PR599092 - Decision - 29 Dec 2017

[2017] FWC 7017
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.185—Enterprise agreement

S &S Webster Investments Pty Ltd T/A Kangaroo Bus Lines
(AG2017/3509)

DEPUTY PRESIDENT MASSON

MELBOURNE,29 DECEMBER 2017

Application for approval of the Kangaroo Bus Lines (KBL) Enterprise Agreement 2017-2021.

[1] An application has been made for approval of the Kangaroo Bus Lines (KBL) Enterprise Agreement 2017-2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by S &S Webster Investments Pty Ltd T/A Kangaroo Bus Lines (the Applicant). The Agreement is a single enterprise agreement.

[2] A notice of employee representational rights was provided to employees on 16 May 2016 1 and the notice complied with the regulations.2 Employees were provided with access to the proposed Agreement and information about the effect of the terms of the Agreement along with a notice of the time and place and method of voting was provided to employees on 21 July 2017. Voting occurred on 2 August 2017 and a majority of those who voted approved the Agreement.3

[3] The Transport Workers’Union of Australia (the TWU) was a bargaining representative on behalf of employees for the Agreement.

[4] The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test was the Passenger Vehicle Transportation Award 2010 (the Award) 4.

[5] The statutory declaration noted that the provisions in the proposed Agreement were more beneficial than the Award or were not conferred by the Award. No less beneficial terms were identified.

[6] The TWU filed a statutory declaration objecting to the approval of the Agreement on 17 August 2017.

[7] In reviewing the Agreement for approval the Fair Work Commission (the Commission) identified a number of issues in relation to the Agreement and supporting documentation. These included pre-approval requirements,National Employment Standards (NES) compliance and better off overall test assessment considerations. The Commission wrote to the Applicant on 6 November 2017 and identified the following issues requiring its response:

(1) The lodged Agreement failed to include the addresses of either the employee or employer signatories to the Agreement as required under Regulation 2.06A of the Fair Work Regulations.

(2) The Applicant’s response to question 2.4 in the employers form F17 statutory declaration was unclear as to how the Agreement and other relevant materials were available to employees at the commencement of and during the access period.

(3) The Applicant’s response to question 2.5 in the employers form F17 statutory declaration was unclear as to the form and manner in which the details of the ballot were provided to employees.

(4) The Applicant’s response to question 2.6 of the form F17 statutory declaration failed to describe how the particular circumstances of employees of a non-English-speaking background were accommodated.

(5) The dispute settlement term in the Agreement only allowed for representation of employees involved after the first two stages of the procedure.

(6) Clause 25.1(e)(ii),excluded apprentices from the benefit of the notice of termination provisions in the Agreement.

(7) The Agreement provided for less beneficial terms,namely:

  Clause 29(b)(iii) provided for training to be conducted outside of the ordinary hours of work at ordinary rates of pay.

  Classification matching and rates of pay in respect of the classifications of school bus and day charter drivers and employees classified as route and long-distance drivers.

  Provisions dealing with minimum engagement periods for casual and part-time employees.

  Part-time employees may be required to work additional hours beyond agreed hours at ordinary time rates of pay.

  Clause 14.1(c) of the Agreement provides that an afternoon shift may be performed between the hours of 4pm and 11pm,Monday to Friday. Further it was noted that clause 12.1(a) provided that the Award penalty rate of 115% had been absorbed into the rates of pay provided for in the Agreement. The combination of these provisions may potentially result in those employees working more than one hour beyond 7pm (Monday-Friday) not being better off overall due to their not receiving the additional penalty rate of 15% on top of their ordinary rates of pay.

[8] In correspondence to the Commission on 6 November 2017 the TWU also identified a number of provisions in the Agreement which they believed were less beneficial than the Award and consequently would have an impact on the better off overall test assessment. Further,they highlighted that those less beneficial provisions were not identified on the employers form F17 statutory declaration. The issues raised by the TWU were as follows:

(1) Clause 14.3 in the Agreement provides for a penalty rate payment on Saturday of time and a half which is less beneficial than the provision under the Award which provides for time and a half of the first three hours and double time thereafter.

(2) Clause 14.2(c) dealing with time off in lieu (TOIL) was less beneficial than the Award. Specifically,there was no provision in the Agreement for TOIL to be paid out during employment or on termination of employment. The TWU also highlighted that a range of TOIL safeguards in the Award were not provided for in the Agreement.

(3) The Agreement provided for temporary employment in excess of 12 months whereas no such provisions for temporary employment existed within the Award. It was contended that such arrangements would potentially deny employees an entitlement to severance payments.

(4) It was contended that clauses 10 and 11.5 that dealt with the relationship of the Agreement to company policies and procedures and confidentiality may expose employees to penalties for breach of the Agreement in addition to penalties for breach of common law contracts of employment.

(5) Clause 16.5 dealing with excessive annual leave enabled a direction to be given to an employee to take annual leave but did not require that such a direction is reasonable. There were also fewer safeguards in the Agreement than under the Award which raised a better off overall test issue.

(6) Clause 27 provided for redundancy entitlements in accordance with the NES. It was highlighted however that the Award provided for redundancy payments if an employee under notice of redundancy left during the notice period,however no such provision existed under the NES.

(7) Clause 25.1(e) dealing with termination of employment provided that notice was not payable if a person was dismissed for “misconduct. It was claimed that this raised better off overall test and NES concerns as the relevant requirement under the Act was that termination without notice was only lawful in circumstances of “serious misconduct”having been established.

(8) Clause 11.2 dealing with minimum employment periods operated so as to prevent an employee on an extended probationary period in excess of six months from seeking an unfair dismissal remedy. It was submitted that this was an unlawful term pursuant to s.194 of the Act.

(9) Clause 13(c) dealing with superannuation provided for superannuation payments to be calculated on the base rate of pay only.

(10) Clause 17.1(c) of the Agreement provided for the accrual of personal/carer’s leave upon the completion of each week of service. This was contrary to the NES which provides for progressive accrual and not on completion of each week of service.

[9] The Applicant provided the Commission with submissions and undertakings on 8 and 22 November and 1 December 2017. The TWU continued to press its objection to the Agreement being approved on the basis of the issues that they had raised in their correspondence of 6 November 2017. That objection was reaffirmed to the Commission and the Applicant in correspondence dated 13 and 24 November 2017.

Applicant Undertakings

Pre-approval requirements

[10] The Applicant provided a revised signatory page with the required addresses of the signatories. The Applicant also provided an amended form F17 statutory declaration to address the Commission’s queries raised in relation to the Applicant’s responses to questions 2.4,2.5 and 2.6 in their original form F17 statutory declaration.

