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[2017] FWC 5667
Fair Work Commission
2017-11-03
Original judgment source is linked above.
s.185 - Enterprise agreement
CQ Industries Pty Ltd T/A CQ Field Mining Services
Application for approval of the CQFMS Enterprise Agreement 2017 - Notice of employee representational rights on company letterhead - Not invalid - Whether employees provided with incorporated material during access period - Failure to comply with s.180(2) of the Act - Application of Black Coal Mining Industry Award 2010 - Black Coal Award relevant to better off overall test - Agreement does not pass better off overall test when compared to Black Coal Award.
[1] This Decision concerns an application under s. 185 of the Fair Work Act 2009 (the Act) by CQ Industries Pty Ltd T/A CQ Field Mining Services (CQFMS/the Company) for the approval of the CQFMS Enterprise Agreement 2017 (the Agreement). The Construction, Forestry, Mining and Energy Union (CFMEU) is a bargaining representative for the Agreement and opposes its approval on a number of grounds, which can be summarised as follows:
There has been non-compliance with the requirements of s. 174(1A) of the Act for issuing a valid Notice of Employee Representational Rights (NERR) on the basis that the NERR issued by CQFMS was on Company letter head;
CQFMS has not taken all reasonable steps as required by s. 180(2) of the Act to ensure that during the access period employees had a copy of, or access to, material incorporated in the Agreement by reference;
CQFMS has not taken all reasonable steps as required by s. 180(5) of the Act to ensure that the terms of the Agreement and their effect are explained to employees;
The Agreement does not pass the better off overall test (BOOT) with respect to some employees or prospective employees of CQFMS who are or would be covered by the Black Coal Mining Industry Award 2010 (the Black Coal Award) and not the Manufacturing and Associated Industries and Occupations Award 2010 (the Manufacturing Award); and
The Agreement contains a term that does not pertain to the employment relationship and a term that is objectionable, on the ground that it is discriminatory.
[2] It was necessary to conduct two hearings. At the first hearing, the Company was not in a position to respond properly to the issues raised by the CFMEU and was given a further opportunity to do so by filing any material upon which it sought to rely to establish that the provisions of the Act relevant to approval had been satisfied. The Company filed additional material and a further hearing was held. At the further hearing evidence for CQFMS was given by Mr Dean Scott, General Manager. Evidence for the CFMEU was given by Mr Steven Pierce, Vice-President of the Queensland District of the Mining and Energy Division of the Union. The CFMEU provided a submission appended to a Form F18 filed by the Union; a further document entitled "Observations" in relation to the Agreement; made a further submission in response to those of the employer; and made oral submissions at the hearing. The Company provided written submissions and also made oral submissions at the hearing. As previously noted, Mr Scott gave evidence, but did not provide a witness statement. All of the evidence and submissions in relation to each of the matters raised by the CFMEU and the Company's responses have been considered.
[3] Mr Pierce gave evidence in opposition to the approval of the Agreement. Mr Pierce provided a written statement[1] and was available for cross-examination. Mr Pierce's evidence is that maintenance of plant and equipment at a coal mine site is a common activity and may be conducted within the mine itself or at a mine based workshop. Maintenance may be planned or scheduled. Maintenance work requires a range of skills and there are classifications in the Black Coal Award which provide for that work. Employees of the mine operator may undertake the work or it may be performed under a contract between the mine operator and another company whereby the other company brings its employees onto the mine site to undertake the work. Where this occurs, the CFMEU seeks to put in place an enterprise agreement built on top of coal mining terms and conditions of employment.
[4] In May 2017, Mr Pierce became aware that CQFMS had made an application for approval of an enterprise agreement. The CFMEU has members employed by CQFMS but was not involved in the negotiation of the Agreement. The CFMEU has resolved to oppose the approval of the Agreement because it undermines coal mining terms and conditions of employment. Mr Pierce has made inquiries about the involvement of CQFMS in the coal industry including talking to an employee of the Company who advised Mr Pierce that he works only on coal mine sites; undertakes maintenance on plant and equipment in the field and the workshop; undertakes planned and unplanned maintenance on trucks and loaders; has undertaken work on shutdowns; generally works across crews rather than being designated to a particular crew; has undertaken shift relief for employees of mine operators; is provided with daily supervision by the management of the mine; has never been to CQFMS' workshop in Mackay; and is bound by the terms of the Coal Mining Safety and Health Act 1999 when working on coal mining sites.
