Mining and Energy Union v Specialised Mine Services Pty Ltd [2025] FWCFB 103

[2025] FWCFB 103

Mining and Energy Union v Specialised Mine Services Pty Ltd [2025] FWCFB 103 | Case summary | Zoe

[1] The Mining and Energy Union (Appellant/MEU) has lodged an appeal, for which permission is required, under s. 604 of the Fair Work Act 2009 (the FW Act), against a Decision[1] of Deputy President Dean made on 27 November 2023, approving with undertakings, the Specialised Mine Services Enterprise Agreement 2023 (SMS Agreement).[2] The Agreement was made by a ballot of four casual employees and covers a single employer, Specialised Mine Services Pty Ltd (SMS). The activity of SMS is described in the Form F17B Employer's declaration in support of approval of the SMS Agreement as "black coal industry subcontractor".

[2] In summary, the background to the matter is that the application for approval of the SMS Agreement was made on 29 September 2023. The MEU corresponded with the Fair Work Commission (Commission) seeking copies of the Form F16 Application for approval, Form 17 Employer declaration in support of approval and any related documents (application documents). After being provided with redacted versions of the application documents by the Commission's Agreements Team, the MEU made further requests, in the form of submissions directed to the Chambers of the Deputy President, to whom the application had been allocated, for the application documents to be provided in unredacted form.

[3] The redacted information that the MEU sought to access was the names of the persons who signed the application documents on behalf of SMS and demographic information including whether the four employees who approved the SMS Agreement were casual employees. In its submissions seeking that the Deputy President provide the unredacted application documents, the MEU raised specific concerns that went to the authenticity of the SMS Agreement. The MEU asserted (with reference to company searches filed with the submission) that:

Mr Sam Perkins and Mr Jesse Yvanoff, respectively a director, and a shareholder of SMS, were involved in making the SMS Agreement;

Mr Perkins and Mr Yvanoff were also respectively the General Manager and Business Manager of a company known as Nortek Pty Ltd (Nortek);

Nortek was a mining contractor as was SMS and both companies undertook the same or similar work;

Nortek and its employees were covered by an in-term enterprise agreement known as the Nortek Developments NSW South Western Enterprise Agreement 2022 (Nortek Agreement); and

The close relationship between SMS and Nortek demonstrated the need for the identity of those involved in the making of the SMS Agreement and the identity of the employees covered, to be disclosed.

[4] The Deputy President refused the request for provision of the unredacted application documents and after inviting and receiving a written submission from the MEU further detailing its objections to the approval of the SMS Agreement, decided to deal with the application on the papers, and as we have stated, approved the SMS Agreement with undertakings.

[5] In the appeal, the MEU contended that by refusing to provide it with unredacted copies of the application documents, the Deputy President failed to apply the principles of open justice established in binding decisions of Full Benches of the Commission and denied the MEU procedural fairness by depriving the Union of an opportunity to advance its case and achieve a successful outcome. The MEU also contended that in approving the SMS Agreement, the Deputy President erred by concluding that the SMS Agreement was genuinely agreed including by failing to consider the Fair Work Statement of Principles on Genuine Agreement, Fair Work Instrument 2023 (Statement of Principles), that the SMS Agreement passed the better off overall test (BOOT), and in accepting undertakings that resulted in substantial changes to the SMS Agreement, contrary to s. 190 of the FW Act and which were not capable of meeting relevant concerns.

[6] The MEU was given access to the application documents in unredacted form, during the appeal. Those documents substantiated the contentions made by the MEU in submissions to the Deputy President with respect to the involvement of Mr Perkins and Mr Yvanoff in SMS and Nortek and in the making of the SMS Agreement. The MEU applied for Orders under s. 590(2) of the Act, requiring Mr Perkins and Mr Yvanoff to attend the hearing of the appeal for the purpose of giving evidence and SMS and Nortek to produce business records relating to the employment of persons said to be covered by the SMS Agreement identified as signatories to the SMS Agreement or as recipients of emails about the bargaining process sent by SMS. The Commission made orders in the form sought. The orders were complied with by the relevant persons and companies without objection. Mr Perkins and Mr Yvanoff gave evidence and the MEU sought to rely on that evidence and to tender documents produced by SMS as evidence in the appeal. For reasons we develop later, we decided to receive that evidence.

[7] The evidence received in the appeal also led to the MEU contending that the employees who purportedly made the SMS Agreement were properly covered by the Nortek Agreement at the relevant time, by virtue of the provisions in Chapter 2, Part 2 - 8, dealing with transfer of business and transfer of instruments. Because this argument was developed during the appeal, it was necessary for us to allow the MEU an opportunity to make further written submissions after the hearing of the appeal and to allow SMS to reply to those submissions. SMS did not avail itself of this opportunity.

[8] For reasons that follow, we have decided to grant permission to appeal, uphold the appeal, quash the decision approving the SMS Agreement and dismiss the application for approval of the SMS Agreement. It is necessary to commence by traversing some of the background to the making of the SMS Agreement, the application for approval, and the sequence of events that preceded its approval.

[9] SMS applied to the Commission for approval of the SMS Agreement on 29 September 2023.[3] Unredacted versions of the application documents show that the SMS Agreement was signed by Mr Perkins in his capacity as General Manager and his signature was witnessed by Mr Mark Hatch, who states that his position is "Supervisor". The SMS Agreement was signed on behalf of employees by Mr Will Davidson who stated that his position is "Trade (Mechanical)", and his signature was witnessed by Mr Luke Sissons who stated that his position is "Operator". All signatories signed the SMS Agreement on 15 September 2023.

[10] The Form F16 Application was signed on behalf of SMS by Mr Yvanoff, on 29 September 2024, in the capacity of Stakeholder Relations Manager of SMS. Mr Yvanoff stated that there were no employee organisations or employee bargaining representatives involved in the agreement making process. The Form F17B Employer's declaration in support of the approval of the SMS Agreement was made by Mr Sam Perkins, who declared that he is the General Manager of SMS and that the primary activity of the employer is "black coal industry subcontractor". Mr Perkins declared that the SMS Agreement does not cover all employees of SMS but covers employees performing production and/or engineering roles as defined by the Black Coal Mining Industry Award 2020 (BCMI Award) who perform "blue collar work" and does not cover employees performing managerial and/or clerical work. Mr Perkins also declared that the SMS Agreement would operate in New South Wales, that at the time of the vote there were four employees covered by the SMS Agreement and that all four employees covered were casual employees.

[11] In relation to award coverage, Mr Perkins declared that the modern award covering the employees and employer covered by the SMS Agreement, is the BCMI Award and that classifications in the SMS Agreement correspond with those in that Award from A.2.2 Mineworker - Induction Level 2 / Mineworker - Training to A.2.5 Mineworker - Specialised. Mr Perkins identified terms of the SMS Agreement said to be more beneficial than the terms of the BCMI Award as follows:

Wage rates at least 10% higher than the BCMI Award equivalent; and

The SMS Agreement provides long service leave and unpaid leave which are not provided for in the BCMI Award.

[12] Mr Perkins also declared that the SMS Agreement contains terms that are less beneficial than equivalent terms in the BCMI Award as follows:

The casual ordinary time rate will be used for all purposes other than for shift rates, public holiday rate and weekend work, and the calculation in these cases will be the ordinary rate; and

Family and domestic violence leave is authorised unpaid leave.

[13] The effect of the SMS Agreement provisions relating to casual loading, is that it is not compounded by penalty rates for ordinary time worked on weekends and for work on public holidays. With respect to the response in relation to casual rates, Mr Perkins declared that it is intended that the actual total payment calculation in the SMS Agreement exceeds the equivalent total payment calculation in the Award for the same hours worked. A note in relation to family and domestic violence leave being unpaid states that it is intended "that the Agreement clause 3.5 will apply as it appears the NES 'provides a greater benefit'." Clause 3.5 of the SMS Agreement deals with the relationship between the Agreement and the National Employment Standards (NES) and states that in the case of inconsistency where the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency. Mr Perkins declared that the SMS Agreement passes the better off overall test (BOOT) because of clause 3.5 in relation to the NES, the fact that the Agreement rates are at least 10% higher than the rates in the BCMI Award and it is intended that total payment for hours worked under the SMS Agreement will be greater than equivalent payment under the BCMI Award.

[14] The notification time for the SMS Agreement was said to be 1 August 2023 and Mr Perkins declared that all employees received the notice of employee representational rights (NERR) by email on 12 August 2023, followed by a telephone call on 14 August 2023 to ascertain that the NERR had been received. An email filed in the Commission with the SMS Agreement attaching the NERR, dated 12 August 2023, was copied to eight persons: Bradley Field, Jack Field, Jack Passlow, Liam Wesley, Luke Sissons, Robert Poole, Tane Wesley and William Davidson. Mr Perkins declared that the employees entitled to vote on the SMS Agreement were provided with a full copy of the Agreement by email and were provided with incorporated material via hyperlinks in a ballot letter that was sent them by email on 5 September 2023.

[15] A covering email filed with the Form F17B by SMS indicated that the ballot letter was sent to: Mark Hatch, Luke Sissons, Robert Poole, William Davidson and Paul Wilson. No explanation is provided as to why the NERR was sent to eight persons, the ballot letter was sent to five persons, and only four voted to approve the SMS Agreement. We also note that the recipients of the email included Mark Hatch who witnessed Mr Perkins' signature on the SMS Agreement in the capacity of Supervisor and it is unclear whether Mr Hatch was intended to be covered by the SMS Agreement. We are satisfied that the four employees who purportedly made the SMS Agreement, and who are described in the Form F17 as casual employees, were Mr Sissons, Mr Poole, Mr Davidson and Mr Wilson. In relation to the steps taken by the employer to explain the terms of the SMS Agreement and the effect of those terms, Mr Perkins declared that a meeting was held with employees at a "Mudgee residence" of the employer on 10 September 2023 and at the Steelers Club in Wollongong on 11 September 2023, and that an oral presentation was made. The outline of the contents of the oral presentation indicates that its focus was on differences between the SMS Agreement and the BCMI Award.

[16] In relation to the explanation of the terms of the SMS Agreement to employees with particular circumstances and needs, Mr Perkins said that this was undertaken via the meetings at Mudgee and Wollongong on 10 and 11 September respectively. Employees were notified of the time and place for the vote and the voting method in the ballot letter sent on 5 September 2023. The voting was said to have been conducted by secret ballot commencing at 6.00 am on Wednesday, 13 September and to have closed at 6.00 pm on Friday, 15 September 2023. It was also declared by Mr Perkins that the ballot was conducted at the employer supplied residence at Mudgee and that the ballot process allowed employees to collect a ballot paper that had no employee identification included on it. The ballot process allowed for a "proxy" to vote on behalf of any employee who wished to cast a vote and was not able to be present at the Mudgee site. The SMS Agreement was said to have been made on 15 September 2023.

[17] In relation to how the employees who were requested to vote on the Agreement had an interest in the terms of the Agreement and were sufficiently representative having regard to the employees the Agreement is expressed to cover, Mr Perkins declared:

[19] In accordance with usual process, after being filed with the Commission, the SMS Agreement was sent to the Commission's Agreements Team to assess its compliance with the statutory approval requirements in the FW Act. The Agreements Team produced an analysis in the form of a checklist on 6 October 2023, and the matter was allocated to the Deputy President for determination. The checklist identified several provisions of the SMS Agreement which were potentially inconsistent with the NES and that the SMS Agreement stated that where there is any inconsistency with the NES and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.

[20] In relation to BOOT issues, the checklist identified that the rates in the SMS Agreement are 10.01% to 10.03% above those in the BCMI Award. In relation to part-time employees, it was noted that in contrast to the BCMI Award, the SMS Agreement does not mention that there must be an agreement in writing at the time of engagement in relation to a regular pattern of work, that alterations must be in writing and that all time worked in excess of the mutually agreed hours, is overtime. In relation to casual employees, it was noted that clause 10.4 of the SMS Agreement allows for employment of any employees on a casual basis. In contrast, the BCMI Award only allows casual employment for staff employees employed under Schedule B of that Award, and not production and engineering employees employed under Schedule A, and there is no like for like comparison between the BCMI Award and the SMS Agreement. It is also noted that casual employees under the SMS Agreement are paid the same percentages above the BCMI Award as permanent employees. The Team referred to the Full Bench Decision in CFMEU v SESLS Industrial Pty Ltd [4] (SESLS) in relation to these issues and stated that once they were resolved, there would appear to be no other issue that would cause concern in relation to the Agreement passing the BOOT.

[21] On 9 October 2024, the MEU corresponded with the Agreements Team requesting the provision of copies of the Form F16, Form F17 and any associated documents lodged in support of the application for approval of the SMS Agreement. On 11 October 2023, copies of those documents, with certain information redacted, were provided to the MEU. The Form F16 Application for approval of the SMS Agreement as provided to the MEU, had the name of the contact person redacted (Mr Yvanoff). The Form F17B Declaration had the following details redacted:

The name of the declarant of the Form F17B (Mr Perkins);

Demographics of the group of employees who made the SMS Agreement including that those employees were all casual employees;

The number of employees who cast a valid vote; and

The number of employees in the four-person voting cohort who voted to approve the SMS Agreement.

[22] Also on 11 October 2023, the Deputy President's Associate corresponded with SMS advising that the Deputy President had concerns that the copy of the SMS Agreement submitted was unsigned and that provisions of the Agreement in relation to casual conversion, family and domestic violence leave and redundancy, appeared to be inconsistent with the NES. In relation to the BOOT, the correspondence advised that overtime and engagement provisions for part-time employees were inconsistent with the terms of the BCMI Award so that those employees may not be better off. SMS was invited to provide submissions or undertakings to resolve these issues and did so by correspondence sent on 30 October 2023.

