of employment concerning black coal mining were incapable of being known when employees voted on the Agreement.[75]

[80] BGC says that:

there is nothing in the analysis undertaken by Flick J that would evince that BGC failed to comply with s.180(5) of the Act;

• One Key Workforce (No 1) is not authority for the proposition that s.180(5) is to be construed as requiring, in every case, a comparative analysis to be provided to each employee of each agreement term against the reference award(s);[76]

• in identifying the deficiencies in the s.180(5) explanatory steps, Flick J found that the employer had merely read out the terms of the Agreement to the relevant employees and had taken no steps to explain the effect of the terms of the Agreement and that the employer had not taken any step to explain the effect of the terms of the Agreement in comparison with the reference award;[77]

• at the highest, the reasons contain obiter observations that failing to provide such an explanation could, in a given case, amount to a failure to take all reasonable steps to explain to employees the effect of the terms of the agreement;[78]

[78]

• that effect was explained to those employees in considerable detail.[79]

[81] The Unions say that Flick J determined that the requirements under s.180(5) depended on the circumstances of the particular case and concluded that "those steps are not satisfied by a person reading - without explanation - the terms of an agreement to an employee".[80]

[82] The Unions say that BGC, unlike One Key Workforce (No 1), did not even read the terms of the Agreement concerning black coal mining to its employees and says that it took no steps whatsoever to say anything about the particular terms of the Agreement insofar as they concerned black coal mining. They say that its complete silence about Schedule A to the Agreement entail that it failed, consistent with Flick J's reasons at [95], [97] and [102] - [105], to comply with s.180(5).[81] The Unions say that BGC took no steps to explain that employees were being asked to approve an Agreement that did not comply with the BOOT - a marked change from their present agreements which provided terms and conditions well in excess of the Mining Award. Further, the Unions say that BGC also misapprehended the terms and effect of the Agreement, meaning it could not have taken all reasonable steps to explain the terms of the Agreement and their effect.[82]

[83] The Unions say that:

• an employer is not relieved from taking all reasonable steps to explain to its employees the terms and effect of the terms of an agreement where that agreement contains numerous detrimental provisions as compared to relevant reference awards if employees are currently covered by an enterprise agreement.[83] What 'all reasonable steps to explain' requires depends on the circumstances of the particular case; and

• where employees are being asked, in effect, to endorse going from an agreement with terms well in excess of the relevant reference award to one that, as BGC belatedly concedes, leaves them worse off as compared to the relevant reference award, it is unsustainable to contend that an employer is not obliged to say anything about this to its employees before it can discharge its obligation under s180(5).[84]

[84] The Unions submit that BGC identified none of the raft of provisions of the Agreement that were less beneficial than the reference awards or the NES. They submit that in the circumstances of this particular workforce and this Agreement, this was a reasonable step which ought to have been taken. The Unions say that it cannot be said that it would have been particularly onerous for a company with BGC's resources, access to human resources and industrial relations expertise to have done so.[85]

[85] That the content of the explanation given is an important consideration in assessing whether all reasonable steps were taken for the purposes of s.180(5) is made clear by the Full Court of the Federal Court in O_ne_ Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union[86] (One Key Workforce (No 2)). In this regard, the Full Court made the following observations about the Commission's function in considering under s.188(a)(i) whether it is satisfied that the employer has complied with s.180(5):

[86]

[86] I accept BGC's contentions that it should not be required to overcome a "higher than usual bar" in respect of the s.180(5) obligation. But s.180(5) is concerned with the taking of all reasonable steps to explain. How many steps and the content of those steps will necessarily depend on the circumstances. Some employers may, by reasons of the prevailing circumstances, need to take more or fewer steps than other employers with different agreements facing different circumstances. The steps which may in a given case be required by "all reasonable steps" is be assessed by reference to the circumstances of the particular case.

[87] I also accept that compliance with s.180(5) will not always require an employer to identify detriments in an agreement vis-à-vis the reference instrument or for the employer to provide an analysis between an agreement and the relevant reference instrument in circumstances where an existing enterprise agreement, not a reference instrument, applies to the employees in their employment with the employer. But as I have already stated, the question of compliance with s.180(5) is to be judged against the circumstances that pertain at the time at which compliance was required. Section 57 of the Act makes clear that a modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment. That was the case at the relevant time that explanations were given vis-à-vis the 2012 Enterprise Agreements and the Mining Award, it would continue to be so in relation to the Agreement, if the Agreement is approved by the Commission. That is the effect of an operative enterprise agreement, save in circumstances where an agreement itself incorporates a modern award, but those terms operate in relation to relevant employees as terms of the agreement. Here there was an additional circumstance, the incorporation of the identified provisions of the Coal Award. These were new provisions to be introduced into the Agreement, which were not part of the 2012 Enterprise Agreements and the Coal Award did not cover the relevant employees.

[88] The relevant employees to be covered by the Agreement were at the relevant time, subject to the application of existing enterprise agreements. Insofar as the terms of the Agreement would have had any relevant effect on existing terms and conditions, it was to displace the application of the terms of the existing agreements. That effect was explained to those employees in considerable detail, in particular as set out in the comparative table.[88]

[89] Further, while any inaccuracy in a Form F17 lodged by BGC may impact upon my assessment of whether there has been compliance with s.180(5), that assessment is not conducted in a vacuum;. Rather, it is undertaken in light of all the relevant evidence about the actual steps taken by BGC to explain the terms of the Agreement, and the effect of those terms. I accept that employers, or more properly those completing a Form F17, cannot be expected to be completely objective and absolutely knowledgeable, and as a consequence mistakes and omissions in the information provided in a Form F17 will occur. It would be a different matter if the errors made in the Form F17 were communicated to relevant employees when the employer was taking steps to explain the terms of the agreement, and the effect of those terms to those employees. But there is no suggestion in the evidence that that occurred here. Nor, without more, am I prepared to infer that it occurred.

[90] In making her Form F17 declaration Ms Tolomei included a statement to the effect that the Agreement's escalation clause meant that rates of pay under the Agreement would always be "better than rates in the Mining Award". It appears that the effect of the escalation clause, which is, clause 7.3 of the Agreement, is to ensure that the Agreement rates do not fall below those in the Mining Award_._ The explanation given to employees contained in the comparison table was that: "Base Hourly Rates of Pay are based on minimum wage rates in the Mining Industry Award. Compensation for the applicable Hourly Rate of Pay and any applicable allowances, overtime payments and loadings, may be given by payment of a composite hourly rate of pay which is higher than the applicable Hourly Rate of Pay for a particular Employee. In any period where the composite hourly rate paid to an Employee under this clause exceeds the minimum amount otherwise payable under the Agreement, any additional amounts payable under the Agreement will be absorbed, and may be set off against, the composite hourly rate. The composite hourly rate can be paid as a flat hourly rate for all hours worked."[89] It also provided the "Base Hourly Rate of Pay will increase from time to time if this is necessary to ensure that it is no less than the applicable Award wage rate".[90]

[91] There was no evidence and it was not put to Ms Tolomei that she made any statement to the effect as set out in the Form F17 declaration to relevant employees. In these circumstances and taking into account the Comparison Table[91] provided by BGC to relevant employees prior to the start of the access period (which appears to make clear the operation of the escalation clause), there is no proper basis to infer that Ms Tolomei made any such statement, or that relevant employees otherwise misunderstood the operation of that clause. The same point may be made in respect of the second identified inaccuracy, namely the answer given to question 3.5 of the Form F17 declaration.