[5] Mr Pierce asserts that employees of CQFMS when performing work on coal mine sites undertake essentially the same work as employees of the mine operator at the relevant coal mine. Mr Pierce further asserts that the Company provides leave relief to coal mine operators involving employees working the same roster as the employee to whom the leave relief is being provided. Mr Pierce also tendered an email to employees from CQFMS' Diesel Division Manager stating that a site visit to Glencore, Collinsville and Newlands had been conducted and the reports were positive with sites ramping up utilising the services of CQFMS employees. Appended to Mr Pierce's statement was a list of clients from CQFMS' website including the following coal mine operators: Anglo - Moranbah North; Anglo Coal (Capcoal Management) Pty Ltd; BMA - Blackwater Caval Ridge, CQ Office and Housing, Daunia, Goonyella-Riverside, Gregory, Hay Point, Norwich Park, Peak Downs, Saraji, Poitrel, South Walker Creek; Carborough Downs Coal Management; CC Pty Ltd; Collinsville Coal Company (Glencore); Downer EDI - Daunia, Goonyella-Riverside, Peak Downs; Foxleigh Management; Hail Creek; Jellinbah; John Holland - Capcoal, Isaac Plains, Jellinbah Plains; Macmahons Contractors; Newlands (Glencore); Rio Tinto; Rolleston Coal; Stanwell Corporation; Thiess - Collinsville, South Walker; Valley Longwall; and Wesfarmers. Mr Pierce also referred to the Form F17 filed by CQFMS which refers to toolbox talks conducted at Moranbah Workers Club to cover site based employees.
[6] Under cross-examination, Mr Pierce said that the evidence about an employee stating that he had never been to the Company's Mackay workshop was that the employee had never worked there. Mr Pierce agreed that any person going onto a coal mine site is bound by the Coal Mining Safety and Health Act 1999. Mr Pierce also agreed that the companies he had nominated from CQFMS' client list may equal around 10% of its total clients but maintained that if a labour hire company is supplying labour to those companies then the employees of the labour hire company are in the black coal industry.
[7] Mr Scott gave evidence in support of the application for approval of the Agreement. Mr Scott said that the Company has a workshop in Mackay with an area of around 3000 m2 where there is a range of engineering and manufacturing equipment including lathes, tooling, plasma cutters and welders. There are eight full time employees including apprentices and in addition there is casual labour on an ad hoc basis to support whatever projects are being undertaken. The Mackay workshop undertakes fabrication for jacking plates, fabrication for builds of dragline and shovel tubs and stainless steel pipe work. The Company also has a workshop in Cloncurry, which services the Eloise Mine (Copper) and Ernest Henry Mine (Copper and Gold) and supplies services to the Cloncurry Shire Council. The Cloncurry workshop also sells safety consumables. There will be six tradespeople at the Cloncurry workshop with additional ad hoc labour as required. The Cloncurry workshop has also contracted CQFMS to design bins for underground work.
[8] In response to a question from the Commission, Mr Scott said that work on coal mine sites could involve discrete projects or employees of CQFMS integrating with employees of the mine operator, including in a labour hire situation but for a particular project or task such as overhauling a piece of equipment. There is a purchase order for the project and there may be multiple contractors undertaking that project.
[9] Under cross-examination, Mr Scott agreed that CQFMS provides leave coverage for coal mine companies. In relation to whether CQFMS employees working on coal mine sites came under the supervision and control of the supervisors and managerial staff of the mine, Mr Scott said that everyone on a mine site reports to the SSE and that sometimes day to day supervision is undertaken by the mine operators. Mr Scott also said that employees of CQFMS do not use equipment owned by the mine operator but have Company vehicles and tools. Sometimes CQFMS employees work in workshops at mines and at other times they work elsewhere on the mine site.
[10] By virtue of s. 173 of the Act an employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who will be covered by the agreement and is employed at the notification time. Section 174(1A) of the Act provides that the notice must:
Contain the content required by the Regulations;
Not contain any other content; and
Be in the form prescribed by the Regulations.
[11] The form prescribed by the Regulations is in Schedule 2.1 of the Fair Work Regulations 2009. It is not in issue that the NERR given by CQFMS contains all of the content required by the Regulations and that is set out in Schedule 2.1. However, the NERR was set out on Company letterhead and the CFMEU asserts that as a result, it is not in the form required by the Regulations. In support of this contention, the CFMEU refers to a Decision of Commissioner Cambridge[2] which held that setting out a NERR on company letterhead had the effect of altering the character of the document so that it departed from the requirements with respect to form and content set out in the Act and Regulations.
[12] Section 180(2) of the Act provides that the employer must take all reasonable steps to ensure that during the access period, employees who will be covered by a proposed agreement are provided with copies of or access to, the written text of the agreement and any other written material incorporated by reference in the agreement.
[13] The CFMEU points to a number of provisions of the Agreement which it contends incorporate written material by reference and which the Union asserts were not provided to or made accessible to employees during the access period:
• The Agreement states that it displaces any other Award or agreement unless specifically noted[3] and then goes on to refer in a number of places to "the applicable award",[4] the "industrial instrument",[5] "the award which would otherwise apply" and the "appropriate award"[6] and accordingly imports by reference the terms of at least the Clerks Private Sector Award 2010; the Manufacturing and Associated Industries and Occupations Award 2010; and the Black Coal Industry Award 2010.
[14] In response to the issues raised by the CFMEU, the Company submits that all employees are inducted into the Company and at that point, are provided with an Induction Pack that includes policies and procedures relevant to them in their employment. The induction process also includes testing of employees in relation to the policies and procedures to ensure understanding. According to CQFMS, there is no requirement that the Company again provide documents to employees which they already possess, and are available in the workplace. The Company further submitted that the availability of such documents in the workplace is communicated to employees at the time they are inducted and on an ongoing basis throughout their employment. CQFMS also submitted that policies are subject to change and to supply them in the form they were in at the time the Agreement was negotiated would infer that they are locked in for the term of the Agreement, which is not the case.