[23] On 16 October 2024, the MEU filed a submission, directed to the Chambers of the Deputy President, advising that it held concerns with the content of the Agreement and that the Agreements Team had provided the MEU with redacted copies of the approval documents. It was asserted in the submission that the redactions included information in the documents that related directly to the authenticity of the bargaining process. The MEU requested that the Deputy President provide unredacted copies of the documents, citing Full Bench decisions in CFMEU v Ron Southon Pty Ltd[5] (Ron Southon) and CFMMEU v Mobilise Group Pty Ltd[6] (Mobilise Group) as authority for the proposition that consistent with the principles of open justice, and absent special circumstances warranting confidentiality, Commission files are available for inspection by any member of the public. The MEU's submission also highlighted that there were only four employees covered by the Agreement and asserted that the unredacted Form F17B was essential to enable the Union to determine how many of those employees were employed on a casual basis. The MEU stated that it wished to be heard in opposition to the approval of the SMS Agreement, requested a reasonable period after the provision of the unredacted documents, to outline the nature of its objections and advised that it would await any further direction from the Deputy President.

[24] By correspondence sent on 16 October 2023, the MEU was informed that the Deputy President refused the request for the provision of unredacted documents and considered that the MEU had been provided with sufficient information to raise any concerns it wished to raise. The MEU was also informed that it would be given until 5.00 pm on Friday 20 October to file any written submissions and other material it wished to file in respect of the application. On 23 October 2023, the MEU filed a further submission raising additional concerns about the SMS Agreement. Those submissions, amounting to 25 pages can be summarised as follows. The MEU repeated its request for the provision of the unredacted documents asserting that the refusal to provide them was inconsistent with Full Bench authority (again citing Ron Southon and Mobilise Group) and the documents were central to the submissions. The MEU submissions also addressed the matters dealt with in the Statement of Principles pointing out that they related to the authenticity or moral authority of an agreement as discussed by the Full Court of the Federal Court in One Key Workforce v Construction, Forestry, Mining and Energy Union[7] (One Key) and in the earlier decision of the Federal Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission.[8]

[25] The MEU submissions emphasised firstly, that there was nothing before the Commission that could possibly result in the Commission being satisfied as to s.188(2) of the Act and that responses to relevant questions in the Form F17B do not engage with that question. Secondly it was contended that the information presently available to the Union (noting the Deputy President's refusal to provide unredacted copies of documents filed in support of approval) indicated that the number of employees who made the Agreement is at odds with the scope of the Agreement, and absent information about classifications, types of employment, mine sites where each of the four employees worked and whether they were paid in accordance with the SMS Agreement, meant that it was incapable of approval. Thirdly, the MEU pointed to the lack of real bargaining for the Agreement as evidenced by the documents filed. Fourthly reference was made to the SMS Agreement being "base line". Fifthly, the MEU made the following submissions in relation to persons it said appeared to be involved in the making of the SMS Agreement:

[26] The assertions in relation to the involvement of Mr Perkins and Mr Yvanoff in SMS and Nortek, were supported by Company Extracts from the Australian Securities and Investment Commission (ASIC) data base for SMS and entities holding shares in that Company[9]. We discuss these documents later. Also appended to the MEU submission was a copy of the Nortek Agreement bearing the names of Mr Yvanoff and Mr Perkins as signatories for the undertakings provided, the Agreement and the application documents.[10] The MEU also asserted that the SMS Agreement had been made for the purpose of the employer obtaining "a four-year insurance policy from the prospect of genuine bargaining" and that it was incapable of approval pursuant to s. 188(2) of the FW Act. The submissions went on to assert issues with the BOOT additional to those identified in the Form F17B as being less beneficial, including the base rates in the SMS Agreement not being high enough to cover allowances, provisions relating to the hours of work of part-time employees, annual leave provisions, notice for personal/carer's leave being inconsistent with the NES, deductions from leave taken for less than half a shift, public holiday rates, shift penalties, shift length and time worked as ordinary hours on shift, change of roster provisions, direction to work at different mine sites, notice periods in the event of redundancy, meals or meal allowance on non-rostered overtime, and non-provision of time off in lieu of overtime. In addition to these matters, issues were raised with the inclusion of casual employment in the SMS Agreement when it is not provided for in the Part of the BCMI Award covering employees who would be covered by the Agreement. In relation to casual employment, it was also submitted that the fact that the casual ordinary rate, excluding the casual loading, would be used to calculate rates for casual employees working on shiftwork, public holidays, overtime and weekend work, was contrary to the provisions in the BCMI Award which do allow for the employment of casuals, in classifications other than those provided for in the Agreement.

[27] Issue was also taken with the explanation provided by SMS to employees covered by the Agreement and omissions in the document provided to employees headed: "Summary of key terms & conditions". In this regard, reference was made to the Statement of Principles, the ballot process undertaken for approval of the SMS Agreement, and the fact that the Agreement was not signed in accordance with the requirements of the Act. For those reasons, it was submitted that the SMS Agreement was incapable of approval and that the application for approval should be dismissed.

[38] When the application for approval of the SMS Agreement was made on 29 September 2024, an enterprise agreement known as the Nortek Developments NSW South Western Enterprise Agreement 2022 (Nortek Agreement) was in effect. The application for approval of the Nortek Agreement was made on 1 September 2022. The Nortek Agreement was approved by Commissioner McKinnon in a Decision[11] issued on 10 October 2022 and operates from 17 October 2022. The Nortek Agreement has a nominal expiry date of 1 July 2025.

[39] Information on the file in relation to the Nortek Agreement shows that the application for its approval was made by Mr Jesse Yvanoff, in the capacity of Nortek's Business Manager. The Nortek Agreement was signed by Mr Sam Perkins in the capacity of Nortek's General Manager. According to the Form F17 Employer declaration filed in support of the application for approval of the Nortek Agreement, also made by Mr Sam Perkins, Nortek is a subcontractor to black coal industry mine owners and is in the business of installing and maintaining conveyor installations, fixed plant civil works and general labour hire. The Form F17 Declaration also states that 119 employees were covered by the Nortek Agreement when it was made, including 89 casual employees.

[40] Clause 1 of the Nortek Agreement states that Nortek is a project-based contractor specialising in the civil, mechanical and electrical installation of conveyor, mechanical and electrical systems and that Nortek supports completed installs with ongoing repair, maintenance and upgrade programs. The parties to the Nortek Agreement are the Nortek and its employees in the South Western Mining District of New South Wales, defined in clause 5.17 as "the geographical boundaries as determined by the Union".

[41] The MEU objected to the approval of the Nortek Agreement asserting that the Agreement had not been genuinely agreed because a representation was made to employees orally and as part of a PowerPoint slide presentation explaining the terms of the Nortek Agreement, that on approval, full time positions would be created for a significant majority of the casual employees of Nortek. Commissioner McKinnon accepted the submissions of the MEU on this point, and found that, pursuant to s. 188(1)(c) there was a concern as to whether the Agreement was genuinely agreed. In this regard, the Commissioner noted that of the 119 employees covered by the Agreement, 89 were casual employees and that it was likely at least some casual employees relied on the representation. To resolve BOOT issues associated with these provisions, the Commissioner accepted an undertaking given by Nortek that subject to the company being awarded a particular contract, it would undertake a review and offer to convert the employment of casual employees employed at the time the Agreement was made, and who were covered by the Agreement, to full time employment.

[42] In deciding to approve the Nortek Agreement, the Commissioner observed that the rates prescribed in the Agreement were at that time, between 31.51% and 47.47% above the rates in the BCMI Award, which was incorporated into the Agreement and applied where the Agreement is silent. The rates in the Nortek Agreement set out at Schedule 1, are as follows:

[43] As can be seen, the rates in the Nortek Agreement at the point it commenced operation on 17 October 2022 were higher than those in the SMS Agreement when it commenced operation on 4 December 2023 and continue to be higher. The rates in the Nortek Agreement were back paid from 1 July 2022. The classification structure in the Nortek Agreement includes a classification designated "New to Industry". The hourly rate specified for employees in that classification was $35.10 when the Nortek Agreement was approved and increased to $35.54 per hour from 1 July 2023. For the classification of Inexperienced (Operators and Trades), an hourly rate of $39.36 was provided for when the Nortek Agreement commenced, and that rate increased to $39.85 per hour from 1 July 2023. The rate for these classifications increased further from 1 July 2024.

[44] In contrast, the SMS Agreement does not contain a classification level for employees new to the industry and the entry level in that Agreement is designated "Inexperienced (Operators and Trades)". The SMS Agreement prescribes a rate of $31.05 per hour for Inexperienced Operators and Trades and an increase to that rate of 2% per annum is provided for in clause 13.2 of the SMS Agreement from 1 July in each year from 2024 to 2027. Accordingly, the rate for Inexperienced (Operators and Trades) in the SMS Agreement will increase to $31.67 (rounded to the nearest cent) on 1 July 2024 compared to a wage rate of $40.35 for the Inexperienced (Operators and Trades) classification in the Nortek Agreement from the same date. There are equivalent differences in the rates for other classifications.

[45] A further difference between the Nortek Agreement and the SMS Agreement is that the casual employment provisions in clause 12.4 of the Nortek Agreement define the "ordinary time rate" for casual employees to include the casual loading of 25%. As a result, the multiplier for overtime rates, shiftwork rates, Saturday and Sunday penalties for ordinary work and public holiday rates is applied to the casual rate including the 25% loading. The casual loading in the SMS Agreement is not compounded by penalty rates including those applicable to work in ordinary time. The Nortek Agreement includes at clause 12.4(a), a provision stating that a casual employee's employment comes to an end at the completion of each shift. The same provision is found at clause 10.4(a) of the SMS Agreement. This provision is not found in the BCMI Award which provides for casual employment only in the classifications in Schedule B - Staff Employment of the BCMIA.

[52] As we have stated, the MEU sought, and was granted, Orders requiring Mr Perkins, the General Manager, Director and Secretary of SMS and Mr Yvanoff, Stakeholder Manager, to attend before the Commission and give evidence in the appeal. The MEU sought to adduce and rely on new evidence in the appeal in the form of oral evidence given by Mr Yvanoff and Mr Perkins and the bundle of material produced by Nortek and SMS in response to a notice to produce issued at the request of the MEU. The MEU also relied on the unredacted documents filed as part of the application for approval of the SMS Agreement. The notices to SMS required the production of documents relating to the recruitment, employment and transfer of employees who were copied into emails by which approval documents related to the SMS Agreement were sent: Luke Sissons, Robert Poole, William Davidson, Mark Hatch and Paul Wilson (the relevant employees), including contracts of employment, tax file declarations, rosters, pay slips or other documents as evidence that the they employed by SMS at the relevant time. The MEU also sought documents relating to the registration of SMS for Coal Industry Portable Long Service Leave Scheme and obtaining a workers compensation policy. Further, the MEU sought documents evidencing communications between SMS and the relevant employees on or before 1 August 2023 in relation to their employment with SMS and the making of the SMS Agreement. The Notice to Nortek required production of documents relating to the employment of any of the relevant employees.

[53] The documents produced by SMS and Nortek without objection included:

Letters of offer from Nortek to three of the four employees who made the SMS Agreement - Luke Sissons, Robert Poole and William Davidson;

Letters of offer from SMS to Mr Wilson, Mr Sissons, Mr Davidson, and Mr Poole;

Payslips for Mr Wilson, Mr Sissons, Mr Poole and Mr Davidson issued by Nortek and SMS between 6 October 2021 and 15 September 2023 when the Agreement was made;

Correspondence and documents relating to SMS obtaining its workers compensation policy with Coal Mines Insurance Pty Ltd and registering with Coal LSL to pay the long service leave levy; and

Correspondence in relation to the first draft of the Agreement.

[54] Section 607(2) of the FW Act confers a discretion on the Full Bench to "admit further evidence" and "take into account any other information" on appeal. The approach to whether the discretion is exercised to admit new evidence or to consider further material is set out in Akins v National Australia Bank[13] and requires that three conditions are met:

it must be established that the evidence could not have been obtained or adduced with reasonable diligence for use at first instance;

it must be evidence which is of such a high degree of probative value that there is a probability that there would have been a different result at first instance; and

the evidence must be credible.

[55] It has also been recognised that in considering whether to exercise the discretion in s. 607(2) it is permissible in an appropriate case to depart from the principles set out in Akins and they need not be strictly applied.[14] An appropriate case may include that the Commission receiving the evidence is consistent with the requirement that it decide matters according to equity, good conscience and the substantial merits of the case.

[56] We decided to receive the documents and to hear the new evidence upon which the MEU sought to rely. We were satisfied that it was appropriate in this case to admit that evidence for the following reasons. The MEU was denied access to the unredacted Form F16 and Form F17, which when made available to the Union in the appeal, supported the assertions it had raised in its submissions at first instance about the authenticity of the SMS Agreement. The Deputy President did not conduct a hearing and curtailed the role of the MEU in the proceedings relating to approval so that the Union was precluded from placing the evidence it sought to call, before the Deputy President. The MEU was diligent in its attempts to place evidence before the Commission at first instance, and there were no further steps that the Union could reasonably have taken in this regard. We were also of the view that the matters canvassed in the MEU's submissions were not hypothetical and raised a real possibility that the SMS Agreement was not a genuine exercise in bargaining. The new evidence comprises business records of Nortek and SMS and oral evidence from two persons involved in the making of the Agreement. The records are credible and the evidence if accepted, would establish to the required standard, that the SMS Agreement was not genuinely agreed and was not capable of approval.

