Aero-Care Flight Support Pty Ltd
[2013] FWCA 965
•12 FEBRUARY 2013
[2013] FWCA 965 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Aero-Care Flight Support Pty Ltd
(AG2012/12949)
AERO-CARE COLLECTIVE AGREEMENT 2012
Airport operations | |
VICE PRESIDENT WATSON | SYDNEY, 12 FEBRUARY 2013 |
Application for approval of the Aero-Care Collective Agreement 2012 - whether agreement passes better off overall test - Fair Work Act 2009 ss.185, 186, 187, 188 and 193.
Introduction
[1] An application has been made for approval of an enterprise agreement known as the Aero-Care Collective Agreement 2012 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Aero-Care Flight Support Pty Ltd (Aero-Care).
[2] There is a significant history leading to the making of this Agreement. Aero-Care has operated for many years providing ground support services to airlines at a variety of Australian airports. For the majority of that time it has conducted its operations pursuant to enterprise agreements approved under relevant legislation. The agreement that has covered the employment of its ground service employees since 2008 is the Aero-Care Collective Agreement 2008 (the 2008 Agreement).
[3] Agreement was reached between Aero-Care and its employees in December 2011 for a replacement agreement for the 2008 Agreement. By decision handed down on 24 April 2012 Deputy President Sams found that the agreement did not pass the tests for approval under the Act. 1 The decision to decline approval of the 2011 Agreement gave rise to further efforts by Aero-Care to develop an agreement that complied with the requirements of the Act.
[4] In June 2012 the ASU sought bargaining orders under s.229 of the Act regarding the negotiation of the 2012 Agreement. This ultimately led to orders for the provision of material relating to the Agreement to be provided to representatives of the ASU and the TWU under confidentiality arrangements determined by the tribunal. 2 The material provided constituted representative data of a prospective four week roster under a draft enterprise agreement, a comparison of costs between the roster under the Agreement and the Airline Operations - Ground Staff Award 20103(the Award) and a summary page of the cost comparisons. The material was subsequently made available to the two unions in September 2012. Hearings regarding the negotiations and the provision of the material were held before me on 14 August, 19 September and 11 October 2012.
[5] The application for approval of the Agreement was made on 12 December 2012 following a vote of employees conducted between 7 to 11 December 2012. Approximately 1014 employees were engaged under by Aero-Care at the time of the vote. Of the 930 employees who cast a valid vote, 900 employees voted in favour of the approval of the Agreement. Approximately 382 employees are engaged on a part-time basis and 604 employees are casuals. Approximately 155 employees are under the age of 21.
[6] The Australian Municipal, Administrative, Clerical and Services Union (ASU) and Transport Workers’ Union of Australia (TWU) oppose the approval of the Agreement on the basis that the Commission cannot be satisfied that the Agreement passes the better off overall test (BOOT).
[7] At the hearing of the matter in Sydney on 21 December 2012, Mr D Houlihan appeared on behalf of Aero-Care, Mr A Slevin of counsel with Mr J Cooney appeared on behalf the ASU and Ms T Walton appeared on behalf of the TWU. Following the hearing directions were made for the filing of further material.
[8] At the request of the ASU the matter was listed for further hearing in Melbourne on 11 February 2013. At the hearing Mr F Parry, of counsel, with Mr J Tracey and Mr D Houlihan appeared on behalf of Aero-Care, Mr A Slevin with Mr J Cooney appeared on behalf of the ASU and Ms T Walton appeared on behalf of the TWU.
Legislative tests
[9] Section 186(1) of the Act provides:
“186 When FWA must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).
[10] Relevant to this application the requirements in s.186 of the Act include the following:
“Requirements relating to the safety net etc.
(2) FWA must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
...
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: FWA may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen
(3) FWA must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) FWA must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).
Requirement for a nominal expiry date etc.
(5) FWA must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which FWA approves the agreement.
Requirement for a term about settling disputes
(6) FWA must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows FWA, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: FWA or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent FWA from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).
[11] Section 187 of the Act relevantly provides:
“187 When FWA must approve an enterprise agreement—additional requirements
Additional requirements
(1) This section sets out additional requirements that must be met before FWA approves an enterprise agreement under section 186.
Requirement that approval not be inconsistent with good faith bargaining etc.
(2) FWA must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.”
[12] Section 188 of the Act relevantly provides:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”
[13] I consider the BOOT in more detail below. I am otherwise satisfied that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met.
The Better Off Overall Test (BOOT)
[14] Section 193 of the Act 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 FWA 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 enterpr(ise 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 FWA was made under section 185.
FWA 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, FWA 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.”
[15] The ASU submits that the Commission cannot be satisfied that the Agreement passes the BOOT for two reasons. It submits that the use of three hour shifts is a disadvantage compared to the Award and the disadvantage is compounded with respect to employees classified as Advanced Airline Service Agents (AASAs) under the Agreement because the proper classification under the Award is a Level 3 employee - rather than the Level 2 classification used by Aero-Care for the purposes of its comparisons. It submits that the list of disadvantages to employees of the Agreement compared to the Award stated by Aero-Care is incomplete and a more extensive list communicated to the Fair Work Australia in December 2012 4 is more accurate.