Classification matching and rates

[11] The Applicant provided an amended form F17 statutory declaration in which it clarified the classification matching and rates of pay provided for under the Agreement. Specifically,it provided that the Applicant engaged employees consistent with classifications Grade 1—4 under the Award. Further,that under the Agreement one minimum rate of pay applied to all of the relevant classifications (Grade 1—4),such rate being in excess of the Grade 4 Award rate of pay.

Temporary employment in excess of twelve months and extended probationary period (clause 11.2(a))

[12] The Applicant submitted that clause 11.2(a) sought to simply outline the circumstances in which the six month probationary period would apply,i.e. where an employee fills an ongoing role or has a temporary position in excess of twelve months. The Applicant submitted that the Award was clear in relation to the entitlement to redundancy and that clause 11.2(a) of the Agreement did not seek to alter or remove that entitlement.

Part-time employees’hours of work (clause 11.3(b)(ii))

[13] An undertaking was provided to amend clause 11(b)(ii) dealing with part-time employees hours of work. The amended clause reads as follows:

“Reasonable additional hours may be worked in accordance with clause 14 Hours of work and related matters. Where a part-time employee agrees to perform additional hours,these hours count towards the ordinary hours of duty for that week. Provided these additional hours are agreed to by both employer and employee.”

Minimum engagement period for part-time employees (clause 11.3(c))

[14] An undertaking was provided to reflect the Award entitlement in respect to the minimum daily engagement period by adding a new clause 11.3(c) in the following terms:

“A part-time employee must receive a minimum payment of three hours for each day engaged.”

Superannuation (clause 13(c))

[15] An undertaking was provided to amend clause 13(c) in the following terms:

“Superannuation contributions will be paid at the rate prescribed by legislation on ordinary time earnings.”

Ordinary Hours –Reconciliation (clause 14.1)

[16] An undertaking was provided by the Applicant to address concerns raised by both the Commission and the TWU in relation to less beneficial provisions of the Agreement dealing with hours of work and penalty rates. The undertaking provided was to insert a new clause 14.1(d) in the following terms:

“All employees working ordinary hours,as identified in clause 14.1,shall receive weekly wages,including any allowances,loadings or penalties,that are in excess of the Award. In this regard the employer shall undertake a reconciliation at the end of each pay week to ensure compliance.”

Time off in lieu (Clause 14.2(c))

[17] An undertaking was provided to insert additional words into clause 14.2(c) in the following terms:

“Any untaken time off in lieu upon termination or at any time during employment shall be paid at the relevant overtime rates.”

Overtime rates on a Saturday (Clause 14.3(b))

[18] An undertaking was provided in respect of overtime penalty rates applying on a Saturday to delete the existing clause 14.3(b) and replace with the following:

“Saturday and Sunday—overtime on Saturday shall be worked at time and a half for the first three hours and thereafter at double time and shall be worked on Sunday at double time.”

Excessive annual leave (Clause 16.5(a))

[19] The Applicant provided the following undertakings to delete the current clause and replace it with the following amended clause:

“(a) An employee may be directed and employee may request in accordance with the award to take leave if:

(i) At the time the direction is given,the employee has accrued greater than eight (8) weeks of leave;

(ii) the amount of annual leave left to the employees credit is at least six weeks leave;and

(iii) the employee is given at least four weeks’notice of the time when such leave is to be taken.”

Personal/carers leave accrual (Clause 17.1(c))

[20] The Applicant submitted that the Agreement reflected the NES entitlement;that being the progressive accrual of personal/carers leaves. The Applicant referred to ss.96(2) and (55) of the Act as supporting and protecting the entitlement to the progressive accrual of personal/carers leave.

Misconduct justifying termination of employment without notice (Clause 25.1(e)(i))

[21] An undertaking was provided that the current clause 25.1(e)(i) dealing with termination of employment without notice be deleted and replaced by the following clause:

“In the case of dismissal for serious misconduct.”

Apprentices –termination of employment (Clause 25.1(e)(ii))

[22] In respect of clause 25.1(e)(ii) dealing with the exclusion of apprentices from the benefit of the notice of termination provisions,an undertaking was provided deleting the clause. The intended effect of the undertaking was to make clear that apprentices had the benefit of the statutory notice period entitlements in accordance with the NES.

Redundancy entitlement (Clause 27)

[23] An undertaking was provided deleting the current clause and replacing it with a revised clause as follows:

“Redundancy entitlements are as per the NES and the Award.”

Training outside ordinary hours (Clause 29(b)(iii))

[24] An undertaking was provided that the current clause 29(b)(iii) dealing with training outside ordinary hours be deleted and replaced by the following clause 29(b)(iii):

“Attendance at training shall only be required during ordinary hours of work and shall be paid at ordinary rates of pay which shall include any penalty rates should such training occur during weekends or before 6am or after 7pm.”

Dispute settlement term (Clause 31(d)

[25] An undertaking was provided that in respect to clause 31 –Grievance and Dispute Resolution,an additional clause 31(d) would be added in the following terms:

“Notwithstanding anything stated above,the employee shall be entitled at all times during the various stages to representation.”

Hearing

[26] Having regard to;the issues raised in relation to the proposed Agreement,the undertakings and responses received from the Applicant and the TWU’s continued objection to the Agreement’s approval,the application was subject to a hearing by telephone on 5 December 2017. The Applicant was represented by Mr Ian McDonald of the Australian Public Transport Industry Association (APTIA) who was accompanied by Mr Darren Webster and Mr Todd Stubbings. The TWU was represented by Ms Margarita Cerrato. Also participating were employee representatives Mr Rick Tompkins and Mr Ross Coutts.

[27] The parties made oral submissions in support of written materials that had been previously provided. At the conclusion of the hearing the parties were also invited to make further written submissions including addressing a recent decision of the Commission in Shop,Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery (“Beechworth”). 5

Applicant Submissions

[28] The Applicant submitted that the undertakings acted as evidence that the Agreement with undertakings met the obligations of the better off overall test envisaged in s.186 of the Act.

[29] The Applicant rejected TWU contentions that the changes referred to in the undertakings would in any way cause concern that the parties did not genuinely agree to the Agreement. The Applicant specifically referred to s.190(2) of the Act which allowed the Commission to approve the Agreement with undertakings.

[30] In dealing with its undertakings the Applicant referred to the reasoning of the Full Bench in Beechworth where at paragraph [21] the Full Bench stated:

“It is convenient therefore that we turn our attention to the undertaking. It is not necessarily the case that,where an agreement does not satisfy all of the approval requirements in ss. 186 and 187,the application for approval must be dismissed.”