[92] To the extent that the Unions rely on the decision in Construction, Forestry, Mining and Energy Union v Shamrock Civil Pty Ltd[92] in support of their contention, that decision does not and cannot establish a decision rule as to the consequences of misstatements in an employer's statutory declaration. The significance of the misstatement will depend on the circumstance including, importantly, that which was actually communicated to the relevant employees. Here it is apparent that notwithstanding Ms Tolomei's declaration, the information actually communicated to relevant employees was accurate.

[93] With the exception of the terms of the Coal Award incorporated in the Agreement by Schedule A thereof, I would otherwise be satisfied that BGC took all reasonable steps to explain the terms of the Agreement and their effect to the relevant employees. In my opinion, BGC did this through a combination of communications with relevant employees. The evidence is that it did so during return to site meetings, pre-shift meetings and consultative committee meetings.[93] It did so on an ad hoc basis through discussions with individual employees. It did so through a series of FAQ documents.[94] It also did so by providing to employees the Final Information Pack. This included detailed tables comparing the terms of the Agreement and the 2012 Enterprise Agreements, the Reference Document, and information about the Preserved Conditions Contracts.[95]

[94] Turning then to the issue of the explanation of the incorporated terms of the Coal Award. BGC readily conceded that it did not initiate or publish any explanation about the Agreement as it would apply to employees performing work in black coal mining.[96] It is uncontroversial that no relevant employee was working in black coal mining at the time of the explanations and at the time that employees voted to approve the Agreement. There is also no evidence that the relevant employees had any particular or relevant experience in black coal mining.[97] The distinction BGC sought to make between One Key Workforce (No 1) and the circumstances applicable here, by pointing to the differing "effect" vis-à-vis the reference or existing industrial instruments of the impugned agreement in One Key Workforce (No 1) does not assist it. It was required to take all reasonable steps to explain the effect of the incorporated provisions of the Coal Award, but it took no steps to do so.

[95] BGC contends that as there were no employees employed by it at the relevant time engaged in the black coal mining industry it was reasonable in the circumstances to make available an opportunity for employees to ask questions of management about all matters concerning the Agreement including the terms and effect of those terms as they would apply to employees who might work in the coal mining sector in the future.[98] BGC did explain to employees that it was seeking an Agreement in order that it may remain competitive in the market and to win new work including in coal mining.[99]

[96] Whether the steps taken by an employer to explain the terms of an agreement and the effect of those terms to relevant employees were reasonable steps or were all reasonable steps is, as I have already indicated, to be assessed in the circumstances faced by the employer. Whilst the fact that there were no relevant employees employed by BGC at the relevant time working in black coal mining is a relevant circumstance, the absence of such an employee does not relieve the employer of the obligation to explain to the relevant employees the terms of the agreement and their effect. This is so even if those terms will have no immediate effect upon the relevant employees. Were it otherwise, an employer would only have an obligation to explain the terms of the agreement and their effect to employees insofar as those terms have any application to the relevant employees who are asked to vote to approve the agreement.

[97] Section 180(5) places an obligation on an employer to take all reasonable steps to explain the terms of an agreement and the effect of those terms to relevant employees. It does not delineate between those terms that may have effect on relevant employees and those terms which will have no effect on relevant employees. As I have already noted, the distinction between the effect of the impugned agreement in One Key Workforce (No 1) and this Agreement sought to be made by BGC does not assist it. The explanation given by an employer is one of the vehicles through which an employee becomes informed about the terms of the agreement and is able to then give informed consent, or to use the statutory phrase, to genuinely agree to the agreement. An employee voting to approve the agreement is not asked to vote to approve only those terms and conditions of an agreement which will have application to that employee. The employee and indeed all employees who will be covered by the agreement are asked to vote for or against the totality of the agreement not just aspects of it. It is for this reason that an employer is obliged by s.180(5) to take all reasonable steps to explain the terms of the whole agreement and the effect of those terms to relevant employees.

[98] The view I have expressed above is reinforced by the Full Court's judgment in One Key Workforce (No 2).

[99] In this case, it is clear that apart from making available the opportunity at various fora to relevant employees to ask questions, BGC took no other material step to explain to relevant employees the terms of the Coal Award which are incorporated in the Agreement by Schedule A or the effect of those terms. The incorporated terms were not trifling, insignificant, or inconsequential so that no or minimal explanation need have been given. These were substantive terms. That the employees were not working in, nor had experience in, black coal mining, meant that a more not less comprehensive, explanation was warranted in the circumstances in order that informed consent might be given. The employer was required to take all reasonable steps to explain these terms and their effect and it did not do so. It took no step. In these circumstances I am not satisfied that the employer has complied with its obligation under s.180(5) of the Act to explain the terms of the Coal Award that are incorporated in the Agreement by Schedule A or the effect of those terms to relevant employees.

[100] I will later return to the question of undertakings.

[88]

[101] As earlier noted Schedule A of the Agreement incorporates by reference in the Agreement a number of terms of the Coal Award. These terms will operate in relation to Coal Mining Employees instead of the corresponding Agreement terms. Reading Schedule A with clause 5 of the Agreement, which defines "Coal Award" as the "Black Coal Mining Industry Award 2010 as at the Commencement Date", and clause 3, which provides that the Commencement date is 7 days after the Agreement is approved by the Commission, it is readily apparent that the date has not arrived. On one view therefore, the precise terms that are incorporated is not known and was not known to relevant employees when they voted to approve the Agreement.

[102] Adopting this construction the Unions contend that BGC did not take any steps to ensure that employees had access to the version of the Coal Award incorporated in the Agreement. They contend that the content of the provisions of the Coal Award that will actually be incorporated into the Agreement were unknown and unknowable when relevant employees voted on the Agreement.[100] The Unions say that the version of the Coal Award displayed on the Commission's website after the employees were provided a URL link to the Modern Awards list web page of the Commission's website between 23 and 27 May 2016 was not the version of the Coal Award that would be incorporated into the Agreement if the Agreement is approved. The Unions say that the Coal Award has been varied by the Commission since the Agreement was approved by relevant employees on 14 June 2016.[101]

[103] BGC say that the Unions argument was not raised at the approval hearing or on appeal and it says that absent of leave; it is outside the scope of the rehearing and should not be considered. BGC says that requiring an employer to provide access to a version of a document which does not yet exist is not a possible step (and is thus incapable of being a "reasonable step" for s.180(2) purposes).[102]

[104] The Unions say that BGC's contention that the Unions cannot raise this argument is misguided for the reasons set out above. The Unions submit that BGC elected to put an agreement to a vote of its employees that incorporated numerous provisions of an award as those provisions would exist at some future point. They say that BGC was required to ensure, by the taking of all reasonable steps, that employees had access to the incorporated provisions of the Coal Award at that (future) point in time. That this may not have been possible was a situation entirely of BGC's own making. [103]

[105] Although the Coal Award existed at the time when the Agreement for which employee approval was sought was provided to relevant employees, the form of the provisions of that award as at the commencement date of the Agreement was not and could not have been known to either BGC or the relevant employees. Nor could the "commencement date" have been known to them. As things presently stand, it is nearly two years since the Agreement was made, and that form of the terms that are incorporated is still not known nor is the "commencement date". Various provisions of the Coal Award have been amended since the Agreement was made.

