ADCO Constructions Pty Ltd [2018] FWC 184

1 Fair Work Act 2009 s.210 - Application for approval of a variation of an enterprise agreement ADCO Constructions Pty Ltd (AG2017/5534) ADCO CONSTRUCTIONS PTY LTD AND CFMEU UNION COLLECTIVE AGREEMENT 2015 - 2019 Building, metal and civil construction industries COMMISSIONER HUNT BRISBANE, 2 FEBRUARY 2018 Application for variation of the ADCO Constructions Pty Ltd and CFMEU Union Collective Agreement 2015 - 2019. [1] On 22 December 2017 I issued a decision [[2017] FWCA 6966] to approve a variation to the ADCO Constructions Pty Ltd and CFMEU Union Collective Agreement 2015 – 2019 (the Agreement) and indicated that I would provide separate reasons for that decision. The reasons are as follows. Background [2] The application was filed on 15 November 2017 by ADCO Constructions Pty Ltd (the Employer). A Form F23A – Employer’s statutory declaration in support of variation to an enterprise agreement accompanied the application, declared by Mr Simon Hawkins, Construction Manager of the Employer. [3] On 23 November 2017 the Construction, Forestry, Mining and Energy Union (CFMEU) filed a Form F23B Statutory declaration of an employee organisation in relation to variation of an enterprise agreement that declared amongst other things, that it disagreed with certain matters specified in the Employer’s F23A declaration. [4] The CFMEU raised several issues with the information provided on the F23A, as follows: (a) That there was insufficient information provided to clarify what information was given to ensure employees were fully aware of the effects of the variations if made, which raised questions as to whether a genuine agreement was reached in accordance with s186(2)(a) and 188 of the Fair Work Act 2009 (the Act); (b) That a variation to clause 18.6 of the Agreement did not provide more beneficial terms and conditions as provided on the form prepared by the Employer; [2018] FWC 184 REASONS FOR DECISION -- 1 of 27 -- [2018] FWC 184 2 (c) That variations to certain clauses were inconsistent with the relevant Award and would not be variations capable of passing the better off overall test (BOOT); and (d) That the Employer had stated the reasons for the majority of varied clauses was to be compliant with the Code for the Tendering and Performance of Building Work 2016 (the Code), but had not clarified the extent to which the variations were required to achieve this. [5] On 28 November 2017 the CFMEU filed a Form F52 application for an Order to Produce certain documents sought by the CFMEU. [6] On the same date, the Employer, represented by Sparke Helmore Lawyers wrote to the Fair Work Commission (the Commission) requesting a predicted timeline for the application to be allocated to a member of the Commission. The Employer noted that it was under ‘significant time pressure’, as it was unable to tender for, be awarded, or commence Commonwealth funded projects until all of its enterprise agreements are compliant with the Code. [7] On 11 December 2017 further correspondence was sent to the Commission on the Employer’s behalf, requesting an urgent hearing of the application due to the consequences of the Employer being prohibited from tendering for, being awarded or commencing work on Commonwealth funded projects. [8] The matter was subsequently allocated to me, and on 12 December 2017 the application was listed for Hearing on 19 December 2017. The parties were invited to file and serve any material they wished to rely upon by 15 December 2017. [9] In dealing with the application for an Order to Produce documents sought by the CFMEU, on 12 December 2017 correspondence was sent from my Chambers inquiring of the Employer if the documents could be provided voluntarily. At 3:00pm on 12 December 2017 the Employer communicated it would provide the documents voluntarily, and would make best endeavours to provide the documents that were sought by midday, 13 December 2017. [10] The CFMEU through its legal representative, Hall Payne Lawyers did not then press for the Order to Produce to be made and withdrew the application. A request was made for the hearing of 19 December 2017 to be vacated. [11] It became clear to me that the CFMEU’s legal representative had misunderstood the purpose of the 19 December 2017 hearing, that being a hearing to deal with the substantive issues of the application, not to deal simply with the application for an Order to Produce. Correspondence was issued from my Chambers on 12 December 2017 at 4.00pm as follows: ‘Dear parties I refer to the above matter and the correspondence below. I wish to clarify that the Commissioner considers that: As the documents sought by the CFMEU are to be voluntarily produced by the Application by midday tomorrow; -- 2 of 27 -- [2018] FWC 184 3 The parties will file and serve any material they wish to rely on in relation to the substantive application, including objections raised by the CFMEU by no later than COB on Friday, 15 December 2017. The substantive application, including objections pressed by the CFMEU will be heard on 19 December 2017.’ Objection to substantive hearing [12] On 12 December 2017 at 4.09pm, Hall Payne Lawyers corresponded with my Chambers to respectfully submit that the matter should not proceed to a substantive hearing on 19 December 2017. One of the reasons provided was that once the requested documents were received (presumably by midday Wednesday, 13 December 2017), it would be likely that calculations would need to be made, and evidence of members then prepared. [13] The CFMEU pressed that it be allowed some further time to prepare its case and sought an adjournment until January 2018. [14] The Employer submitted that the matter should proceed for the reasons set out in the letter of 11 December 2017 and referred to at [7]. Hall Payne Lawyers responded that the letter had only just been provided to the firm, and that while the CFMEU accepted that the application needed to be heard promptly, submitted that continuing with a hearing on 19 December 2017 would deny the CFMEU procedural fairness. [15] Correspondence was sent to the parties on 13 December 2017 advising that the hearing on 19 December 2017 would take place. The CFMEU was afforded until 3.00pm on 18 December 2017 to file any material it wished to rely upon. [16] The correspondence also informed the parties that relevant to the BOOT considerations, the Agreement, together with the variation sought contains relatively high rates of pay (approximately double the modern award rate of pay), and on the Commission’s analysis at that time, the variation sought would satisfy the BOOT. [17] The CFMEU inquired if the Commission’s analysis was available to the parties, which, if made available, might help to refine the issues to be determined at hearing. Information was made available to the parties that had been prepared by the Commission’s agreement triage team. The parties were informed that the information provided did not constitute any concluded view that I may have of the BOOT considerations. [18] On 13 December 2017 the Employer filed in the Commission five folders of documents voluntarily produced. [19] On 18 December 2017, the CFMEU filed submissions together with statements of Mr Jade Ingham, Assistant Secretary of the Northern Territory Branch of the CFMEU, and Mr Luke Tiley of Hall Payne Lawyers. Mr Tiley stated that the documents produced by the Employer were received by his firm at approximately 2.00pm and 5.30pm on 13 December 2017. -- 3 of 27 -- [2018] FWC 184 4 Hearing – 19 December 2017 [20] At a hearing before me on 19 December 2017 the Employer was represented by Mr J Murdoch QC, instructed by Sparke Helmore Lawyers. The CFMEU was represented by Ms L Doust of Counsel, instructed by Hall Payne Lawyers. Leave was granted pursuant to s.596 of the Act for both parties to be represented given the complexity of the issue before the Commission. [21] At the hearing the CFMEU pressed for an adjournment, citing prejudice to its case if the matter continued. It was submitted that it needed to speak with members. Ms Doust submitted that a further ‘couple of days’ might be sufficient to allow the CFMEU time to properly prepare its case. [22] The Employer submitted that a delay in hearing the application until after Christmas would be against its interests. [23] Where I had been heavily listed with a 3.5 day hearing in the week leading up to Christmas, on the matter resolving I then had capacity to hear the application on 21 December 2017. I informed the parties that while I did not agree with the CFMEU that it would be denied procedural fairness if the matter was heard on 19 December 2017, on my calendar becoming clear it would be more convenient to hear the matter on 21 December 2017. The hearing was adjourned until then. [24] I suggested that in light of the objections raised by the CFMEU relevant to whether employees had genuinely agreed to the variation, Mr Hawkins should prepare a witness statement prior to the hearing on 21 December 2017. Mr Hawkins’ statement was filed and served on the CFMEU on 20 December 2017 at 4.44pm. Hearing – 21 December 2017 [25] At the hearing on 21 December 2017 Ms Doust helpfully informed the Commission that upon analysing the documents produced by the Employer, the objection to the variation of the Agreement meeting the BOOT was no longer pressed. [26] The remaining objections as outlined in the CFMEU’s submissions were: (a) The affected employees did not genuinely agree to the proposed variation as required by section 188 