[31] The Applicant dealt with the objection of the TWU to the reconciliation undertaking provided by the Applicant (see paragraph [16]). The Applicant submitted that the undertaking proffered did not offend the reasoning of the Full Bench in the Beechworth in which it said at paragraphs [42]—[45]:

“[42] However,we do not consider that the part of the undertaking contained in paragraph 6 was capable of satisfying any concern that the Agreement did not pass the better off overall test. First,and most obviously,paragraph 6 of the undertaking does not create an enforceable right to any payment,which if made,would mean that a relevant employee would be better off overall under the Agreement than under the applicable modern award. Rather,the undertaking operates only to allow an employee who “considers that . . . they are not better off overall under this agreement than the applicable award”to request a comparison,and thereafter if the comparison identifies a shortfall,the shortfall together with an additional 1.5% payment by reference to the shortfall amount would be paid in the next pay period after the review is completed.

[43] Such obligation to “make good”any shortfall arises only if an employee makes a request for a review. If no such request is made,whether through ignorance or design,or perhaps because an affected employee simply lacks the time,information or ability to form a view,then no obligation to conduct a review,much less “make good”any shortfall,arises. Any concern that an employee or prospective employee would not be better off overall if the Agreement applied to the employee than if the relevant modern award applied to that employee cannot be met by such an undertaking.

[44] In considering whether an undertaking should be accepted as satisfying a concern that an agreement may not pass the better off overall test,it is necessary to analyse the undertaking so as to ensure that it is expressed in a way which will allow it to be enforced as a term of the agreement. An undertaking that in its expression is uncertain,ambiguous,aspirational or perhaps conditional,with the result that it will not create an enforceable entitlement as a term of the agreement,will not likely meet the concern that an agreement does not pass the better off overall test.  6

[45] The second obvious flaw in the undertaking is that since an employee’s consideration that he or she is not better off overall under the agreement compared to the applicable award arises by reference to a four month period,this necessarily means that any review as might be conducted would only occur three times a year in respect of each employee. The inevitable consequence is a delay in payment to an employee. Moreover,the potential length of the delay is unknown as disputes may arise about the quantum of payment due under the undertaking as is apparent from the dispute resolution mechanism established by the undertaking. In these circumstances it is by no means apparent that a 1.5% increase in payment might compensate an employee for that which could be a substantial difference in entitlements over a potentially lengthy and indeterminate period.”

[32] Distinguishing the proposed clause 14(1)(d) from the Full Bench’s reasoning in its rejection of a reconciliation undertaking in Beechworth, the Applicant submitted that the undertaking provided by it:

(i) Is not ambiguous,not uncertain,not aspirational nor conditional. The undertaking makes it clear that all employees will be paid for the hours of work under the Agreement at a rate which will provide them with wages in excess of the Award.

(ii) Places the obligation upon the employer at the end of each pay week to make sure a reconciliation takes place to ensure that all of its employees are paid in excess of the Award.

(iii) Is an enforceable right which an employee has as a result of the undertaking.

[33] The Applicant submitted that there were,in addition to the above Award base pay rates provided for in the Agreement,a number of clauses within the Agreement which were either more beneficial or not replicated in the Award. The provisions referred to were:

(i) Clause 12.2(f)—Wage rates increases which provided for wage rate increases during the life of the Agreement greater than those guaranteed in the Agreement in circumstances where the Applicant was able to realise greater labour cost reimbursement under its contract with Translink.

(ii) Clause 14.5—Emergency On-call Allowance of $170 per week for drivers placed on the on-call roster.

(iii) Clause 14.6—Rail Replacement provided for an increased the rate of pay of $41.87 an hour for drivers required to undertake rail replacement work between specified hours.

(iv) Clause 15.2—Extended Tours flat rates per day.

(v) Clause 30—Driver Monitoring and Performance Program process requires validation of complaints and ensures job protection for drivers in the event of drivers not meeting service delivery requirements.

(vi) Clause 32—Amenities.

TWU Submissions

[34] In its closing submission dated 12 December 2017 the TWU pressed their earlier submissions that the Commission could not be satisfied that the undertakings offered by the Applicant addressed the concerns in respect of the better off overall test assessment.

[35] In relation to clause 14.1—Ordinary hours in the reconciliation undertaking the TWU submitted that the undertaking did not make clear that it intended to give rise to an entitlement,and if it did,it was unclear what the entitlement was. It was further submitted that the Beechworth decision of the Full Bench did not alter the requirement that an undertaking needs to give rise to an enforceable right to payment.

[36] The TWU further referred to a Full Bench decision in Communications,Electrical,Electronic,Energy,Information,Postal,Plumbing and Allied Services Union of Australia,Australian Manufacturing Workers' Union v Main People Pty Ltd (“Main People”) 7 where the Full Bench was dealing with an undertaking that required the employees to be “…paid more under this Agreement than they would have been paid under the Metals Award if it applied to the work carried out by them from time to time.”In considering the terms of the undertaking and whether it satisfied s.190(2) of the Act the Full Bench stated:

“[38] Second,we do not consider that paragraphs 2 and 6 of the undertaking,read together,are such as to have permitted satisfaction under s.190(2) that the concern that the Agreement did not pass the better off overall test had been met. In considering whether to accept an undertaking relevant to a better off overall test concern,it is necessary to analyse the undertaking to ensure that it is expressed in a way which allows it to be enforced as a term of the Agreement in accordance with s.191. An undertaking which is uncertain,ambiguous or merely aspirational such that it does not establish an enforceable entitlement for the purpose of s.191 is unlikely to meet a concern that an agreement does not pass the better off overall test.”

[37] The TWU submitted that the undertaking offered by the Applicant should be distinguished from the reasoning of the Full Bench in Beechworth. Specifically,there is no mechanism within the proposed undertaking to make good any shortfall in the present matter. This is to be contrasted with Beechworth where an employee had to make a request for reconciliation each quarter whereas the issue in this case is that there is no enforceable entitlement at all. If the employer fails to ensure compliance there is no corresponding requirement to make good any shortfall.

[38] The TWU submitted that it would still be up to an employee to identify any shortfall as there was no transparency in the reconciliation process. Further,if there were any shortfall against the Award,apart from instituting proceedings for breach of the Agreement,there was no entitlement to be enforced. Also relevant was that if there were a dispute about whether an employee had received more than the Award in any given week,any payment would be delayed by the requirement to follow the disputes procedure which did not provide for arbitration.