[106] As I have earlier indicated, the Act contemplates that material contained in an instrument may be incorporated into an agreement as is in force "at a particular time" or as in force "from time to time". The references to "a particular time" and "from time to time" both suggest some level of specificity or certainty at least when the agreement is made. It seems arguable that the words "at a particular time" contemplate some certainty as to the time. An uncertain commencement date arguably cannot be described as "at a particular time", at least not at the time an agreement is made. In the phrase "at a particular time", the word "particular" is used as an adjective to describe "time". In this respect it is synonymous with "specific", "certain" or "distinct".

[107] Similarly, the phrase "from time to time" includes the specific time that the material is incorporated that is, when it is made. The incorporation provisions of the Agreement do not incorporate provisions of the Coal Award as in force from time to time.

[108] Given all this, it seems arguable that to incorporate into an agreement material from an instrument as in force at some future date (including a modern award) that is uncertain is not something that the words as in force "at a particular time" contemplate. In this regard, I note that the Full Court in Teys observed:

[90]

[109] But I need not decide that issue. Both BGC and the Unions (as I earlier noted) agree that the incorporation is permissible under s.257. I will therefore proceed on the basis of the parties' common position, that the incorporation was one that is contemplated by s.257. Consequently, I deal with the consequence of a valid incorporation on the obligations in s.180(2) and (5). I would note however, that if the incorporation is not permissible by s.257, this has significant consequences for the assessment of the BOOT as well as for the issue of genuine agreement.

[110] Assuming that incorporating provisions of the Coal Award as in force at the Commencement Date is the kind of incorporation permitted by s.257 of the Act, it does not follow that simply because it was not possible to provide relevant employees with or allowing them access to the incorporated material during the relevant period specified under s.180(2), that BGC is relieved completely of any obligation in s.180(2). At the very least, even though the precise terms of the material incorporated was not known at the time that the obligation to comply with s.180(2) arose, it seems to me that BGC is required to take all reasonable steps to ensure employees are given or at least have access to the relevant iteration of the provisions that are incorporated by reference as in force at the time the obligation to comply arises, allowing for the fact that the terms may alter by the time the Commencement Date arrives. For the reasons earlier stated, I am not satisfied that BGC complied with that obligation. Its attempts to do so fell short of complying with the obligation.

[111] However, even if I am wrong and there is no obligation to take any step in respect of the incorporation of materials as in force at some future date, it seems to me that BGC was nevertheless obliged by s.180(5) to explain the incorporation provisions and their effect to the relevant employees. This would include an explanation about the effect of the existing provisions of the Coal Award that are to be incorporated as in force at the Commencement Date, and that these terms may or may not be the final version of terms that will operate as incorporated terms of the Agreement as at the Commencement Date. An explanation of the effect of the incorporated terms might also have required BGC to explain those particular terms which are in the Coal Award which might be altered as a consequence of then extant proceedings before the Commission relating to, for example, the award modernisation review and particularly a related application dealing with an alteration to the redundancy provisions of the Coal Award. The application at that time was being progressed on 10 April 2015, a Full Bench varied the Coal Award[105] by deleting clause 14.4(c) therefore removing the age cap, but it granted liberty to any party wishing to further vary clause 14 of the Coal Award as a consequence of the removal of the clause 14.4(c).[106] As part of the 4-yearly review of awards, the Coal Mining Industry Employer Group (CMIEG) subsequently on 4 June 2015 proposed a variation to clause 14 of the Coal Award. A conference was held on 19 June 2016 and subsequently numerous submissions were filed by the parties. Hearings were held on 7, 8, and 10 November 2017 and the Full Bench published its decision on 27 January 2017.[107]

[112] At the time that employees voted to approve the Agreement, BGC should have known that clause 14.4 of the Coal Award could have been varied at a future date. As I have already indicated, it is apparent that BGC took no step to explain the terms of the Coal Award that are incorporated into the Agreement, as in force, at the time that the obligation to explain the terms and the effect of those terms arose. It did not explain any of the matters to which I have referred above. Moreover, as is evident from the discussion earlier in this decision, until the matter was remitted to me by the Full Bench, BGC proceeded on the assumption that the provisions of the Coal Award as in force when the Agreement was made were the terms incorporated by reference. Thus, even if it had taken a step, which it did not, to explain the terms and the effect of those terms to relevant employees the explanation would likely have been wrong or at the very least, incomplete.

[113] For the reasons already stated I am not satisfied that BCG complied with s.180(5) of the Act.

[114] I will later return to the question of undertakings.

[94]

[116] The purpose, nature and breadth of this provision and the matters that may be relevant to the Commission's consideration under it was considered and explained in detail by the Full Court in One Key Workforce (No 2).[108]

[117] In summary the Full Court noted:

that the language utilised in ss.186(2)(a) and 188(c), particularly the word "genuinely" in the phrase "genuinely agreed", indicates that mere agreement will not suffice and that consent of a higher quality is required;

if "agreement by employees" was all that was required the word "agreed" on its own, suffices to achieve that end;

the word "genuinely" must be given some additional work to do;

s.188(c) is cast in very broad terms. It is intended to pick up anything not caught by ss.188(a) or (b);

therefore, any circumstance which could logically bear on the question of whether the agreement of the relevant employees was genuine would be relevant;

even if the Commission is not bound by s.180(5) to consider the content of the employer's explanation in order to be satisfied that the agreement was "genuinely agreed to" having regard to s.188(a)(i), this was a matter which was not only relevant to the question raised by s.188(c), but was a mandatory consideration;

although it is abundantly clear that an enterprise agreement may be made with two or three employees and, in relation to a new enterprise, may be made as a non-greenfields agreement where some employees of the enterprise are already employed;

it does not follow from the fact that agreement-making of that kind has not been prohibited by the Act that the Act is unconcerned with agreement-making that may undermine or subvert its preference for collective bargaining;

where employees working in few occupational classifications consent to an agreement which covers numerous other occupations or other occupations in many industries beyond their own, an explanation of the terms of the agreement and their effect may fall short of providing an adequate basis for the formation of genuine consent; and

• the capacity to provide consent based upon a true understanding of the consequences of the proposed agreement across the breadth of classifications covered is likely to be adequate, if representatives of each classification or classificational grouping are involved.[109]

[118] As to the Commissioner's decision the Full Court observed that it evinced jurisdictional error because:

it was apparent 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; and

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. Therefore:

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; and

whether the three employees had appreciated the terms and conditions provided 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.

