Aaron Fennell
[2024] FWCFB 111
•27 FEBRUARY 2024
| [2024] FWCFB 111 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 7, Item 30(4) – Application to extend default period for enterprise agreement made during bridging period
Aaron Fennell
(AG2023/4605)
Jodie Norley
(AG2023/4616)
Christopher James Coomber
(AG2023/4623)
Colin Cummins
(AG2023/4679)
Colin Harper
(AG2023/4670)
Omer Balta
(AG2023/4861)
Tracey Davies
(AG2023/4868)
Bryce Kelaart
(AG2023/5049)
NCR AUSTRALIA PTY LTD - NATIONAL ENTERPRISE AGREEMENT 2009
Market and business consultancy services
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| SYDNEY, 27 FEBRUARY 2024 |
Applications to extend the default period for the NCR Australia Pty Ltd - National Enterprise Agreement 2009
Applications have been made by eight employees, Mr Fennel, Ms Norley, Mr Coomber, Mr Cummins, Mr Harper, Mr Balta, Ms Davies and Mr Kelaart (Applicants) under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to extend the default period for the NCR Australia Pty Ltd - National Enterprise Agreement 2009 (Agreement). The applications seek to extend the default period for the Agreement to 6 December 2027.
Each of the applicants identified the Agreement as an agreement-based transitional instrument to which Sch 3 applies. However, the Agreement was made during the bridging period as defined in Sch 7 of the Transitional Act. It was approved by Fair Work Australia on 19 February 2010.[1] Item 30 of Sch 7 to the Transitional Act applies to the applications. We will consider the applications as if made under Schedule 7.
The Transitional Act was amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (SJBP Act) to provide for the automatic termination of all remaining transitional instruments.
Item 30 Sch 7 of the Transitional Act provides for the automatic sunsetting of enterprise agreement made during the bridging period by the end of the default period on 6 December 2023, subject to the capacity to apply to the Commission for an extension of that period for up to four years in prescribed circumstances.
The agreements to which these provisions apply are commonly known as ‘zombie agreements’. The main features of the provisions allowing for the extension of the default period for zombie agreements are described in detail in the Full Bench decision in Suncoast Scaffold Pty Ltd (Suncoast).[2] The Full Bench was dealing with item 20A of Schedule 3. The provisions in item 30 of Sch 7 are in similar terms and the reasoning applies equally here. We rely upon what is said in that decision.
Under subitem 30(6) of Sch 7, where an application is made under subitem 30(4) for the default period to be extended, the Commission must extend the default period for a period of no more than four years if, under subitem (6)(a), either subitem (7) or (8) applies and it is otherwise appropriate to do so, or, under subitem (6)(b), it is reasonable in the circumstances to do so. Subitem (7) applies if bargaining for a replacement agreement is occurring. Subitem (8) applies if it is likely that as at the time the application is made the award covered employees, viewed as a group, would be better off overall if the agreement continued to apply than if the relevant modern award applied.
The applications are in similar terms. Each claim that the Applicants would be better off overall if the Agreement continued to apply than if the relevant modern award applied. The applications are opposed by the employer covered by the Agreement, NCR Voyix (NCR).
Background
NCR Corporation was an American manufacturer of cash registers and information-processing systems. On 1 October 2023 NCR Corporation split into two independent companies, NCR Voyix and NCR Atleos. NCR Voyix Corporation is a global provider of digital commerce solutions for the retail, restaurant and banking industries. The Agreement applies to 73 employees. Seventy-one of those employees are engaged full-time and 2 part- time. Most of those are employed as Technical Services Employees. Others are engaged in sales and supply change management. The employees principally work from 8:30am to 5:00pm, Monday to Friday. Some shift work occurs due to the global nature of the business. Two modern awards cover the work, the Professional Employees Award 2020 and the Clerks – Private Sector Award 2020 (Awards).
NCR informs us that the employees’ actual rates of pay are above those in the Agreement as employees are paid in accordance with salary bands derived from market survey data. Those salaries are also above the rates specified in the Awards. For our purposes the relevant comparison is between the Award rates and the Agreement rates. Section 206 of the FW Act provides that where the base rate of pay payable under an agreement is less than the base rate of pay that would be payable under the modern award the agreement has effect as if the agreement rate were equal to the award rate.