[57] The documents produced by SMS and Nortek were formulated into a Court Book for reference in the appeal. The documentary and oral evidence we received in the appeal can be summarised as follows.

[61] By letter dated 31 March 2023, Mr Sissons was offered conditional employment with Nortek as a casual Operator (Experienced), at the Dartbrook Mine, with a start date to be advised on the basis that his terms and conditions of employment were governed by the BCMI Award. The rate of pay offered to Mr Sissons was $59.41 per hour for a roster described as "Week Day Day shift". Mr Sissons signed an acceptance of the offer on 31 March 2023. The employment offer was signed for Nortek by Mr Perkins, General Manager - Underground Operations.[18]

[62] By letter dated 5 May 2023 Mr Sissons was offered conditional employment with Nortek as casual Operator (Experienced) at the Ulan Mine, with a start date to be advised on the basis that his terms and conditions of employment were governed by the BCMI Award, and not the Nortek Agreement. The rate of pay offered was $64 per hour for a roster described as "Week Day Night Shift". Mr Sissons signed an acceptance of the offer on 5 May 2023. The employment offer was signed for Nortek by Mr Perkins, General Manager - Underground Operations.[19]

[63] By letter dated 22 June 2023, Mr Sissons was offered conditional employment with SMS as a casual Operator, at the Ulan Mine with a start date of 26 June 2023 on the basis that terms and conditions of employment were governed by the BCMI Award. The rate of pay offered was $64 per hour on a "Weekday Night shift" roster. Mr Sissons signed an acceptance of the offer on 23 June 2023. The employment offer was signed for SMS by Mr Sam Perkins, General Manager - Underground Operations.[20]

[64] Pay slips produced by SMS for Mr Sissons showed that he was paid at the rate of $64 per hour for the pay period from 26 June 2023 to 2 July 2023 and received a "Ulan KPI" payment of $14.29 in addition. The payslips for 17 July 2023 to 21 August 2023 indicated an hourly rate of $69 and a "Ulan KPI 7 Day Roster" payment of $8.16 per hour. For the period from 22 August 2023 to 4 September 2023, Mr Sissons was paid an amount of $70 per hour. For the period from 28 August 2023 to 1 October 2023, Mr Sissons was paid $57 per hour. Mr Sissons also received a "Ulan KPI" payment ranging from $8.16 to $14.2857 for the period. Mr Sissons was paid overtime hours at $70 per hour.[21]

[70] The letters of offer from SMS to Mr Wilson, Mr Sissons, Mr Poole and Mr Davidson were accompanied by a document in the form of an audit report, indicating that each of the letters of offer was created by Marcus Nuutinen whose email address was a Nortek address.[27] These documents are in the same form as others provided with the letters of offer from Nortek that were also produced. Other documents produced by SMS included a form completed by Ms Melissa Bennett, Commercial Manager of SMS requesting Coal Mines Insurance Pty Ltd to issue the Trustee for Specialised Mine Services Unit Trust trading as Specialised Mine Services Pty Ltd, with a policy to provide indemnity under the Workers Compensation Act 1987 (NSW) for the period of 15 June 2023 to 30 June 2023. The day-to-day business activity of SMS was said to be "providing contracted labour for underground black coal mines".[28] The employees of SMS were said to be classified in the trades of electrician and fitter and to be paid under the BCMI Award. The completed form stated that 70% of SMS' activities were undertaken on an underground mine site, and 10% of activities involved operational mining service onsite. Total employee numbers were said to be five, with estimated wages during the insurance period being $31,150 including superannuation, and it was also stated that no employees were working in New South Wales in non-coal industry business activities.[29]

[71] Documents evidencing registration of SMS with Coal LSL, and the creation of an account with that body were produced by SMS, and tendered by the MEU, including employer registration forms dated 7 July 2023 and 3 August 2023.[30] The forms were signed by Ms Bennett as the authorised officer but included Ms Sherry Perkins as an additional contact and stated Ms Perkins' position as "Director". Ms Perkins is the wife of Mr Perkins.

[72] A draft of the SMS Agreement was also produced and marked as "EA Version 1".[31] In that draft, the heading of clause 11.4 dealing with casual employment is highlighted. The clause does not contain an equivalent provision to clause 10.4(iv) as it appears in the final version of the SMS Agreement, providing that the 25% casual loading is not compounded by shift rates, public holiday rates and rates for weekend work.

[75] In contrast with the oral evidence given by Mr Yvanoff, the documents produced by SMS show that Mr Sissons, Mr Poole and Mr Davidson were employed by Nortek prior to their employment with SMS. There was no documentation evidencing that Mr Wilson was employed by Nortek prior to commencing with SMS. Mr Yvanoff was questioned about the employment history of those persons. Mr Yvanoff accepted that Mr Sissons and Mr Poole were employed by Nortek prior to commencing with SMS. Mr Yvanoff also said that Mr Davidson was not employed by Nortek and that Mr Wilson may have been. Later, Mr Yvanoff said that Mr Wilson was not employed by Nortek and had been employed by SMS on 3 July 2023 at the Dendrobium Mine and the Metropolitan Mine. Mr Yvanoff was unable to explain why Mr Sissons, and Mr Poole were employed by Nortek undertaking work covered by the Nortek Agreement and were told in documents relating to their employment with that company, that their terms and conditions of employment would be governed by the BCMI Award. Mr Yvanoff said that this must have been an error.[40]

[76] As we have stated, contrary to Mr Yvanoff's evidence, the documents produced by Nortek show that Mr Davidson was offered employment with Nortek on 22 May and commenced on 26 May 2022 and was offered employment with SMS on 22 June 2023 and commenced on 26 June 2023. Those documents also make clear that Mr Sissons, Mr Poole and Mr Davidson were being paid rates in excess of the rates in the SMS Agreement at the point they purported to make that Agreement. The wage rates being paid to those employees were also in excess of the wage rates in the Nortek Agreement.

[77] In relation to the circumstances in which the former Nortek employees, left their employment with that Company and commenced employment with SMS, Mr Yvanoff said that he thought there was "some form of separation with Nortek before we got the contract or at least the ability to supply employees at Ulan and these were prime candidates for us to put on".[41] Mr Yvanoff later said that Nortek had the contract with Ulan and the capability to "put people on" and that the Mr Poole, Mr Sissons and Mr Davidson were employed by Nortek to perform work at Ulan, before they were employed by SMS.[42] Mr Yvanoff had the following exchange with Ms Sarlos:

[78] Later, Mr Yvanoff said that the former employees of Nortek "were offered employment with SMS and they accepted that employment. So they did, in effect, resign from Nortek".[44] In relation to how the SMS Agreement was negotiated, Mr Yvanoff said that the employees who made the SMS Agreement were told, while they were still working for Nortek, that it was the intention of SMS to make an enterprise agreement.[45] This occurred because there were issues around people leaving and it was necessary to "placate some of that anxiety" by holding discussions with employees about how a longer arrangement with Glencore - the owner of Ulan - could be made,[46] and the need to make an enterprise agreement because the Nortek Agreement rates were seen as being too high.[47]

[79] According to Mr Yvanoff, the employees with whom he had this discussion requested that something be put together so that they could see what an enterprise agreement would look like and were provided with a draft of the SMS Agreement by email on 20 July. [48] The covering email stated: "Please find attached our draft vI for discussion in the coming weeks.[49] Mr Yvanoff said that at this point, SMS had not begun bargaining and did not have an intention to bargain.[50] Mr Yvanoff also agreed that less than two weeks later, on 1 August 2023, SMS indicated an interest in commencing bargaining and sent out the NERR on 12 August 2023.

[80] When asked whether Mr Wilson was provided with a NERR, Mr Yvanoff said he did not remember and agreed that there was no evidence that this had occurred. Between the draft Agreement being sent to employees on 20 July 2023 and the ballot letter being sent on 5 September 2023, Mr Yvanoff could not recall if any other versions of the Agreement had circulated. [51] SMS did not produce a version of that email showing how many employees it was sent to and the identity of those employees. Mr Yvanoff's evidence about the explanation of the terms of the SMS Agreement provided to the four employees with whom it was made, was that:

he explained the terms of the SMS Agreement at the Mudgee and Wollongong meetings;

the Mudgee meeting was attended by Mr Sissons and Mr Davidson and the Wollongong meeting was attended by Mr Wilson;

• Mr Poole was not available to attend either meeting, but Mr Yvanoff had a telephone discussion with Mr Poole in similar terms to the discussions at the meetings;[52]

• the discussion about casual employment under the SMS Agreement related to the casual rate of pay and did not cover the status of casual employees or that the BCMI Award did not provide for casual employment for employees in equivalent classifications to those covered by the SMS Agreement.[53]

[81] In response to questions about whether the employees were informed about the need to create a new entity because Nortek was too expensive, Mr Yvanoff confirmed that the employees were told about the "strategy" during the agreement explanation presentation.[54] In response to questions about the differing rates of pay of the four SMS employees, Mr Yvanoff confirmed that this was due to the rosters worked by the employees because the rates of pay were "all in one rates".[55] Mr Yvanoff said that the rate of pay "was never worked out based on what you know in the award as an ordinary rate" but rather SMS ensured that it "met, at least, that total number if they worked those rosters under the award".[56] Mr Yvanoff also agreed that the contracted rates were based on rosters and if the rosters changed, the rate would also change.[57] In relation to the differing rosters, Mr Yvanoff said that this would be changed based on the needs of the client and as the employees were employed on a casual basis, SMS could supply workers as needed by Ulan.[58] Mr Yvanoff confirmed that SMS had a direct relationship with Ulan even though it did not have a contract with that company.[59] In response to a question about whether clause 10.4(a) of the Agreement had been explained to the employees, Mr Yvanoff confirmed that he had told the employees that at the end of every shift their employment ends, except to the extent that they had a roster.[60] Mr Yvanoff also confirmed that it was SMS' intention for the employees to continue their employment under the roster.

[82] Upon being informed by Ms Sarlos (with reference to the payslips produced by Nortek) that the three Nortek employees who took up employment with SMS, not being paid the rates in the Nortek Agreement, Mr Yvanoff purported to express surprise, saying "they weren't?".[61]

[83] Mr Sam Perkins made the Form 17B - Employer's declaration in his capacity as General Manager for SMS. Mr Perkins confirmed that the Form F17B for the SMS Agreement was completed by Mr Yvanoff, but said that he was confident the matters declared were accurate.[65] Mr Perkins also said that his role in the business is operational and he lets Mr Yvanoff take the lead on enterprise agreement and award matters.[66] Mr Perkins said that he was in the room when the meeting was held in Mudgee to explain the SMS Agreement to the employees and there were "six to seven guys...or thereabout" in the room[67] who were "part of that contract out there with Ulan.[68] Mr Perkins could not recall the names of all the employees who attended the meeting and went on to say: "Scott, I believe, was one of them. Will, Scott, two - the two Wesley, father and son, were there, I believe. Tayne Leeman(?)." [69] Mr Perkins was taken to the Form F17B and acknowledged that he had made a declaration to the Commission about what was said in the Wollongong meeting, but accepted that he had based his declaration on what Mr Yvanoff had told him was said at the meeting.[70]

[84] Mr Perkins said that a detailed discussion was undertaken around the casual status and how the Agreement term differed from the Award. In this regard, a proposition was put to Mr Perkins that the Agreement permits SMS to engage production employees on a casual basis even though this is prohibited under the BCMI Award. Mr Perkins initially said that the employees did not perform production work and were engaged to perform "secondary support type" work[71]. However, Mr Perkins later accepted that employees were engaged by SMS to perform work underground involving maintenance, ventilation, conveyer work and the overhauling of production equipment.[72] In response to a question as to whether an explanation was provided to SMS employees that they could be employed as casual employees under the Agreement but not under the BCMI Award, Mr Perkins said that he could not remember such a discussion and could not remember which employees were in the room when the discussion was held.[73] Mr Perkins explained this by stating that at the time he had "eighty-something" employees, and in response to a question as to whether those employees were employed by SMS, said that eventually they would be and that it would be good for SMS to have more employees. Mr Perkins later said that SMS currently had three or four employees.[74]

[85] Mr Perkins was also questioned about his business vision for SMS and the relationship between SMS and Nortek. Mr Perkins said that he is the Director of SMS and it is his entity moving forward. Mr Perkins' wife Sherry-Anne is the sole director of Nortek[75] and at the time he gave his evidence, Mr Perkins was the Operations/General Manager of that company.[76] In relation to his role with Nortek, Mr Perkins had the following exchange with Ms Sarlos:

[88] Mr Perkins also said that when he first came to New South Wales he did not know much about enterprise agreements, and when Nortek came to sites to try to get work, the company was told that it needed to have an enterprise agreement.[85] When asked about whose idea it was to bring the three employees who made the SMS Agreement across from Nortek, Mr Perkins said that it was a collective decision, but mainly his idea. Mr Perkins was also asked to explain the reason for making the SMS Agreement and said that to operate on certain sites in New South Wales, there needs to be an enterprise agreement.[86] Mr Perkins was not sure whether an enterprise agreement was required for the Ulan Mine but confirmed that SMS does not have a contract to perform work at Ulan.[87] Mr Perkins said that SMS employees who perform work at the Ulan Mine are contracted through Nortek under its arrangement with that Mine.[88] Mr Perkins accepted that those employees ceased their employment with Nortek and were then hired by SMS to perform work under the Nortek contract at the Ulan Mine. When asked about whether there was a break in employment for those employees between ceasing employment with Nortek and commencing employment with SMS, Mr Perkins said he could not remember but accepted that if there was a break, it would not have been more than a month.[89]

[89] Mr Perkins agreed that none of the employees who voted to approve the SMS Agreement were paid the rates in that Agreement and that they continued to be paid the rates set out in their employment contracts.[90] Mr Perkins maintained that he always tried to be the highest payer on a site, or close to that level, and he wanted to pay employees the most money they could be paid.[91] When asked about what purpose it serves to have an agreement with lower rates, Mr Perkins said that "an enterprise agreement is based off a base rate that has to be agreed between the tier 1 company and the contracting company" and "if you can pay your guys more than above the EA, that's not a legal (sic) thing to do, you can do that." [92]

[90] In response to a question about what was discussed in bargaining with the employees about the pay rates and whether the employees were concerned that the rates in the Agreement were far below what they were paid, Mr Perkins said there was never any concern or otherwise the employees would not have come across from Nortek[93]. Mr Perkins was then taken to the rates in Schedule 1 to the Nortek Agreement[94] and the SMS Agreement[95]. Mr Perkins confirmed that the employees who made the SMS Agreement were informed that they would retain their higher pay rates notwithstanding that the rates in the SMS Agreement are lower.[96] Mr Perkins also said that it was Mr Yvanoff who went through the clauses of the Agreement and explained them to the employees. Mr Perkins accepted that there was no explanation given to employees about the differences between the terms of the Nortek Agreement and the terms of the SMS Agreement.[97]

[91] The MEU contends that permission to appeal should be granted, the appeal upheld, the Decision to approve the SMS Agreement should be quashed and the matter be redetermined by the Full Bench. The MEU's first and second grounds of appeal relate to the Deputy President's decision to refuse the MEU access to unredacted versions of the documents filed in support of the application for approval of the Agreement. The MEU submits that it requested access to the unredacted documents to obtain information contained in the Form F17B in relation to casual employment and the identity of those involved in the agreement making process. This information is said to be directly relevant to appeal grounds 3, 4 and 5.