[119] The Unions and BGC recently filed some additional submissions addressing One Key Workforce (No 2).

[120] The Unions contend that the Full Court's judgment in One Key Workforce (No 2) reinforces its previous submissions that BGC failed to adequately explain the terms of the Agreement to its employees particularly in respect of the incorporation of Coal Award and the less beneficial terms in the Agreement.[110] In light of my earlier conclusions, I need not deal with this submission.

[121] The Unions further contend that the Full Court's interpretation of the meaning of 'genuine agreement'[111] augments its position that the Commission cannot be satisfied that employees genuinely agreed to the Agreement. The Unions' say that this is so for the following reasons. Firstly, there was an absence of full disclosure by BGC about the terms of the Agreement and their effect especially the Coal Award and the terms and conditions that were less beneficial vis-à-vis the reference awards.[112] Secondly, that BGC's explanation of the Agreement was inadequate, and in several respects, misleading.[113] Thirdly, it was likely that, given the lack of explanation about the Agreement, employees would not have understood how the Coal Award operates and the impact that it would have on the operation of the terms of the Agreement.[114] Fourthly, the Unions submit that the group of employees covered by the Agreement could not fairly speak for the occupational scope of the Agreement so far as it concerned black coal entitlements, because they had never before worked in that industry and thus may be "indifferent" to any impact it may have had.[115] Lastly, the Unions say in light of the preserved employment contracts, the employees were never going to be subject to the award level terms and conditions and therefore, would have acted out of self-interest, rather than turning their minds to the wages and entitlements that their future colleagues may have found themselves with.[116]

[122] BGC contend that the Full Court's observations in One Key Workforce (No 2) need to be distinguished from the facts in this case.[117] BGC contend that the Full Court in One Key Workforce (No 2) held that in forming a satisfaction as to whether the employer discharged its obligations under s.180(5), the Commission must have regard to the content of the employer's explanation to its employees of the terms of the proposed agreement and the effect of those terms.[118] BGC submits that it has outlined in its submissions the steps that it took to discharge that obligation and why these were reasonable in the circumstances and that nothing in One Key Workforce (No 2) changes that.[119] BGC say that this case differs to One Key Workforce (No 2) because in the latter case, there was no evidence before the Commission, nor did it enquire about, the explanation provided to employees about the terms of the agreement and their effect. I have already dealt with the substance of this submission earlier and need not say anything further.

[123] BGC further contend that the facts in this case can be distinguished from One Key Workforce (No 2), because unlike the latter_,_ where a "grab bag" of modern awards were incorporated and where three employees working in mining and construction purported to make an agreement covering "industries and occupations" outside of mining and construction, this Agreement concerned only two awards, both of which apply in very similar industries.[120] BGC submit that it informed employees of the purpose of the broader coverage in the Agreement whereas the employer in One Key Workforce (No 2) did not and thus should not be relied on in considering whether to approve the Agreement.[121]

[124] I turn to consider each of the particular matters identified by the Unions in their earlier submissions going to s.188(c), with the benefit of the prism that is One Key Workforce (No 2) and the light it may shed on these matters.

[125] The Unions submit that numerous terms of the Agreement are so uncertain or muddled that employees could not have given their informed consent to the Agreement, meaning that their assent to the Agreement was neither sound nor authentic.[122]

[126] BGC says that for the following reasons, ambiguity or uncertainty in any of the impugned terms would not provide a reasonable ground for believing that the employees did not genuinely agree to the Agreement. They say:

s.188(c) is directed toward whether the Agreement, considered as a whole, was genuinely agreed to by the employees. A finding that there is an uncertainty in a term of the Agreement does not necessarily provide a reasonable ground for s.188(c) purposes; and

• the Commission cannot properly approach the question of uncertainty of terms in assessing s.188(c) reasonable grounds with reference to assumed subjective understandings and beliefs of employees. BGC says that such an approach would provide a standard of review of the quality of agreements surpassing any general law standard applicable to the formation of a contract. [123]

[127] The following describes the competing contentions as to ambiguity in respect of particular provisions of the Agreement.

[99]

[136] The Unions submit that clause 8 of the Agreement sets out the terms and conditions of employment for first to fourth year and adult apprentices. They say that Schedule A to the Agreement determines that clause 8 does not apply to Coal Mining Employees and that clause 11 of the Coal Award is substituted. Clause 11 of the Coal Award deals with school-based apprenticeships. They say it is not apparent how terms pertaining to apprentices generally could be substituted for the provisions of the Coal Award concerning school-based apprentices. The Unions submit that how the substitution operates is manifestly unclear. They also contend that it was certainly not something explained by BGC to the employees. Moreover, they say that the table at Schedule A determines that clause 7 of the Agreement is to be replaced by Schedule A to the Coal Award. They say that Schedule A to the Coal Award at A.6 sets out the terms and conditions of employment for apprentices, which are not limited to school based apprentices.[132]

[137] The Unions say that how the Agreement operates in relation to apprentices is manifestly uncertain. They say, that for this reason, the Agreement could not have been genuinely agreed to by the employees.

[138] BGC says that no ambiguity or uncertainty arises, it submits that on an ordinary and proper reading of those various provisions, it is clear that clause 11 of the Coal Award is incorporated in substitution of clause 8 of the Agreement insofar as it applies to school-based apprentices. It does not displace clause 8 of the Agreement beyond the scope of its operation. It also submits that there was no evidence to suggest that there was a significant demographic of apprentices in the voting group to which this provision would be of particular relevance such as would require a more detailed explanation and it says that there is no evidence that this could have altered the outcome of the vote.[133]

[139] I consider that BGC's construction is correct for the reasons set out in the preceding paragraph.