The Applicants are employed in positions that are covered by the Professional Employees Award 2020. NCR identified the following Agreement conditions that are more beneficial than that Award:
a)Ordinary hours of work are 37.5 per week under the Agreement compared to 38 under the Award.
b)The Agreement requires NCR to reimburse employees for all reasonable business-related expenses whereas the Professional Employees Award 202 expense-rated allowances are limited to Travelling expenses and travelling time, and Equipment and special clothing.
c)The Agreement specifies a meal allowance and first aid allowance which the Award does not.
d)Under the Agreement, NCR pay leave loading of 17.5% on all leave taken as annual leave or paid out, whereas the Professional Employees Award caps payment of the loading and only allows cashing out of two weeks’ leave per year.
e)The Agreement provides more generous notice upon termination, requiring 5 weeks’ notice in all circumstances compared to the Award which has graduated payments for years of service up to a maximum of 5 weeks.
f)Redundancy under the Agreement is paid at 4 weeks for the first year and 3 weeks per year of service with no cap.
NCR identified the following Award conditions that are more beneficial than the Agreement:
a)Under the Award employee engaged on a full-time basis must not be converted to a part-time basis without the employee’s written agreement.
b)Casual loading is 25% under the Award compared to 20% under the Agreement.
c)The Award requires one month’s notice when changing from dayshift to night shift. The Agreement does not provide for any notice of change of shift.
d)The vehicle allowance in the Award is greater than the allowance in the Agreement.
e)There is no provision in the Agreement equivalent to the Award provision allowing for agreement to substitute another day for a day that would otherwise be a public holiday.
f)There is no provision in the Agreement equivalent to the job search entitlement in the Award.
The Applicants raise as their main concern the loss of entitlements on termination of employment. Each of the applicants has at least 18 years’ service and they are concerned that if the Agreement terminates, they will be significantly worse off due to the loss in entitlements to severance and redundancy pay. NCR responds that it does not intend to change the current arrangements and that those arrangements are enshrined in company policies on redundancy. The Applicants raise that they have not been provided a written assurance from NCR that their entitlements will be preserved.
Consideration – Better off overall
The Commission’s Agreements Team conducted an analysis of the Agreement against the Awards. The analysis was provided to the parties for comment. That analysis follows.
The Agreement covers full-time, part-time and casual employees who are engaged in either Technical Support Operations (TSO) or Management Centre (AMC) and who would otherwise be covered by the Professional Employees Award 2020 and the Clerks – Private Sector Award 2020.
The Agreement provides hours of work similar to or slightly more beneficial when compared to the Awards and in some instances appears to provide more beneficial penalty rates for employees otherwise covered by the Professionals Award.
The Agreement provides more beneficial overtime penalties when compared to the Professionals Award and slightly less beneficial overtime penalties when compared to the Clerks Award, however these provisions only apply to employees with a base salary of $47,000 or less and it is unlikely that these provisions will currently apply to employees.
The Agreement provides a higher Saturday penalty when compared to both Awards, a higher Sunday penalty when compared to the Professionals Award and a higher public holiday penalty when compared to the Professional Award, however, these provisions only apply to employees (other than AMC employees) with a base salary less than $54,000 and it is unlikely that these provisions will currently apply to employees.
Schedule F of the Agreement provides further hours of work and on-call provisions for TSO employees but is largely silent on all other award provisions.
Schedule G of the Agreement provides further provisions for AMC employees such as hours of work, overtime, public holiday and night shift provisions. The hours of work, overtime and public holiday provisions are more beneficial when compared to the professionals Award but are less beneficial when compared to the Clerks Award. The shift provisions are less beneficial when compared to both Awards.
Full-time employees under the Clerks Award, are unlikely to be better off overall under the Agreement given the less beneficial provisions outlined above and are further impacted by the lack of maximum daily hours, minimum engagement, afternoon shift provisions and any award allowances they may otherwise be entitled to.
There may be instances where full time employees under the Professionals Award would be better off overall if engaged as an AMC employee under Schedule G of the Agreement such as working weekends, public holidays or permanently working night shifts. Otherwise, full-time employees covered by the Professionals Award do not appear to be better off overall given the less beneficial provisions outlined above.
Part-time employees otherwise covered by the Clerks Award do not appear to be better off overall under the Agreement given the lack of Award Safeguards, the lack of overtime payments when working in excess of their agreed hours and the ability for the employer to increase or decrease a part- time employees’ hours of work in order to meet unexpected fluctuations in business activity. Part-time employees would be further impacted by the lack of allowances.
Casual employees cannot be considered better off overall under the Agreement given the lower casual loading and the lack of minimum engagement period, allowances, overtime, weekend and public holiday penalties.