of the Act because the [Employer] relevantly misrepresented to them that: (i) Each and every aspect of the proposed variation was required so as to ensure that the applicant’s industrial instrument was compliant with the Code for the Tendering and Performance of Building Work 2016 (the Code) and that the applicant was therefore eligible to tender for the performance of building work that is wholly or partly funded by the Commonwealth, when in fact that was not the case in respect of several clauses in the Agreement; and/or -- 4 of 27 -- [2018] FWC 184 5 (ii) The respondent wished to remain a party to, and named in the title of, the Agreement following the proposed variation when in fact that was not the case; (b) The proposed variation was not signed by an Employee Representative as required by section 185 of the Act and the Fair Work Regulations 2009 at r.2.06A. [27] During the course of the hearing the CFMEU withdrew its objection relevant to the signature on the variation not meeting the requirements of the Fair Work Regulations 2009 at r.206A. [28] The CFMEU advanced a proposition that in the event the Commission did approve the variation of the Agreement, the Commission should, at its discretion pursuant to s.586 of the Act excise the CFMEU from the name of the Agreement and it being named as a party to the Agreement. Section 586 of the Act states: ‘586 Correcting and amending applications and documents etc. The FWC may: (a) allow a correction or amendment of any application, or other document relating to a matter before the FWC, on any terms that it considers appropriate; or (b) waive an irregularity in the form or manner in which an application is made to the FWC.’ [29] The Employer communicated that it was not opposed to this course of action. Evidence of Mr Simon Hawkins [30] Mr Hawkins was present at the hearing and gave evidence. He was cross-examined in relation to the statutory declaration sworn by him in support of the application to vary the Agreement. Mr Hawkins agreed with Ms Doust that the first proposed variation to the Agreement that was discussed with employees on 19 October 2017 was a CFMEU-preferred variation, not the variation the subject of this application. [31] Mr Hawkins’ statement accounts for the following events: (a) On 19 October 2017 Mr Hawkins met with 10 of the 12 affected employees to discuss the CFMEU-preferred draft variation. Mr Hawkins had been in attendance at meetings with the CFMEU throughout the course of 2017 when the draft was discussed. The meeting on 19 October 2017 lasted for approximately 1.5 hours; (b) The draft variation was handed out and some employees advised they were not comfortable with a number of items including: (i) Hot weather guidelines; (ii) Double time overtime; (iii) 50 hour week restriction; (iv) RDO penalty rates; (v) Shift work; and (vi) Lack of RDO flexibility. -- 5 of 27 -- [2018] FWC 184 6 (c) Employees were concerned the proposed variation would limit their overtime availability and potentially reduce their take home pay each week; (d) A Gold Coast and Brisbane representative of employees was elected; (e) The following changes to conditions was discussed: (i) A minimum 9 hour day to be taken at the employee’s discretion; (ii) No overtime restrictions; (iii) Flexible RDO’s bankable up to 20 days with the ability to pay out at the end of each calendar year; (iv) To encourage ADCO to allow employees to perform work on an RDO, the employees suggested normal rates of pay for the days worked with the day to be accrued; (v) Overtime rates as per the existing agreement; and (vi) Shift work clause to be amended to allow early starts without penalty to ADCO. (f) On 25 October 2017 Mr Hawkins met with 11 of the 12 affected employees and held an information session to explain a company-drafted variation to the Agreement. The document prepared by the Employer incorporated the changes to conditions discussed at the meeting of 19 October 2017, together with changes required to make the Agreement Code compliant; (g) A page-by-page review of the proposed variation was undertaken. Mr Hawkins explained the reasons for each amendment being made, being either due to Code compliance or to one of the employee’s requests; (h) When discussing site allowances payable, one employee suggested a preference to return to a flat rate of site allowance, regardless of the size of the project. All other employees at the meeting agreed. Discussion ensued and the employees present and Mr Hawkins agreed on a rate of $3.00 per hour. It was understood that the site allowance rate replaced all other allowances in Appendix 2 of the Agreement; (i) A suggestion was made by employees to include wording within the variation to the effect that employees would be offered work in preference to labour hire workers; (j) The meeting lasted for approximately two hours; (k) Following the meeting, amendments were made to the draft variation to reflect what had been discussed; (l) On 26 October 2017 Mr Hawkins held an information session with the only employee who had not been present at the meeting the day earlier. Mr Hawkins discussed with the employee the changes sought due to the Code and those requested by employees; -- 6 of 27 -- [2018] FWC 184 7 (m) On 26 October 2017 Mr Hawkins distributed to the 12 employees the draft variation including a copy with tracked changes; (n) On 27 October 2017 Mr Hawkins left two voice messages on Mr Ingham’s phone and the two men spoke at approximately 4.11pm1 (o) Following the telephone call Mr Hawkins emailed Mr Ingham the draft variation and invited him to attend an information session with employees on 31 October 2017; (p) On 30 October 2017 employees were informed there would be an information session on 31 October 2017; (q) Mr Ingham and another CFMEU representative attended the information session; (r) Copies of the draft variation were not distributed as they had been issued by email and by the employees’ supervisor on 26 October 2017; (s) Mr Hawkins opened the meeting and welcomed Mr Ingham. He discussed the earlier two meetings held on 19 and 25 October 2017; (t) Mr Hawkins discussed the CFMEU-preferred variation and stated that employees had said they wished to move from that document to one which they preferred. He informed the employees this was reflected in the proposed variation; (u) Mr Ingham then spoke to the group and said words to the effect: ‘This agreement is a three way deal. I should have been invited to previous meetings and this won’t be a union deal in its current form. The employees will be going backwards in my view.’ (v) Mr Ingham addressed some of the changes, including the allowances that employees would be giving up in order to receive a flat site allowance. Some employees responded that they considered a flat site allowance to be a fair outcome for all ADCO employees regardless of the size of the project they were working on; (w) One employee stated it was important that the meal allowance be retained within the Agreement; (x) Employees informed Mr Ingham that they wished to have flexibility with hours. Mr Ingham responded with words to the effect that the union cannot be flexible with the agreement, it is an industry standard they are establishing; it’s the union’s way or you are on your own; (y) The employees requested the CFMEU and ADCO representatives leave the room so that the employees could discuss it between themselves. The meeting of employees took place over approximately 15 minutes; -- 7 of 27 -- [2018] FWC 184 8 (z) Upon the CFMEU and ADCO representatives returning to the meeting, Mr Shannon Overton, on behalf of the employees informed those present that the employees were happy to move forward with the ADCO proposed variation; (aa) Mr Ingham asked the employees if they would like further advice regarding the variations. An employee stated they would read the document and come back to the CFMEU with any questions; (bb) Mr Ingham said that there were strong voices in the room, and if anyone was not confident enough to speak in front of the group, they were welcome to contact Mr Ingham or other CFMEU representatives; (cc) Mr Craig Fielder responded that nobody had been pressured; (dd) Mr Ingham repeated his offer to speak privately with individuals if an employee did not feel comfortable talking in front of the group; (ee) After Mr Ingham and the other CFMEU representative left the meeting, Mr Overton stated that it would be necessary for the meal allowance to be re-inserted into the variation. Mr Hawkins agreed and stated that he would reissue the documents and restart the voting period; (ff) On 31 October 2017 Mr Hawkins issued the variation including a document with tracked changes. Employees were informed the voting period would be from 9 November 2017 until 14 November 2017. Employees could vote in person at the Brisbane or Gold Coast offices, by post or by electronic response; (gg) On 1 November 2017 Mr Hawkins sent to Mr Ingham the variation. Hard copies of documents were distributed to employees on 1 November 2017; (hh) ADCO received seven entry notices for CFMEU representatives to inquire into suspected contraventions of the Work Health and Safety Act 2011 at seven of its sites across Brisbane and the Gold Coast where its employees were working. The entry notices were for 3 November 2017; (ii) On 7 November 2017 an email was sent to employees attaching a letter dated 7 November 2017 and entitled ‘Explanation of changes to ADCO Constructions Pty Ltd and CFMEU Union Collective Agreement 2015-2019’ and a document