[15] The CFMEU's assertion that the Agreement does not pass the BOOT centres on the appropriate reference Award for the purpose of the application of the test. The CFMEU contends that the appropriate Award is the Black Coal Mining Industry Award 2010 (the Black Coal Award). The CFMEU submits that to the extent that CQFMS employs employees "in the field" at black coal mines, the employees are performing work in the black coal mining industry where the minimum terms and conditions of employment are governed by the Black Coal Award. In this regard, the CFMEU points to the definition of coal mining employees in clause 4.1 of the Black Coal Award and submits that employees of CQFMS come within its scope.
[16] The CFMEU contends that the Agreement contains provisions that make it clear that employees under the Agreement may work in coal mines. In the fourth dot point in Part III a) a specific reference is made to a 35 hour week, which is a feature of work under the Black Coal Award as opposed to the Manufacturing Award or the Clerks Award which provide for a 38 hour week. The Agreement also refers to site or project work which can include work in the coal industry. Further, in paragraph 2.6 of the Form F17 lodged with the Agreement, it is stated that CQFMS held meetings at Moranbah to cover site based employees. From this is said to follow that employees based on site work away from the Company's Mackay operation and are working on site at coal mines.
[17] The CFMEU also points to the fact that on its website, CQFMS lists among its clients a number of companies engaged in coal mining in Queensland including: BMA Coal; Xstrata Coal, Downer EDI Mining, Anglo Coal, Ensham Resources and Thiess. There is no exclusion of coal mining in the Agreement and in a current enterprise agreement that is in operation and covers the relevant employees - CQFMS Enterprise Agreement 2014[7]- there is a table of classifications and wage rates for Mineworkers at a variety of levels under a heading "Coal Mining Rates July 2014". That table does not appear in the Agreement subject of these proceedings which simply provides two tables with classifications and wage rates headed "Clerk's Private Sector" and "Manufacturing". The CFMEU submits that by removing a table from the current agreement and a reference to Coal Mining Rates, the coverage of the Agreement and its application to the black coal mining industry, is not changed.
[18] The CFMEU also submits that the present case can be distinguished from the circumstances in Transfield Services (Australia Pty Ltd)[8] on the basis that employees of CQFMS come under the day to day supervision of the coal mine operator. Similarly, in contrast to the factual situation in The King v Central Reference Board and Others Ex parte Thiess Repairs Pty Ltd[9] the work undertaken by CQFMS is performed on a mine site and not at a workshop that is off the mining lease. Further, the CFMEU submits that the decision in Brown and Grant v Broadspectrum (Australia) Pty Ltd[10] relied on by CQFMS in its submission has no relevance as it deals with the Coal Mining (Long Service Leave) Administration Act 1992, and does not determine the question of whether the employees subject of that decision were covered by the Black Coal Award.
[19] The CFMEU points to a range of provisions where the Agreement provides for less beneficial terms than the Black Coal Award including:
The Black Coal Award provides for 35 ordinary working hours per week while the Agreement provides for 38 ordinary working hours per week;
Shift work provisions with respect to shift allowances and overtime are higher under the Black Coal Award than they are under the Agreement;
Personal leave entitlements are greater under the Black Coal Award than they are under the Agreement;
Public holiday rates and overtime provisions on public holidays are greater under the Black Coal Award than they are under the Agreement;
Reimbursement of training costs is provided for in the Black Coal Award and not in the Agreement;
Employees are required to give greater amounts of notice to terminate their employment under the Agreement than they would be required to give under the Black Coal Award;
The Agreement does not provide for payout of personal leave to retrenched employees as is the case under the Black Coal Award;
The Agreement does not provide for the industry based redundancy scale as is provided for under the Black Coal Award and which exceeds the NES entitlements;
Provisions in relation to alternative employment in the event of an employee being made redundant are more favourable under the Black Coal Award than they are under the Agreement;
The Agreement provides for casual employment and the Black Coal Award does not; and
The Agreement provides confidentiality terms and places obligations on employees and exposes them to prosecution for breach of the Agreement while the Award does not contain such obligations.
[20] In summary, the CFMEU states that on the ordinary hours issue alone, the gap of three hours overtime - which for a seven day shift worker would be an extra six hours pay per week - if the employee works 38 hours per week, would result in a difference of $142.50 per week for a Level 3 Mineworker, without consideration of overtime, shift rates, leave, termination of employment entitlements, redundancy entitlements, public holiday entitlements and other entitlements identified by the CFMEU in its submissions. Accordingly, it follows that the Agreement cannot pass the BOOT.
