365 Plant Hire (NSW) Pty Limited

[2019] FWC 1619

[2019] FWC 1619

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

365 Plant Hire (NSW) Pty Limited
(AG2018/5571)

COMMISSIONER WILSON MELBOURNE, 13 MARCH 2019

Application for approval of the 365 Plant Hire (NSW) Pty Limited Enterprise Agreement 2018-2022.

[1] An application has been made for approval of an enterprise agreement known as the 365 Plant Hire (NSW) Pty Limited Enterprise Agreement 2018 – 2022 (the Agreement). It has been made by 365 Plant Hire (NSW) Pty Limited (the Applicant). The Agreement is a single enterprise agreement.

[2] On 8 February 2019, the Commission sent correspondent to the Applicant advising them that upon view of the application, there were a number of concerns regarding whether the Agreement satisfies the requirements of the Fair Work Act 2099 (Cth) (the Act). The concerns were as follows:

“PRE-APPROVAL

1. Copy of the Agreement/incorporated materials provided to employees (Q2.4): The response provided at Q2.4 of the Form F17 does not provide information regarding ‘how’ employees were provided a copy of the Agreement and any other material incorporated by reference. The Fair Work Act requires that the employer must take all reasonable steps to ensure that employees are given a copy of the written text of the agreement and any other material incorporated by reference, or have access throughout the access period, with the access period being 7 clear days before the start of the voting process (s.180 of the Fair Work Act) – see CFMMEU v CBI Constructors Pty Ltd [2018] FWCFB 2732. The Commissioner requests a revised Form F17 be provided including the how employees were provided with a copy of the Agreement. Please ensure all signature requirements are followed when providing a revised F17.

2. Notification of the Vote (Q.2.5): As you may be aware the Act requires that the employer must take all reasonable steps to notify the relevant employees of the time, place and method of the vote by the start of the access period. With the access period being 7 clear days before the start of the voting process (s.180 of the Act) – see CFMMEU v CBI Constructors Pty Ltd [2018] FWCFB 2732 . At question 2.5 of the Form F17 it is unclear how this information has been provided to employees. Additionally the attached copy of the notice does not appear to be consistent with the information provided in the F17. The letter (found at the end of the EA – who knows why) is dated 24 August 2018, provides for a meeting to be held on 14 May 2018 and provides for a vote on 24 August 2018. Moreover, the response at question 2.6 provides for the vote to have been deferred due to an employee’s leave, but no further information has been provided. The Commissioner requests a revised Form F17 addressing these concerns is provided.

3. Genuine Agreement/explanation of terms of the Agreement: Section 180(5) of the Fair Work Act 2009 (Cth) (the Act) provides that the employer must take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees, and that this explanation occur in an appropriate manner taking into account the particular circumstances of relevant employees (including whether they had a representative in bargaining). The Commissioner requests further information in answer to Q2.6 and Q2.7 of the Form F17 detailing the steps taken to explain the Agreement to employees, having regard to the decision in One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77. The Commissioner also requests information about the classifications of employees who voted for the Agreement and how they are representative of the group of employees to be covered by it. When providing a revised Form F17 please ensure that all signature requirements of the statutory declaration have been complied with. The Commissioner has also specifically requested further information be incorporated into the revised Form F17 include the number of people employed now who would be covered by the Agreement as well as an estimate regarding how maybe people will be employed in three months’ time. Please ensure all signature requirements are followed when providing a revised F17.

4. Genuine Agreement/Less beneficial terms: Part 3 of the F17 provides a number of questions directed at identifying more beneficial and less beneficial terms and conditions in the Agreement when compared to the relevant modern awards. The response provided to these questions is very brief and does not address what appear to be a range of differences between the Agreement and the Building and Construction General On-Site Award 2010 being the underpinning modern awards. This gives rise to a concern about whether the terms of the Agreement, and the effect of those terms, were explained to employees prior to the Agreement being made. The Commissioner requests a revised F17 be provided addressing Q3.4 and Q3.5 accurately and in detail by providing a list of each of the more and less beneficial terms in the Agreement compared to relevant awards.