[92] By declining to provide the unredacted documents, the MEU submits that the Deputy President erred by acting contrary to the principles of open justice. Although the Deputy President acceded to the MEU's request to be heard, the MEU contends that it was required to make its submissions without any knowledge of, relevantly, the casual status of the voting cohort and their undisclosed relationship with Nortek. The absence of this knowledge deprived the MEU of the ability to seek further information, including to file notices requiring the production of documents by Nortek and SMS to clarify the nature of that relationship. The MEU submits that without that information, it was denied a real opportunity to influence the Commission's determination. In the MEU's view, procedural fairness required this information to be made available to the union prior to it making its submissions, and the Deputy President was in error to deny it.

[93] In oral submissions at the hearing of the appeal, the MEU asserted that the four employees who made the SMS Agreement were paid above the rates in that Agreement and had been employed by Nortek under similar contracts of employment. The MEU also asserted that the casual status of the employees who made the Agreement, and their relationship with Nortek was known to the Commission. From these facts, the MEU contended that one of two situations arose:

the employees who made the Agreement were engaged contrary to the exclusions in the BCMI Award on the engagement of production and engineering employees as casuals; or

the employees who made the Agreement were properly employed as casuals under the Nortek Agreement.

[94] Appeal grounds 3 - 5 concern whether the Agreement was genuinely agreed as required by s. 186(2)(a) of the FW Act. The MEU contends that the Deputy President erred in failing to consider the Statement of Principles in accordance with s. 188B. The Decision does not contemplate the Statement of Principles at all, and instead, identifies a blanket satisfaction of ss. 186 and 188 and an express consideration of only the matters set out at [9] of the Decision. In the MEU's oral submission, it contended that this lacuna of evidence is a process devoid of the active intellectual consideration which the legislation required.[98] Further, it was put that the Deputy President's potted consideration was not enough, and specific consideration of each relevant principle was required.[99]

[95] The MEU also referred to the Full Bench decision of Health Services Union v Clinpath Laboratories Pty Ltd & Strath and Others[100] where it was observed that:

[96] It is the MEU's submission that this principle can be expanded in light of the new obligation placed on the Commission, to consider the Statement of Principles before it can reach the requisite standard of satisfaction when determining if an enterprise agreement has been genuinely agreed. Where a decision maker is required to take into account, or have regard to, a prescribed set of circumstances, then that requirement is a jurisdictional prerequisite to the exercise of power.[101] Without an active intellectual process undertaken in the process of forming any state of satisfaction for a matter that is live and potentially dispositive of the application, a failure to deal with it in the published reasons may raise a strong inference that it has been overlooked. This is what the MEU submits occurred in the present case.[102]

[97] That the SMS Agreement had not been authentically agreed, can be strongly inferred from the evidence of Mr Yvanoff and Mr Perkins. The MEU submits that paragraph [9] of the Decision evidences that the Deputy President engaged in a different thought process that did not have regard to the fact that there was a small cohort of employees who were paid well above the rates of the Agreement and both existing terms and conditions of employment and those under the Agreement - matters which the MEU submits are necessary to consider under s. 188(2) and principles 17 and 18.[103] Although the Deputy President appears to have considered several of the matters raised by SMS in response to the MEU's concerns, the Statement of Principles was not treated as a matter of significance in the agreement making process. It is submitted that this was in error, and the Deputy President failed to reach the requisite state of satisfaction by failing to take into account matters that there was a statutory obligation to take into account; misunderstood the nature of the task invested in her by s. 188(1); and/or reached a state of satisfaction for the purposes of s. 188(1) when such a satisfaction was not available on the material before her.

[98] In the MEU's view, had the Deputy President properly taken into account the Statement of Principles, it would have been apparent that:

Principle 8: For the reasons set out in relation to appeal ground 5, all reasonable steps were not taken to explain the terms of the Agreement.

Principle 10: The explanation of the terms was both misleading and incorrect. The unredacted Form F17B identifies that each of the four employees who cast a vote in the ballot were casual employees who were either not covered by the Award on account of that status or were employed by SMS in breach of the limitation on casual employment in the Award. There is no evidence to suggest that this lack of clarity was addressed but instead, employees were provided with an explanation against the Award to equip them with an understanding of how the terms and conditions of employment would change if the Agreement was approved, in circumstances where the Award either did not cover them, or they were engaged in breach of the limitation on casual employment in the Award.

Principle 12: There was no record or summary kept of the oral explanations. This was a matter raised not only by the MEU at first instance, but also by Commission staff in the initial review of the Agreement. As foreshadowed by Commission staff, had this matter been dealt with as one of significance, the Deputy President ought to have sought more information to remedy the absence thereof in reaching the requisite state of satisfaction for both ss. 188(1) and (4A), and 180(5).

Principle 17: For the reasons set out in relation to appeal ground 4, the employees were not, and the Commission did not have enough information upon which it could determine, that the employees were, sufficiently interested in, and representative of, the employees to be covered by the Agreement.

• Principle 18: The Agreement was not an exercise in authentic agreement making, of the kind discussed by a Full Bench of the Commission in Shop, Distributive and Allied Employees Association v Allen Family Pty Ltd.[104] The circumstances under which the voter cohort came to be employed by SMS remain opaque, and their relationship with Nortek needed to be disclosed. Concerns about the involvement of Nortek management in the making of the Agreement, the intimate way in which the explanation was provided, and the conduct of the ballot being at the employer's residence should also have been considered.

[99] Further, in relation to the Deputy President's finding at paragraph [9](c) that the employees covered by the SMS Agreement were sufficiently experienced in bargaining, the MEU drew the Full Bench's attention to the oral evidence of Mr Yvanoff that he did not interrogate the employees experience in bargaining and that he knew one of the employees had only been in the coal industry since mid-2022.[105] To the extent that the conclusion at [9](c) of the Decision was directed at Principle 18, the MEU contends that it demonstrates a failure of the Deputy President to grapple with the task required and a failure to consider the requirements of Principle 18.[106]

[100] In relation to the fourth ground of appeal it is asserted that the Deputy President erred in being satisfied that the voter cohort had a sufficient interest and was sufficiently representative of the employees to be covered by the Agreement, in circumstances where there was no evidence upon which that state of satisfaction could be reached. The MEU submits that to determine that the employees had a sufficient interest in the terms of the Agreement, a relevant consideration was the actual rate of pay for the voter cohort of employees. However, the Deputy President had no evidence of the rates of pay for the relevant employees before her.

[101] Further, it is the MEU's submission that to determine that the employees were sufficiently representative having regard to classifications the Agreement is expressed to cover, details about the voter cohort were a relevant consideration. In particular, the classifications of the voter cohort were a necessary consideration, yet the only information which the Deputy President had before her was what could be inferred from the signature page of the Agreement. Even if that were considered, it only shows two of four classifications represented and was an insufficient basis upon which to be satisfied that the voting employees were representative of the cohort covered by the Agreement.

[102] The MEU also submits that the geographic location of the employees is relevant to a determination of whether the employees were sufficiently representative, yet the Deputy President had no evidence of where the voter cohort were located, only where the oral presentations were said to have been made. The MEU noted that the ballot was conducted in person in Mudgee and as such, either that precluded employees not in Mudgee from being able to vote in a free manner, which goes to a separate issue concerning the genuineness of the agreement, or the voter cohort were employed only in Mudgee. If it is the latter, the voter cohort were not sufficiently representative.

[103] In oral submissions, the MEU said that the fact the employees were paid above the Agreement rates should also cast serious doubt over whether they had a sufficient interest in the terms of the Agreement.[107] The MEU referred to the explanatory memorandum in relation to s. 188(2)(b) which relevantly states that "[a] small cohort of employees would also not be sufficiently representative where the agreement is intended to ultimately cover a much wider workforce, following transfers of employment, possibly within a corporate group"[108]. The MEU asserted that the whole voting cohort were casual employees and yet they agreed to terms of an agreement that may apply to part-time and full-time employees in the future. Taken with Mr Perkin's evidence that he hoped that employees of Nortek would go to work for SMS, the MEU submitted that this raises serious questions about whether the Agreement has been genuinely agreed.[109]

[104] The MEU submitted that by reaching a state of satisfaction that the requirements of s. 188 (and therefore, s. 188(2)) had been met, the Deputy President erred: in failing to take into account relevant matters, as set out above and/or by concluding that s. 188(2) was satisfied when such a satisfaction was unavailable having regard to the absence of information it was necessary to consider prior to reaching any state of satisfaction.

[105] Appeal ground 5 concerns alleged errors in the Deputy President's assessment of whether all reasonable steps were taken under s. 180(5). The MEU asserted that contrary to the Deputy President's conclusion that "the explanation of terms and the effect of the terms was sufficient to meet the requirements of the Act", the requirements of the FW Act are not a mandatory set of rules which must be complied with. Instead, the legislation calls for consideration of the explanation provided and a determination that the explanation provided amounted to all reasonable steps. The MEU submitted that the Deputy President's conclusion demonstrates a misunderstanding of the nature of the task required by ss. 180(5) and 188(4A). Alternatively, the MEU contended that in reaching that conclusion, the Deputy President did not consider, or give due weight to, matters raised by the MEU in respect of s. 180(5) by expressing a view that the explanation was "sufficient". According to the MEU, the conclusion that the explanation provided was sufficient is a view that could not have been reasonably formed.

[106] In support of this contention, the MEU submitted that the oral explanation of the terms is unknown beyond the general editorialising set out at question 22 of the Form F17B,[110] and the two-page table annexed to the ballot letter dated 5 September 2023[111] does not, contrary to the Respondent's description, present "key points and brief explanation of those points". Consequently, the MEU contends that the Deputy President erred in respect of s. 180(5) in that she failed to take into account the content of the oral explanation given by the employer in respect of the terms of the Agreement and in doing so, failed to perform the statutory task required by her.

[107] Alternatively, the MEU contended that the Deputy President erred in finding that s. 180(5) was otherwise satisfied when such a satisfaction was not available on the material before her. In oral submissions, the MEU said that principle 8 makes it clear that the explanation required for s. 180(5) should include, at a minimum, explaining to employees how the proposed agreement will alter their existing minimum entitlements and other terms and conditions of employment, and the table contained in the ballot letter was inadequate for this purpose.[112] It was also contended that without knowing the content of the explanation provided by way of oral presentation, it was not open to the Deputy President to be satisfied that all reasonable steps had been taken to ensure that the terms had been explained or that the employees genuinely agreed to the Agreement. [113]

[108] In relation to appeal ground 6(b), the MEU noted that in reaching the requisite state of satisfaction in respect of s. 186, the Decision expressly states nothing more than the Commission had undertaken its "usual practice" which resulted in SMS proffering the undertakings, and that the BOOT concerns were addressed by these undertakings, in particular undertaking 1. The MEU asserted that there is no reasoning provided in relation to which benefits and detriments were taken into account or how the global assessment was applied.

[109] The MEU's seventh ground of appeal relates to the undertakings filed by SMS on 30 October 2023. By appeal ground 7(a) the MEU asserted that contrary to the express terms of the Agreement, undertaking 1 does incorporate the Award into the Agreement and substantially changes the way the entitlements under the Agreement operate by requiring the Agreement to be read alongside the 34 clauses of the Award. This is a substantial change within the meaning of s. 190(3)(b) of the FW Act and the Deputy President erred in accepting undertaking 1. In appeal ground 7(b) the MEU asserted that undertaking 1 was proffered to address a concern that casuals would not be better off overall given the SMS Agreement deprives them of the casual loading in circumstances including on public holidays and for weekend work. Reverting to the Award for casual rates of pay in circumstances of an inconsistency does nothing to meet this concern, particularly where there is little difference between the Agreement and the Award on anything but rates of pay, and an undertaking promising employees the same as the BCMI Award, does not result in them being better off, particularly given the sole benefit of the SMS Agreement is the rate of pay.