[39] The TWU further noted that a number of the undertakings provided by the Applicant referred back to the Award,thus requiring an employee to refer to the Award in order to determine their entitlements. Attention was drawn to the undertakings in respect of clauses 9(b)(iii);14.2;16.5(ii);20 and clause 27 as falling into this category. Any reconciliation undertaking would likewise require an employee to consult the Award to work out what their entitlements would be.

[40] The TWU submitted that the undertaking in respect of clause 16.5—Excessive Annual Leave provided for only four weeks’notice to take leave whereas the Award specified eight weeks’notice. Further,there is no requirement under the Agreement for an attempt to be made to reach agreement with an employee before directing the taking of leave. Nor does the undertaking provide for an employee to give the employer notice of taking leave as in the Award. Consequently,the undertaking provided remains less beneficial when compared with the Award entitlement.

[41] The TWU pressed their submission in relation to the accrual of personal leave as previously submitted in correspondence dated 24 November 2017. It was contended by the TWU that the Agreement provision which provided for weekly accrual was detrimental when compared with the NES which required progressive accrual.

[42] The TWU also submitted that the nature of the exposure of employees to civil penalties for breach of clause 10—Relationship of this Agreement to KBL policies and procedures,acceptance of policies of the Agreement needed to be weighed when conducting the better off overall test assessment. The TWU referred to a number of decisions in which it had been found that an exposure of employees to civil penalties for breach of an agreement in respect of such provisions was a relevant matter when considering whether the agreement passed the better off overall test. The TWU also noted a more recent decision of Deputy President Sams in Surf City Coaches Pty Ltd t/as Bus IT Queensland (“Surf City”) 8 in which he stated:

“[23] The Union submitted that cl 16 deals with a matter which is inappropriate for inclusion in an enterprise agreement. It refers to common law duties and obligations. Asbury C,dealt with a similar provision in Glen Eden Thoroughbreds Pty Ltd T/A Ray White Shailer Park [2010] FWA 7217 (‘Glen Eden Thoroughbreds’) where she agreed with Gooley C’s assessment in Smith &Nephew Pty Ltd [2010] FWA 2465. The Commissioners in both cases found that the exposure of employees to civil penalties for breach of the Agreement in respect of such provisions,was a relevant matter when considering whether the Agreement passes the BOOT.

[24] The applicant submitted the clause is a standard provision relating to confidential information found in many modern enterprise agreements. In the case of Glen Eden Thoroughbreds,Asbury C reviewed,amongst other things,a ‘confidentiality clause’,similar to the one envisaged in clause 16 of the Agreement. At para [58],she considered that such a clause,which exposed employees to civil penalties,was a relevant matter for consideration of the BOOT. The applicant believed that the provision of a ‘confidential information’clause is a matter relevant to the employment relationship and is an appropriate clause in the Agreement. In assessing the impact on the employees for the purpose of the BOOT,the applicant observed that the employees,particularly mechanics,drivers and clerks are remunerated well above the Award. An expectation not to contravene confidentiality is not an unreasonable outcome to impose upon employees in exchange for increased rates of pay. In any event,given the nature of the applicant’s business,the likelihood of an employee breaching the provisions of the clause,which might give rise to a financial penalty being imposed upon the employee,is very remote.

[25] In my view,it is not to the point that a confidentiality provision is a common law obligation of an employee and therefore inappropriate for inclusion in the Agreement. Many terms of enterprise agreements (and Awards for that matter) also have a common law foundation. Notice of termination and summary dismissal are two such terms which readily spring to mind. I do not consider,as a matter of law,that it is impermissible to include a confidentiality provision in an enterprise agreement on the grounds contended for by the Union.

[26] While I have my own doubts as to whether such a clause is a relevant matter for the purposes of the BOOT,even if it is,the unlikelihood of it ever being invoked to the detriment of an employee,is so remote as to it being a neutral consideration in the BOOT balancing exercise.”

[43] As regards clause 11.2(c) the TWU identified that the Applicant had previously indicated an intention to provide an undertaking that it (the Applicant) would delete the clause but had not done so. The TWU pressed their position that clause 11.2(a) provides for a minimum probationary period of no less than six months,thus allowing longer probationary periods. Clause 11.2(c) precludes an unfair dismissal application being made in circumstances where an employee has been dismissed during the probationary period. The TWU contended that the effect of clauses 11.2(a) and 11.2(c) was to deny an employee on a probationary period in excess of six months a right to pursue an unfair dismissal application,thus making the provision unlawful. Furthermore,the clause has the effect of misleading employees regarding their rights to pursue an unfair dismissal remedy.

[44] As regards the more beneficial provisions that the Applicant referred to in their submissions 9 the TWU submitted that while accepting that the better off overall test assessment required a balancing of more and less beneficial provisions it was necessary for the Commission to be satisfied that each employee covered by the Agreement must be better off overall when compared to the Award. In making that submission the TWU made the following points regarding the more beneficial terms raised by the Applicant:

(i) While clause 12.2(f)—Wage rate increases provided for greater increases in wage rates should the regulator Translink increase the labour cost reimbursement level,such greater increases were contingent on a range of factors including movements of other fixed and variable costs under the contract.

(ii) Clause 14.5—Emergency On-call Allowance is contingent on employees being on the on-call roster and therefore is not a benefit applicable to all employees.

(iii) Clause 14.6—Rail Replacement rate of pay would apply only to those employees engaged in such work and therefore is not a benefit applicable to all employees.

(iv) Clause 15.2—Extended Tours rates of pay would only apply to employees who are engaged on such work and therefore are not a benefit applicable to all employees. The TWU also submitted that the Award provides for reasonable costs incurred for accommodation and meals to be provided by the employer which,along with the Award penalty rate and overtime provisions,needs to be balanced against the extended tours rates provided for under the Agreement.

(v) Clause 30—Driver Monitoring and Performance Program does no more than provide for procedural fairness in the event of a complaint being made giving rise to possible disciplinary action. As such,the clause simply gives effect to employer obligations that arise under the Act in terms of ensuring procedural fairness in taking employee disciplinary action for conduct or performance issues.

(vi) Clause 32—Amenities explicitly states that it does not create rights or obligations in addition to those imposed on the parties by legislation. As the Award does not and cannot exclude the operation of such legislative provisions the Agreement provision dealing with amenities cannot be said to provide for more beneficial entitlements.