[102]

[143] The Unions say that:

Schedule A to the Agreement provides that clause 13 will not apply to Coal Mining Employees and will be substituted, relevantly for present purposes, by clause 17 of the Coal Award. Clause 17 of the Coal Award deals with overtime. Clause 14 of the Agreement remains applicable to Coal Mining Employees. Clause 14.2 provides that shift workers who have not had at least 8 hours off duty between shifts will be released upon completion of overtime, until they have had 8 hours off, without loss of pay for ordinary hours of work occurring during any such absence;

clause 17.6 of the Coal Award, contra distinctly, provides that all employees (including shift workers) who have worked so much overtime that they have not had at least 10 consecutive hours off-duty will be released from duty until they have had 10 consecutive hours off and will receive payment for ordinary hours of work time occurring during this absence; and

• these clauses are irreconcilable and submit that their operation is unclear and indiscernible.[137]

[144] BGC says that again no conflict arises. It says that contextually construed, clause 14.2 refers to overtime under clause 13 (and thus has no work to do with respect to overtime under the incorporated clause 17 of the Coal Award). It says that Clause 17.6 of the Coal Award, and not clause 14.2 of the Agreement, governs breaks between overtime periods for shift workers.[138]

[145] Apart from the matters I have addressed under some of the various headings above, it is not necessary for me to resolve the question whether there is ambiguity or uncertainty in the provisions identified above, or if there is such ambiguity or uncertainty, how that should be resolved. That a provision of an agreement may be ambiguous or uncertain does not in my view, without more, provide a proper basis for concluding that there are reasonable grounds that the agreement has not been genuinely agreed to by the relevant employees. It is reasonable to assume that the employees who voted to approve the Agreement did so, on the basis of assessing the terms of the Agreement assisted by the explanation given by BGC in relation to the terms of the Agreement and their effect. Of course, it may be accepted that no explanation about the Coal Award was given. I will return to this issue shortly. That there may be another construction of some terms of the Agreement to that which the employees understood or which BGC offered by way of explanation does not change that fact.

[146] Moreover, the scheme of the Act contemplates that provisions of an enterprise agreement may be ambiguous or uncertain. Subdivision B of Division 7 of Part 2 - 4 of the Act expressly contemplates that an enterprise agreement might contain ambiguity and uncertainty and thus provides a mechanism by which ambiguity or uncertainty may be removed. Moreover, dispute settlement procedures under enterprise agreements will usually provide a vehicle through which disputes about the construction of an enterprise agreement, often involving ambiguity or uncertainty, may be resolved. Most disputes brought to the Commission under the disputes settlement procedures of enterprise agreements involve disputes about the construction, meaning or effect of particular terms of such agreements.

[147] I do not suggest that the existence of ambiguity or uncertainty will never provide a proper basis for concluding that there are reasonable grounds for believing that an agreement has not been genuinely agreed to by the relevant employees, but this is not such a case. I do not consider that the identified areas of disputed construction are so significant that it would warrant a conclusion that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees.

[114]

[152] I agree in essence with the observations of the Full Bench. Although it is readily apparent that the employees who voted for the Agreement did not have a stake in the Agreement, in the sense that their terms and conditions of employment would be preserved in common law contracts of employment, it does not follow that the employees did not more generally have a stake in the Agreement or in voting to approve it. Plainly, the continued employment of the employees in the enterprise to which the Agreement relates is contingent upon BGC conducting a successful, viable and profitable enterprise. It is apparent from the material that BGC explained to relevant employees its business strategy and the business case for making the Agreement. This included the need for it to position itself for continuing mining operation contracts in an environment where there was an industry downturn. It seems to me that the employees can be taken to have understood the consequence of no change on the viability of their ongoing employment in the enterprise. The relevant employees had a stake in the Agreement in the manner that I have just explained. This is so notwithstanding that their terms and conditions of employment would be preserved. In these circumstances I am not persuaded despite the matters to which the Unions' point, that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees. Although the relevant employees had no apparent experience in black coal mining (there being no evidence of it), they were mining employees nonetheless. This is therefore not a case where, with appropriate explanation (a point to which I will return shortly) the employees could not properly have given informed consent in respect of, for example, classifications applicable to black coal mining employees. It is also to be borne in mind that those classifications and other terms that are contained in the Coal Award, have been determined by the Commission with input from industry participants, including the Unions, as appropriate minimum or safety net conditions applicable to black coal mining employees. This is not a case where these terms are terms that do not operate or cannot operate in that sector.

[115]

[153] The Unions submit that BGC did not, at the time of the vote, engage in the black coal mining industry, save for a brief period in 2004.[147] The Unions say that it is not credible or possible to presume that the employees could have given their informed consent to an Agreement which roped in the classification structure and a multitude of other provisions of an award with which the employees had had no experience and were unfamiliar.[148] For the reasons given in the preceding paragraph, with a proper explanation of the terms and effect of the incorporated Coal Award provisions, I cannot see why mining employees could not have given informed consent to a classification structure and other conditions that will apply to Black Coal Mining Employees. But, the relevant explanation is the missing link here.

[154] The effect of this submission therefore speaks more forcefully to considerations under s.180(5) and in relation to which I have already given my conclusion. Section 188(c) is concerned with the existence of "other" reasonable grounds, that is grounds other than those in s.188(a) or (b). For completeness, the Full Court in One Key Workforce (No 2) observed that if it were to "be wrong to conclude that the Commission is bound by s 180(5) to consider the content of the employer's explanation of the terms of the Agreement and their effect, in order to be satisfied that the Agreement was "genuinely agreed to" having regard to s 188(a)(i), then for similar reasons we would hold that this was a matter which was not only relevant to the question raised by s.188(c), but was a mandatory consideration."[149] It seems to me therefore that the absence of an explanation about the terms and effect of the incorporated provisions from the Coal Award, combined with the absence of any evidence of experience in black coal mining amongst the group of relevant employees, provides a basis for concluding that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees. However, for the reasons earlier indicated, the absence of an explanation speaks more forcefully to the consideration under s.180(5) and therefore s.188(a)(i) rather than s.188(c).

[116]

[155] The Unions say that it did not abandon the entirety of its 'misleading information' case before Deputy President Binet and say that in any event, it presses such a case on a rehearing.[150]

[156] The Unions say that BGC represented to the employees in question 8 of the 29 March FAQ that the Agreement would not impact most of their current conditions. The Unions say that this was untrue. The Unions say that a cursory glance at the rates and allowances of the Agreement as compared to the 2012 Enterprise Agreements, showcases that an array of terms and conditions of employment would be significantly and adversely impacted by the Agreement.[151]

[157] BGC says that:

these arguments were found by the Full Bench to have been abandoned by the Unions by the time of their closing submissions at the approval hearing. Further, these arguments did not survive the finding of the Full Bench in the Appeal Decision at [49]-[55] that the FAQs explained to employees the business rationale for the Agreement and what was at stake for the employees;

in relation to question 8, the Union's argument cannot be accepted as it starts from a strained and artificial reading of the answer in isolation. BGC says that it is contradicted by other questions and answers in the same FAQ, including question 3, question 4 and question 10; and

• further, and in any event, the response to question 8 could not have provided a reasonable ground for believing that the Agreement was not genuinely agreed. The significant disputed issue in bargaining was the claim made by the South Australian union representatives to include the preserved wages and conditions in the Agreement instead of the Preserved Conditions Contracts. That was a central plank of the "vote no" campaign. Far from being misled about the operation of the Preserved Conditions Contracts, employees and their bargaining representatives understood it well.[152]