[21] The CFMEU also points to provisions of the Agreement to the effect that at Part III c) dot point 2, it provides that an employee engaged to undertake work which is not covered by the tables provided, is to be paid above the rate provided in the classification levels of "an appropriate award and their total remuneration must be superior to that total remuneration to which they would be entitled under that award." At Part III b) dot point 2 the Agreement states that "Project or site work will generally be subject to higher rates of pay than apply to town work and where it becomes necessary to negotiate a separate rate for such a location, it will be agreed in advance and will not be lower than the town rate." The Agreement also provides for salaried positions and individual arrangements to be negotiated. The CFMEU asserts that it is not possible to determine a rate for onsite coal mine workers under the Agreement and that the enforcement of its terms at law would be problematic.
[22] Other issues identified by the CFMEU are that the Agreement contains confidentiality provisions that continue after employment ends and for termination of employment "for any reason, without explanation and without any legal obligations, other than the giving of the required period of notice" which is discriminatory and allows for dismissals on grounds that may constitute adverse action. The CFMEU asserts that failure on the part of CQFMS to identify the less beneficial terms as required by the questions in the declarations filed in support of the Agreement, results in the Commission not being able to be satisfied that an explanation of the terms of the Agreement and their effect has been given to employees as required by s. 180(5) of the Act.
[23] In relation to the BOOT issues raised by the CFMEU, the Company contends that it is not engaged in the black coal industry. In this regard, it is submitted that CQFMS is engaged in the manufacturing and maintenance services industry and has a substantial workshop, depot, stores and administrative complex in Mackay. The Company provides services to all manner of clients including within the sugar industry, export terminals, and to mines of various kinds including coal, phosphate, gold and to quarries as well as the gas and petrochemical industries. CQFMS submits that consistent with the Decision of the Commission in Transfield Services Australia Pty Ltd[11] it is not in the black coal industry and the Black Coal Award has no relevance for the application of the BOOT to the Agreement.
[24] CQFMS also submits that the CFMEU treats the Black Coal Award as being superior to all other awards and has practice of seeking to interfere with employers accessing coal sites if those employers do not have an agreement including black coal provisions, regardless of whether the employer would be covered by the Black Coal Award or not. It is not sufficient to invoke the Black Coal Award on the basis that that there is a mention in the documentation filed by the Company in support of the approval of the Agreement, that site based employees are working in Moranbah.
[25] According to CQFMS it has been the practice of Companies to include Black Coal Award provisions in their enterprise agreements not through legal necessity, but to avoid the loss of potential work and to assure employees that their entitlements would satisfy the BOOT. An ancillary consideration was that those employees may at some point actually become engaged in the black coal industry such that they would then be covered by the Black Coal Award, but equally, those employees could be engaged in any other industry.
[26] Notwithstanding its submissions about the Black Coal Award, CQFMS also contends that part III c) of the Agreement at dot point two provides that where an employee is engaged to undertake work which is not covered by the tables in the Agreement, they are to be paid at a rate above the rate provided in the classification levels of an appropriate award and their total remuneration must by superior to the total remuneration to which they would have been entitled under the Award. The Company submits that this provision ensures that the Agreement passes the BOOT even if the Black Coal Award does apply. In this regard, the Company submits that:
"...this provision refers to 'total remuneration under the Award' and therefore includes provision for absolutely every entitlement whatever Award may have applied might have provided, including additional annual leave, additional leave loading, industry specific redundancy provisions and so on."[12]
Was a valid NERR issued by CQFMS as required by s. 174(1A)?
[27] In relation to the NERR issue, I am unable to accept the proposition that a NERR given on Company letterhead is invalid on that basis. In my view the fact that a NERR is set out on Company letterhead is not a matter that goes to the form or the content of the notice. The Decision of the Full Bench in Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union[13] is not authority for such a proposition. In Peabody the Full Bench held that a failure to comply with s. 174(1A) of the Act goes to invalidity.[14] The issue associated with the NERR in that case was that it included other content, by virtue of the fact that the employer provided additional documents with the notice but stated that the additional documents were part of the NERR. Accordingly the NERR was not valid. The Full Bench also held that:
"[84] We wish to make it clear that the finding we have made in this case as to what constitutes the notice turns on the particular facts in this matter. We repeat our earlier observation (at paragraphs [68] to [70] that s.174(1A) is not to be construed so as to preclude an employer from providing additional material to its employees at the same time as the Notice is given to them. Where additional material accompanies a document which complies with the form and content of the prescribed Notice the issue to be determined is what purports to be the Notice. This issue will turn on the evidence and particular circumstances of each case."[15]
[28] In the present case, the NERR given by CQFMS contains all of the required content. I do not accept that the Company letterhead is additional content. Even if the letterhead is additional content, it is not content purported to be part of the Notice. The obligation to take all reasonable steps to give the Notice to relevant employees is placed on the employer. It is difficult to envisage how a Notice containing all of the required content and set out on an employer's letterhead in a form identical to that set out in Schedule 2.1 of the Regulations, could mislead employees in circumstances where only the employer can give the Notice. In any event, there is no evidence in the present case that any employee was misled with respect to their rights and obligations as set out in the Notice. For these reasons, I do not accept that the NERR given by CQFMS is invalid. There is no basis for refusing to approve the Agreement on this ground.
Has CQFMS complied with the requirements of s. 180(2) in relation to incorporated material?