[45] The TWU referred to the position of the Applicant prior to the Agreement ballot in that the TWU claimed the Applicant had been adamant that there were no provisions within the Agreement that were below the minimum statutory requirements. Given the scope of the undertakings now provided by the Applicant the TWU submitted that the terms of the Agreement could not have been properly explained to employees. Consequently the Agreement could not have been genuinely agreed to as required under s.185 of the Act.

[46] The TWU also raised concern with the manner in which it said the Applicant had sought and was continuing to seek to negotiate with the Commission over the provision of the undertakings. The TWU referred to the Full Bench decision in AKN Pty Ltd t/a Aikin Crane Services (Aitkin Cranes) 10 where the role of the Commission in agreement making was considered in detail. The TWU noted that the Applicant had already had two opportunities to provide undertakings and submitted that it was not the role of the Commission to provide advice to Applicants nor was it appropriate for the Applicant to request such advice. The role of the Commission in the TWU’s submission was to identify concerns regarding a proposed agreement and request undertakings,not negotiate with the Applicant. It referred to the Full Bench’s decision where it stated the following at paragraphs [34] and [38]

“[34] The statutory scheme therefore requires the application by the Commission of the provisions of ss.186-190 to an enterprise agreement that has been already bargained for,approved by employees and “made”under Div.3 and Subdiv.A of Div.4 of Part 2-4. That is to say,in relation to non-greenfields enterprise agreements,the Commission is discharging its functions by reference to an agreement which has already been developed and finalised by a process of collective bargaining at the enterprise level. The Commission’s approval functions are not intended to be a process by which an employer,in a process of dialogue with the Commission,can seek to develop the agreement further so that it may eventually satisfy the approval requirements in ss.186 and 187. The undertaking facility in s.190 provides an opportunity to an employer to proffer an undertaking to address any concern which the Commission may have concerning the satisfaction of the approval requirements in ss.186 and 187. Because any such undertaking may not result in substantial changes to the agreement,the opportunity provided is necessarily limited in nature and cannot involve a wholesale reshaping of the agreement which has already been made.

[38] Having filed a response to the Commissioner’s Statement within the specified time,there was no legitimate basis for AKN to expect a further opportunity to make submissions or offer undertakings. The addition of the statement “Do not hesitate to contact the Company with any further queries or concerns you may have arising out of these Submissions and undertakings”to AKN’s response did not impose any obligation upon the Commissioner to explain why AKN’s response,including its proposed undertakings,did not address all his concerns,nor could AKN have reasonably expected that the Commissioner would do so. In effect,AKN should have understood that,in respect of any proposed undertakings,it had to put its best foot forward in its response to the Statement rather than merely entering its opening bid.”

[47] The TWU further submitted that the extent of the undertakings required to bring the Agreement up to the minimum legislative standard would result in significant changes to the Agreement. The TWU referred to a decision of Commissioner Gregory in Hartfell Pty Ltd ATF The Haylock Family Trust T/A Emerald Carrying Company 11 where he concluded at paragraph [55]:

“[55] It is also noted in conclusion the previous Commission decisions have emphasised that the process of providing and considering proposed undertakings is not intended to be part of an extended process of negotiation between the applicant and the commission after an application is lodged for approval. The logic behind this is self-evident. The legislation intends that the commission deal with the terms of an agreement that have been previously negotiated by and agreed upon by the parties. While undertakings can be accepted in some circumstances,it is not the intention that the commission deal with an outcome that is significantly different from what was in contemplation when the agreement was made and voted upon. This is evidenced from the provisions in s.190(3) which provide that an undertaking may only be accepted if it is not likely to result in substantial changes to the agreement.”

[48] The TWU in conclusion submitted that despite the process and the significant undertakings offered by the Applicant to date the Agreement failed to meet the minimum statutory requirements for approval and that the application should be dismissed.

Statutory framework

[49] Section 186(1) of the Act establishes a “basic rule”that where an application for approval of an enterprise agreement is made under s.185 (which prescribes the time in which such an application must be made and its content),the Commission must approve the agreement if the requirements in ss.186 and 187 are met. Sections 186 and 187 set out a range of approval requirements. Section 186(2) sets out approval requirements in relation to the safety net,and relevantly provides as follows:

“186 When the FWC must approve an enterprise agreement—general requirements

(2) The FWC must be satisfied that:

...

(d) the agreement passes the better off overall test.

[50] Section 193 prescribes what is necessary to pass the better off overall test. It relevantly provides:

      “193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section .if the FWC is satisfied,as at the test time,that each award covered employee,and each prospective award covered employee,for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement;and

        (b) at the test time,is covered by a modern award (the relevant modern award) that:

(i) is in operation;and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement;and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who,if he or she were an employee at the test time of an employer covered by the agreement:

        (a) would be covered by the agreement;and

        (b) would be covered by a modern award (the relevant modern award) that:

          (i) is in operation;and

          (ii) would cover the person in relation to the work that he or she would perform under the agreement;and

          (iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test,if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class,the FWC is entitled to assume,in the absence of evidence to the contrary,that the employee would be better off overall if the agreement applied to the employee.”

[51] It is not necessarily the case that,where an agreement does not satisfy all of the approval requirements in ss.186 and 187,the application for approval of the agreement must be dismissed. Section 190 allows for an agreement to be approved with undertakings. It provides:

“190 FWC may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under section 185;and

(b) the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

      (2) The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under sub-section (3) of this section meets the concern.

Undertakings

      (3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement;or

        (b) result in substantial changes to the agreement.

FWC must seek views of bargaining representatives

      (4) The FWC must not accept an undertaking under sub section (3) unless the FWC has sought the views of each person who the FWC knows is a bargaining representative for the agreement.

Signature requirements

      (5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.

[52] Section 191(1) identifies the legal effect of an undertaking given in relation to a single-employer enterprise agreement as follows:

“(1) If:

(a) the FWC approves an enterprise agreement after accepting an undertaking under sub-section 190(3) in relation to the agreement;and

(b) the agreement covers a single employer;

the undertaking is taken to be a term of the agreement,as the agreement applies to the employer.”

Consideration

Pre-approval requirements

[53] The revised signatory page and Form form F17 statutory declaration provided by the applicant addressed concerns that were raised by the Commission in relation to the signatory requirements and also the manner and process of explanation of the Agreement terms to employees. I am satisfied on the basis of the additional information provided by the Applicant that the necessary Agreement pre-approval requirements have been satisfied.