entitled ‘Explanation of proposed changes to the ADCO Constructions Pty Ltd and CFMEU Union Collective Agreement 2015-2019’; (jj) At no point did employees approach Mr Hawkins to discuss the variation other than at the meetings the Employer held with employees. [32] In cross-examination Mr Hawkins was asked if it would have been a ‘straight up and transparent’ way of dealing with attempting to obtain a Code-compliant varied agreement to invite Mr Ingham to the meeting of employees on 19 October 2017. Mr Hawkins answered that he wasn’t doing anything wrong; he was meeting with his employees and was transparent with Mr Ingham once he had established with employees what they would like out of the variation. -- 8 of 27 -- [2018] FWC 184 9 [33] Relevant to the meeting held on 31 October 2017 and to which Mr Ingham attended, it was put to Mr Hawkins that at the meeting explaining the variation to employees, he had forcefully put to employees that the variation was necessary to achieve Code compliance. When asked if he had stated it was imperative that the variation be agreed to make the Agreement Code-compliant, Mr Hawkins answered, “I don’t recall.”2 [34] Ms Doust took Mr Hawkins through the 7 November 2017 document. This document had been produced by the Employer with an additional column on the right of the page to help explain to employees the reason for the changes sought. The letter attached to the document is as follows: ‘Dear ADCO Employee EXPLANATION OF CHANGES TO ADCO CONSTRUCTIONS PTY LTD AND CFMEU UNION COLECTIVE AGREEMENT 2015 – 2019 Further to our recent discussions and the documentation issued to you last week, please find attached the following document: Explanation of proposed changes to the ADCO Constructions Pty Ltd and CFMEU Union Collective Agreement 2015 – 2019 (“the Agreement”) This document sets out a table of the changes to the Agreement which will be voted upon by the Employees from Thursday, 9 November 2017. The table is based upon the Variation already issued to you. As previously explained, most of the changes to the Agreement are required to ensure compliance with the Building Code 2016. The attached table includes a column on the right- hand side, Explanation of the Change, for ease of reference and understanding of the proposed change. This table is issued as a guide only and should be read in conjunction with the documentation already issued to you, including the Variation, the clean copy of the proposed Agreement (as varied) and the copy of the proposed Agreement with tracked changes. We have held several information sessions regarding the proposed Variation and I remain fully available to discuss and explain any of the proposed changes to you. Please do not hesitate to call me if there is any aspect of the Agreement or the Variation which you do not understand or which you wish to discuss. Your sincerely Simon Hawkins Queensland Manager’ [35] Ms Doust questioned Mr Hawkins relevant to clause 24.11 of the original Agreement. This clause addresses where an employer wants an employee to work on an RDO and the process to be followed. One of the provisions which would arguably be offensive to the Code would be the requirement for the employer to consult with the worker and their union representative at least one week prior to the scheduled RDO which is proposed to be worked. [36] The wording of the clause in the Agreement prior to the variation being made and approved covered subclauses (a) through to (f). The varied clause covered (a) to (c) only. The explanation for the change in the right hand column is as follows: -- 9 of 27 -- [2018] FWC 184 10 ‘This clause has been amended to comply with the Building Code 2016. The process for requiring an Employee to work on an RDO has changed, as set out adjacent. The Employer is not required to consult a Union representative at least 1 week prior to the scheduled RDO which is proposed to be worked. The employer is not required to request Union agreement to work on any RDO.’ [37] It was put to Mr Hawkins that the removal of clause 24.11(c) – ‘An Employee or group of Employees may decline to work any RDO without the threat of Employer retribution or actual Employer retribution’ – was not a necessary change due to Code compliance. Mr Hawkins was asked if it was the case that there might have been some reason to make changes to clauses for Code compliance, but elsewhere there was a range of collateral reasons motivating the change. Mr Hawkins agreed with this proposition.3 [38] Relevant to the deletion of clauses 32.1 – 32.10 of the Agreement, Mr Hawkins agreed in cross-examination that not all of the clauses removed were necessary due to the Code issue; 32.2 and 32.6 were not necessary to remove due to the Code.4 The explanation of the change in the right hand column of the guidance document states the following with respect to clauses 21.1 – 32.10: ‘These clauses have been removed and replaced to comply with the Building Code 2016. The clauses have been replaced by the adjacent clause 31, nothing the requirements for the Parties to comply with the FW Act and the WHS Act, including when exercising a right of entry.’ [39] In re-examination, Mr Hawkins stated that the document provided to employees on 7 November 2017 was communicated as a guide only. Employees were encouraged to review the tracked changes document provided. [40] Relevant to the changes made to working on RDO’s, Mr Hawkins was asked if the change made was at the request of the Employer. He answered that it was not; it had been the employees seeking changes, and not having to seek the approval of the CFMEU to work on RDO’s. Evidence of Mr Jade Ingham [41] Mr Ingham prepared a witness statement and gave evidence by telephone during the hearing on 21 December 2017. Mr Ingham stated that in the lead up to 27 October 2017 the CFMEU had been engaging in enterprise bargaining negotiations with the Employer and other employers. The purpose of the negotiations was for each company to achieve an enterprise agreement which was Code compliant so that each company could tender for and perform Commonwealth Government work. The CFMEU was willing to assist each of the builders to achieve a Code compliant variation, but ‘it also had other objectives which it wanted to achieve through those negotiations in the interests of its members.’5 [42] It was Mr Ingham’s evidence that employees had the potential to lose terms or conditions on the variation of an agreement in order to achieve Code compliance. -- 10 of 27 -- [2018] FWC 184 11 [43] On 27 October 2017 Mr Ingham received a telephone call from Mr Hawkins. Mr Hawkins informed Mr Ingham that he had been having direct discussions with ADCO employees about a variation to the Agreement. Mr Ingham responded angrily, stating it was not conducive to a good relationship between ADCO and the CFMEU or its workforce for there to be direct negotiations without the CFMEU. [44] Mr Ingham was invited to the meeting held with employees on 31 October 2017. He was provided with a copy of the variation, and upon reading it concluded that the variation would leave employees worse off and should not be approved. Mr Ingham resolved to articulate those matters to the employees at the meeting. [45] Mr Ingham’s evidence was that at the commencement of the meeting Mr Hawkins told employees that ADCO had been negotiating with them for some time and the company had endeavoured to take on board their views. Mr Hawkins stated that the time had come to vote upon the variation because it was imperative that the variations are made to achieve compliance with the Code. Mr Ingham’s evidence was that Mr Hawkins made it very clear that the cause of the variation was the need to make the Agreement Code-compliant. [46] Mr Hawkins did not go through the proposed variations one-by-one, and he did not identify that some of the variations were not necessary in order to achieve Code compliance. [47] When Mr Ingham was given the opportunity to address the employees he informed them that he thought the process that ADCO had engaged in was deceitful, and the employees were being asked to compromise their Agreement and award entitlements. Mr Ingham stated that ADCO would have to take the CFMEU’s name off the document, and the CFMEU would not support the variation. [48] In cross-examination, Mr Ingham stated that there were a number of items he was able to address with employees at the meeting of 31 October 2017, however he didn’t have the opportunity to implore the employees to vote against the variation on all matters he wished to address. The following exchange occurred in cross-examination:6 ‘It became clear to me that, you know, that because of the three prior meetings that had already been had, the mind of the workers had already been made up. I'm convinced that Hawkins and others had presented the document in such a way to those workers that they were - either directly or indirectly felt threatened in respect of their job security if they didn't change the agreement. Essentially by removing the maximum hours clause (indistinct).’ You addressed the workers prior to their meeting on their own and then after they'd met on their own, didn't you?---That's right. And so far as you were given the opportunity to address them, no restriction was put on you in relation to the time you could take or what you could say, was it?