Casual employees are receiving a loaded rate given the lack of penalties, overtime and allowances, and given that the decision of the Full Bench in Loaded Rates in Agreements decision[3] provides that it will be difficult for casual employees with loaded rates to pass a better off overall assessment, because ‘it would always be possible for the casual employee, in a given pay period, to be engaged to work on a day or at a time which would attract the payment of penalty rates under the relevant award and not to be engaged on any other hours or at any other times’, casual employees cannot be considered better off overall.
The parties provided responses to the analysis which did not challenge it. The Applicants pointed to the omission of the benefits on termination of employment.
Taking into account the information provided by NCR, the analysis provided, and the responses of the parties, on balance, we are not satisfied that it is likely that as at the time the application was made the Award covered employees, viewed as a group, would be better off overall if the Agreement continued to apply than if the Awards applied. Consequently, the default period cannot be extended under subitem 30(6)(a).
Consideration – Reasonableness
The default period may be extended under subitem 30(6)(b) if the Commission considers that it is reasonable in the circumstances to do so. The reasonableness test involves the application of a broad evaluative judgement.
In Suncoast, the Full Bench said:
[17] The 'reasonable' criterion in the subitem should, in our view, be applied in accordance with the ordinary meaning of the word - that is, "agreeable to reason or sound judgment". Reasonableness must be assessed by reference to the circumstances of the case, that is, the relevant matters and conditions accompanying the case. Again, a broad evaluative judgment is required to be made.
In Peter Frick [4] the Full Bench considered that the default position of the statute to automatically terminate transitional instruments on 6 December 2023 suggests a policy preference for employees covered by zombie agreements to be regulated by contemporary instruments made under the Act.[5]
We also consider the purpose of the provisions to be relevant to the broad evaluative judgment we are required to make. The Explanatory Memorandum of the SJBP Act expressed that purpose in this way[6]:
Provision would be made for the FWC to (upon application) extend the default period to ensure the automatic sunsetting of zombie agreements does not operate harshly, including by leaving employees worse off.
The issue of reduced severance and redundancy pay was raised by the Applicants as a harsh outcome of the Agreement automatically sunsetting. NCR submits that it has no intention of reducing those entitlements. It asserts that the entitlement is enshrined in company policy and will continue to apply once the Agreement expires. In those circumstances we do not consider the employees will be worse off if the Agreement sunsets and so do not consider it reasonable to extend the Agreement.
The applications are therefore dismissed.
For completeness, we make these observation in relation to two of these matters. First, NCR contended that the Agreement did not apply to one of the Applicants, Ms Norley, and so her application was not competent. Subitem 30(4) specifies who may apply for the extension of the default period of an agreement and provides that an employee covered by the agreement may apply. Clause 1.5 of the Agreement relevantly provides that the Agreement shall have no application to employees with a Base Salary exceeding $120,000 per annum. NCR contends that as Ms Norley’s base salary is greater than $120,000 the Agreement does not apply to her. Ms Norley responded that despite clause 1.5, her contract of employment states that her employment is regulated by the contract and the NCR Australia Pty Limited National Enterprise Agreement 2009. We do not need to resolve this issue as it has no impact on the result of the applications and our decision not to extend the default period of the Agreement. However, we have taken Ms. Norley’s views into account in coming to our decision.
Second, the application made by Mr Kelaart was made after 6 December 2023. Subitem 30(4) provides that an application to extend the default period must be made before the end of the grace period. The grace period is defined in the subitem 30(2) as the period of 12 months beginning on the day Part 13 of Schedule 1 to the SJBP Act commenced. Part 13 of Schedule 1 to the SJBP Act commenced on 6 December 2022. Consequently, applications under subitem 30 of Sch 7 could not be made after 6 December 2023. There is no provision that permits the Commission to extend the time for the making of such applications. Consequently, Mr Kelaart’s application is dismissed as it was made out of time. The views expressed by Mr Kelaart expressed in his application were nonetheless taken into account in our decision to not extend the default period given that he was affected by our decision.
As our decision is to refuse to extend the default period under subitem 20(6) of Sch 7 and our decision is made after the sunset date in the Transitional Act, subitem (10)(e) provides that we must extend the default period to the day of this decision or specify a day that is not more than 14 days after the day of this decision. We have decided that to enable the parties to make the necessary administrative arrangements to give effect to the sunsetting of the Agreement the default period is extended until 12 March 2024.
DEPUTY PRESIDENT
[1] [2009] FWAA 1346.
[2] [2023] FWCFB 105.
[3] [2018] FWCFB 3610 at [121].
[4] [2023] FWCFB 137.
[5] Ibid, [32].
[6] Explanatory Memorandum Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 at [670].
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