Classification matching and rates

[54] In the amended form F17 statutory declaration the Applicant clarified that it employs staff in classifications equivalent to Grade 1 to Grade 4 under the Award. In doing so it pays a minimum rate of pay under the Agreement,that minimum rate being $22.75 per hour. This compares with the minimum Award rates of pay per the following:

    Grade

    Minimum Weekly Rate

    Hourly Rate

    Grade 1

    $749.60

    $19.72

    Grade 2

    $767.80

    $20.20

    Grade 3

    $811.80

    $21.36

    Grade 4

    $840.20

    $22.11

[55] A comparison of the Agreement versus Award rates reveals the margin of the Agreement minimum rate above the Award at Grade 4 is 2.89% and the margin above the Award for an employee engaged at Grade 1 is 13.5%.

[56] I am satisfied that the base rates of pay provided for under the Agreement deliver rates of pay in excess of the Award ranging between 2.89% (Grade 4) and 13.5% (Grade 1). I am consequently satisfied that the base rates of pay under the Agreement are more beneficial than the Award which is a relevant consideration for the Commission’s better off overall test assessment.

Relationship of this Agreement to KBL policies and procedures (clause 10)

[57] I share the reservations expressed by Deputy President Sams in Surf City regarding whether a provision in an agreement referring to company policies is a relevant matter for the purpose of the better off overall test assessment. In any event I am not satisfied that the prospect of an employee being pursued for a breach of such a policy is other than remote. Therefore it is a neutral consideration in the better off overall test assessment.

Temporary employment in excess of twelve months and extended probationary period (clause 11.2(a))

[58] I have considered the TWU submissions as to the effect of this provision,specifically that it would enable an employee to be engaged for a probationary period in excess of six months and that the provision purports to prevent an employee on an extended probationary period from pursuing an unfair dismissal remedy,rendering the term unlawful.

[59] The Applicant in its submissions sought to clarify that a probationary period of six months would be applied in circumstances where an employee was engaged to fill an ongoing permanent role or for the purpose of filling a temporary role exceeding 12 months.

[60] While the clause could be worded better I am not satisfied that the clause seeks to establish a regime where employees engaged for permanent employment or temporary employment in excess of 12 months may be subject to probationary periods in excess of six months. Consequently I am not satisfied that the provision is unlawful or seeks to mislead employees as to their rights to pursue an unfair dismissal remedy under the Act.

Part-time employees’hours of work (clause 11.3(b)(ii))

[61] I am satisfied that the undertaking provided by the Applicant reflects the entitlement provided for at clause 10.4(c) of the Award and is therefore a neutral consideration in the Commission’s conduct of the better off overall test assessment.

Minimum engagement period for part-time employees (clause 11.3(c))

[62] The undertaking provided by the Applicant,which provides for a minimum engagement period of three hours per day for part-time employees,is consistent with clause 10.4(g) of the Award. I am satisfied that the undertaking provided ensures that the Agreement entitlement is the same as that available under the Award therefore is a neutral consideration in the better off overall test assessment.

Superannuation (clause 13(c))

[63] I am satisfied that the undertaking provided in relation to superannuation contributions reflects the statutory obligation to calculate the minimum superannuation contribution on the basis of ordinary time earnings (OTE) and is therefore a neutral consideration in the better off overall test assessment.

Ordinary Hours –Reconciliation (clause 14.1)

[64] The undertaking provided by the Applicant requires that the Applicant conducts a weekly reconciliation of each employee’s wages to ensure that they are receiving wages in excess of what they would be entitled to under the Award. Based on the authorities of Beechworth and Main People it is necessary for me to be satisfied that the undertaking provided is not “…uncertain,ambiguous or merely aspirational such that it does not establish an enforceable entitlement for the purpose of s.191.”

[65] I accept that,unlike in Beechworth, the undertaking provided in respect of the Agreement does not place the obligation on the employee to request a reconciliation. Rather,there is an ongoing obligation on the Applicant to conduct such reconciliation. I also accept that the frequency with which that reconciliation must be undertaken corresponds with the weekly pay cycle,again distinguishing the present matter from that that existed within Beechworth. Nevertheless,the undertaking is expressed in terms that leave considerable doubt as to whether it is aspirational or intended to create an enforceable entitlement.

[66] Even if the Commission were satisfied that it (the undertaking) was intended to create an enforceable entitlement,a difficulty remains in that there is no certainty as to what amount an employee would be entitled to receive if it were determined through the weekly reconciliation that they were receiving payments that were not more beneficial than the Award. The undertaking is silent on the specific rate or level of remuneration/earnings that a reconciliation adjustment would need to be made to,in order to ensure compliance with the undertaking.

[67] This lack of certainty gives rise to the same difficulty that was identified by the Full Bench in Main People. Specifically,an employee pursuing a remedy in a court for underpayment under the Agreement would be unable to quantify how much if anything was owed to them. Consequently the undertaking lacks sufficient certainty to constitute an enforceable entitlement.

[68] For the reasons outlined above the undertaking provided is not capable of satisfying the Commission’s concerns that the Agreement fails to meet the better off overall test,as required under s.190(2) of the Act.

Time off in lieu (clause 14.2(c))

[69] The undertaking provided by the company establishes the right of an employee to request the payment of accrued TOIL during or on termination of their employment. That substantive entitlement is consistent with the Award in respect of TOIL. However,the Agreement is silent on a number of protections available under the Award including:

  that any TOIL must be the subject of separate written agreement;and

  that any accrued TOIL taken off must be taken within a period of six months after the overtime is worked and at a time or times within that period of six months agreed by the employer and employee.

[70] While the Agreement does not contain some of the administrative protections surrounding the taking or payout of accrued TOIL under the Award,the basic entitlement to TOIL is comparable to the Award. Nevertheless,the absence of some of the administrative protections available under the Award renders the Agreement provision marginally less beneficial than the Award and is a relevant consideration for the purposes of the Commission’s better off overall test assessment.

Overtime rates on a Saturday (clause 14.3(b))

[71] I am satisfied that the undertaking provided in relation to overtime rates on a Saturday ensures that the overtime provisions available under the Agreement would mirror Award provisions. Consequently the undertaking provided will be a neutral consideration in the Commission’s better off overall test assessment.

Excessive Annual Leave (clause 16.5(a))

[72] The undertaking provided by the Applicant in relation to its right to direct employees to take annual leave in circumstances where they have an excessive leave accrual balance reflect certain provisions under the Award. Specifically:

  a direction can only be given where an employee has an excessive leave accrual balance,defined as a balance of eight weeks or greater;and

  that any direction to take excessive annual leave would not result in the employee’s leave balance falling below six weeks.

[73] There are however a number of protections under the Award which are not provided for in the Agreement. Specifically,the employer must,under the Award,have genuinely tried to reach agreement with an employee prior to directing the employee to take one or more periods of paid annual leave. Further,any notice to an employee to take excessive leave under the Award must be of no less than eight weeks whereas under the Agreement the notice period is no less than four weeks.