[29] Section 180(2) of the Act provides that the employer must take all reasonable steps during the access period to ensure that employees employed at the time who will be covered by the proposed agreement, are given a copy of the written text of the agreement and any other material incorporated by reference in the Agreement or have access to a copy of those materials. As a Full Bench of the Commission observed in CFMEU v Sparta Mining Services Pty Ltd[16] compliance with s. 180(2) is mandatory and by virtue of s. 186(1) and s. 188(a)(i) of the Act where those requirements have not been complied with the Commission has no power to approve an agreement other than in exceptional circumstances, if the Agreement does not meet the BOOT, and by accepting an undertaking in relation to a BOOT issue.[17] An undertaking cannot cure a failure to comply with s. 180(2) of the Act.
[30] The CFMEU's objection to approval of the agreement in the present case is based on the proposition that a number of clauses in the Agreement incorporate by reference certain documents external to the Agreement. These clauses are in the following terms:
"This agreement will therefore displace any other industrial instrument or provision including any award unless specifically noted otherwise within this agreement."
"The employee agrees to abide by the various company policies and procedures in order to ensure a safe, efficient, harmonious and fair workplace."
The employer agrees to comply with State and Commonwealth Occupational Health & Safety Laws and any relevant industry codes of practice.
The employee agrees to carry out any instructions, policies and decisions made to promote and maintain a safe workplace required by relevant Occupational Health and Safety legislation including any further requirements specific to the employer's industry and workplace - even if not specified in the legislation."
[31] I note that the clauses in relation to health and safety in the workplace are in virtually identical terms to those that were in the agreement considered by the Full Bench in Sparta at clauses 6.1 and 6.2. In relation to the clause dealing with employees carrying out instructions, policies and decisions in relation to occupational health and safety laws and industry codes of practice, the Full Bench in Sparta held that it is expressed in terms of an obligation agreed to by employees and the content of that obligation could only be understood by reference to the external documents referred to. The Full Bench further held that while the clause referred to instructions and decisions which may include those made from time to time in the future, the reference to policies of a specific nature is clearly intended to import obligations of those policies into the agreement including those extant at the time the agreement was made.
[32] The Full Bench went on to hold that it is not necessary for a clause to be regarded as incorporating material by reference for the purposes of s. 180(2), or that the material must be specifically described in the clause. What is necessary for a clause incorporating entitlements or obligations from an external document to be legally effective is that the document is described in a way which permits it to be identified. There is no rule as to how this is to be done and nor is there any rule against incorporation where the external document is referred to by general description.[18]
[33] The Full Bench in Sparta also dealt with an argument to the effect that employees would have received policies referred to in provisions of the agreement in that case, when they were inducted to work on mine sites and that the policies would have remained accessible on the intranet. The evidence in support of this submission was found by the Full Bench not to be a complete answer to the question of whether there had been compliance with s. 180(2)(b) of the Act, because it did not specifically address whether the polices were accessible to employees during the access period as required by s. 180(2)(b) of the Act nor whether any access to the policies constituted a step taken by the Company.[19]
[34] In order to determine whether CQFMS has failed to comply with the requirement in s. 180(2) of the Act it is necessary to consider whether any of the clauses in the Agreement incorporate by reference, an external document. I do not accept that the terms of Part I c) of the Agreement have the effect of incorporating Awards that the Agreement purports to displace. I also do not accept that Part II a) dot point 2 refers to external documents with sufficient particularity to place obligations on employees. However, consistent with the decision of the Full Bench in Sparta which considered a virtually identical term, I am of the view that the terms of Part II e) in the second dot point prescribe policies with sufficient particularity for an obligation to comply with them to be legally enforceable. Accordingly, consideration as to compliance with s. 180(2) is required.
[35] The Form F17 Employer declaration in support of the approval of the Agreement asks what steps were taken by the employer, and on what date they were taken, to ensure that the relevant employees were either given a written copy of the text of the Agreement and any other material incorporated in it contains the following statement:
Memo 043 sent out 4th April notifying employees of voting dates (24 April - 1 May 2017)
Memo 044 sent out to employee representatives and managers for distribution 13 April 2017 CQFMS Draft EA
Weekly email correspondence to employees 7 April and 13 April respectively.
[36] That material was provided to the Commission as appendices to the submissions made by CQFMS in support of the application for approval of the Agreement. There is nothing in the material to indicate that copies of instructions, policies and decisions referred to in Part II e) dot point 2 were provided to employees or that they were informed where they could obtain copies, during the access period for the Agreement. Consistent with the Full Bench decision in Sparta I do not accept that the fact that employees may have been informed about the relevant instructions, policies and decisions in site inductions, is sufficient to meet the requirements in s. 180(2) of the Act. Accordingly, I am not satisfied that CQFMS has complied with s. 180(2) of the Act.
Does the Agreement pass the BOOT as required by s. 186(2)(d) and s. 193?
[37] One of the general requirements for approval of an agreement as specified in s. 186(2)(d) of the Act, is that it passes the BOOT. By virtue of s. 193(1) an enterprise agreement that is not a greenfields agreement, passes the BOOT if the Commission is satisfied at the test time, that each award covered employee and each prospective award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee. The CFMEU's assertion that the Agreement does not pass the BOOT, is based on the proposition that the Black Coal Award applies to some of the employees who are or will be covered by the Agreement.