---Only that workers asked to be given some time on their own and then refused an offer – I think there was a couple of strong voices in the room but they refused an offer for me to go right through the document. I think we touched on maybe four or five items in the first period and then after when they were – the five minutes that I had after they'd met on their own was basically offering workers the opportunity, you know, to talk to the union directly, not in front of the group. I had a view that there were some people that might have been intimidated by the fact there was management presence in the room and also there was a couple of really strong voices for, you know, the company's proposal amongst the workforce. -- 11 of 27 -- [2018] FWC 184 12 Yes, well when you refer to the strong voices in the room, you're referring to strong voices among the employees?---That's right. And there was also discussion about the desire that employees had for changes to the working conditions which we detailed earlier, the RDO's, the start times, et cetera?---Yes, the company expressed those views and so did some workers in the room. [49] The following questions were put by me and answered by Mr Ingham:7 ‘……it's Mr Hawkins' evidence that after the employees requested to speak alone, then you were given the opportunity to inform the employees that if they wanted to speak one on one with you or other people within the CFMEU privately that they could do that. Did anybody take you up on that offer?---I think one of them or two of them might have contacted one of our organisers down the coast but it was a very brief conversation, I think mainly to let them know that they were intending to vote the document up. I'm sorry, I missed that part?---A very brief conversation and the context was that they intended to vote the document up. So they were informing – so members were informing the CFMEU that they intended to approve the variations, is that right?---Yes, that's right. Did you attend on any of the ADCO sites after 31 October?---No, I didn't. And your suggestion about the reintroduction of the meal allowance was met by the company, wasn't it, after your concerns were raised on 31 October?---Yes, I believe so. I think they changed it. That was one of the items that I did get to talk about with the workers, Commissioner, and it was clear to me the workers had no idea that they were missing out on that. There was some discussion about the significant changes to the RDO's. Do you recall what Mr Hawkins said to employees about those changes?---At that meeting on the 31st? Yes?---Is that what you mean? Not specifically, Commissioner, only that – actually, I don't know that he said a lot. I'm trying to think about what Hawkins said versus what the workers said. I'm sorry, I just – yes, couldn't really give you a clear answer on that. Did you impress upon the employees that this idea of banking up to 20 RDO's was, in your view, not a good idea?---Absolutely, I did. Do you recall what the employees said to you in return?---There was one worker that spoke, from memory, on this point and, you know, and he said that he wanted flexibility for his RDO's. And it struck me probably afterwards, Commissioner, to be honest, but I think where most of the ADCO CW's actually work, they're pretty well got total flexibility already, so I don't know that changing the clause in the agreement gave them any more than what they were going to have. That's what – yes, I wished I had have thought about that at the time on the 31st but like everything, it's 20/20 vision, in hindsight. It's Mr Hawkins' evidence that this was being employee led, at the employees' initiative. Was that your impression?---I think that's farcical, to be honest. I think – the meeting I went to, certainly there was a couple of strong voices of workers but again the fact that there was three meetings prior to the union being informed that they were even going on, says something of the company's intent. And I've never – again, I've said it before, I've never seen workers want -- 12 of 27 -- [2018] FWC 184 13 to work more hours for less money. That's just – it's rubbish if that's the view of – and it is the view because I've read the Hawkins statement. At least one employee voiced his view that he was happy with the variation that was being sought relevant to the RDO because it might provide more flexibility?---Yes.’ [50] In cross-examination, Mr Ingham stated that the day before the Hearing, Hall Payne Lawyers had contacted some of the employees.8 Legislative Context [51] Sections 180 and 188 of the Act state: 180 Employees must be given a copy of a proposed enterprise agreement etc. Pre-approval requirements (1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section. Employees must be given copy of the agreement etc. (2) The employer must take all reasonable steps to ensure that: (a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials: (i) the written text of the agreement; (ii) any other material incorporated by reference in the agreement; or (b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials. (3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement: (a) the time and place at which the vote will occur; (b) the voting method that will be used. (4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1). Employees must be given copy of disclosure documents etc. (4A) If an organisation gives the employer a document under section 179 by the end of the fourth day of the access period for the agreement, the employer must take all reasonable steps to ensure that the relevant employees: (a) are given a copy of the document as soon as practicable after it was given to the employer; or -- 13 of 27 -- [2018] FWC 184 14 (b) are given access to a copy of the document as soon as practicable after it was given to the employer and have access to that copy throughout the remainder of the access period for the agreement. Note: This subsection is a civil remedy provision (see Part 4-1). (4B) If the employer is required to prepare a document under section 179A, the employer must take all reasonable steps to ensure that the relevant employees: (a) are given a copy of the document by the end of the fourth day of the access period for the agreement; or (b) are given access to a copy of the document by the end of that fourth day and have access to that copy throughout the remainder of the access period for the agreement. Note: This subsection is a civil remedy provision (see Part 4-1). (4C) The employer must not knowingly or recklessly make a false or misleading representation in the document that the relevant employees are given a copy of or access to under subsection (4B). Note: This subsection is a civil remedy provision (see Part 4-1). Terms of the agreement must be explained to employees etc. (5) The employer must take all reasonable steps to ensure that: (a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and (b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees. (6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph: (a) employees from culturally and linguistically diverse backgrounds; (b) young employees; (c) employees who did not have a bargaining representative for the agreement.” “188 When employees have genuinely agreed to an enterprise agreement An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that: (a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement: (i) subsections 180(2), (3) and (5) (which deal with pre approval steps); -- 14 of 27 -- [2018] FWC 184 15 (ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and (b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and (c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.” Employer’s Submissions [52] The Employer submitted that pursuant to s.180(5) of the Act, an employer must take all reasonable steps to ensure that the terms of the variation and their effect are explained to the employees, and the explanation is provided in an appropriate manner taking into account the particular needs and circumstances of the relevant employees. [53] Four information sessions across the 12 employees were held. All employees covered by the Agreement attended at least one session. Mr Hawkins discussed the proposed variations and their effect on the employees at these sessions, and encouraged employees to ask questions regarding the variations, or if there was any aspects which they did not understand. The Employer also distributed information by email on 26 October 2017. [54] Following the final information session on 31 October 2017, further changes were made to the proposed variation to take into account what had been pointed out by the CFMEU - that the meal allowance should be reinstated. [55] Employees were issued with the variation on 7 November 2017, and employees were encouraged to contact Mr Hawkins if they wished to discuss the variations or required further explanation of the proposed changes to their individual circumstances. No employees advised that they did not understand the variations proposed or their effect. [56] The Employer submitted that all employees covered by the Agreement are well known to Mr Hawkins, are all from English speaking backgrounds, and do not appear to have any difficulty with reading, writing or understanding English. All employees have completed Grade 10, with seven of the 12 employees having completed Grade 12. All but one employee has completed or is in the process of completing post-secondary qualifications. [57] The Employer submitted that the CFMEU had been aware of the proposed variation since 27 October 2017, and had opportunity to discuss the variation and its effect with employees since that date. Mr Ingham was invited to attend and did attend