[16] That list is as follows:
Condition | Award | Agreement |
Split shifts - More than one shift in a single day. | 28.2(c) - The ordinary hours of work are to be worked continuously. | 9.1 - Allows for the working of more than one shift in a single day. |
Higher Duties Payment | 25 - Higher Duties paid all day or shift at the higher duties rate. | 7.6 - four month trial period. |
Higher Duties Allowance | 25.1 - Payment all day or shift at the higher duties rate | 12 - Modified Duties minimum period of 16 hours or more over a continuous four day span before entitlement accrues. |
Casuals minimum payment | 11.5(d) – Four Hours | 9.3 – Three Hours |
PTE minimum payment | 11.4(a)(iii) – four hours | 9.5 – PSE three hours. |
Overtime:- Supplementary Hours | 32.1(a) – All work outside ordinary hours at time and a half for the first two hours and double time thereafter (all double time for a continuous shift worker). | 9.9 - Such hours cannot be subject to overtime payments. 10.2(c) FTE’s will be paid the pro-rata rate of the Employee’s Monday to Friday ordinary hourly rate of pay. |
Roster Changes / Altered Hours | 30.2 – Provides seven days notice of roster changes and where there is less than two days notice overtime rates will be paid. | 10.3 – Company may give two hours notice for altered hours. |
Overtime:- Nominated Hours | 32.1(a) – All work outside ordinary hours at time and a half for the first two hours and double time thereafter (all double time for a continuous shift worker). | 10.5: work an available shift not currently rostered (Published Shift) or shift the Company needs to man, in which event the employee will be paid for such hours at the Employee’s ordinary rate of pay for all hours worked (Nominated Hours). |
Multiple Shift Allowance | 30.6(a) required to work three shifts that commence at times that are greater than 30 minutes apart | 11.2 - Start and finish times may be varied by the Company in the event of aircraft cancellations, aircraft delays and off schedule flight operations |
Maximum 12 hour shift | 28.4(c) - provides for a maximum 12 hour shift | 11.3 of the Agreement provides that “an employee, having attended to commence a rostered shift, shall continue to work until the shift has been completed or until they have completed any Supplementary Hours or Altered Hours” |
Rest period after overtime | 32.2 - Rest period after overtime (10 consecutive hours) | N/A |
Transport after overtime | 32.5 - transport after overtime | N/A |
Meal Breaks | Clause 29.1(b) working through a meal break paid at overtime rates. | 11.12 working through a break will be paid for at the ordinary time rate of pay |
Allowances | 21.7 - Disability Allowance | N/A |
Leave Loading | 34.5 - holiday loading of 17.5% | N/A |
[17] The TWU generally supports the submissions of the ASU and also emphasised the application of the clause regarding “nominated hours” which it said is a further disadvantage compared to the Award.
[18] I accept the comparison between the Agreement and the Award contained in the ASU December 2012 correspondence. The task of the Commission in applying the BOOT is to assess the significance of these matters as well as the benefits to employees arising from the Agreement.
[19] The benefits to employees arising from the Agreement are summarised in the statutory declaration of Mr Shelley filed with the application. Those benefits are as follows:
Term of Agreement | Term of Award | Employees affected |
9.16 - no employee shall be rostered exclusively or predominantly in Sunday's or Public Holidays | No equivalent term | All agreement covered employees |
10.2 - Overtime rates are at a higher rate than the award equivalent rate | Clause 32 | All agreement covered employees |
14.3- automatic annual pay increases | No equivalent term | All agreement covered employees except Leader 3 |
14.4 - automatic annual pay increases | No equivalent term | Only Leader 3 |
14.9 - upon approval back pay will be paid (also see clause 33) | No equivalent term | All existing employees |
15 - the loaded rates provide for a higher superannuation contribution | Clause 27 | All agreement covered employees |
18.2 - Public holidays are paid at 200% of the Monday - Friday rate which is greater than 200% of the award rates | Clause 37 | All agreement covered employees |
18.6 - 5 weeks of annual leave for shift workers. Shift worker definition (clause 5) is much wider than the clause in the award (34.4) | Clause 34.4 limits 5th week of annual leave to a narrower class of employees when compared with the agreement | All agreement covered employees |
18.11 - the loaded rates on offer provide for a higher Long Service Leave payment | No term | All agreement covered employees |
18.13 - employees on Personal Leave receive a higher rate of pay when on leave due to the loaded rates | Clause 35 | All agreement covered employees |
20 - Employees with more 10+ years of service receive additional severance payments. | No term | All agreement covered employees with 10+ years of service |
20 - All employees who are made redundant receive a higher weekly pay due to the loaded rates | No term | All agreement covered employees |
30 - Pre dawn shift Allowance | No equivalent allowance in clause 30.3 | All agreement covered employees |
31 - Paid car park Allowance | No term | All agreement covered employees |
Schedule A - Table 2 Higher base rates of pay for hours on Monday - Saturday | Clause 15 with application of relevant provisions of clauses 28.2 and 30.3 | All agreement covered employees |
No provision | Clause 17 - Junior rates | All employees under 21 ages (155 employees) |
[20] There were detailed submissions regarding the three matters raised by the unions in the proceedings before me as mentioned above - three hour minimum engagement periods, the appropriate Award classification for AASAs and the concept of ‘nominal hours’. I deal with each of these in turn.
