DECISION

Fair Work Act 2009
s.185—Enterprise agreement

4 Hundred Electrical Pty Ltd
(AG2018/7136)

COMMISSIONER MCKINNON

MELBOURNE, 2 MAY 2019

Application for approval of the 4 Hundred Electrical Pty Ltd Agreement 2019 – single enterprise agreement – better off overall test – application dismissed.

[1] Application has been made by 4 Hundred Electrical Pty Ltd under s.185 of the Fair Work Act 2009 (the Act) for approval of a single enterprise agreement known as the 4 Hundred Electrical Pty Ltd Agreement 2019 (the Agreement).

[2] Concerns in relation to the application were raised with the Applicant on 11 April 2019 in relation to the better off overall test. The Applicant responded on 18 April 2019. The Applicant’s response addresses some of my concerns, including by offering undertakings for the benefit of employees. However, I remain concerned that the Agreement does not pass the better off overall test.

[3] The Electrical, Electronic and Communications Contracting Award 2010 is the relevant modern award for the purposes of the better off overall test. The Agreement is more favourable than the Award in relation to minimum rates of pay, afternoon and Saturday penalties and maximum weekly hours of work. The Agreement is less favourable than the Award in relation to fares and travel allowances, overtime penalties for continuous shiftworkers, overtime crib breaks, annual leave loading and apprentice entitlements.

[4] On the Commission’s analysis, apprentices will not be better off overall under the Agreement.

[5] A Year 1 adult apprentice working 36 hours per week, Monday to Friday, who starts work on the job site with transport provided by the employer will earn $789.73 under the Agreement compared to $803.66 under the Award. The difference is attributable to the lack of travel time and start and/or finish on job allowances as well as annual leave loading in the Agreement. Comparable rates of pay for Year 2 adult apprentices employees deliver a similar result ($856.80 under the Agreement compared to $871.71 under the Award). The scenario is one that I consider likely to occur under the Agreement. The detriment is exacerbated if employees are required to work overtime of up to four hours, because no overtime crib break is provided until four hours overtime has been worked.

[6] The detriment to apprentices is not adequately mitigated by terms of the Agreement that are more beneficial than the Award. On balance, I am not satisfied that the Agreement will leave each class of employees better off overall than if the Award applied to their employment.

[7] It follows that the Agreement cannot be approved. The application is dismissed.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

The applicant, 4 Hundred Electrical Pty Ltd, sought approval of a proposed single enterprise agreement with its employees. The dispute was heard and dismissed by the Fair Work Commission. The primary issue before the Commission was whether the proposed agreement met the "better off overall" test, which requires that the majority of employees not be worse off in the agreement compared to their existing conditions. The applicant argued that the proposed agreement was beneficial to the employees, while the respondents, including the Electrical Trades Union of Australia and the National Electrical and Communications Association, contended that the agreement did not meet the better off overall test.

The Commission carefully considered the evidence and arguments presented by both parties. It examined the financial implications of the proposed agreement, including changes to wages, allowances, and working conditions. The Commission found that while some employees would benefit from the proposed agreement, others would experience a reduction in their take-home pay. Given this outcome, the Commission concluded that the proposed agreement did not satisfy the better off overall test. The Commission dismissed the application for approval of the 4 Hundred Electrical Pty Ltd Agreement 2019.

The Commission's decision highlights the importance of ensuring that any proposed enterprise agreement genuinely benefits the majority of employees. In dismissing the application, the Commission underscored the need for careful consideration of the financial and non-financial implications of proposed agreements to meet the statutory requirements. The dismissal of the application means that the proposed agreement cannot proceed without amendments that satisfy the better off overall test.

4 Hundred Electrical Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established