the information session with employees on 31 October 2017. [58] It was the Employer’s submission that s.180(5) of the Act, taking into consideration that this application is a variation to the Agreement, not the Agreement approval itself, has been met. It is contended that the ultimate variation put to the employees and voted upon was by way of a process of evolution. The CFMEU-preferred variation was put to employees, with employees responding with their wishes to changes terms and conditions. This was -- 15 of 27 -- [2018] FWC 184 16 accommodated by the Employer. A further meeting was held on 31 October 2017, and a further variation then distributed. The Employer submitted that the employees were actively involved and engaged in the process of evolution of the drafts. [59] It was submitted that having regard to how the proposed variation was explained to the employees, and the needs of the employees, the employees would, having regard to their education, be expected to have a reasonable ability to comprehend documents that are relevant to their terms and conditions. This is enforced by the strong views expressed at the meeting of 31 October 2017. [60] The employees had the benefit of a clean copy of the variations, together with a marked up version. They had an oral presentation on 31 October 2017, and the benefit of an explanation guide on 7 November 2017. [61] The employer rejected the contention advanced by the CFMEU that the employees had been misled or misinformed that all of the variations or most of them were necessary to achieve Code compliance. The Employer submitted that this flies in the face of the evidence before the Commission; especially so when employees at the first meeting advanced a set of conditions they wished to see changed; that is, improvements the employees considered were important. It was submitted that the employees proposed them because the employer wanted something and they, the employees wanted something in return. [62] The CFMEU offered to speak to employees one-on-one if employees required further information. It would appear that none of the employees took the CFMEU up on that invitation. Mr Ingham’s evidence is that two employees contacted the CFMEU to advise that the variation would be voted in favour, and despite the CFMEU’s concern, the variation would be made by the employees. [63] Regarding the document distributed by the Employer to employees on 7 November 2017, the Employer submitted that the document was clearly articulated to be a guide only. It was stated that the document was not intended to be a detailed chapter and verse explanation of the variation. [64] In response to questioning from me about whether the employees were led to believe the reason for extending the term of the Agreement was compliance with the Code, Mr Murdoch submitted that both the terms of the variation and the effect of those terms were explained to the employees. [65] The existing words in the Agreement prior to the variation came into effect were: ‘2.1 This Agreement remains in force until 2 July 2019. The Agreement will continue to apply beyond its expiration date until it is replaced by another agreement with, or which covers, the Constructions, Forestry, Mining and Energy Union (CFMEU).’ [66] The variation stated: ‘2.1 This Agreement remains in force until 23 May 2020. The Agreement will continue to apply beyond its expiration date until it is replaced by another agreement.’ [67] The ‘Explanation of the Change’ contained within the 7 November 2017 document is: -- 16 of 27 -- [2018] FWC 184 17 ‘This change extends the nominal expiry date to 23 May 2020, previously 2 July 2019. It also ensures compliance with the Building Code 2016’ [68] The Employer submitted that s.180(5)(a) of the Act requires an employer to explain to employees the ‘effect’ of the term, not the ‘purpose’. The effect of the change was to do two things; to extend the term of the Agreement, and to remove the provisions regarding the next agreement being made with the CFMEU, which would fall foul of the Code. [69] With respect to the criticism made by the CFMEU that the Employer should have involved the CFMEU in discussions about a proposed variation earlier than it did, the Employer contended that there is no obligation in law, either under the Agreement or the Act. Nevertheless, the Employer did contact Mr Ingham and provided him with a copy of the proposed variation prior to the meeting of employees. Mr Ingham was able to review the document, assess it, and he was afforded the opportunity to address the union’s concerns when he met with employees. [70] It was submitted that there was nothing contentious in the words used by Mr Hawkins in the meeting of 31 October 2017 to encourage employees to vote yes to approve the variation the Employer wished to make to the Agreement. The Employer does not resile from Mr Hawkins’ statement to employees that it was imperative the variation should be approved by employees to achieve compliance with the Code. On the evidence, the variation contained provisions the Employer needed to ensure Code compliance, and there were terms that the employees desired; it was their ‘price’. [71] The Employer submitted that retaining the words ‘CFMEU Collective Agreement’ in the title of the Agreement was not a misrepresentation designed to mislead the employees into believing the varied Agreement was endorsed by the CFMEU. Rather, it was the actual title of the existing Agreement, and neither the Employer nor employees sought a variation on this aspect. [72] The Employer contended that in light of Mr Ingham’s forceful remonstration to employees at the meeting on 31 October 2017 that the CFMEU did not support the variation, it cannot be said that employees were misled or misinformed that the CFMEU was supporting or endorsing the variation simply by the retention of the CFMEU name in the title. [73] The Employer submitted that the variation should be approved by the Commission. CFMEU’s Submissions [74] The CFMEU requested of the Commission to find, pursuant to the test required in s.188(c), that the Employer’s conduct could not result in the Commission being satisfied that the Agreement has been genuinely agreed to by the employees. It was submitted that it is a positive requirement that the Commission needs to be satisfied that there is an absence of grounds for concern that the employees had not genuinely agreed to the variation. [75] Reference was made to a decision of Asbury DP in Application by Central Queensland Services Pty Ltd [2015] FWC 1554 where the Deputy President said the following: -- 17 of 27 -- [2018] FWC 184 18 ‘[71] It can be seen from the cases that the question of whether the Commission is satisfied that there are no other reasonable grounds for believing that an agreement has not been genuinely agreed to by employees is not limited to a consideration of whether there has been coercion or misinformation in relation to the agreement or its effect. The consideration under s.188(c) is not limited to these matters and incorporates all of the relevant circumstances surrounding the process by which employees indicate their agreement. ….. [74] I am also of the view that when considering whether employees have been coerced, intimidated, mislead or misinformed in relation to agreeing to the terms of an agreement, there is no requirement that the conduct of the person or persons involved was intentional. All that is required is that the Commission be satisfied that, in addition to the matters in s.188(a), there are other reasonable grounds for believing that the agreement has not been genuinely agreed to by employees.’ [76] It was submitted that the ADCO employees who voted for the variation had been misled or misinformed, but not coerced or intimidated. [77] It was contended that the Employer misrepresented the bundle of variations it proposed were all, or particular clauses were necessary to ensure the Agreement became Code compliant, when many of the variations were not. [78] It was submitted that communication between Mr Hawkins and Mr Ingham represented that the variation was required because of Code compliance, together with the statements made by Mr Hawkins to employees at the meeting of 31 October 2017. The CFMEU conceded that the communication sent by the Employer to employees on 7 November 2017 which stated that the ‘majority’ of the proposed variations were required to achieve Code compliance, but contended that this represented a difficulty for the Employer because it was not represented as a correction to the earlier statements. [79] The CFMEU filed a document outlining the variations to the Agreement, and whether they were necessary to achieve Code compliance. It was contended that employees who voted for the variation to be made were not seized of all correct information at the time they cast their vote. [80] It was submitted that the employees could not have been clear as to what they were voting to approve, and why they were doing so. In that case, it was submitted that the employees were misled, and therefore the variation cannot be approved. [81] It was submitted that the Employer had known of the requirement to vary the Agreement from 2016, and it was a ‘hot issue’ in the industry. The CFMEU agreed that employees were well aware of the need to have an agreement compliant with the Code. Where, however, the danger lies, is the compulsive force of that concern, and employers would be obligated to be exceptionally clear to employees about what is necessary relevant to the