[158] Putting to one side the abandonment point, I consider that BGC's submissions are correct. The proposal to provide the Preserved Conditions Contracts meant at the least that "many", if it is not "most", of the current conditions would not be affected by the Agreement. Moreover, the explanation cannot be read in isolation. It needs to be read in conjunction with other material provided to the relevant employees. For example, the response to question 3 provides that the Agreement "will provide the minimum conditions that you are entitled to under the law".[153] The answer is responsive to the following question: "What's the difference between the current Agreement and the new one BGC is proposing?"[154]

[159] Question 4 asks:

[128]

[163] The Unions assert that these answers are misleading because they imply that BGC could not lawfully offer terms and conditions above those contained in the Mining Award.[160]

[164] BGC says that the FAQ document had a number of other questions and answers, including: "we have reviewed a number of recent enterprise agreements of our competitors and labour hire companies. Our findings indicate that the trend is towards agreements with rates that are closer to the Mining Industry Award. Some agreements reflect the minimum while others have additional conditions. Our aim is to position ourselves to be as competitive as we can- to match those companies that have the minimum conditions".[161] It submits that that answer, of itself, makes clear that employers are able to make enterprise agreements that do not strictly reflect award conditions and that BGC intended to position itself to be competitive.[162]

[165] Further, the Unions submit Ms Tolomei represented in the Form F17 that the rates of pay under clause 7.3 of the Agreement would always be better than rates in the Mining Award. The Unions say that this is a misrepresentation.[163]

[166] BGC submits that the matters weigh against a finding that employees were in fact misled by any of the impugned statements. That is particularly so when one considers the high participation rate in the vote, and the comfortable majority by which the Agreement was approved by relevant employees.[164]

[167] The Unions say that BGC's attempts to deflect from the incorrect information provided in Ms Tolomei's erroneous Form F17 declaration are misconceived. The question under s.188(c) is whether the Commission is satisfied that there are 'no reasonable grounds for believing'. They say high participation rates and the extent of the majority vote are irrelevant in this regard.[165]

[168] I do not consider on a fair reading of the answers to the questions reproduced above that the answers were misleading. I consider that the words "must be based" are referring to BGC's desire to construct an agreement in a particular way, based on its then identified needs for the ongoing success and viability of the enterprise, rather than a suggestion that there existed some legal fetter on its capacity to make an agreement on different terms. I do not accept that this provides a proper basis for concluding that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees.

[136]

[172] The Unions submit that these representations wrongly conveyed that a no vote would result in employees losing the conditions they currently enjoyed under their extant enterprise agreements. They were designed to intimidate employees into agreeing to the Agreement.[169]

[173] Lastly, the Unions say that the hearsay evidence of Mr Fiebig and Mr Wake combined with the notes and emails recounted above supports the proposition that BGC threatened employees in Western Australia by informing them that if they did not vote for the Agreement they would either be made redundant, fall back on the award or lose their current terms and conditions. The overwhelming endorsement of the Agreement by the Western Australian employees as compared to the overwhelming rejection of the Agreement by the South Australian employees lends some further support to this proposition.[170]

[174] BGC says that as noted in its appeal submissions at [33], the Union's arguments were abandoned by closing submissions at the approval hearing. Again, BGC says that there is no cogent reason for their revival. BGC says that they are outside scope of the rehearing, and any attempt to revive them would be an abuse of process. Otherwise, BGC relies upon its appeal submissions at [32] and [36]. BGC says that beyond the matters the subject of their abandoned argument, the Unions now rely upon additional statements made to Western Australian employees during Q&A sessions to support a finding of intimidation. BGC submits that these statements do not (of themselves, or in conjunction with the hearsay evidence of Mr Fiebig and Mr Wake) elevate BGC's conduct to the level of "overbearing the will" of employees.[171]

[175] Putting to one side the question whether the union's objections were abandoned before Deputy President Binet, I agree with the submissions of BGC noted above. I would also observe that BGC could not be expected to respond to the hearsay evidence since the persons making the purported statements had not been identified. Again, a reasonable reading of that which was communicated must be adopted. Thus, when Mr Stevenson said that he "took the opportunity to point out the difficulties with a no vote and that there are no guarantees on preserved rates should this be voted down", it should reasonably be understood in the context that guarantees as to preservation of rates were to be contained in terms of a contract of employment yet to be made. It should also be understood against the background of the explanation of the business case for the proposed alteration to the terms and conditions of employment to be reflected in the Agreement. I am therefore not persuaded that the matters raised by the Union under this head of objection provides a proper basis for concluding that there are reasonable grounds for believing that the Agreement was not genuinely agreed to by the relevant employees.

[158]

[182] BGC says that clause 18.2 does not exclude the NES. It says that clause 18.2 does not (nor could it) displace s.114(3): rather, clause 18.2 merely sets the employer's expectation around working on a public holiday (a relevant factor to be considered under s.118(4)(c) and (d)).[176]

[183] BGC say that the Union's submission concerning public holiday entitlements of casual employees depends on a pedantic and technical reading of the clause, when another construction is available that would operate harmoniously with s.116. BGC says that clause 18.1 does not exclude (or compel BGC to refuse) payments to casuals under s.116 if the casual were rostered on for the public holiday.[177]

[184] I do not accept the construction of clause 13.2 of the Agreement advanced by BGC. It seems plain enough that clause 18.2 empowers BGC to require an employee to work on a public holiday. This conferral of right on BGC is inconsistent with s.114 of the Act. The clause seems to me therefore to exclude an employee's entitlement to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes, except where an employer makes a request that is reasonable having regard to the matters in s.114(4), for the employee to work on a public holiday. Being "required to work" as set out in clause 18.2 is not a request to work. But even if it were so construed, the capacity of BGC to require an employee to work on a public holiday is not conditioned by any notion of reasonableness nor is there any capacity for an employee to refuse the requirement to work if the requirement is unreasonable. That the provision makes clear that BGC is entitled to require work on a public holiday is reinforced by clause 18.1 which limits the entitlement to a day off on a public holiday "in accordance with the FW Act" to circumstances where an employee "is not required to work" on the public holiday. I therefore consider that clause 18.2 of the Agreement contravenes s.55(1) of the Act.

[185] As to the second matter raised by the Unions, namely the exclusion of casual employees from public holiday entitlements by clause 18.1 of the Agreement, the point raised appears to me to be correct. Where a particular NES entitlement is intended to operate to the exclusion of a casual employee, there is express provision to that effect.[178] No such exclusion is to be found in respect of the NES public holiday entitlement.

[186] Clause 18.1 is concerned with public holiday entitlements under the NES. It makes this plain by its reference to "an Employee shall be entitled to Public Holidays in accordance with the FW Act". According to clause 18.1, the "Employee" so entitled, is "an Employee (other than a casual)" who "is rostered to work and is not required to work for the sole reason that the day is a Public Holiday". Respectfully, there is nothing pedantic and technical in such a reading of the clause. That is the effect of the clause. It excludes the entitlement of a casual employee under the NES to public holidays as prescribed therein.

