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

Application for approval of the I-MED Regional Victoria Enterprise Agreement 2023 - Cannot be satisfied that the Agreement was genuinely agreed to - Application dismissed

• [1] This is a decision further to my decision in Application by I-MED Regional Pty Ltd - [2025] FWC 1221 in relation to an application under s 185 of the Fair Work Act 2009 (Cth) for approval of the I-MED Regional Victoria Enterprise Agreement 2023**.** In that decision, I concluded:

[86] In summary, while I am of the view that I-MED did take reasonable steps to explain the Agreement, it failed to take all reasonable steps as it did not explain the terms and effect of the updated classification structure. I am of the view that those changes were not minor or trivial.

[87] Section 190(1) allows me to accept an undertaking with respect to the issue of whether employees have genuinely agreed to an agreement under s 186(2). Section 188(5)(aa) allows me to disregard minor procedural or technical errors where employees may not have been disadvantaged by the error. It is appropriate to provide I-MED with an opportunity to offer an undertaking or make submissions about the application of s 188(5) before finally determining this matter, and to provide bargaining representatives the opportunity to provide their views on any undertakings.

• [2] I issued Directions for the parties to provide submissions or offer undertakings.

• [3] I-MED filed submissions and restated its earlier offered undertakings. I-MED submitted that the failure to take all reasonable steps to explain the terms and effect of the updated classification structure was a minor procedural or technical error and that employees were not likely to have been disadvantaged by the error such that I could disregard it under s 188(5). It did not offer any undertakings relevant to this issue but did restate its earlier offered undertakings which related to my concerns about whether the Agreement passed the better off overall test.

• [4] The Health Services Union of Australia Victoria No. 3 Branch trading as Victorian Allied Professionals Association (VAHPA) also filed submissions. VAHPA submitted that the failure above was not a minor procedural or technical error, that I could not be satisfied that employees were not likely to have been disadvantaged and so could not disregard the error under s 188(5). VAHPA also indicated in those submissions that, in the event I approved the Agreement subject to the undertakings, it did not object to the undertakings.

• [5] Section 188(5) of the Act provides:

"In determining whether it is satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement (including determining whether it is satisfied that an employer complied with the provisions mentioned in subsection (2A) or (4) or (4A)), the FWC may disregard minor procedural or technical errors made in relation to the following requirements if it is satisfied that the employees were not likely to have been disadvantaged by the errors:

(a) section 173 or 174 (which deal with notices of employee representational rights for certain agreements);

(aa) subsection 180(5) (which requires employers to explain the terms of agreements);

(ab) section 180A (which deals with agreement of certain bargaining representatives);

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

(c) subsection 182(1) or (2) (which deal with the making of different kinds of enterprise agreements by employee vote)."

• [6] By section188(5)(aa), I may disregard errors relating to the employer's explanation of the terms of the Agreement. However, I may only disregard the error if:

• it is a minor procedural or technical error; and

• I am satisfied that employees were not likely to have been disadvantaged by the error.

• [7] The Full Bench in Huntsman Chemical Company Australia Pty Ltd T/A RMAX Rigid Cellular Plastics & Others[1] comprehensively considered the proper construction of then s 188(2), which is now s 188(5). The Full Bench said:

"what constitutes a minor error calls for an evaluative judgement having regard to the underlying purpose of the relevant procedural or technical requirement which is not being complied with and the relevant circumstances."[2]

• [8] The wording of s 188(2) that was considered in Huntsman is not the same as the wording in the current s 188(5). The key differences between the old s 188(2) and current s 188(5) are that the old s 188(2) provided that the Commission may be satisfied that the agreement has been genuinely agreed but for minor procedural or technical errors, whereas the current s 188(5) provides for a discretion to disregard minor procedural or technical errors. The requirement that employees were not likely to have been disadvantaged by the errors remains the same. The requirement that the errors relate to particular requirements (the Notice, explanation of terms, timing of the request to vote) relevantly remains the same. I am of the view that the principles discussed by the Full Bench in Huntsman remain applicable to current s 188(5).

• [9] I am of the view that the employer's failure to comply with s180(5) is a procedural error but that it is not a minor error that I may disregard.

• [10] First, I made no findings that the employer intentionally failed to comply[3] with its obligations under s180(5), and so it may constitute an error.

• [11] Second, I consider that it was a procedural, rather than technical error, as it relates to procedural requirements of the Act rather than in relation to form or content requirements of the Act.[4]

• [12] Third, in considering whether the procedural error is minor, I have regard to the underlying purpose of the requirement, which is to ensure that employees understand the effect of the agreement that is to be voted on, enabling them to make an informed decision[5]

• [13] While I do consider that I-MED went to significant and reasonable lengths to explain the terms and effect of the Agreement, I also found that it did not take all reasonable steps as it did not explain the terms and effect of the Agreement in relation to the updated classification structure. Despite I-MED informing employees individually about how the updated classification structure affected them, the employer's failure to explain the updated classification structure meant that employees may not have understood those terms and effect of the Agreement such that they could make an informed decision about whether to make the agreement.

• [14] I-MED drew my attention to the Full Bench's decision in Construction, Forestry, Maritime, Mining and Energy Union v FMS Group,[6] where the Full Bench found that the procedural error of not complying with s 180(5) in relation to explaining the coverage of the agreement under consideration was a minor error that could be disregarded as employees were not likely to have been disadvantaged by that error. There, the error was that the employer had failed to explain that the agreement did not cover work that was covered by the Hydrocarbons Award and the error was minor because the employer provided an explanation document and comparison tables that "made it clear enough that the [agreement] only provided for rates and conditions in respect of the five awards identified in clause 4.1" (which did not include the Hydrocarbon Award).[7] The employees were not likely to have been disadvantaged because the information was available to them in the explanation document and comparison tables.[8]

• [15] The error here is not similar to the error in FMS Group. The employer did not provide to employees any other information from which they could have been informed of the changes to the classification structure other than the agreement itself.

• [16] As I have concluded that the error was not minor, I do not need to consider whether employees were likely to have been disadvantaged. For completeness and for similar reasons to the error not being minor, I cannot be satisfied that employees would not have been likely to have been disadvantaged.

• [17] I-MED did not propose any undertakings relevant to the issue of genuine agreement.

• [18] As I have found that I-MED did not take all reasonable steps to explain the terms and effect of the Agreement and that its failure was not a minor procedural or technical error that I may disregard, I cannot be satisfied that the Agreement was genuinely agreed to. As a result I am not satisfied of the requirements under s 186 and do not approve the Agreement.

[1] [2019] FWCFB 318

[6] Construction, Forestry, Maritime, Mining and Energy Union v FMS Group [2022] FWCFB 18

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