[110] In relation to undertaking 4, the MEU asserted that it seeks to address the concern that the redundancy provisions in the Agreement are inconsistent with the NES, through providing that redundancy will be in accordance with the Award. The Award redundancy provisions are inconsistent with the NES, providing a lesser entitlement to redundancy for employees made redundant after one year, but less than two. It is submitted that neither undertaking meets the relevant concern and any satisfaction that the undertakings could meet the requirements was not reasonably formed, nor based on a correct understanding of law and, consequently, the requisite state of satisfaction was not reached. In those circumstances, the MEU contends that it was not open to the Deputy President to accept the undertakings.

[111] At the appeal hearing, the MEU also contended that Mr Sissons, Mr Davidson and Mr Poole were transferring employees within the meaning of s. 311 of the FW Act. In response to the Full Bench's question about how the MEU submitted that a transfer of business had occurred between Nortek and SMS, the union filed a note after the hearing of the appeal stating that the contracts of employment produced by SMS and Nortek before the Commission showed that:

On 26 May 2022 Mr Davidson commenced employment with Nortek at Appin Mine;

On 31 March 2023 Mr Sissons commenced employment with Nortek at Dartbrook Mine;

On 5 May 2023 Mr Sissons signed a new contract of employment with Nortek to perform work at Ulan Mine;

On 5 May 2023 Mr Poole commenced employment with Nortek at Ulan Mine;

On 23 June 2023 Mr Sisson commenced employment with SMS at Ulan Mine;

On 29 June 2023 Mr Davidson commenced employment with SMS at Ulan Mine;

On 8 July 2023 Mr Poole commenced employment with SMS at Ulan Mine.

[112] The work that the employees performed at Ulan Mine is work that has been described as either being outsourced from Nortek to the Respondent or performed by the Respondent for a contract or purchase order held by Nortek. For the purposes of s. 311 of the FW Act, the MEU submits that Nortek is the old employer, and SMS is the new employer. The MEU also submits that the employment of each of the employees with Nortek was terminated, satisfying the requirements of s. 311(1)(a) and within three months of the termination, the employees became employed by SMS, satisfying the requirements of s. 311(1)(b). The work that Mr Sissons and Mr Poole performed for the Respondent is the same as the work that they performed for Nortek, satisfying the requirements of s. 311(c) in respect of those employees. In relation to the work performed by Mr Davidson for Nortek, it was at least initially under a different position and at a different location to the work performed with the Respondent. Notwithstanding this, the MEU submitted that the work should be regarded as substantially the same as the work being performed for Nortek by the end of Mr Davidson's employment with that company. Consistent with the evidence, the MEU contends that Nortek had outsourced the work performed by the employees for SMS in the manner described by s. 311(4), and so s. 311(1)(d) is satisfied.

[113] In relation to s. 311(4), the MEU submitted that whether described as work that is outsourced, or work that is performed under a contract or purchase order held by Nortek, the work performed was work that had been outsourced by Nortek to SMS. On the basis that the employees were transferring employees, the MEU submitted that the explanation provided to the voting employees could not have been sufficient for the Deputy President to be satisfied that all reasonable steps had been taken by the Respondent to explain the terms of the SMS Agreement and their effect on the relevant employees.

[114] If the Commission accepts that the employees were transferring employees within the meaning of s. 311 of the FW Act, the MEU asserted that the transferring instrument will cover the new employer and the transferring employees in relation to the transferring work. Accordingly, by virtue of s. 313 of the FW Act, the Nortek Agreement continued to apply to Mr Sissons, Mr Poole and Mr Davidson, after the time that they became employed by SMS and will continue to apply until it reaches its nominal expiry date on 1 July 2025. This was not considered by either Mr Yvanoff and Mr Perkins, and no evidence has been provided by SMS upon which the Commission could be satisfied that the employees were provided with an explanation that referred to their actual terms and conditions of employment, rather than the relevant award. Noting it can be strongly inferred from the evidence of Mr Yvanoff and Mr Perkins that such an explanation was not provided, the MEU contended that the Commission was not in a position to reach the requisite state of satisfaction that all reasonable steps had been taken for the purposes of s. 180(5) and that, in accordance with s. 188(4A), the Commission could not have been satisfied that the agreement had been genuinely agreed.

[115] SMS submitted that permission to appeal should not be granted. In relation to appeal grounds 1 and 2, SMS said that the Deputy President was not in error in refusing to provide the MEU with access to the unredacted copies of the application documents. The Form F17B was completed under the "threat" that knowingly giving false or misleading information or knowingly producing a false or misleading document in support of an application for approval of an enterprise agreement is an offence punishable under the Criminal Code. Further, SMS contended that disclosing the identity of the employees involved in the agreement making process could violate their right to privacy under the provisions of the Privacy Act 1988 (Cth) and consequently, the MEU's submission that the Deputy President erred in acting contrary to the principles of open justice should be rejected as open justice does not demand the disclosure of irrelevant or sensitive information. In relation to the MEU's contention about the "undisclosed relationship with an entity described as "Nortek" which is understood to be Nortek Development Pty Ltd", it is stated that the relevance of this matter "escapes the Respondent" and is a "fishing expedition" that has no impact on the Deputy President's Decision.

[116] In response to appeal grounds 3 - 5, SMS asserted that contrary to the MEU's submission, the Deputy President was satisfied that the requirements of both ss. 186 and 188 were met as stated at paragraph [8] of the Decision. In relation to the MEU's contention that the Deputy President erred in failing to take into account the Statement of Principles, SMS rejected this submission and contended that it was obvious the Deputy President had taken into consideration the relevant principles and issues to be satisfied that that genuine agreement had been reached. Specifically, SMS submits that the MEU's submissions regarding Principle 8 do not provide any evidence or factual explanation of why SMS allegedly did not take all reasonable steps to explain the Agreement and relies on the Deputy President's findings at paragraph [9] of the Decision. Further, SMS submits that all four employees were sufficiently experienced and had previously been involved in bargaining.

[117] In relation to the MEU's contentions regarding Principle 10, SMS rejects that its explanation was misleading and incorrect. It contends that this is pure conjecture as the MEU has not provided any evidence or factual explanation. Further, there is no statutory obligation to keep records or summaries of oral explanations as submitted by the MEU in relation to Principle 12 and the Form F17B provided information that was acceptable to the Deputy President. Regarding Principle 15, SMS rejects the MEU's contention that by holding the ballot at a physical premises in Mudgee, the employees were deprived of a fair and reasonable opportunity to cast a vote.

[118] The MEU's submission regarding Principle 17, that the Commission did not have enough information to determine whether the employees were sufficiently interested in the Agreement, is without merit and devoid of any argumentative value as SMS only had 4 employees at the time and all 4 of them cast a vote so all employees were "sufficiently interested in, and representative of the employees to be covered by, the Agreement". In relation to Principle 18, the MEU's submission is speculative and based on no evidence or factual explanation. SMS relied on the Deputy President's finding that the 4 employees were

[119] In response to the MEU's submissions about the circumstances under which the voter cohort came to be employed by SMS it is contended that this argument cannot be sustained as a reason why the Deputy President erred in her approval of the agreement. The FW Act is not prescriptive regarding what would constitute a suitable voting venue. Further, the "alleged involvement" of a manager of Nortek had no bearing on the outcome of a voting process regarding an agreement to be made with SMS. The four employees voluntarily voted in favour of the agreement and the Deputy President was correct to accept this.

[120] In relation to appeal ground 6(b), SMS referred to the Full Bench decision in Re Armacell Australia Pty Ltd (Armacell)[115] in support of the proposition that the BOOT requires the identification of agreement terms which are more beneficial, and terms which are less beneficial, and an overall assessment as to whether employees would be better off under the agreement than under the relevant award, rather than a line-by-line analysis. SMS also submits that the question posed by the BOOT is not whether each employee is better off under the Agreement compared to their existing working arrangements but whether they are better off overall if the Agreement applied rather than the relevant modern award. On that basis, SMS submits that the Deputy President would have considered the requirements of the legislation in informing her view.

[121] In relation to appeal ground 7(a) with respect to undertaking 1, SMS submitted that the undertaking does not incorporate the Award. Rather, the intention was to underscore the Respondent's desire to comply with Award provisions in the event of any inconsistency and nothing more. Finally, in response to appeal ground 7(b) that undertakings 1 and 4 were not capable of meeting the relevant concerns, SMS states that while it did not concede any of the MEU's arguments, it did not intend to address each of the submissions in this ground. The Respondent asserts that at the request of the Deputy President, it provided undertakings in good faith to satisfy her that the Respondent has met the requirements of the FW Act, and this was accepted by the Deputy President. Neither SMS nor Nortek responded to the MEU's submissions asserting that there was a transfer of business between Nortek and SMS.

[131] Because the MEU's appeal relies on new evidence adduced in the appeal, it is necessary for us to assess the evidence and make findings of fact to determine the appeal, including whether permission to appeal should be granted. We have examined the documentary evidence and the oral evidence of Mr Yvanoff and Mr Perkins. In addition to the grounds of appeal set out in the Form F7 Notice of appeal, the evidence in the appeal raised the issue of the relationship between Nortek and SMS in the context of the transfer of business provisions in Chapter 2, Part 2 - 8 of the Act. The submissions of the MEU in the hearing of the appeal (after the MEU had access to the unredacted filing documents and evidence was received from Mr Perkins and Mr Yvanoff) asserted that there had been a transfer of business and that the employees who purportedly made the SMS Agreement were properly employed as casuals under the Nortek Agreement at the relevant time. The nature of the relationship between SMS and Nortek was pursued by the MEU at first instance and in the appeal. However, the specific question of whether there had been a transfer of business between the two companies arose during the appeal. Accordingly, we allowed both parties the opportunity to make written submissions in relation to this matter. The MEU provided a written submission and SMS did not respond nor provide any submission to the contrary.

[132] This is consistent with the failure of SMS to properly engage with the case advanced by the MEU in the appeal. To the extent that SMS did engage with the MEU case we consider that the evidence of Mr Yvanoff and Mr Perkins was evasive and contradictory. It is true that Mr Yvanoff and Mr Perkins made concessions against their interests in response to questions posed by Ms Sarlos. While we accepted those concessions as truthful, we formed the view that the matters conceded manifested a dearth of knowledge about the legislative framework for the making and operation of enterprise agreements. We also observed that the concessions were generally made in the face of documentary evidence from the business records of Nortek and SMS, that effectively ruled out any other response. We expand upon our reasons for this assessment later.

[133] Further, it is surprising that Mr Yvanoff, who is said to have experience in making enterprise agreements, and whose advice was relied on by Mr Perkins, would not have understood the significance and implications of the fact that employees with whom the SMS Agreement was purportedly made, may have been covered by the Nortek Agreement, which was well within its period of operation and may have continued to apply to those employees under the transfer of business provisions. It is equally surprising that Mr Yvanoff would not have understood the significance of the transfer of business provisions of the FW Act in the context where three of four SMS employees (and possibly all four employees) were selected from the ranks of Nortek's employees, and engaged on work they had previously performed for Nortek, on the same site, with no break in employment.

[134] Notwithstanding our acceptance - albeit with some reservations - that the conduct engaged in by Mr Yvanoff and Mr Perkins in connection with the SMS Agreement demonstrated ignorance of the legislative regime in relation to the making and operation of enterprise agreements rather than untruthfulness, we are also of the view that the case advanced by SMS in its outline of submissions, filed before the appeal was heard, was disingenuous in some respects. In this regard, we note the following contentions advanced on behalf of SMS by Mr Yvanoff that:

The relevance of the involvement of Nortek in the making and approval of the SMS Agreement "escapes" SMS;

The MEU seeking information about the involvement of Nortek in the SMS Agreement is a "fishing expedition" and has no impact on the Deputy President's Decision to approve that Agreement;

The "alleged involvement of a manager of Nortek" has no bearing on the outcome of a voting process regarding the making of the SMS Agreement; and

The reality dictates that 4 employees of the Respondent voluntarily voted in favour of the SMS Agreement, which was acceptable to her Honour and correctly so.

[135] Contrary to the submissions advanced on behalf of SMS, the relevance of the relationship between Nortek and SMS is central to several key issues in the appeal, including whether the Nortek Agreement applied to the persons who purportedly made the SMS Agreement at the time the SMS Agreement was said to have been made. This is a significant matter going to the authenticity of the SMS Agreement and the question of whether at least three of the four employees who made that Agreement had a sufficient interest in it, so that it was genuinely agreed. Mr Yvanoff and Mr Perkins could hardly be described as being allegedly involved with the making of the SMS Agreement and must have known of their involvement with both Nortek and SMS. The attempts by the MEU to obtain information about the employees who made the SMS Agreement, and the involvement of Mr Yvanoff and Mr Perkins, was not a "fishing expedition" in the pejorative sense used in the SMS submission. The MEU had reasonable grounds to advance its contentions about this matter, and if it was on a fishing expedition, the MEU had a successful catch.

[136] Based on the evidence before us in the appeal, we make the following findings.

[138] The MEU asserts that pursuant to these provisions, there was a transfer of business between Nortek and SMS and that rights and obligations under the Nortek Agreement transferred from Nortek to SMS, so that when they commenced employment with SMS, the Nortek Agreement applied to Mr Sissons, Mr Poole and Mr Davidson, because it was in operation (and will continue to operate until 1 July 2025). As we have noted, Nortek did not respond to the submission of the MEU in relation to this contention, and our findings are made in this context and on the balance of probabilities.