[21] Contrary to the submissions of Aero-Care I consider that the minimum engagement period of three hours under the Agreement compared to the minimum four hours under the Award is a disadvantage. I do not believe that a three hour work period followed by a subsequent one hour unpaid meal break is consistent with the Award requirement that employers roster part-time employees for a minimum of four consecutive hours on any shift or the minimum payment of four hours for casuals. In my view the wording of the meal break clause of the Award does not alter this conclusion. I propose to consider this change as a detriment to both part-time and casual employees.
[22] A more difficult question arises as to the quantification of this detriment. In my view the matter needs to be considered in a practical way by comparing the situation of the rostering regime created by the Award to the regime created by the Agreement. The Award provides for a minimum engagement of four hours. If the Award applied, employees would be likely to be rostered for shifts of four hours or more and be paid for the number of hours they worked. The Agreement permits three hour shifts. It can be expected that subject to the requirements of the Agreement, employees employed under the Agreement would be rostered for some shifts at least for three hours work and be paid three hours pay at the higher Agreement rates. For each engagement, the costs and inconvenience of attending work would be approximately the same but under the Agreement, the overall payment to defray these costs would be less. Further, the comparison must in my view take into account the notion that employees are both working less hours and being paid for less hours work when working under the Agreement. This represents a less advantageous payment but a more advantageous requirement to perform work. In my view, both factors should be taken into account. I also note the terms of clause 9.16(b) of the Agreement on the working of shifts of three hours duration. It follows therefore that, to an extent, the impact of the difference provided by the ASU is overstated.
[23] In the evidence before me, Mr Shelley explained that the AASA classification is a classification to which Aero-Care promotes its good performing Airline Service Agents (ASAs). He said that there is no difference in the duties of the two classes of employees and none of the general airline industry duties for the Level 3 classification in the Award applied. There was no evidence to the contrary. I consider that for the purposes of BOOT comparisons the appropriate Award classification for this category of employee is Level 2.
[24] The TWU emphasised the notion of ‘nominated hours’ under clause 10.5 of the Agreement. This provides for employees, with prior written company approval, to swap rostered shifts with another employee to work an available shift not currently rostered. Payment is made at the ordinary rate of pay or time can be taken off in lieu for working these additional hours, regardless of whether the employee has otherwise worked the full complement of ordinary hours in the relevant period. The normal position of swapping of shifts does not involve working hours beyond the ordinary time limits and does not attract overtime payments, but in some circumstances, an additional shift may give rise to overtime payments under the Award. Such arrangements are voluntary for employees and subject to written agreement of Aero-Care. I do not consider that this matter can be regarded as a significant detriment.
[25] I note that the arguments advanced by the unions in their submissions are confined to the general comparisons of provisions. There was no evidence with respect to any employee as to their personal circumstances or anticipated rostering arrangements. I also note the safeguards and undertakings contained in the Agreement and attached to the submissions of Aero-Care, 5 especially those relating to rostering of shifts on Sundays and public holidays (clause 9.16(a)), rostering of three hour shifts (clause 9.16(b)), the conversion of casual employees and the accrual of paid leave benefits.
[26] I have weighed the respective advantages and disadvantages under the Agreement compared to the Award. In my view the benefits of the Agreement are substantial. I have also considered the detailed evidence and calculations provided in the proceedings which assists in assessing the extent of the benefits and the disadvantages. I note that in relation to minimum shift lengths the basis of these calculations adopt the unions’ proposals regarding financial impact. Having regard to all of the circumstances I am satisfied that each Award covered employee and each prospective Award covered employee would be better off overall if the agreement applied than if the Award applied. In my view the Agreement satisfies the BOOT.
Conclusion
[27] The Agreement is approved and, in accordance with s.54(1)(a), will operate from 19 February 2013. The nominal expiry date of the Agreement is 19 February 2017.
[28] Pursuant to s.191 of the Act, the undertaking provided by Aero-Care is taken to be a term of the Agreement. A copy of the undertaking is annexed to this decision and to the Agreement.
VICE PRESIDENT WATSON
Appearances:
F. Parry, of counsel, with J. Tracey and D. Houlihan for Aero-Care Flight Support Pty Ltd
A. Slevin, of counsel, for the Australian Municipal, Administrative, Clerical and Services Union
T. Walton for the Transport Workers’ Union of Australia
Hearing details:
2013.
Melbourne.
February, 11.
Appearances:
D. Houlihan for Aero-Care Flight Support Pty Ltd
A. Slevin with J. Cooney for the Australian Municipal, Administrative, Clerical and Services Union
T. Walton for the Transport Workers’ Union of Australia
Hearing details:
2012.
Sydney.
December, 21.
1 [2012] FWA 3227.
2 [2012] FWA 7214, PR528231.
3 MA000048.
4 Exhibit S1.
5 Exhibit H5.
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