Code. [82] The CFMEU contended that at the presentation on 31 October 2017, Mr Hawkins represented to employees that the entire package of variations was required in order to achieve compliance with the Code. -- 18 of 27 -- [2018] FWC 184 19 [83] It was submitted that if an employer was seeking to include in a variation items that were additional to changes necessary for an agreement to be Code compliant, it is incumbent on the employer to be crystal clear about what is essential, and what is an opportunity for the employer. [84] On questioning from the Commission as to why, if it was asserted that employees had been misled about the reasons why the variation should be voted for by employees, no employees were giving evidence in support of that proposition, the CFMEU submitted that no inference should be made against the CFMEU given the availability of employees, the speed at which the proceedings took place, and the time of year. [85] The CFMEU submitted that by continuing to name the CFMEU as a party to the Agreement and its name being part of the title of the Agreement, the variation had the effect of misleading the employees about the fact that the CFMEU supported it. It is said this gives rise to a reasonable ground for believing that the employees did not genuinely agree to the proposed variation. [86] The following was put on behalf of the CFMEU: 9 MS DOUST: The final issue to deal with, Commissioner… is that the proposed variation contained the misrepresentation that it was an agreement between ADCO and the CFMEU when it was not. It's clear this was not a matter that was ever – it was not advanced with the CFMEU in the first instance. It appears the CFMEU was left in the dark for much of the process of the employer formulating its position in relation to this variation and the CFMEU has not agreed to the variation that the employer seeks and it does not agree with the employer's reasons for the variations that it seeks. And in those circumstances, having that name on the document is a misrepresentation to the employees that voted upon it that should give concern about the genuineness of the agreement. [87] In the event the Commission did approve the variation, the CFMEU submitted that the Commission should exercise its power under s.586 to excise the reference to the CFMEU in the title and in clause 4 of the Agreement. The CFMEU agreed that if the Commission made the amendments as requested, the CFMEU would still be covered by the Agreement by reason of the decision to approve the Agreement. It was conceded that there would be no ability for the Commission to do otherwise.10 [88] In reply to the Employer’s closing submission that it had taken all reasonable steps to provide information to the employees, the CFMEU submitted that the test relevant to this application was not that contained within s.180(5) of the Act, but rather, that set out in s.188(c), which asks whether there are no other reasonable grounds to believe that the agreement has not been genuinely agreed to by the employees. In reply, the Employer agreed regard must be had for s.188(c), but the primary obligation was on the employer relevant to the consideration in s.180(5).11 [89] In reply to the Employer’s submission that the employees had proposed many of the changes that were not related to the Code compliance, the CFMEU submitted that this argument was not capable of explaining all of the changes, as, for example, there was no evidence that the employees sought changes which effectively lengthened the term of the Agreement. -- 19 of 27 -- [2018] FWC 184 20 [90] Further, the CFMEU submitted that the Employer cannot seek to rely on the table provided to employees on 7 November 2017 as demonstrative of its reasonable steps to explain the variation, whilst simultaneously minimising the weight that employees should place on the document by arguing it was merely a guide that needed to be read with other documentation. The CFMEU argued that although the table did not purport to be a precise analysis of the variation, the context and content of the table included explanations by the Employer of what motivated the change, and submitted this approach characterised the document in a way that was relevant to the test of genuine agreement in s.188(c) of the Act. Consideration [91] The only matters in contest before the Commission at the end of the hearing were: (a) had the Employer taken all reasonable steps to ensure that the terms of the variation, and the effect of those terms were explained to the relevant employees and the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees; (b) whether the Commission could be satisfied that there were no other reasonable grounds for believing that the variation has not been genuinely agreed to by the employees; and (c) if the variation was capable of approval, whether the Commission should exercise its discretion to remove references to the CFMEU within the varied Agreement. [92] Having reviewed all of the evidence and submissions of the parties, I determined that all of the requirements of the Act had been met which would require that the Commission must approve the variation. [93] I declined to meet the request of the CFMEU (not opposed by the Employer) to remove references to the CFMEU within the Agreement. [94] In considering the examination at s.188(c), it is important to have regard to the provisions of s.180(5). One cannot determine whether employees have genuinely agreed to the variation without having regard to the steps taken by the Employer to ensure that the terms of the variation, and the effect of those terms are explained to the employees, and the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the employees. [95] There is, of course, conduct that could be taken by any party outside of what is necessary to be considered at s.180(5) which may affect whether employees have genuinely agreed to vote for a variation to an agreement. This could include, for example, intimidation and coercion which might not have anything to do with explanations to employees of the terms of an agreement or variation and the effect of those terms. [96] In examining the requirements at s.180(5) it is necessary to consider the Employer’s actions. It is only the Employer’s conduct that is required to be considered. In examining what might be considered at s.188(c), a broader context is allowed, which in this case might include the actions of the relevant employees and also that of the CFMEU. [97] I have had regard to the circumstances from the time the Employer sought to reach an agreed variation with employees, until the variation was approved by employees. There is no -- 20 of 27 -- [2018] FWC 184 21 doubt there was a valid expectation from the CFMEU that given it had been involved in industry discussions with relevant employers during 2017, it would have been invited by the Employer to negotiate the terms of a variation to be put to employees. [98] There was, however, nothing untoward about the course of conduct the Employer took in in having initial discussions with employees directly in October 2017. The legislative context of agreement making and variations to agreements is that it is a document put by an employer to its employees. It is the employees who vote upon the document, not a third party, even if the third party - the CFMEU in this case - is a stated party to the Agreement. [99] During the meeting of 19 October 2017 the employees present were provided with a CFMEU-preferred draft variation. I am satisfied that robust discussion ensued between the employees and Mr Hawkins. I am left in no doubt that the employees were informed that a variation of the Agreement was required to ensure Code-compliance, and without Code- compliance, this would have a bearing on their employment. [100] I am equally satisfied, however, that the employees present took this opportunity to discuss among themselves, and with Mr Hawkins, things that they would like to see varied in the Agreement. From the very first meeting held with employees it was clear that if the Agreement was to be varied, there would be items within the variation that would not have any relevance to the Code. It can be reasonably inferred that the clauses the employees were seeking to alter were terms and conditions that the employees considered important to them. [101] The meeting lasted for 1.5 hours; a considerable period of time. Mr Hawkins’ evidence is that he took account of the employees’ wishes and ultimately made changes to the next draft variation to accommodate the employees’ wishes. [102] This is not an unusual feature of variations to agreements, and on Mr Ingham’s evidence, it was something the CFMEU was attempting to achieve in its negotiations with employers. Mr Ingham stated that the CFMEU was willing to assist ‘the builders in achieving Code compliance but it also had other objectives which it wanted to achieve through those negotiations in the interests of its members.’ That the employees were able to achieve the changes they sought without the need to obtain assistance from the CFMEU is not important. It is, however, persuasive as to whether there are reasonable grounds for believing that the variation has not been genuinely agreed to by the employees. I accept that the employees, to some degree, determined their destiny and owned the bargain that they wished to make directly with the Employer. [103] This application was not an example where the Employer resisted the variations sought by employees. In that instance, it would be arguable that an employer who was seeking a Code-compliant variation, and resisting any improvements that employees or their representatives considered important, might be coercing or intimidating employees to vote on a variation or risk their employment due to the employer not being awarded Commonwealth funded work. [104] In this instance, it is reasonable to infer that it was abundantly clear to employees that some of the variations that ultimately made up the variation the subject of the application before the Commission were drafted at the initiative of the employee and not for the purpose of achieving Code-compliance. Therefore, if it is asserted that Mr Hawkins acted forcefully in imploring employees to vote for the variation at the meeting of 31 October 2017, regard -- 21 of 27 -- [2018] FWC 184 22 must be had for what was reasonably within the knowledge of the employees at the time of the meeting. [105] The evidence before the Commission is that most of the employees at the meeting of 31 October 2017 had been present at the meeting of 19 October 2017 when employees had initiated discussion on clauses they wished to see altered. At the meeting of 31 October 2017 the CFMEU was given opportunity both in the presence of the Employer, and then alone with the employees to speak against the variation proposed by the Employer. [106] Mr Ingham’s evidence is that he spoke against the variation, told employees they would be worse off under the varied agreement, and that the CFMEU didn’t support it. In my view, it could not have been more obvious to employees present that the CFMEU did not think the variation was in the employees’ best interests, or that the CFMEU wished not to be connected in any way to the variation. [107] The Employer’s submissions are correct in that the conduct complained of relevant to Mr Hawkins is that he was explaining the purpose of some of the changes to the Agreement within the variation, and that is not what is required to be considered relevant to s.180(5) when regard is had to what is the effect of the changes. The purpose or the reasons behind why the variation is put to employees is different from the effects that the changes will have on the employees. [108] However, the CFMEU is correct in that what was said by Mr Hawkins to employees relevant to requiring the variation to achieve Code compliance is important when considering s.188(c). Could Mr Hawkins be said to have been misleading or misrepresenting to employees why the variation should be voted for by the employees? Did the written communication of 7 November 2017 misrepresent to employees the urgent imperative relevant to some of the variations? [109] As Asbury DP said in Central Services Queensland Pty Ltd, there is no requirement that the conduct of the person or persons involved be intentional to, in this case, mislead or misinform. I do not consider that relevant to each of the items in the right hand column of the document produced to employees on 7 November 2017 it was capable of or had the effect to mislead, misinform or misrepresent to employees the ‘explanation of the change’. [110] When looking at the increased term of the Agreement due to the variation, and the ‘explanation of the change’ to employees in right hand column of the 7 November 2017 document, it informs employees of the extended nominal expiry date of the Agreement, and in a separate paragraph states, ‘It also ensures compliance with the Building Code 2016.’ These are two separate statements, and regard must be had for the word ‘also’. The statements are not linked and I do not accept that the employees could have been misled or misunderstood that the term had to be lengthened to comply with the Code. [111] Despite there being opportunity afforded to employees to give evidence to the Commission that there was misunderstanding relevant to this clause (and others), as to why it was so important for the existing clause to be varied, no evidence was given. The Commission can inform itself through submissions, and without evidence of employees that there are reasonable grounds for believing that the variation has not been genuinely agreed to by the employees. However the evidence of employees to that effect is far more compelling. -- 22 of 27 -- [2018] FWC 184 23 [112] Despite the CFMEU’s attempts to speak with relevant employees, none of the affected employees gave evidence that they were confused by the above statement, or that they understood that the variation required to reach Code compliance would require an extension of the nominal term to 23 May 2020. [113] It is noted that the CFMEU submitted that not enough time was available in the week before Christmas to obtain evidence of employees who might have something to inform the Commission relevant to their understanding of the variation. The parties were informed on 12 December 2017 that a substantive hearing would take place on 19 December 2017, which was then adjourned until 21 December 2017. Mr Ingham’s evidence is that Hall Payne Lawyers spoke with some employees on 20 December 2017. In my view if there were employees who wished to give evidence to the Commission to the effect that they considered they had been misled or misinformed, which might affect if they had genuinely agreed to the variation, they would have given evidence. [114] If employees had wanted to give evidence, having been contacted by the CFMEU’s lawyers, but the timing of the hearing in the days before Christmas was a particular issue, it is expected that an appropriate application for an adjournment might have been made. Equally, the Commission could have allowed evidence by telephone as it permitted for Mr Ingham. It is reasonable to infer that having been contacted by the union’s lawyers about the matter, those employees contacted did not wish to give evidence. [115] The document of 7 November 2017 includes a column, ‘Delete the existing clause wording’. The next column along is headed, ‘Insert the following clause wording’. The last column states, ‘Explanation of the Change’. Having regard to the stated educational levels of employees which is at a reasonable level, I concluded that it was reasonable to infer that the employees could understand and read between the two columns regarding the deletion of clauses in the existing Agreement and the insertion of clauses in the proposed variation. [116] While many of the rows commence with the words in the right hand column, ‘This clause has been amended to comply with the Building Code 2016’, many then go on to say other things in addition to that sentence. [117] Relevant to the amended clause 24.11 of the earlier Agreement, the ‘Explanation of the Change’ is described as follows: ‘This clause has been amended to comply with the Building Code 2016. The process for requiring an Employee to work on an RDO has changed, as set out adjacent. The Employer is not required to consult a Union representative at least 1 week prior to the scheduled RDO which is proposed to be worked. The Employer is not required to request Union agreement to work on any RDO.’ [118] Where the earlier Agreement contained subclause at 24.11(c), which stated the following: 24.11(c) An Employee or group of Employees may decline to work any RDO without the threat of Employer retribution or actual Employer retribution; -- 23 of 27 -- [2018] FWC 184 24 this no longer exists in the varied Agreement. [119] There is no doubt that even with the removal of clause 24.11(c), protections exist for employees if they decline to work any RDO. The varied Agreement no longer states that employees may decline to work RDO’s without the threat of Employer retribution or actual Employer retribution. Having regard to the relatively small group of employees who were asked to vote for the variation, their reasonable educational levels, and the circumstances of the way the variation was negotiated between the Employer and the employees, with informed views of the CFMEU urging against the variation, I do not consider that there are reasonable grounds for believing that the variation has not been genuinely agreed to by the employees. [120] The explanation in the right hand column of this particular varied clause does no more or less in describing an employee’s existing rights. Whether 24.11(c) is in the Agreement or not, an employee would have protections against threatened or actual retribution by their employer for declining to work an RDO. I do not consider it necessary for the right hand column to have stated to the effect that while the Employer wishes for 24.11(c) to be removed from the Agreement, protections continue to exist for employees. Nor do I consider the statement that the clause has been amended to comply with the Building Code 2016 to be misleading or misrepresentative to the employees. It is by large the purpose for most of the changes sought by the Employer. [121] I accept that the Employer’s desire to meet the Code did not necessarily require it to remove subclause 24.11(c) from the Agreement. If the Employer was tasked with being explicit relevant to the removal of this subclause, it would presumably need to communicate to employees along the following lines: ‘Delete 24.11(c). If an employee declines to work any RDO there are protections within the Fair Work Act 2009 available to employees. The effect of deletion of the subclause would be an employee could not commence proceedings for a breach of an enterprise agreement in a court.’ [122] Having regard to the requirements in s.180(5) that the employer take all reasonable steps to explain to the employees the terms of the variation and the effect of those terms, I do not consider that it is necessary to state to the relevant employees information in such detail above. A person of reasonable intellect would understand that subclause 24.11(c) would no longer be within the varied Agreement. In this instance, including that in an explanation of achieving Code compliance would not, in my view, have had any material impact on any of the employees’ decisions to vote against the variation, particularly when the employees were seeking their own amendments, and had the opportunity of the CFMEU to speak against the proposal, including the removal of this subclause. [123] Mr Hawkins was taken by Ms Doust through the deletion in the variation of the entire clause 32 within the Agreement titled ‘Union rights promoting representation of members’. He was asked if the explanation in the right hand column, ‘These clauses have been removed and replaced to comply with the Building Code 2016. The clauses have been replaced by the adjacent clause 31, noting the requirements for the Parties to comply with the FW Act and the WHS Act, including when exercising a right of entry’ was correct. Mr Hawkins conceded that subclauses 32.2 and 32.6 didn’t need to be deleted in their entirety in order for the variation to meet the requirements of the Code. -- 24 of 27 -- [2018] FWC 184 25 [124] Clause 32.2 of the Agreement prior to variation read: ‘Any Employer representative who discourages an Employee from becoming a financial member of the Union breaches both the intent of this Agreement and the FW Act.’ [125] Clause 32.6 of the Agreement prior to variation read: ‘Where practicable, the Employer will provide a Union noticeboard at every workplace. The display of material upon the Union noticeboard will be under the control of the Union.’ [126] On Mr Ingham’s evidence, employees and employers within the industry were aware throughout 2017 of the need to obtain a Code-compliant agreement. Mr Hawkins had taken employees through the proposed variation line-by-line at meetings prior to the meeting of 31 October 2017. If any employee had a concern about the above clauses being removed it could have been discussed. Mr Hawkins’ evidence is that employees did not raise any concerns about the clauses proposed to be removed, other than the meal allowance which was then reinstated. [127] Mr Ingham had opportunity on 31 October 2017 to inform employees that clauses such as those contained within clause 32, and of great importance to the CFMEU, ought not to be approved by employees. [128] I am not satisfied that Mr Hawkins’ statements at the meeting of 31 October 2017, or the document of 7 November 2017 constitute reasonable grounds for believing that the variation has not been genuinely agreed to by the employees. [129] If there was any unintentional misrepresentation to employees in either the document of 7 November 2017 or the statements made by Mr Hawkins at the meeting of 31 October 2017, I do not consider it had any material impact on the employees’ decision to vote for the variation. [130] I reached this conclusion taking into account all of the circumstances of the written communication, meetings and oral presentations involving the affected employees, and the active, not passive role played by the employees in the ultimate form of the variation. [131] I am strengthened in this view having regard for the forceful way in which some of the employees informed Mr Ingham at the meeting on 31 October 2017 that the variation was something that they appeared to be readily interested in, despite the CFMEU’s objections, and despite Mr Ingham having the opportunity to communicate in private with the employees any concern he might have had with what they had been advised by Mr Hawkins.12 [132] It is known that sometime after the meeting of 31 October 2017, one or two employees spoke with a CFMEU Organiser to inform the Organiser that according to them, the variation would be approved when voted upon.13 [133] As to whether employees might have been misled to approve the variation thinking that it was an endorsed CFMEU agreement because the CFMEU remained in the title and one of the clauses as a party to the Agreement, Mr Ingham’s communication to employees on 31 October 2017 made it abundantly clear that the CFMEU wished for nothing to do with the variation. In the absence of evidence of employees that they were under the impression that it -- 25 of 27 -- [2018] FWC 184 26 was a CFMEU-endorsed variation, Mr Ingham’s own evidence is enough to strike down that argument. [134] I determined on 22 December 2017 that all of the relevant criteria to approve the variation had been met. I was satisfied that s.180(5) had been met, and I was satisfied that relevant to s.188(c) there were no other reasonable grounds for believing that the variation has not been genuinely agreed to by the employees. [135] I declined to excise the CFMEU from the title of the varied Agreement, and to remove the CFMEU as a party to the varied Agreement, despite the Employer not having an issue with that course of action. [136] I declined to do so because an agreement or a variation is made between an employer and its employees. The CFMEU is a third party to the Agreement or variation. It is the employees who voted upon the variation proposed by the Employer. Unions are at times invited to sign an agreement, but they are not obliged to do so. [137] At various times throughout the two hearings I inquired of the CFMEU if it had consulted with members on this issue, and whether the Commission should have regard to the views of the members and employees. [138] I do not consider there is any power available to the Commission, discretionary or otherwise to alter the terms of an enterprise agreement or a variation that has been made between an employer and its employees. The legislative scheme contains specific provisions relating to when a variation to an enterprise agreement can be made.14 These specific provisions contain strict requirements to be met when making a variation to an enterprise agreement. As was the case in this matter, the proposed variation relevant to s.208(1)was negotiated and put to employees for their consideration. The employees voted on that document, and voted in favour of that document, the proposed variation. [139] The CFMEU rely on s.586 of the Act as the source of the Commission’s power to make the variation sought. Indeed s.586 of the Act affords the Commission broad power and discretion to amend any application, or other document relating to a matter before the Commission on any terms it considers appropriate (emphasis added). Presumably it is the reference to ‘or other document’ that the CFMEU rely upon as the source of the Commission’s power to make the amendments sought. [140] In my view, Division 7 of Part 2-4 of the Act contains specific provisions pertaining to when a variation to an enterprise agreement can be made and the prerequisites contained therein. The general powers under s.586, while broad, cannot derogate from and must yield to the specific provisions under Division 7 Part 2-4. [141] Further, there may be some employees of the Employer who are comfortable or indeed proud to have a CFMEU-titled enterprise agreement. I consider that it is both inappropriate and beyond the Commission’s power to interfere with the sanctity of the document put by the Employer to the employees for their consideration, and ultimately voted upon by employees. [142] There is no reference at all within ss. 207-216 of the Act of the role, duties or obligations of an employee organisation covered by an agreement to assist in the determination of whether a variation should be approved or not. A variation is made between -- 26 of 27 -- [2018] FWC 184 27 an employer and its employees. There indeed there may be standing for an affected employee association to raise matters before the Commission which might affect the Commission’s determination whether to approve a variation or not, however the first instance an employee organisation covered by the agreement is referred to is at s.217 of the Act, allowing an employer organisation to make application to the Commission to vary an enterprise agreement to remove an ambiguity or uncertainty. No application has been made. [143] Even if s.586 of the Act allows the Commission to make the amendments to the Agreement sought by the CFMEU, I declined to exercise my discretion to allow the amendments for the reasons given above. [144] Having regard to the Employer’s stated position that it would not oppose the CFMEU seeking to remove its name from the title of the Agreement, and from being a party to the Agreement, I encourage the Employer and the CFMEU to work together to prepare a variation to that effect. The Employer could then put the variation to the employees for a vote, which would, no doubt, be supported by the CFMEU. It is ultimately up to the employees if the variation is made by a majority of the affected employees who cast a valid vote approving the variation. If the variation is made, it could then be put to the Commission for consideration by the Commission to approve the variation. COMMISSIONER Printed by authority of the Commonwealth Government Printer <AE419036 PR599403> 1 Exhibit A2, Folder 2 Tab 3. 2 PN386. 3 PN419. 4 PN440. 5 Witness statement of Mr Jade Ingham at [6]. 6 PN586. 7 PN606. 8 PN619. 9 PN775. 10 PN782. 11 PN818. 12 PN594. 13 PN606. 14 See Fair Work Act 2009, Division 7 of Part 2-4. -- 27 of 27 --