NES

5. Notice of Termination – Probationary Employees (clause 15): Clause 15 appears to be less beneficial than the National Employment Standards (NES). This is because it provides for probationary employees to be entitled to one day’s notice of termination, whereas under the NES probationary employees are entitled to one weeks’ notice of termination.

6. Notice of Termination (clause 15): Clause 15 appears to possibly be less beneficial than the NES and requires clarity given under the heading ‘by the employer’ it provides for two sets of notice of termination requirements, making it unclear which applies.

7. Serious Misconduct (clause 15): Clause 15 appears inconsistent with at s.123(1) of the Fair Work Act 2009 (the Act) which provides that the Division (Div 11, in which Notice of Termination appears) has no application to termination for reason of serious misconduct, a term defined by the Act to have the meaning set out in the Fair Work Regulations (s.12 and r.1.07). The clause seems to provide an alternative definition of serious misconduct to the Act, and is therefore likely inconsistent. An undertaking should be provided removing all inconsistencies.  

Concerns relating to compliance with the NES unless otherwise specified, may be able to be addressed by undertakings that the relevant clauses will operate “subject to the NES”. For example:

“The company undertakes that the following clauses will operate subject to the National Employment Standards:

• Clause
• Clause… “

BETTER OFF OVERALL TEST (BOOT)

The following issues have been identified in relation to whether employees will be better off overall under the Agreement:

8. Possible Opt-Out (clause 7): Clause 7 of the Agreement appears to make it possible for the employer to opt-out of the Agreement in part or it full. It provides that the company ‘in its absolute discretion’ may determine that it will apply part of all of a relevant site or project agreement to the relevant employees. This term appears uncertain and it is difficult to assess the BOOT in circumstances where the terms and conditions of employment are not known. You may wish to consider an undertaking to the effect ensuring such employees are better off under the Agreement as a result of this provision.

9. Rates of Pay: The rate of pay is a ‘composite rate inclusive of all penalties and allowances’ however then is it also states that it excludes, includes and/or modifies certain award conditions dealing with penalty rates, overtime and all other allowances which appears inconsistent. For example:

i. Clause 8 provides for clauses 20, 21 and 22 of the Award (with the exception of clause 21.2, 21.2, 22.2(g) and 22.2(h), which pertain to industry allowances, wet work and dirty work respectively) to be applicable to employees. Additionally it provides that an employee working on a Sunday will be paid 200% and an employee working on a Public Holidays shall be paid 250%.

ii. Clause 9 provides that the additional hours beyond 38 and up to 43 shall be ordinary time, and additional hours beyond 43 in any week including Saturdays, shall be paid at 150%. It is unclear if all hours on a Saturday are paid at 150%

iii. Schedule A and Clauses 8 and 9 appear to be contradictory to one another. If Schedule A is correct, then it appears the loaded rates will compensate for shift penalties, weekend penalties, overtime penalties and allowances. If this is so, employees may not be better off overall working a high proportional of shift work and weekend/ overtime work.

10. Shift Penalties: It is unclear if employees fall under the General building and construction and metal and engineering construction sectors or the Civil Construction Sector. If the former there is concerns thatemployees do not appear receive a penalty of 50% for undertaking shift work.

UNLAWFUL TERMS

11. Deductions: Clause 11 of the Agreement appears to allow the employer to deduct reasonable monetary value from the employees termination pay for items of property not returned. The Commissioner is concerned that clause 11 may be an unauthorised deduction. As you may be aware, s.324 of the Act provides:

324 Permitted Deductions

An employer may deduct an amount from an amount payable to an employee in accordance with section 323(1) if:

1. the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or

2. the deduction is authorised by the employee in accordance with an enterprise agreement; or

3. the deduction is authorised under a modern award or an FWC order; or

4. the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

In particular, the Commissioner would like you to note that, unlike under a modern award, for employees covered by an enterprise agreement, monies can only be deducted from an employee’s wage if it is authorised by an employee in accordance with the enterprise agreement.