[38] If one or more employees or prospective employees to whom the Agreement applies or would apply are covered by the Black Coal Award, then the Commission is required to take that Award into account in deciding whether the Agreement passes the BOOT. In relation to coverage, the Black Coal Award provides that:
(a) employers of coal mining employees as defined in clause 4.1(b); and
(i) employees who are employed in the black coal mining industry by an employer engaged in the black coal mining industry, whose duties are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A - Production and Engineering Employees or Schedule B - Staff Employees of this award; (ii) employees who are employed in the black coal mining industry, whose duties are carried out at or about a place where black coal is mined and are directly connected with the day to day operation of a black coal mine and who are employed in a classification or class of work in Schedule A - Production and Engineering Employees or Schedule B - Staff Employees of this award; and**(iii)** employees employed by a mines rescue service.
4.2 For the purposes of this award, black coal mining industry has the meaning applied by the courts and industrial tribunals, including the Coal Industry Tribunal. Subject to the foregoing, the black coal mining industry includes:
(a) the extraction or mining of black coal on a coal mining lease by means of underground or surface mining methods;
(b) the processing of black coal at a coal handling or coal processing plant on or adjacent to a coal mining lease;
(c) the transportation of black coal on a coal mining lease; and
(d) other work on a coal mining lease directly connected with the extraction, mining and processing of black coal.
4.3 The black coal mining industry does not include:
(a) the mining of brown coal in conjunction with the operation of a power station;
(b) the work of employees employed in head offices or corporate administration offices (but excluding work in town offices associated with the day-to-day operation of a local mine or mines) of employers engaged in the black coal mining industry;
(c) the operation of a coal export terminal;
(d) construction work on or adjacent to a coal mine site;
(f) haulage of coal off a coal mining lease (unless such haulage is to a wash plant or char plant in the vicinity of the mine); or
(g) the supply of shotfiring or other explosive services by an employer not otherwise engaged in the black coal mining industry.
NOTE: The coverage clause is intended to reflect the status quo which existed under key pre-modern awards in relation to the kinds of employers and employees to whom those awards applied and the extent to which the awards applied to such employers and employees.
An example of the types of issues and some of the case law to be considered when addressing coverage matters can be found in Australian Collieries Staff Association and Queensland Coal Owners Association - No. 20 of 1980, 22 February 1982 {Print CR2297} and in the Court decisions cited in this decision.
4.8 Subject to clauses 4.1 and 4.2, where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.
NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an award with occupational coverage.
[39] Australian Collieries Staff Association and Queensland Coal Owners Association[20] and the decisions cited in that Case, establish the principles in relation to determining whether employers and employees are covered by the Black Coal Award and its predecessors including:
• Whether an employer is engaged in the black coal mining industry depends on the substantial character of the industrial enterprise in which the employer and the employee are concerned.[21]
• The supply of goods or services to companies in a particular industry is not sufficient to identify that the supplier is in the industry to which the goods and services are supplied.[22]
• The fact that an activity is carried out at a coal mine is not the sole determinant of the issue. The difference depends on circumstances, the chief of which must be separateness of establishments in point of control, organisation, place, interest, personnel and equipment, and is a matter of degree.[23]
• The fact that two industries are carried on at the same place does not abolish the distinction between them.[24]
• The relationship of employer and employee must have some connection with the activity of mining of coal.[25]
[40] The judgements of the majority in the decision of the High Court in The King v Central Reference Board; Ex parte Thiess (Repairs) Pty Ltd (Thiess) cited in the Australian Collieries Staff Association case contain a number of observations relevant in the present case. In Thiess the majority considered that a dismissed employee was not employed in the coal mining industry, in circumstances where the employer carried out repairs to mining machinery at a facility located off a mine lease (although within relatively close proximity), notwithstanding that a related company with common management employed persons on the mine lease to mine coal and to conduct running repairs on mining machinery at a workshop on the mine lease.