[139] We are reasonably satisfied that the requirements in s. 311(1)(a) - (c) were met with respect to the employees of Nortek (the old employer) and SMS (the new employer). In this regard, we are satisfied that three of the four employees who made the SMS Agreement (Mr Sissons, Mr Poole and Mr Davidson) were employed by Nortek from dates in May 2023 and all had commenced employment with SMS by 8 July 2023. It is also notable that the letters of offer of employment with Nortek for the employees were prepared, sent to the employees and administered, via a Nortek email address. Mr Yvanoff's evidence was that those employees finished with Nortek on one day and commenced with SMS on the following day. If the employees had a break between ceasing work with Nortek and commencing with SMS, we are comfortably satisfied that the break did not exceed the three-month period specified in s. 311(1)(b). We also find that the work that each of those employees undertook for SMS was the same or substantially the same as the work they had undertaken for Nortek.

[140] In this regard, Nortek is a subcontractor to owners/operators of black coal mines and undertakes work installing and maintaining conveyor installations, fixed plant, civil works and labour hire. SMS is in the same business evidenced by the coverage clause of the SMS Agreement. Nortek had a contract at the Ulan Underground Mine (albeit it operated under a system involving purchase orders) to perform installation and maintenance work on underground conveyors. The Ulan Mine is owned by Glencore and operated by its wholly owned subsidiary, Ulan Coal Mines Limited, presumably the other party to the contract with Nortek. While maintaining the contract with Ulan, Nortek contracted with SMS to provide labour to do the work it had contracted for at the Ulan Mine. Consistent with the Form F17B Declaration made by Mr Perkins, the primary activity of SMS is black coal industry subcontractor. SMS is not simply a supplier of labour. SMS employed Mr Sissons, Mr Poole and Mr Davidson to do work that Nortek had contracted to undertake, and those persons commenced employment with SMS at the Mine within a period that was less than three months (and likely on the next working day) after their employment with Nortek ended and continued to do the work they had previously done for Nortek. That work was likely "transferring work" within the meaning in s. 311(1)(b) of the FW Act.

[141] We are reasonably satisfied that there is a connection between Nortek and SMS for the purposes of s. 311(1)(d), which provides that there is a connection between the old employer and the new employer as described in any of the subsections (3) - (6). In relation to s. 311(4), we find that there was an arrangement between Nortek and SMS involving Nortek outsourcing to SMS, the work it had contracted with Ulan to undertake. We also noted a tendency on the part of Mr Yvanoff and Mr Perkins to refer to Nortek and SMS synonymously as "us' and "we", indicating that they considered those entities to be interchangeable. Further, it was apparent that from their perspective, it was immaterial which of the two entities held the contract to provide services to a mine or employed workers to carry out those services, and that the two entities were used interchangeably for these purposes. While outsourcing is not defined, in the FW Act, we are comfortably satisfied that this was the effect of the arrangement between Nortek and SMS.

[142] In relation to s. 311(6) the MEU asserted, and SMS did not contest, that Nortek and SMS are associated entities within the meaning in s. 50AAA of the Corporations Act 2001. Relevantly, the documents produced by SMS and in evidence in the appeal, indicate that at the time Mr Poole, Mr Sissons and Mr Davidson commenced employment with SMS and when the SMS Agreement was purportedly made, indicate the following:

On 7 June 2023, Ms Melissa Bennett in the capacity of Commercial Manager, completed an Employer Registration Form for employers obliged to pay the long service leave levy for 'eligible employees' as defined in the Coal Mining Industry (Long Service Leave) Administration Act 1992 to the Coal Mining Industry (Long Service Leave Funding) Corporation, stating that The Trustee For Specialised Mine Services Unit Trust with a trading name of Specialised Mining Services Pty Ltd ACN/ABN 80 244 11607, was the employer of the relevant employees and that an additional contact was "Sherry Perkins" whose position was 'Director'.

On 15 June 2023, in a Workers Compensation Insurance Proposal for a policy to provide indemnity under the Workers Compensation Act 1987 (NSW), Ms Bennett stated that the legal name of the employer was The Trustee For Specialised Mine Services Unit Trust and the entity's trading name was Specialised Mine Services Pty Ltd ABN 80244 and ACN654 264 883.

On 3 August 2023, Ms Bennett completed an Employer Registration Form for employers obliged to pay the long service leave levy for 'eligible employees' as defined in the Coal Mining Industry (Long Service Leave) Administration Act 1992 to the Coal Mining Industry (Long Service Leave Funding) Corporation, stating that Specialised Mine Services Pty Ltd ACN/ABN 654 264 883 was the employer and that an additional contact was "Sherry Perkins" whose position was 'Director'.

• Mr Sam Perkins was the General Manager of both Nortek[121] and SMS.[122]

• Mr Perkins' wife, Mrs Sherry-Anne Perkins was the sole director of Nortek.[123]

• Mr Perkins gave evidence contending that he was the sole director of SMS and a current company extract for SMS provided to the Deputy President at first instance[124] supports that contention, notwithstanding references to Sherry Anne Perkins being a Director of SMS in documents filed with the Coal Mining Industry (Long Service Leave Funding) Corporation.

[143] A Company Extract Current & Historical[125] was before the Deputy President at first instance, as an Attachment to the MEU's first written submission dated 16 October 2023, showing the following information:

Specialised Mine Services Pty Ltd ACN: 654 264 883 was registered on 06/10/2021.

Mr Sam Craig Perkins was the Director and Secretary.

100 ordinary shares in the Company were issued.

40 shares were held by The Perkins Family Group Pty Ltd ACN: 636 223 348.

20 shares were held by Ivanov Enterprises Pty Ltd ACN: 136 361 585.

40 Shares were held by Letters to Vince Pty Ltd ACN: 632 739 685.

[144] A Company Extract Current & Historical[126] was before the Deputy President in relation to the Perkins Family Group Pty Ltd showing that:

Mr Sam Craig Perkins was the Director and Secretary.

The company had 10 issued shares.

5 shares were held by Sam Craig Perkins and 5 shares were held by Sherry Anne Maree Perkins.

[145] A Company Extract Current & Historical for Ivanov Enterprises Pty Ltd[127] was also before the Deputy President at first instance showing that:

Chanda Nogra-Yvanoff and Jesse Yvanoff were Directors.

Jesse Yvanoff was Secretary.

20 shares were issued.

10 shares were held by Chanda Nogra-Yvanoff and 10 shares were held by Jesse Yvanoff.

[146] In our view, these facts at the very least, support an inference that SMS and Nortek are associated entities within the meaning of s. 50AAA of the Corporations Act 2001. If that was the case, consistent with s. 312, the Nortek Agreement may have been a transferrable instrument. Given our findings that Mr Sissons, Mr Poole and Mr Davidson were transferring employees, the Nortek Agreement would have applied to them at the time they purportedly agreed to make the SMS Agreement and the SMS Agreement could not have applied to them. In relation to Mr Wilson we infer that he may have been employed by Nortek prior to being employed by SMS.

[147] However, we do not make a finding on this matter, given the late stage in proceedings at which it arose and in view of our finding in relation to s. 311(4) that the necessary connection is established by transferring work being outsourced by Nortek to SMS.

[151] We are satisfied that the SMS Agreement was entirely unauthentic, lacking in moral authority and a sham. We accept that the "strategy" had nothing to do with paying employees more, and rather was designed to establish an enterprise agreement with lower rates than those contained in the Nortek Agreement, and then to use the SMS Agreement as a vehicle to engage a larger number of employees (likely to be sourced from Nortek) to undertake work that Nortek had contracted to perform, at Ulan or at other Mines in the region where Nortek obtained work. Alternatively, SMS may have taken over contracts from Nortek. Regardless of how it was implemented, the effect of the strategy was to avoid the obligation to pay employees the rates in the Nortek Agreement and to establish an agreement with lower rates.

[152] In this regard, it is notable that it is Nortek and not SMS that has a contract or arrangement with Ulan implemented by way of periodic purchase orders. SMS employees now undertake that work. It is also notable that Mrs Perkins is said to be the sole director of Nortek, Mr Perkins is the sole director of SMS, and Mr Perkins is the General Manager of both entities. Mr Yvanoff is also closely involved in both entities through shareholding by his family company in SMS and by virtue of his management roles with each of them. Mr Perkins' attempt to paint a picture that he decided to start his own business to separate himself from the principals of Nortek, due to some financial issue, is highly improbable, given the connections he has to both companies. It is likely that the constraint associated with Nortek, referred to in the evidence of Mr Yvanoff, was the existence of the Nortek Agreement and the wage rates it required Nortek to pay employees to whom that Agreement applied.

[153] The strategy was achieved by selecting a small number of employees of Nortek, and Mr Wilson, who were known to Mr Perkins, and likely to be cooperative. Three of those employees were encouraged to cease employment with Nortek and take up employment with SMS. Between late June and 8 July, the four employees (Mr Poole, Mr Sissons, Mr Davidson and Mr Wilson) were employed by SMS. Their letters of offer and employment contracts were prepared and sent to them by a Nortek manager. There was no negotiation or bargaining for the SMS Agreement. On 20 July 2023 the four employees selected for the purpose of making the that Agreement were given a draft which was ultimately approved by them without any change, bargaining was initiated on 1 August, the NERR was provided by email on 12 August, meetings said to have been for the purpose of explaining the terms of the SMS Agreement and their effect were held on 10 and 11 September, and a ballot in which the Agreement was purportedly approved, closed on 15 September.

[154] The evidence of Mr Perkins and Mr Yvanoff about the rationale for the strategy, was inconsistent, contradictory and improbable. While, we acknowledge that some of the evidence given by Mr Perkins and Mr Yvanoff was contrary to their own interests, it was given reluctantly in response to questions from Ms Sarlos and Members of the Full Bench and in the context of documentary evidence which would have been difficult to otherwise explain. For example, Mr Yvanoff had no option but to concede that he sent an email attaching a draft of the SMS Agreement to employees on 20 July 2023, before bargaining was initiated by SMS, because SMS produced the email in response to the Notice issued by the Commission. That evidence was at odds with Mr Yvanoff's assertion that that there was no intention on the part of SMS to commence bargaining on 20 July.

[155] Mr Yvanoff's evidence that the SMS Agreement was put into place because the rates being paid by Nortek were not sufficient to retain employees, is at odds with his evidence that Nortek was perceived by its clients as a higher paying employer with an expensive enterprise agreement. The fact that the wage rates in the Nortek Agreement are substantially higher than those in the SMS Agreement is also inconsistent with the proposition that the SMS Agreement was part of a strategy to pay employees higher rates to retain them in employment. The fact that the SMS Agreement contained rates of pay that were less than those in the Nortek Agreement is at odds with the evidence of Mr Perkins, that he wanted to be one of the highest paying employers on sites where SMS was working. If that was the case, SMS could simply have replicated the Nortek Agreement or continued to use Nortek to engage labour to undertake work at Ulan. Mr Perkins insistence that he wanted to set up his own business entity because of issues with colleagues is also inconsistent with the fact that Mr Perkins also said that the colleague in question had ceased employment. Further, Mr Perkins told the Full Bench that his is the sole director of Nortek and that he is the General Manager of both that company and SMS.

[156] We do not accept the evidence of Mr Yvanoff and Mr Perkins, to the extent that it attempts to provide an innocent explanation for their conduct and motives in relation to the conceptualisation and implementation of the SMS Agreement. In our view, the strategy was likely an attempt to create a legally binding instrument (the SMS Agreement) which allowed to employ a larger number of employees after the Agreement was made and pay those employees the lower SMS Agreement rates notwithstanding the guarantees provided to the four employees who made the Agreement about maintaining their higher rates. The benefit of the SMS Agreement to both SMS and Nortek was that Nortek would retain the contract or arrangement at Ulan and avoid paying the higher rates in the existing Nortek Agreement. Alternatively, SMS would contract with Glencore to undertake work at Ulan. Mr Perkins would benefit from this strategy either by virtue of his relationship with Nortek via his wife being the sole director of that company, or his relationship with SMS, by virtue of his role as sole director and General Manager of that company. Mr Yvanoff would benefit from the strategy by the shareholding of his family company in SMS. Both Mr Perkins and Mr Yvanoff would doubtless have also benefited from their employment in senior managerial roles with both Nortek and SMS. The only persons who did not stand to benefit were the employees to whom the SMS Agreement purportedly applied, on the basis that in the absence of the SMS Agreement the Nortek Agreement would have likely applied to them by virtue of the provisions in Part 2 - 8 of Division 2 of the FW Act and they would have been entitled to be paid the higher rates in that Agreement. Alternatively, if former Nortek employees working for SMS were covered by the BCMI Award, they would have been entitled to initiate bargaining to seek wages and conditions of employment equal to, or better than, those under the SMS Agreement.

[157] It is unlikely that SMS or Nortek would have succeeded in negotiating with Glencore/Ulan's commercial staff for either Nortek or SMS to provide labour, which would be employed by SMS and paid the rates under the SMS Agreement rather than the higher rates under the Nortek Agreement and with that contract in place, renegotiating the labour rates with Glencore/Ulan's operational staff, to enable higher rates to be paid to the SMS employees.

[158] It is only necessary to document the so called "strategy" to appreciate the absurdity of the evidence given by Mr Yvaoff and Mr Perkins that they were seeking to pay higher rates to the employees of SMS. Even if the negotiations with Glencore/Ulan's contractual and commercial staff succeeded (a matter about which we entertain doubt) the strategy had little, if any, potential to benefit SMS employees including the three former Nortek employees who purportedly made the SMS Agreement. Employees to whom the SMS Agreement applied were not guaranteed to receive rates in excess of those in the SMS Agreement, and at the end of the day employees of SMS (including Mr Sissons, Mr Poole and Mr Davies who had likely been entitled to at least the rates in the Nortek Agreement) would have been legally entitled to be paid only the rates under the SMS Agreement and any payments exceeding those rates would be at the continuing discretion of SMS. The risk that this could have occurred was heightened by the provision in the SMS Agreement to the effect that their casual employment was deemed to end at the completion of every shift.