[187] Although the notion of casual employment developed by reference to the characteristic that a casual employee was someone who had occasional or irregular work, this is plainly no longer the case. Casual employees now frequently work for a single employer on regular hours over extended periods. Casual employees may be used in the short term or for much longer or extended periods; they may be employed as a casual employee on a regular and systematic basis with an expectation of continuing employment on that basis; or they may be called upon to work as a casual employee infrequently or irregularly and have no expectation of being engaged otherwise. It is thus conceivable that a casual employee might work a pattern of engagement that would raise the NES public holiday entitlement. Clause 18.1 would exclude that entitlement. It therefore contravenes s.55(1) of the Act.

[185]

[196] The Unions submit that clause 21.5 of the Agreement results in employees not receiving, in part, the benefits provided by ss.105,106 and 89(2) of the Act. They contend that this is an impermissible exclusion of the NES under s.55(1). They say that clause 21.5 of the Agreement provides that payment in respect of compassionate leave is to be made only when an employee would otherwise have been working and will not be granted during any authorised absences or non-rostered time. They say that no such restrictions are imposed on payment for periods of compassionate leave by ss.105 and106 of the Act.[181]

[197] BGC says that no such exclusion arises, it says that s.106 requires payment for what would otherwise be the employee's ordinary hours of work during the compassionate leave period. It says that employees on compassionate leave would not otherwise be working during that period and would therefore not have any "ordinary hours of work" for that period. It says that clause 21.5 merely restates the operation of s.106, and makes clear that an employee will not be entitled to "double dip" by claiming payment for both annual leave and compassionate leave for the same period.[182]

[198] The construction advanced by BGC is respectfully incorrect. Clause 21.5 does not merely restate the operation of s.106. Section 106 deals with payment and provides that if an employee takes a period of compassionate leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period. The "period being a reference to the period of the compassionate leave". Section 89(2) of the Act clearly contemplates that an employee may take compassionate leave during a period that the employee is also taking annual leave.

[199] The effect of s. 89(2) is one of deeming. It deems that the employee is taken not to be on paid annual leave for the period of that other leave or absence, with the consequence, in respect of the period of compassionate leave during annual leave, the employee is paid compassionate leave and not annual leave for that period. Plainly as the employee is on annual leave, that employee would not otherwise "have been working". Clause 21.5 of the Agreement allows for paid compassionate leave only in respect of a period where an employee "otherwise would be working". It necessarily excludes a period when an employee might be on annual leave when the need to take compassionate leave arises. Clause 21.5 touches upon the NES entitlement as is made clear by the opening words of clause 21.1 of the Agreement. It therefore contravenes s.55(1) of the Act.

[198]

[26] As earlier stated, the process of termination of employment due to absence from work established by clauses 21.1 and 21.2 imply a measure of consultation with the employee, but that is not sufficient we consider to make them "about" consultation such as to be authorised by s 139(1)(j). We accept the submission made by ABI and the NSWBC that the use of the word "about" in s 139(1) requires a connection between the award term and the subject matter that is more than just of an incidental or ancillary nature. That is demonstrable from the ordinary meaning of the word "about" (that is, "concerned with"), the legislature's presumably intentional use of the wider expression "relating to" in s 140 when it came to permissible award terms regarding outworkers, and the existence in s 142(1) of a discrete and limited power to include incidental terms in modern awards. The clauses cannot be said to be about any of the other subject matters identified in s 139(1), and no party contended otherwise. Nor are they terms that must be included in modern awards under Subdiv C of Div 3 of Pt 2-3, or terms authorised by s 55(4) or any provision of Pt 2-2. The Ai Group's submission that clause 21 is authorised by s 142 as a term incidental to the wages or termination of employment provisions in the Manufacturing Award mainly relied on matters connected with clause 21.3, not clauses 21.1 and 21.2. We do not consider that clauses 21.1 and 21.2 are incidental to the wages provision in the award, since they have nothing to do with wages. Nor are they incidental to the termination of employment provision (clause 22) which, apart from a cross-reference to the notice of termination provisions in the NES (clause 22.1), is concerned only with the notice to be given by employees to terminate their employment (clause 22.2) and the job search entitlement of an employee who had been given notice of termination (clause 22.3). Clauses 21.1 and 21.2 are therefore not terms which are permitted or required to be included in a modern award. Their inclusion in the Manufacturing Award is contrary to the prohibition in s 136, and accordingly they have no effect under s 137.

[208]

• employees who are not Coal Mining Employees are also not assured of being paid rates of pay under the Agreement higher than those prescribed by the Mining Award, as the Mining Award from 1 July 2016 provided weekly and hourly rates higher than those prescribed by clause 7.2 of the Agreement.[199]

[216] The Unions say that an overall assessment leads to the conclusion that employees will not be better off overall under the Agreement than they would be if the relevant reference awards applied to them.[200] They say that the extensive amount of undertakings required to rectify the deficits and detriments in the Agreement so that it passes the better off overall test mean there will be substantial changes to it.[201]

[217] BGC says that as a general observation, many of the purported detriments the Unions identify involve matters that are either contingent (e.g. certain redundancy benefits) or otherwise not easily quantifiable (e.g. provisions requiring minimum notice when requesting annual leave).[202] BGC accepts that the relatively "thin" margin on wage rates, balanced against various detriments (albeit contingent, difficult to quantify and fairly marginal), could give rise to a concern that the Agreement does not pass the BOOT. That concession does not equate to an acceptance of every aspect of Deputy President Binet's reasoning process.[203] It says that an undertaking of this kind would not involve a substantial change to the Agreement but rather it would operate to clarify how BGC would exercise its discretion in respect of wage increases already present in clause 7.3 and the definition of Coal Award as it applies in the last sentence of Schedule A.[204]

[218] BGC says that it stands ready to provide an appropriate undertaking to address any concern that the Commission has about the BOOT, including an undertaking in the form of an across the board percentage increase in base rates across all classifications.[205]

[219] There are two well-established propositions concerning the application of the BOOT which may be derived from previous Full Bench decisions. The first, which is in essence a restatement of s.193(1), is that the BOOT requires a finding that each award covered employee and prospective employee would be better off under the agreement than under the relevant modern award.[206] The requirement that "each" such employee and prospective employee be better off overall is a rigorous one. The ordinary meaning of "each" is "every, of two or more considered individually or one by one".[207] Thus, every award covered employee or prospective employee must be better off overall, with the corollary that if any such employee is not better off overall, the relevant enterprise agreement does not pass the BOOT.

[220] In the case of enterprises other than small enterprises, the examination of the circumstances of each individual employee to reach a state of satisfaction that the BOOT is passed would be an exhaustive task. Section 193(7) substantially relieves the Commission of this burden by permitting it to assume, if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, that employees would be better off overall in the absence of evidence to the contrary.