[41] In reaching this conclusion, Latham CJ observed that "coal mining industry" is not a technical term, and it is a question of fact depending on all of the circumstances of the case, whether a particular employer or employee is engaged in the coal mining industry. His Honour also further observed that one industry may be entirely concerned with the service of another industry and yet may not be part of that other industry.[26] Further, his Honour noted that the fact that operations of one enterprise are carried out in proximity to those of another cannot itself show that the enterprises are part of the same industry and that a single employer may conduct two or more separate enterprises in two or more industries. The central question to be asked is: "What is the substantial character of the industrial enterprise in which the employer and the employee are concerned?" [27]
[42] Latham CJ concluded that the employer was not engaged in the coal mining industry, on the basis that:
It was not under the control of the mine owner or its own related entity that conducted mining operations for the mine owner; and
• Its operations were separate to and different in kind from the operations carried on at the open cut.[28]
[43] Rich J reaching the same conclusion, also observed that the ambit of the coal mining industry is a question of fact and degree and that necessarily differences of opinion may occur in arriving at a decision. Starke J observed that if an employer set up a workshop at the open cut wherein its workers effected major and minor repairs to equipment and plant used in connection with its mining operations, then the finding that the company and its employees were engaged in the coal mining industry may have a basis of fact to support it and the work might be regarded as ancillary to and part of the mining operations. Conversely, if the work was sent to and effected by persons carrying on an independent engineering business, then the fact that the equipment and plant was used in connection with mining operations, would not support a finding that those persons would be engaged in the coal mining industry. They would be engaged in the engineering business or industry. Starke J concluded that the fact that the employer divided its activities between two independent companies, one a mining company and one a repair company, does not support a finding that the repair company is engaged in the coal mining industry, because it repairs coal mining equipment and machinery. Rather as a question of fact, the employer and its employees in that case, were not engaged in the coal mining industry but in an industry which effected repairs to coal mining and other equipment and plant.[29]
[44] In a dissenting judgment, Dixon J relevantly observed that the function or activity with which the case was concerned, was the repair and overhaul of earthmoving and excavating equipment used in removing the over-burden and winning coal from the open cut. Such work could be carried out as an integral part of the operations of open-cut mining so as to form an indivisible element in the undertaking, or may be relegated to separate and independent engineering operations outside the undertaking. Whether they are part of the industry of coal mining or not, depends upon the circumstances "chief of which must be separateness of establishments in point of control, organisation, place, interest, personnel and equipment. It must in the end come down to a matter of degree." His Honour held that the employer had not established that the major repair and overhaul of the equipment was conducted otherwise than as an integral part of the mining undertaking because:
The operations in question, although carried on by a distinct company, were under one control and management with the mining operations;
The distinct company was a subsidiary;
The works were situated close to the open cut (three-quarters of a mile away) and the site was chosen for that reason;
The site at which the work was carried out was variously described as "upon the open cut", "adjacent to but outside the area of the open cut" and "upon the mine owner's land but outside the fence";
Although other work had been done, the repair and overhaul was the purpose of setting up the engineering shop, and substantially it had no other present purpose; and
• There was an interchange of tools between the workshop in question and another workshop established for minor adjustments established at the open cut.[30]
[45] In Transfield Services (Australia) Pty Ltd[31] I decided that the Black Coal Award did not apply to the Company in circumstances where it sought approval of an enterprise agreement to apply to employees engaged to perform maintenance and/or miscellaneous surface work at any surface mining site in Queensland where the Company had a contract to perform such work. The basis of that conclusion was that Transfield is an engineering company carrying out general work. In carrying out that work Transfield was not under the control of a mine owner or a contractor conducting mining operations. Transfield conducts maintenance, project and shutdown work and did not undertake any mining activity with respect to employees covered by the agreement. Employees were performing work including mechanical fitting, electrical and rigging and were supervised by Transfield's supervisory employees. Employees covered by the agreement were not embedded in or supplementary to the work force of the mines at which they performed work and worked different rosters.
[46] I accept that in the present case, CQFMS undertakes manufacturing and engineering work, both on a range of sites including coal mines and in its workshops, and that employees performing such work are covered by the Manufacturing Award. Similarly, where CQFMS is undertaking a project or a discreet package of work it has contracted to perform such as shut down work on plant and equipment, the Manufacturing Award applies even where such work is undertaken at a coal mine. However, that is not the end of the matter. It is necessary for the purposes of the application of the BOOT to consider whether at the test time any current or prospective employees are or will likely be covered by the Black Coal Award.
[47] On the evidence before me I am satisfied that CQFMS employs or will employ during the term of the Agreement, employees who are covered by the Black Coal Award. I have reached this conclusion for the following reasons. The Black Coal Award has application to employers who employ persons in the black coal industry and does not exclude employers who employ persons in other industries even where the majority of employees may be in other industries. This is apparent from clause 4.1(a) and (b)(ii), which read together, make it clear that it is not necessary that an employer of an employee in the black coal mining industry is also in that industry, or substantially or principally within that industry.
[48] An employee may be in the black coal industry regardless of the industry of his or her employer, in circumstances where the employee meets the definition in clause 4.1(b)(ii) of the Black Coal Award. The coverage clause of the Black Coal Award recognises that an employer may be in more than one industry and by virtue of clause 4.8 of the Black Coal Award, where this is so, employees are covered by the award classification most appropriate to the work the employee performs. While the cases referred to in the Note to clause 4.2 contain principles that are relevant to the construction of the coverage provisions of the Black Coal Award, it is important to note that those cases dealt with "all or nothing arguments" where an employer was either in the coal mining industry or not, consistent with the exclusions in clause 4.3 (a) - (g). The cases did not deal with companies who supply labour to coal mines in a labour hire type of arrangement where employees integrate with the employees of the mine operator or replace those employees temporarily.
[49] Consistent with the case law, employees in the workshops operated by CQFMS are not covered by the Black Coal Award, notwithstanding that they are working on equipment that is used to mine black coal. Mr Scott's evidence establishes that employees of CQFMS go on to black coal mine sites to perform project work such as maintenance shut downs or installation of new equipment where CQFMS contracts to perform a particular package of work or project. Such employees will also not be in the black coal industry by virtue of performing such work, regardless of whether they work alongside the mine workforce.