[74] I am consequently satisfied that the undertaking provided by the Applicant would establish an arrangement under the Agreement that was less beneficial than the Award and as such will be a relevant consideration as part of the better off overall test assessment.

Personal/carers leave accrual (clause 17.1(c))

[75] Clause 17.1(c) of the Agreement states that:

“Paid personal/carer’s leave is accrued and credited upon the completion of each week of service. Paid personal/carer’s leave is cumulative but will not be paid out on separation of employment.”

[76] On its face the clause appears to provide for a basis of accrual that is inconsistent with s.96(2) of the Act which provides for the progressive accrual of personal/carer’s leave during the year of service according to an employee’s ordinary hours of work.

[77] Any tension between the wording of clause 17(c) and the entitlement under the NES is however resolved by the opening statement of clause 17 of the Agreement which explicitly provides as follows:

“Employees are entitled to personal/carer’s leave and compassionate leave in accordance with the provisions of the NES.”

[78] I am consequently satisfied that clause 17.1(c),if read in conjunction with the introductory statement in clause 17 would ensure that employees under the Agreement were entitled to the accrual of their personal/carer’s leave on a progressive basis consistent with the NES.

Misconduct justifying termination of employment without notice (clause 25.1(e)(i))

[79] I am satisfied that the undertaking provided would ensure that the Agreement provisions dealing with termination of employment under clause 25.1(e)(ii) would reflect the relevant obligations under the Act,specifically that termination without notice can only be lawful in circumstances of “serious misconduct”rather than simply “misconduct”.

Apprentices –termination of employment (clause 25.1(e)(ii))

[80] I am satisfied that the undertaking provided by the Applicant to delete clause 25.1(e)(ii) would address the concern raised by the Commission in relation to the exclusion of apprentices from the benefit of notice of termination of employment.

Redundancy entitlement (clause 27)

[81] I am satisfied that the undertaking provided by the Applicant would ensure that employees would receive the benefits of the relevant provisions in the Award in conjunction with the NES. It is therefore a neutral consideration in the better off overall test assessment.

Training outside ordinary hours (clause 29(b)(iii))

[82] I am satisfied that the undertaking provided would ensure that employees required to undertake training during ordinary hours that fall either on a weekend or outside the spread of hours of 6am to 7pm Monday to Friday would receive penalty payments consistent with the Award. As such is it is a neutral consideration in the Commission’s better off overall test assessment.

Dispute settlement term (clause 31(d)

[83] I am satisfied that the undertaking provided would ensure that employees would be entitled to representation at all stages of the dispute settlement procedure in accordance with s.186(6)(b) of the Act.

More Beneficial Provisions

[84] The Applicant in its submission raised a number of Agreement provisions that it contended were more beneficial than the Award 12. The TWU challenged those submissions. I have considered the competing positions of the Applicant and TWU and make the following findings:

(i) While clause 12.2(f) provides for potentially higher wage rate increases than those guaranteed under the Agreement,such greater increases depend on the Applicant’s contractual arrangements and outcomes secured with their client Translink. There is however no certainty to that outcome and there are other factors in the contractual arrangements that may impact. Given that uncertainty I am unwilling to place weight on this provision in the better off overall test assessment. It is a neutral consideration.

(ii) With respect to clause 14.5—Emergency On-call Roster I accept that the provision provides a benefit not conferred by the Award. I note that participation in the roster is voluntary and that the Company is required under the terms of the Agreement to apply the principles of equity in rostering volunteers. Consequently there is potential for all eligible drivers to benefit from the provision. On that basis I accept that it is a beneficial provision for the purposes of the better off overall test assessment.

(iii) With respect to clause 14.6—Rail Replacement duties and rates of pay I accept that the provision provides a benefit not conferred by the Award. The incidence of payment was not apparent hence making it difficult to assess the value of the benefit to an individual employee. Nevertheless,I am satisfied that access to the benefit,which is not conferred by the Award,means that it is a more beneficial provision for the purposes of the better off overall test assessment.

(iv) Clause 15.2 –Extended Tours provides for flat rates per day. I accept that the specific benefit is not conferred by the Award however,as the TWU submitted,there are other provisions within the Award that would operate in the absence of the Agreement provision,i.e. clauses dealing with meals,accommodation and penalty rates entitlements. No material was available to the Commission to allow a comparison of the conferred benefit under the Agreement with that of entitlements under the Award. Consequently the Commission is not in a position to assess whether the provision is more or less beneficial. It is therefore a neutral consideration for the purposes of the better off overall test assessment.

(v) Clause 30—Driver Monitoring and Performance Program provision requires the Applicant to ensure particular processes are followed in managing the performance of its employees and/or responding to complaints from the public. If followed,the process would ensure procedural fairness was accorded to employees in the investigation of performance or conduct matters. Whilst the specification of the processes in the Agreement may be welcome from an employee’s perspective the absence of the clause would not relieve the Applicant of its obligation to accord its employees procedural fairness in any disciplinary process. Accordingly the provision is a neutral consideration for the purposes of the better off overall test assessment.

(vi) Clause 32—Amenities does no more than spell out that the Applicant will comply with the relevant workplace health and safety standards. That obligation would exist whether the provision was in the Agreement or not. It is therefore a neutral consideration.

NES and better off overall test assessment

[85] I am satisfied that Agreement pre-approval requirements have been addressed by the revised form F17 statutory declaration and Agreement signatory page provided by the Applicant.

[86] I am satisfied that the submissions and undertakings provided with respect to the following provisions would,if accepted,ensure that the relevant statutory requirements were met:

  Clause 11.2(a)—Temporary employment in excess of twelve months and extended probationary period;

  Clause 13(c) –Superannuation;

  Clause 17.1(c)—Personal/carers leave accrual;

  Clause 25.1(e)(i)—Misconduct justifying termination of employment without notice;

  Clause 25.1(e)(ii)—Apprentices –termination of employment;and

  Clause 31(d)—Dispute settlement term.

[87] I am satisfied that the following provisions,subject to the undertakings provided being accepted,would be more beneficial for the purposes of the better off overall test assessment:

  Base wage rates are in excess of the minimum Award rates by between 2.9% and 13.5%;

  Clauses 14.5 and 14.6 provide for the payment of certain allowances which are not conferred by the Award.