In other words, unlike a modern award, the enterprise agreement cannot itself authorise the deduction. This clause may therefore be unenforceable if the Agreement were to be approved. You may wish to provide an undertaking removing this clause.” 

[3] The rates of pay in the Agreement are between 30.49% - 51.84% above the Building and Construction General On-Site Award 2010 (the Award) being the relevant Award applicable, and are inclusive of all penalties and allowances.

[4] The Applicant did not provide a response to these concerns.

[5] Further contact was attempted with the Applicant by telephone on 5 March 2019 on the details provided in the Form F16 application. However, the number advised that it had been disconnected.

[6] Correspondence was then sent by registered post to the Applicant noting that the issues raised on 8 February 2019 had not been addressed and therefore the application was not capable of approval. The Applicant was directed to file any materials by 5:00 PM Tuesday, 12 March 2019 as follows:

“To Mr Adam El-Mir The Proper Officer

URGENT NOTICE

RE: AG2018/5571 Application for approval of the 365 Plant Hire (NSW) Pty Limited Enterprise Agreement 2018 - 2022

I refer to the application lodged in the Fair Work Commission by 365 Plant Hire (NSW) Pty Limited (365 Plant Hire) on 4 October 2018, which has been allocated to Commissioner Wilson for determination. The Commissioner has attempted to contact 365 Plant Hire on several occasions regarding the application to no avail.

On 8 February 21018 an email was sent to [email removed] being the contact provided in the Form F16 outlining several concerns regarding approval of the application (see enclosed) and requesting a response to those concerns by close of business Thursday, 14 February 2019.

When a response to this correspondence was not forthcoming, a further email was sent on Wednesday, 20 February 2019 advising that a lack of response to the Commissioner’s concerns as raised on 8 February 2019, by not later than 5:00 PM Friday, 1 March 2019 would result in the application being determined on the materials provided (see enclosed).

Further contact was again attempted on 5 March 2019 by telephone to the mobile number [phone number removed] as provided in the Form F16 which advised that the mobile number is no longer connected (see enclosed file note).

The Commissioner continues to hold the concerns as originally raised on 8 February 2019, but now given the lack of contact with 365 Plant Hire is also concerned that the business may cease to exist.

The Commissioner directs the Applicant to file any response to the concerns raised by email on 8 February 2019 as soon as possible but not later than 5:00 PM (AEST), Tuesday, 12 March 2019. A failure to respond to these concerns will result in the application being dismissed for failure to meet the relevant statutory requirements.

You are strongly advised not to ignore this correspondence, and to ensure your company responds to the Commission as soon as possible.

You are also strongly advised to immediately seek legal advice on this matter, or advice from a person experienced in industrial relations, such as an employer association or industry association.

Notwithstanding this advice, and as a courtesy to the Commission, if it is your intention to withdraw your application, you are requested to provide, in writing, such an intention.

Finally, given the difficulties in making contact the Commission kindly requests that you please provide updated contact details including an email address and telephone number at your soonest convenience.

Sincerely,”

[7] The Commission did not receive a response from the Applicant. I therefore consider that it is both fair and appropriate that I determine the matter on the basis of material before me. I have determined that the Agreement does not meet the BOOT, I cannot be satisfied that the Agreement has been genuinely agreed to and that it contains terms which are detrimental when compared to the NES. In these circumstances I have provided the Applicant with reasonable opportunity to provide undertakings which might resolve these concerns.

[8] Based on the materials before the Commission, I therefore cannot be satisfied that the application satisfies the requirements of ss.186, 187, and 188 of the Act.

[9] On that basis, the application is dismissed.

COMMISSIONER

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