[50] CQFMS hires employees to coal mine operators for leave coverage. In my view, these employees are or will be covered by the Black Coal Award, notwithstanding that such employees use tools and equipment provided by CQFMS, including vehicles. Where CQFMS employees are on hire to a coal mine operator, and integrate into the workforce of the coal mine operator or replace employees of the mine operator to perform work at a black coal mine, they are covered by the Black Coal Award where:
The work is directly connected to the day to day operations of such a mine;
Employees are employed on work within a classification in the Black Coal Award; and
They are supervised by the coal mine operator.
[51] On the basis of the evidence before me, I am satisfied and find that some employees of CQFMS who will be covered by the Agreement are doing work within the definition of coal mining employees in clause 4.1(b)(ii) of the Black Coal Award and that there will be prospective employees doing that work. Such employees are undertaking temporary placements at coal mine sites where they are replacing employees on leave and are integrated into the mine workforce, working the same rosters and subject to the same supervision as direct employees of the mine who are also covered by the Black Coal Award. This is so even if the same employees work on other occasions at another location after the placement such as CQFMS' workshop or another site that is not a black coal mine.
[52] There is no provision in the Agreement that restricts its coverage, or which excludes employees who are or would be covered by the Black Coal Award. To the contrary, the Agreement contemplates that Awards other than the Manufacturing and Clerical Awards may apply to employees under the Agreement.
[53] I have also had regard to the fact that the enterprise agreement currently applicable to employees of CQFMS who will be covered by the Agreement subject of the present proceedings, contains a table including classifications and wage rates for coal mining. There does not appear to have been any relevant change in the operations of CQFMS and the fact that these classifications and rates do not appear in the Agreement subject of these proceedings, was not adequately explained by the submissions or the evidence of Mr Scott for CQFMS, who essentially asserted that coal industry rates and classifications were put into the current agreement in circumstances where they were not required.
[54] I am of the view that when the Agreement is compared to the Black Coal Award, it does not pass the BOOT. In this regard I accept the submissions of the CFMEU that when ordinary working hours, overtime, shift work, annual leave, personal leave, pubic holidays, training, notice of termination of employment and other relevant provisions of the Black Coal Award are considered against the Agreement, employees are not better off overall than they would be if the Black Coal Award applied.
[55] I also do not accept that there are provisions in the Agreement which address the BOOT issues. Part I d) relied on by CQFMS provides as follows:
[56] Those provisions do not operate to guarantee an employee will be better off overall under the Agreement regardless of which Award applies to the employee. In my view the provisions are uncertain, aspirational and unenforceable. I do not accept that in circumstances where CQFMS asserts on the one hand that the Black Coal Award does not apply to employees covered by the Agreement, it can argue on the other hand that the Agreement gives employees who might be covered by the Black Coal Award, the right to receive total remuneration that is better than that Award. An employee seeking to enforce an entitlement to be paid remuneration better than that provided by the Black Coal Award would face some difficulty in circumstances where the employer does not accept that the Black Coal Award applies to any employee.
[57] Further, I am of the view that in circumstances where CQFMS maintains before the Commission that the Black Coal Award does not apply to employees and has failed to identify a number of terms of the Agreement that are detrimental when compared to that Award, the Company cannot have given employees a proper explanation of the terms of the Agreement and their effect, as required by s. 180(5) of the Act.
[58] For the reasons set out above I am not satisfied that CQFMS has complied with s. 180(2) of the Act on the basis that the Company did not ensure that during the access period, each employee had a copy of or access to, material incorporated into the Agreement by reference. Further I am not satisfied that the Company took reasonable steps to provide an explanation of the Agreement and its terms, given the deficiencies identified above in respect of the BOOT. Accordingly, I am not satisfied as required by s. 188(a)(i) of the Act that the Agreement has been genuinely approved. Further, I am not satisfied that the Agreement passes the BOOT. Given that I must not approve the Agreement unless I am satisfied that the requirements for concluding that it has been genuinely approved are met, it is not necessary to consider whether my concerns about the BOOT issues could be addressed by the employer providing undertakings.
[59] The application for the approval of the CQFMS Enterprise Agreement 2017 is refused and an Order to that effect and dismissing that application will issue with this Decision.
[1] Exhibit 1 - Witness Statement of Steven Allan Pierce.
[2] DP World Melbourne Limited [2016] FWC 386.
[12] Applicant Submission in Response to CFMEU Objections.
[20] No. 20 of 1980, 22 February 1982 {Print CR2297}.
[21] The King v Central Reference Board; Ex Parte Thiess (Repairs) Pty Ltd [1948] HCA 9; (1948) 77 CLR 123 at 135.
[24] The King v Drake Brockman; Ex parte National Oil Pty Ltd [1943] HCA 35; (1943) 68 CLR 51 at 57.
[25] Australian Collieries Staff Association and Queensland Coal Owners Association No. 20 of 1980, 22 February 1982 and [CR2297].
Printed by authority of the Commonwealth Government Printer
(1948) 77 CLR 123
(1943) 68 CLR 51