[221] Section 193(7) is not prescriptive about the nature of the classes of employees that might be selected for the purpose of applying the BOOT, so that the Commission must make an evaluative judgment in that respect. Nevertheless, the selection of a class for the purpose of s.193(7) will be of utility only if, the agreement affects the members of the class in the same way so that there is likely to be a common BOOT outcome. If the employees in the classification worked a variety of roster patterns some of which attracted penalty rates under the relevant modern award and some of which did not then, such a class would need to be further divided into subclasses based on common patterns of working hours, taking into account evening, weekend and/or overtime hours worked, in order to apply the BOOT. The effective application of s.193(7) to existing employees necessarily requires an examination of existing roster or working patterns worked by various categories of award covered employees as at test time.

[222] Greater difficulty arises with respect to the requirement to apply the BOOT to every prospective award covered employee. This requires consideration of the position of potential employees to whom the agreement might apply in the future, and thus necessarily involves a degree of conjecture. In the case of an agreement applying to a defined workplace or workplaces in an established enterprise, the degree of conjecture may be small because it may be safe to assume that any prospective employees will be employed on a type of roster or working pattern already applied in the existing enterprise to an existing class of employees. The position will necessarily be different where the enterprise or part of it is new or still in a development or growth stage or one that aspires to grow. In that situation, the basis of employment of prospective employees will not readily be able to be extrapolated from the characteristics of any identifiable classes in the existing workforce.

[223] The task of applying the BOOT in respect of prospective employees was discussed in the Explanatory Memorandum as follows:

[213]

[225] The agreement under consideration in KCL Industries Pty Ltd was held not to have been genuinely agreed to by the employees who made it for a range of reasons, but as was made clear in the Federal Court Full Court decision in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd[209] (John Holland) and confirmed by the High Court in ALDI Foods Pty Limited v Shop, Distributive & Allied Employees Association[210], (ALDI) there is no inherent reason why an agreement made with a very small number of employees working at a particular location which covers a much broader range of classifications and occupations with a wide geographic area, and which might in future cover a much larger number of employees, could not be approved under the Act. In John Holland, Buchanan J considered the expression "the group of employees covered by the agreement" used in relation to the "fairly chosen" approval requirement in s.186(3) as referring to the "whole class of employees to whom the agreement might in future apply", and said that this class "may be very difficult to evaluate or assess, depending on the breadth of coverage specified by the terms of the agreement and, perhaps, the nature and complexity of the employer's business". Buchanan J also referred to "the virtual impossibility of knowing with certainty the composition of the whole group within the potential coverage of the agreement ...". These observations are apposite to the task of applying the BOOT to prospective award covered employees in respect of an agreement with a scope of coverage, classification structure and hours of work provisions which have a potential operation that is significantly wider or different to the existing workforce. Of course, the more limited the classificational reach of an agreement, the less will be the difficulty in applying the BOOT to prospective award covered employees.

[226] Where a substantial disparity of this nature exists between the current workforce as at test time and the class of prospective employees to whom the agreement might apply in the future, so that useful indications as to future employment patterns may not readily be drawn from the way in which the existing workforce operates, the starting point must necessarily be an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment which the agreement provides for or permits.

[227] In accordance with established principles of the construction of agreements, the express provisions of an enterprise agreement may be approached on the basis that they were intended to establish binding obligations and have a practical field of operation and are not otiose.[211] Thus, for example, if an enterprise agreement makes express provision for employees to be required to work particular hours or patterns of working hours, that provision cannot be ignored for BOOT purposes simply on the basis that an employer asserts that it does not currently, and does not intend to, make use of that provision. There may however be objective evidence available which might support the conclusion that, notwithstanding an express provision of the agreement which apparently permits something to be done, it cannot in fact be done or is extremely unlikely to be done.

[228] The second proposition is that satisfaction that an employee is better off overall under the agreement than under the award requires an evaluative assessment after considering the provisions of the award and the agreement that may have been more beneficial to employees and those that may have been less beneficial.[212] This assessment was recently described by the High Court in ALDI as follows:

[216]

[229] In the Decision, Deputy President Binet identified a number of detriments which operate upon employees and prospective employees of BGC when comparing their position if the Agreement applied than if the relevant reference instruments applied to those employees as at test time.[214] Without repeating them the matters identified raise concerns about whether the Agreement passes the BOOT. This much is conceded by BGC.[215]

[230] Before the Deputy President and as a consequence before me since all parties relied upon the submissions made at first instance, there are said to be a number of non-financial or contingent detriments contained in the Agreement for the purposes of assessing the Agreement on an overall basis in comparison to the reference instrument for the purposes of the BOOT. In this regard I make the following general observation about such comparisons.

[231] The application of the BOOT requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement.[216] Where the terms required to be compared bear directly upon the remuneration of employees, the assessment will largely be mathematical. However, the position becomes more complex when an agreement contains provisions more beneficial to or not contained in the reference instrument, conferring entitlements to non-monetary benefits, benefits which are accessible at the employee's election, or monetary benefits which are contingent upon the occurrence of specified events. The same observation may be made when there are non-monetary contingent detriments in an Agreement which are not also contained in or are more onerous than the reference instrument. While it is necessary to take such entitlements into account in the BOOT assessment, ascertaining the value they are to be assigned may be a difficult task. This difficulty was adverted to in the Full Bench decision in National Tertiary Education Industry Union v University of New South Wales[217] in the following terms:

[218]

[232] This issue arose for consideration in Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi-Lo[219](Hart), albeit in the limited context of whether benefits of these types were to be assigned sufficient value to outweigh detriments which the Full Bench had identified for certain categories of employees in respect of direct remuneration.

[233] An assumption cannot readily be made that non-monetary or contingent entitlements in an agreement (and by analogy non-monetary or contingent detriments) have the same value to all employees, because that value may differ depending upon the personal circumstances of each individual employee. In some cases, it may be possible to precisely identify the categories of employees who do and do not benefit from a particular entitlement. In other cases, such as, for example, flexibility in working hours or time off in lieu of overtime, it will not be possible to precisely identify who will benefit, although it may be possible to make some broad generalisations. A contingent benefit, such as enhanced redundancy pay, may provide a potential benefit for most or all employees, but an assessment will need to be made about the likelihood of that benefit crystallising during the period in which the agreement for which approval is sought is likely to remain in operation. This is true also of a contingent detriment as in the case of a reduced redundancy benefit. In all cases, even where the beneficiary of an enhanced entitlement in an agreement may be identifiable, it is likely to be difficult to assign any monetary value to the entitlement. However, unlike a contingent benefit which only applies to some employees and thus may provide little assistance in assessing the position of "each" employee vis-à-vis the BOOT, a contingent detriment need only to be shown to affect one employee or prospective employee for it to affect the assessment of whether an Agreement passes the BOOT.

[234] As I have already stated the detriments identified in the Decision raises concerns that the Agreement does not pass the BOOT. I deal with the question of undertakings below.

BGC Contracting Pty Ltd [2018] FWC 1466 (12 June 2018)

At a glance

Court

Decision date

Source

Judgment (401 paragraphs)

BGC Contracting Pty Ltd [2018] FWC 1466 (12 June 2018)

Legislation Cited (4)

Cases Cited (6)