[88] I am satisfied that the following provisions,subject to the undertakings provided being accepted,would be of neutral consideration in the conduct of the better off overall test assessment:

  Clause 10—Relationship of this Agreement to KBL policies and procedures;

  Clause 11.3(b)(ii)—Part-time employees’hours of work;

  Clause 11.3(c)—Minimum engagement period for part-time employees;

  Clause 13(c) –Superannuation;

  Clause 14.3(b)—Overtime rates on a Saturday;

  Clause 27 –Redundancy;

  Clause 29(b)(iii)—Training outside ordinary hours;

  Clause 12.2(f) –Wage rate increases;

  Clause 15.2 –Extended Tours;

  Clause 30 –Driver Monitoring and Performance Program;and

  Clause 32 –Amenities.

[89] I am not satisfied that the following provisions in the Agreement would be more beneficial for the purposes of conducting the better off overall test assessment,in circumstances where the Commission were to accept the undertakings provided:

  Clause 14.1—Ordinary Hours –Reconciliation;

  Clause 14.2(c)—Time off in lieu;and

  Clause 16.5(a)—Excess Annual Leave.

[90] It will be seen from the statutory provisions provided above that an enterprise agreement will be found to have passed the better off overall test if the Commission is satisfied,that at the test time,each Award covered employee and each prospective Award covered employee employed under the Agreement would be better off overall if the Agreement applied to the employee rather than if the Award applied to the employee.

[91] The application of the better off overall test is not applied as a line by line test. Rather,it is a global consideration of the provisions in the Agreement compared to the Award taking into account those provisions that are less beneficial and weighing them against those provisions that are more beneficial.

[92] In conducting its assessment of the Agreement it is open to the Commission to accept undertakings given pursuant to s.190 of the Act. That is if the Commission is satisfied that the undertaking or undertakings provided are not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.

[93] It is self-evident that the undertakings provided have been designed to ensure that the Agreement,when read with the undertakings,would pass the better off overall assessment as well as satisfying NES requirements. Each of the undertakings provided,which are summarised below,would not cause financial detriment to any employee that would be covered by the Agreement:

  Clause 11.3(b)(ii)—Part-time employees’hours of work;

  Clause 11.3(c)—Minimum engagement period for part-time employees;

  Clause 13(c) –Superannuation;

  Clause 14.1—Ordinary Hours –Reconciliation;

  Clause 14.2(c)—Time off in lieu;

  Clause 14.3(b)—Overtime rates on a Saturday;

  Clause 16.5(a)—Excess Annual Leave;

  Clause 25.1(e)(i)—Misconduct justifying termination of employment without notice;

  Clause 25.1(e)(ii)—Apprentices –termination of employment;

  Clause 27—Redundancy entitlements;

  Clause 29(b)(iii) Training outside ordinary hours;

  Clause 31(d) Dispute settlement term.

[94] Before turning to consider as I must,whether the undertakings provided would cause substantial changes to the Agreement I will deal with the effect of the undertakings,were they to be accepted,in terms of the better off overall test.

[95] In the present matter I am satisfied that the base rates of pay provided for in the Agreement are above that provided for in the Award by a margin of between 2.89% and 13.5%. In addition there are some allowances in the Agreement that are not conferred by the Award. 13 A large number of provisions in the Agreement,which have been supplemented by undertakings,simply reflect Award entitlements and would therefore be a neutral consideration.14

[96] It is therefore necessary to consider the more beneficial provisions within the Agreement,supplemented by the undertakings provided,with those provisions which have been determined to be less beneficial. 15 With respect to the time off in lieu and excess annual leave clauses the differences are not substantive,consequently when weighed in isolation against the more beneficial base wage rates and allowances the Commission could be satisfied that in a global assessment employees covered by the Agreement would be better off overall.

[97] A key concern however is that of how the reconciliation undertaking would operate in conjunction with clause 14.1. As highlighted at paragraph [7] the Commission raised concerns with the Applicant in relation to the interaction of the hours of work,Award penalty rates and absorption of shift penalty rates into base rates within the Agreement. The Commission identified that in some circumstances it could not be satisfied that employees would not be better off overall. Specifically,where employees were required to work ordinary hours beyond 7pm on a Monday to Friday for which they would not receive afternoon shift penalties. To address that concern the Applicant provided an undertaking that imposed an obligation on the Applicant to conduct a weekly reconciliation of employees’wages to ensure that employees remained better off overall when compared to the Award.

[98] For the reasons previously detailed in paragraphs [64] –[68] the undertaking is not expressed in terms that clearly establish that it (the reconciliation undertaking) gives rise to an entitlement. Further,the undertaking is expressed in a form that lacks specificity or certainty as to what the entitlement is that an employee would actually receive or pursue in the event of a reconciliation by the Applicant identifying a shortfall. In these circumstances the undertaking is incapable of meeting the concern that the Agreement failed to pass the better off overall test. Therefore the Commission is unable to accept the undertaking.

[99] Finally,I have also considered whether the scope of the undertakings provided is such that the undertakings would result in substantial changes to the Agreement. The undertakings include changes to;weekend penalty rates,arrangements for the engagement and payment of part-time employees,superannuation arrangements,payment for training,TOIL arrangements,excessive annual leave taking,redundancy arrangements,termination of employment and dispute settlement procedures. Each of the undertakings,if viewed separately,may not be regarded as constituting a substantial change to the Agreement. However,when the scope of the undertakings provided is considered as a whole,they (the undertakings) do more than simply provide for minor clarifications and alterations to the Agreement. The undertakings result in substantial changes to the Agreement and are therefore not accepted.

Conclusion

[100]
As a consequence of not accepting the undertakings provided,the Commission cannot be satisfied that the Agreement passes the better off overall test. The application for approval of the Agreement is consequently dismissed. An order giving effect to this decision is separately issued in PR599144.

DEPUTY PRESIDENT

 1  Section 173 of the Act

 2  Section 174 of the Act

 3  Section 180 of the Act

 4  MA000063

 5  [2017]FWCFB 1664

 6  CEPU and AMWU v Main People Pty Ltd [2015] FWCFB 4467 at [38].

 7  [2015] FWCFB 4467

 8  [2014] FWC 3028

 9  See paragraph [33]

 10  [2015] FWCFB 105

 11  [2017] FWC 4973

 12  See paragraph [34]

 13  See paragraph [87]

 14  See paragraph [88]

 15  See paragraph [89]).

Printed by authority of the Commonwealth Government Printer

<Price code G, PR599092>

About this document
(1)
Code:
PR599092
Title:
PR599092 - Decision - 29 Dec 2017
Effective:
29 Dec 2017
Updated:
5 Jan 2018
Related Information
1.0.11.0 SD