FWCFB sheds light on the infor­ma­tion employ­ers are required to pro­vide employ­ees for an agree­ment to be gen­uine­ly agreed’

In the case of The Aus­tralian Work­ers’ Union v Skout Solu­tions Pty Ltd [2021] FWCFB 119, a Fair Work Com­mis­sion Full Bench (FWCFB) has pro­vid­ed fur­ther guid­ance on the infor­ma­tion an employ­er is required to pro­vide to employ­ees to ensure it has tak­en all rea­son­able steps to explain the terms of a pro­posed enter­prise agree­ment in sat­is­fac­tion of sec­tion 180(5) of the Fair Work Act 2009.

The AWU had applied for per­mis­sion to appeal against a deci­sion of Deputy Pres­i­dent Clan­cy to approve the Skout Solu­tions Indus­tri­al Enter­prise Agree­ment 2019 (the 2019 Agree­ment). The 2019 Agree­ment replaced the Skout Solu­tions Indus­tri­al Enter­prise Agree­ment 2016 (the 2016 Agree­ment) and whol­ly dis­placed any mod­ern awards that would oth­er­wise apply. 

There were three grounds of appeal advanced by the AWU, the first of which sub­stan­tial­ly relat­ed to whether the 2019 Agree­ment had been gen­uine­ly agreed. In respect of that ground the union argued his Hon­our could not have been sat­is­fied as to com­pli­ance with sec­tion 180(5) of the FW Act (and there­fore that the 2019 Agree­ment had not been gen­uine­ly agreed as required by sec­tion 186(2)(a) of the FW Act) giv­en the expla­na­tion pro­vid­ed to employ­ees of the terms of the 2019 Agree­ment and the effect of those terms, both rel­a­tive to the four rel­e­vant awards and the 2016 Agree­ment, had been con­fined to the dis­tri­b­u­tion of the fol­low­ing documentation: 

  • A high-lev­el award com­par­i­son doc­u­ment that set out a high-lev­el sum­ma­ry of the 2019 Agree­ment terms rel­a­tive to the four under­pin­ning awards, as well as copies of the awards.
  • A doc­u­ment sum­maris­ing the changes in the 2019 Agree­ment from the 2016 Agreement.
  • A fre­quent­ly asked ques­tions document.

The AWU crit­i­cised the com­pre­hen­sive­ness, rel­e­vance and accu­ra­cy of the doc­u­ments pro­vid­ed, as well as the fact there was no evi­dence as to what was said to employ­ees in two infor­ma­tion sessions. 

In con­sid­er­ing the appeal, the FWCFB observed that sec­tion 188(1) of the FW Act makes clear that com­pli­ance with sec­tion 180(5), and whether rea­son­able steps” were tak­en, does not need to be objec­tive­ly proven. Rather, com­pli­ance need only be estab­lished to the sat­is­fac­tion of the deci­sion mak­er based on the mate­r­i­al pro­vid­ed (cit­ing Fed­er­al Court in One Key Work­force Pty Ltd v CFMEU [2018] FCAFC 77). What is rel­e­vant, there­fore, is the mate­r­i­al that was before the Deputy Pres­i­dent to sup­port his find­ing as to com­pli­ance with sec­tion 180(5) based on the cir­cum­stances of the par­tic­u­lar case. 

In that regard, the FWCFB not­ed a detailed expla­na­tion of the dif­fer­ences between the 2019 Agree­ment and var­i­ous award pro­vi­sions was not required in cir­cum­stances where the terms and con­di­tions of the employ­ees were not reg­u­lat­ed by the four awards due to the oper­a­tion of the 2016 Agree­ment. The high-lev­el sum­ma­ry the employ­er pro­vid­ed of the 2019 Agree­ment pro­vi­sions ver­sus the awards was enough in the cir­cum­stances and a rea­son­able step’ for it to have taken. 

What was required was com­par­i­son between the 2016 Agree­ment and the 2019 Agree­ment. The FWCFB con­sid­ered it rel­e­vant that the 2019 Agree­ment was essen­tial­ly a rollover’ agree­ment with lim­it­ed sub­stan­tive changes and one the rel­e­vant employ­ees would have been famil­iar with. The brief com­par­i­son doc­u­ment sum­maris­ing the changes in the 2019 Agree­ment from the 2016 Agree­ment pro­vid­ed by the employ­er, sup­ple­ment­ed by the infor­ma­tion ses­sions, was there­fore appro­pri­ate in the circumstances.

In response to the union’s sub­mis­sion that the expla­na­tion pro­vid­ed to employ­ees failed to include any ref­er­ence to two minor changes to the 2019 Agree­ment, the FWCFB observed at [70] that, in this case at least, it was unnec­es­sary to explain every change made from the pre­vi­ous applic­a­ble instrument.

A fur­ther appeal ground relat­ing to whether the group of employ­ees was fair­ly cho­sen was reject­ed by the FWCFB, how­ev­er it ulti­mate­ly con­sid­ered that per­mis­sion to appeal ought to be grant­ed in respect of whether the 2019 Agree­ment met the bet­ter off over­all test (BOOT). An under­tak­ing pro­vid­ed by the employ­er was able to address the FWCF­B’s concerns. 

Employ­ers seek­ing FWC approval of a replace­ment enter­prise agree­ment can obtain some com­fort from the FWCF­B’s deci­sion in this case. Although it is impor­tant to keep in mind that the FWC’s inquiry as to whether the steps tak­en by the employ­er were rea­son­able’ will depend on the cir­cum­stances, it is rea­son­able to assume that if a mod­ern award does not apply, and the enter­prise agree­ment has minor deriva­tions from its pre­de­ces­sor, a com­pre­hen­sive com­par­i­son with the under­ly­ing ref­er­ence instru­ment will not be required in sat­is­fac­tion of sec­tion 180(5) of the FW Act.