[161] The Statement of Principles at paragraph 8(a) provides in relation to s. 180(5) that where a proposed enterprise agreement will replace an existing enterprise agreement, it will generally be necessary to explain the differences in entitlements and other terms and conditions between the proposed agreement and the existing agreement and any applicable modern award provisions that have been varied since the existing agreement was made, including award variations that have not yet come into effect.

[162] The Form F17B Declaration made by Mr Perkins, indicates that to the extent that there was an explanation about the terms of the SMS Agreement, it focused on the differences between the SMS Agreement and the BCMI Award. That explanation was not relevant for at least three of the four employees (and possibly all four employees) who made the SMS Agreement if they continued to be covered by the Nortek Agreement after they commenced employment with SMS. As the Statement of Principles makes clear, an explanation of the terms of an agreement and their effect, should include at a minimum, explaining how the proposed agreement will alter existing minimum entitlements and other terms and conditions of employment.

[163] There is no evidence that the differences between the Nortek and SMS Agreements were explained to employees. As we have noted, those differences are significant in several respects, particularly in relation to wage rates and the treatment of casual loading when penalty rates for ordinary time and overtime are payable. Nor is there any indication that it was explained to the employees who purportedly made the SMS Agreement that they were making an enterprise agreement that would cover future employees and who would not be guaranteed the same rates of pay as them.

[164] If there was not a transfer of business and the employees who made the SMS Agreement were covered by the BCMI Award, it is also the case that the explanation of the terms of the Agreement and the effect of those terms was inadequate. There is no indication that the explanation covered the fact that the BCMI Award does not provide for production and engineering employees in classifications described in Schedule A to be employed on a casual basis, or that under the SMS Agreement, casual loading would not be compounded on overtime as it is in the part of the BCMI Award that does provide for casual employment. Further, the BCMI Award, insofar as it provides for casual employment, does not provide that the employment of a casual employee ends at the conclusion of each shift, in contrast with the provisions of the SMS Agreement.

[165] Mr Perkins' evidence in the appeal that there were six or seven employees in the room during the Mudgee meeting when the explanation of the terms of the SMS Agreement was given, is concerning, in light of the fact that there were only four employees who voted in the ballot for the approval of the SMS Agreement. We are also concerned that on the evidence of Mr Yvanoff, only two of the four employees attended the Mudgee meeting where the terms of the Agreement were purportedly explained. The evidence about the explanation being provided to the other two employees of SMS is unsatisfactory. We are not able to be satisfied as to which employees attended the meetings and whether SMS took all reasonable steps to ensure that an explanation consistent with the requirements in s. 180(5)(a) was provided.

[166] We also note that the names of persons said by Mr Perkins in his oral evidence in the appeal, to have been present at the meeting in Mudgee are different to the names of the four persons who made the SMS Agreement and there are differences in the identities and numbers of persons provided with the NERR and the ballot material. Further, we note that Mr Perkins did not attend the Wollongong meeting despite giving evidence about what was said at that meeting. There is no documentary evidence to establish the contents of the presentation that was given to employees or the employees who attended. While the Principles on Genuine Agreement do not require this, it may have assisted to establish what employees were told at those meetings, as is stated in Principle 12(c).

[169] Appeal Ground 1 centres on the refusal by the Deputy President to provide the MEU with certain information in the Form F16 and F17B that had been redacted by the administrative staff of the Commission including the name and contact details of the persons who completed those documents. While the total number of employees covered by the SMS Agreement was not redacted, demographic information including the number of casual employees who made the SMS Agreement and/or employees who had special circumstances and needs relevant to the explanation about the terms of the Agreement and their effect, was redacted. The number of employees who cast a valid vote and voted to approve the Agreement was also redacted.

[170] The decision of a Full Bench of the Commission in Ron Southon[128] established a principle that, absent special circumstances justifying an order for confidentiality, Commission files should be freely available for inspection by any member of the public.[129] The basis for this approach is the interests of open justice. As the Full Bench in that case said, completed Forms provide important information on which the Commission relies in determining whether to approve enterprise agreements. The Full Bench in Ron Southon also observed that the need to increase efficiency and reduce the administrative burden on parties, resulting in an increasing amount of the work of the Commission being undertaken "in Chambers" and decisions being made on the papers, should not have the unintended result that the activities of the Commission become shielded from the public gaze.[130] The decision of the Full Bench in Ron Southon was endorsed by a Full Bench in Mobilise Group,[131] which found that a refusal by a Member of the Commission to provide an unredacted Form F17 to the Union showing the number of employees covered by the Agreement, the number who cast a valid vote and the demographics of the voting cohort, was an error and inconsistent with the principles of open justice.

[171] In relation to privacy issues associated with access to Commission files, in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v The Australian Workers' Union; Renewable Technical Services Pty Ltd (Renewable Technical Services),[132] a Full Bench of the Commission explained that when an enterprise agreement is being dealt with by administrative staff within the Commission's Agreements Team, those staff are required to comply with the Privacy Act 1988 (Cth), in relation to material (including names, signatures, addresses, phone numbers and demographic information) which may disclose the identity of individuals, when they provide documents pertaining to the approval of the agreement.[133] The Full Bench in that case pointed out that the appropriate mechanism for seeking access to unredacted documents is for the person or organisation to apply to the Member of the Commission to whom the matter is allocated. In this regard, the Full Bench said:

[172] Dismissing the appeal, the Full Bench noted that the Union had not requested that the Member dealing with the approval of the relevant material provide the application documents and was not satisfied that the provision of those documents would have changed the outcome. Significantly for the present appeal, the Full Bench also said that if an application for disclosure had been made by the union in that case, and the Member deciding whether to approve the agreement had declined to allow disclosure of at least the name of the declarant and the demographic information contained in the declaration, the union might have had some arguable basis for complaint in its appeal.

[173] In the present case, after the Agreements Team provided the MEU with redacted copies of the application documents relating to the SMS Agreement, the Union followed the procedure discussed by the Full Bench in Renewable Technical Services and directed the request for the provision of unredacted documents, to the Deputy President's Chambers. The Deputy President refused the request. There were no exceptional circumstances identified in correspondence from the Chambers of the Deputy President or in the Decision approving the SMS Agreement, to justify the refusal. The MEU sought the identity of the declarant of the Form F17B and demographic information about the cohort of employees who made the Agreement. The MEU did not initially request the names of the employees who made the SMS Agreement. In its second request the Union sought the provision of an email identifying the persons who had been sent the NERR, which was appended to the Form F17B Declaration, and had been provided in a redacted form. The submissions of the MEU set out a reasonable basis for the request. An examination of the unredacted Form F16 and Form F17B would have indicated that the MEU's concerns about the connection between SMS and Nortek were soundly based. Any concerns about the request for the unredacted email (which would have identified the employees who made the Agreement) could have been addressed by an examination of the unredacted email and seeking information from SMS about those employees and whether they had been employed by Nortek at or before the SMS Agreement was made.

[174] The refusal by the Deputy President to provide the information sought, was contrary to Full Bench authority in Ron Southon, Mobilise Group, and Renewable Technical Services. In refusing to provide the unredacted documents, the Deputy President did not distinguish those cases. The principle of open justice in the context discussed in those cases, does not require a person or organisation seeking information from the Commission's files to establish that prima facie there is an irregularity in relation to an application for approval of an enterprise agreement, to justify the provision of the application documents in a form that would have allowed the MEU in the present case to ascertain the identity of the person who made the Form F17B Declaration and demographic information the Form requires be provided about the employees who made the Agreement, including whether they were employed on a casual basis. This may also have been an appropriate case for the MEU to be provided with the names of the employees who purportedly made the SMS Agreement subject to appropriate steps being taken to protect the privacy of those persons or further information could have been obtained from SMS by the Deputy President. Notwithstanding that the principles of open justice did not require the MEU to establish a basis for the provision of the information it sought, the MEU's submission established an arguable case that the SMS Agreement was not genuinely agreed and that the Agreement and the context in which it was developed and agreed to by the employees who purportedly made it, should be subject to closer scrutiny. The assertions made by the Union were supported by the unredacted filing documents which were before the Deputy President when the request was refused. Those assertions have been substantiated in this appeal. We uphold appeal ground 1.

[175] By ground 2, the MEU asserts that by denying access to an unredacted copy of the application documents, the Deputy President failed to afford the MEU procedural fairness. It is well established that administrative decision makers including Members of the Commission, must accord procedural fairness to those affected by decisions they make. It is also well established that where a party has been denied a right to be heard, a denial of procedural fairness may be established by nothing more than that failure, unless it did not deprive the party of the possibility of a successful outcome.[135] However, as a Full Bench of the Commission observed in Construction, Forestry, Mining and Energy Union v Ditchfield Mining Services Pty Limited (Ditchfield)[136] the steps necessary to achieve this in any given case, should be determined by: "what is required in order to ensure that the decision is made fairly in the circumstances having regard to the legal framework within which the decision is to be made".[137] The Full Bench in Ditchfield went on to cite the observation of the High Court in Re Refugee Review Tribunal; Ex parte Aala[138] where it was said that while not every breach of natural justice affects the making of a decision, once a breach is proved a court should refuse relief only when it is confident that the breach could not have affected the outcome.[139]

[176] As we have noted, the principles of open justice require that the Commission's file on the SMS Agreement, was available to be viewed by any member of the public. Consistent with the Full Bench Decision in Renewable Technical Services, the principles of open justice required, as a minimum, that the identity of the person who made the Form F17B Declaration and demographic information about the employees who made the SMS Agreement, to be provided to the MEU. It must be remembered that the MEU is not simply a member of the public with no interest in the approval of enterprise agreements in the black coal mining industry. To the contrary, the MEU is a registered organisation with rules providing coverage of the work to be performed under the SMS Agreement and the BCMI Award that underpins it and has a real and legitimate interest in maintaining what it views as acceptable standards for pay and conditions in that industry.

[177] There is nothing illegitimate about employers seeking to make enterprise agreements providing for lower wages and conditions than the MEU believes are acceptable or market standards, subject to compliance with all requirements for making an enterprise agreement and seeking its approval. Conversely, the MEU has the right to agitate for higher wages and better conditions for workers in the industry including by seeking to examine the processes by which enterprise agreements are made, to ensure that they are genuinely agreed to, and seeking to be heard in the approval of enterprise agreements, regardless of whether it was a bargaining representative, subject to being granted leave by the Member of the Commission dealing with the approval. In the present case, the MEU's initial submissions cited Full Bench authority as to why it should be provided with the application documents and highlighted that it required information as to the how many of the four employees who made the SMS Agreement, were employed on a casual basis. When the application documents were not provided, the MEU made a further submission, which as we have stated, made a cogent case for scrutiny of the process by which the SMS Agreement was made and the business activities of the employer representatives involved in making that Agreement.

[178] The MEU did not seek private contact details for the persons who signed the SMS Agreement and supporting declarations on behalf of the employer and nor did the Union seek private contact details of employees who made the Agreement. In its second request to the Deputy President the Union sought an unredacted email that would have identified the four employees who purportedly made the SMS Agreement. The email could have been provided in partially unredacted form by redacting the email addresses of those employees, or it would have been open to the Deputy President to request the provision of further information to establish whether any, or all, of the four employees who made the SMS Agreement had ever been employed by Nortek and if so, the relevant periods. The redacted information the MEU sought was critical to the case the Union sought to advance, and the Deputy President's refusal to provide the unredacted application documents effectively prevented the MEU from joining issue with the Respondent on the matter of whether the SMS Agreement was authentic and had been genuinely agreed by the persons who purported to make it. This was a denial of procedural fairness of the kind referred to by the Full Bench in Renewable Technical Services.

[179] Demographic information in application documents about the cohort of employees who made an enterprise agreement may be significant to deciding whether the employees have a sufficient interest in the terms of the agreement. As the Statement of Principles indicates, matters including the extent to which the employees entitled to vote to approve an enterprise agreement are employed across the full range of classifications in the agreement, the types of employment it covers (for example full-time part-time and casual) are relevant to whether employees have a sufficient interest in its terms.

[180] In the context of the legal framework within which the Decision to approve the SMS Agreement was to be made, the genuineness of an enterprise agreement is a matter about which the Commission must be satisfied before the agreement can be approved. Having heard the evidence in the appeal that the MEU was unable to bring at first instance, we are satisfied that had the Union been provided with the unredacted application documents, and been given an opportunity to advance the case it conducted in the appeal, the outcome of the application for approval would likely have been different, and approval refused on the ground the SMS Agreement was not genuinely agreed to by the four employees who purportedly made it.[140] We are unable to be satisfied that the MEU would not have established that at least three of those employees were covered by another enterprise agreement (the Nortek Agreement) at the point they purportedly made the SMS Agreement. We are also satisfied that even absent a finding in relation to transfer of business from Nortek to SMS, the evidence considered in the context of the Statement of Principles would have resulted in a finding that the terms of the SMS Agreement and their effect was not properly explained to all four of the employees who purportedly made it and those employees did not have a sufficient interest in the terms of the SMS Agreement to have genuinely agreed to it. We uphold appeal ground 2.

[181] Appeal grounds 3 - 5 concern whether the SMS Agreement was genuinely agreed within the meaning of s. 188 of the FW Act. We have set out the relevant legislative provisions above, and in summary they are as follows. Section 188(1) requires the Commission to take into account the Statement of Principles in determining whether it is satisfied that the agreement is genuinely approved. To take something into account means to evaluate it and give due weight, having regard to all other relevant factors.[141]

[182] Relevantly in the present case, the principles deal with the following matters:

Steps that will be generally sufficient to satisfy the requirement in s. 180(5) of the FW Act in relation to explaining to employees how a proposed agreement will alter their terms and conditions of employment, including where the agreement replaces an existing agreement (Principle 8);

The effect of an incorrect or misleading representation made by an employer about a significant term of the proposed agreement (Principle 9);

Whether the employees are to be paid the rates in the agreement (Principle 17(a));

The extent to which employees entitled to vote on the agreement are employed across the full range of classifications in the agreement and types of employment it provides for.

[183] Section 188(2) provides that the Commission cannot be satisfied that an enterprise agreement has been genuinely agreed to by employees covered, unless the employees have a sufficient interest in the terms of the agreement and are sufficiently representative having regard to the employees the agreement is expressed to cover. Section 188(4A) provides that the Commission cannot be satisfied that an enterprise agreement is genuinely agreed unless it is satisfied that the employer complied with the requirements in s. 180(5), which broadly requires that the employer take all reasonable steps to explain the terms of an enterprise agreement and their effect to employees employed at the time who will be covered by the agreement, having regard to their particular circumstance and needs. Based on the evidence in the appeal, our findings of fact above and the reasons which follow, we consider that it was not reasonably open to the Deputy President to be satisfied that any of the requirements for genuine agreement in s. 188(1), (2)(a) or (b), and (4A) were met.

[184] It is convenient that we deal with grounds 3 - 5 together. There is no reference to the Statement of Principles in the Deputy President's Decision. There is also no indication in the Decision that the Deputy President took the Statement of Principles into account in deciding that the SMS Agreement was genuinely agreed. This was an error of principle, which of itself meant that the Deputy President did not comply with the requirement in s. 188(1) to take the Statement of Principles into account.

[185] While there will be cases where there are no apparent issues with the making of an enterprise agreement, and a brief reference to the Statement of Principles, either directly or by dealing with a submission asserting consistency with the Principles, will be sufficient to address contested issues concerning genuine agreement[142], in the present case, the MEU raised cogent concerns about the SMS Agreement to which the Statement of Principles was directly relevant. In paragraph [9] of the Decision, the Deputy President dealt with the size of the voting cohort, the BOOT concerns, the bargaining experience of the employees who made the SMS Agreement, the ballot process and found that the explanation of the terms of the Agreement was sufficient to meet the requirements of the Act. As a result of these conclusions, the Deputy President found that the SMS Agreement was genuinely agreed.

[186] In the context of the case advanced by the MEU in opposition to the approval of the SMS Agreement, these conclusions and related findings were not open to the Deputy President without reference to the Statement of Principles. The conclusions are also not open in light of the information provided in, and appended to, the application documents. In paragraph [5](a) the Deputy President noted that the MEU had taken issue with the fact that the SMS Agreement had been made with only four employees and that the Union had questioned whether the employees were employed on a full-time, part-time or casual basis. While the number of employees who made an agreement is not of itself a cause for concern about its authenticity, there were other factors that would have raised concerns if considered in the context of the Statement of Principles. As the application documents and attached material indicated:

The explanation of the terms of the Agreement and their effect set out in the Form F17B was self-evidently inadequate and simply repeated the contents without explaining them.
The MEU submissions combined with the information in the Form F17B was sufficient to establish real concerns about the possibility that the Nortek Agreement applied to the four employees who made the SMS Agreement, which warranted further examination.
If the Nortek Agreement applied to the employees who purportedly made the SMS Agreement, the explanation about the terms of the SMS Agreement and their effect, should have referred to the Nortek Agreement.
If the BCMI Award applied to the employees the explanation should have included information to the effect that the Award does not permit employment of employees in classifications in Schedule A on a casual basis and that in contrast with the BCMI Award, the SMS Agreement contains a provision mandating that the employment of casual employees ends at the completion of every shift, notwithstanding Mr Yvanoff's evidence that this was not the practice of SMS.
If the casual provisions applicable to Part B of the BCMIA were relevant, the explanation should have at least included the fact that in contrast to the SMS Agreement, the BCMI Award provides for casual loading to be compounded by certain penalty rates.
The evidence about the provision of the explanation was entirely unsatisfactory, one employee did not attend, and the evidence about the number of employees present at the Mudgee residence when the explanation was provided gives rise to significant doubt as to whether all employees who were eligible to vote were given an opportunity to do so, given the differences between the numbers of persons present for the explanation and copied into documents sent by SMS, and the number of employees who purportedly made the SMS Agreement.
There was no reasonable explanation for the evidence of Mr Perkins which established that the number of employees who attended the briefing, exceeded the number who voted to approve the SMS Agreement.

[187] The Deputy President's Decision engages only on a peripheral level with the MEU submissions and does not indicate the reasons for the matters raised in those submissions not being fully considered. As we have observed, there may be cases where limited consideration of a submission in relation to approval of an enterprise agreement, is sufficient to meet the requirements for the Commission to provide reasons for decisions. This was not such a case, as indicated by the submissions the MEU made at first instance. As we have set out in our consideration of the evidence, the grounds upon which the MEU contended that the SMS Agreement should not be approved were substantive and reasonably arguable. The grounds were set out in comprehensive and cogent submissions and have now been found to largely be established in this appeal.

[188] The factual matters asserted by the Union in its submissions were also objectively verifiable from the unredacted filing documentation. The persons the MEU asserted to have been involved in the making of the SMS Agreement (Mr Yvanoff and Mr Perkins) had signed the application for approval of the SMS Agreement, the Declaration in support of its approval and the SMS Agreement itself. The MEU had provided ASIC searches verifying the roles of Mr Perkins and Mr Yvanoff in Nortek and SMS and informed the Deputy President that an agreement covering Nortek and its employees, performing the same or substantially the same work in the same geographical area as SMS, had been approved by the Commission and was still well within its term. The unredacted filing documents lodged with the Agreement by SMS contained the names of all the persons to whom the NERR had been sent and the discrepancy between the number of persons who were sent the ballot email containing information about the Agreement and the number who purportedly made the SMS Agreement was evident.

[189] The Deputy President had access to those application documents, which on their face, indicated that the MEU's concerns were well founded and raised issues that the Statement of Principles is designed to address. As we have noted, the information could have been provided without providing contact details of the persons who were involved in making the SMS Agreement, to the MEU.

[190] We uphold appeal grounds 3 - 5 and find that the SMS Agreement was not genuinely agreed and was accordingly not capable of approval.

[192] The Full Bench went on to consider whether the agreement passed the BOOT on the hypothetical basis that the casual provisions in Part B of the BCMI Award applied to prospective casual employees under the agreement. The Full Bench noted that the agreement incorporated the BCMI Award, applied all relevant penalties and loadings, assigned a 25% loading for casuals, and affords an additional 1% remuneration, so that whatever the total payments under the Award would have been at least 1% more was paid under the agreement. On that basis, the Full Bench found that the agreement passed the BOOT.

[193] In the present case, the mode of engagement of all four employees who made the SMS Agreement is stated to be casual. This is relevant to the explanation of the terms of the SMS Agreement and their effect for reasons we have discussed in relation to genuine agreement. In relation to the application of the BOOT to the SMS Agreement, it is not the case that employees are entitled to receive all relevant penalties and loadings in the BCMI Award and to have those loadings compounded by the 25% casual loading. The Agreements Team did not specifically note the effect of the 25% loading not compounding penalty rates but simply noted that the issue of casuals under the SMS Agreement would need to be considered in light of the Full Bench decision in SESLS. The Agreements team also noted that the Agreement rates were some 10% in excess of the BCMI Award rates for permanent full-time employees. It was also noted that the Agreement provided for work Monday to Sunday on varying shift patterns and that employees may work six or seven day rosters.

[194] Applying SESLS, for the Deputy President to have been satisfied that the SMS Agreement passed the BOOT, it was necessary to consider whether the BCMI Award rates for the classifications covered by the Agreement, including all relevant penalty rates for rosters worked or likely to be worked by employees, were less than the rates an employee working the same rosters under the SMS Agreement would receive, with the casual loading not compounding the Agreement rates and penalties and taking into account any other relevant benefits and detriments provided by the SMS Agreement.

[195] There is no indication in the Decision that this comparison was conducted. It is not immediately apparent that the rates in the SMS Agreement are sufficiently above those in the BCMI Award that it would pass the BOOT if the comparison was conducted in the manner we have identified. It is also not apparent that the undertaking provided by SMS addresses this issue. That undertaking is that where there is an inconsistency between the Agreement and the Award, and the Award provides a greater benefit, the Award provision will apply to the extent of the inconsistency. On one view, this undertaking simply guarantees that employees will be paid the same amount as they would be entitled to be paid under the Award rather than that they would be better off overall.

[196] In light of the issues raised in the Full Bench decision in SESLS it is unclear how the SMS Agreement would interact with the Award, in circumstances where the employees covered by the Agreement are said to be engaged on a casual basis prior to the SMS Agreement being approved, which as we have noted, is of itself, inconsistent with the Award. This question would have been relevant if it was found that the Nortek Agreement did not apply to the employees at the time they purportedly made the SMS Agreement. Given our conclusions in relation to that matter and the appeal grounds concerning genuine agreement, it is not necessary for us to decide this matter.

[197] In relation to appeal ground 7, on its face the undertaking accepted by the Deputy President would generally resolve minor BOOT related inconsistencies between an enterprise agreement and an award, in the circumstances of this case, and absent consideration of the BOOT issue we have discussed in relation to appeal ground 6(b), it is not apparent how the undertaking could have resolved those issues. Also because of our conclusions in relation to the appeal grounds concerning genuine agreement, it is not necessary that we decide this matter.

[198] In conclusion, we note that the importance of open justice, including the provision of access to material on the Commission's files relevant to the question of whether an enterprise agreement has been genuinely agreed, has been heightened in recent cases where registered employee organisations have appealed decisions to approve enterprise agreements and thereby exposed sham agreements, the provision of false information in declarations, or agreements which are the product of ingenuine and fake arrangements.[146] Members of the Commission are reliant on the integrity of parties making declarations. If an agreement is approved and later asserted to be a sham, there is no power to revoke or vary the approval decision on the Member's own initiative.[147] The only mechanism by which the Commission can deal with an assertion that an enterprise agreement that has been approved, is ingenuine or a sham, is a successful appeal by a person aggrieved by the decision to approve the agreement, resulting in that decision being quashed.

[199] Open justice can be achieved by providing sufficient information to enable an organisation of employees with sufficient interest, to heard on approval, to be provided with information in the Form F16 and F17B, including at least, demographic information about the cohort of employees who made the relevant agreement and the name of the person who signed the Form F17B Employer declaration. In appropriate cases, open justice may require information about the identity of individual employees who were involved in making the agreement, subject to the Member receiving appropriate undertakings about the use that will be made of the information. If there is a concern in relation to privacy, it is also open to the Member to consider the information in Chambers, after obtaining information from the employer, and inform the parties (including those opposing the approval of an agreement) of preliminary conclusions about the information, for the purposes of addressing concerns. The Commission routinely takes this approach in dealing with the question of whether there is a majority for the purposes of a majority support determination application under s. 236 of the FW Act.

[200] For the purposes of lodging an appeal, a registered organisation of employees eligible to represent the industrial interests of the employees covered by an enterprise agreement, will generally be a person aggrieved for the purposes of s. 604 of the FW Act and will have standing to appeal, notwithstanding that the organisation was not a bargaining representative for the agreement and had no right or standing to be heard at first instance, other than by leave of the Member dealing with the application for approval. New evidence may be allowed in an appeal against a decision to approve an enterprise agreement, in accordance with the principles in Akins v National Australia Bank[148] discussed above. An appeal, particularly where new evidence is permitted to be called, may be a lengthy process. As a result, a sham agreement may operate for an extensive period until the decision approving the agreement is quashed, with the result that it has not validly operated at all. This can have significant implications for the employer and the employees who purported to make the agreement, not the least being uncertainty in relation to the source of entitlements.

[201] Members have discretion about the extent (if any) to which a registered employee organisation is permitted to be heard in relation to an application for approval of an enterprise agreement for which it is not a bargaining representative and to place limitations on the matters such an organisation will be permitted to address and the manner in which the matters are articulated by the organisation - by written or oral submission or by being granted permission to call evidence. There may be cases where such an organisation provides no basis upon which the discretion should be exercised or where the involvement of a registered organisation that is not a bargaining representative is limited to providing a written submission outlining its objections, which can be considered and addressed without a hearing. The present case is not one of those cases. It evidences the assistance a contradictor can provide in relation to the accuracy of declarations filed in support of approval, whether an agreement is genuinely agreed or whether it passes the BOOT. The present case also illustrates the desirability of these matters being dealt with at first instance rather than on appeal.

[202] For these reasons, where a prima facie case that an enterprise agreement is ingenuine or a sham is sought to be advanced, it is preferable that it be dealt with at first instance, rather than on appeal. Any concerns that a Member of the Commission dealing with an approval application or the parties to an enterprise agreement may have about the involvement of third parties in the process, can be addressed by the Commission Member dealing with the application for approval.

At a glance

Court

Decision date

Source

Judgment (327 paragraphs)

Mining and Energy Union v Specialised Mine Services Pty Ltd [2025] FWCFB 103 (23 May 2025)

Parties

Legislation Cited (5)

Cases Cited (11)