[2021] FWCA 103

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Aerocare Flight Support Pty Ltd T/A Aerocare
(AG2018/2008)

AEROCARE COLLECTIVE AGREEMENT 2018

Airline operations
COMMISSIONER JOHNS	SYDNEY, 29 JANUARY 2021

Application for approval of the Aerocare Collective Agreement 2018.

[1] On 15 May 2018 an application was made for approval of an enterprise agreement known as the Aerocare Collective Agreement 2018 (2018 Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (FW Act). The application has been made by Aerocare Flight Support Pty Ltd (Aerocare, now Swissport 1). The Agreement is a single enterprise agreement.

[2] On 30 January 2020 Commissioner Wilson approved the 2018 Agreement (Approval Decision 2). The Approval Decision was proceeded by an interim decision issued on 20 December 20193 (Interim Decision).

[3] In the 365 days since the Approval Decision the following events have occurred.

a) On 6 February 2020 the 2018 Agreement commenced operation. It had a nominal expiry date of 30 January 2024. 4 The Agreement replaced the Aerocare Collective Agreement 2012 (2012 Agreement) (which, in any case, had been terminated with effect from 6 February 2020).

b) Employees were back-paid to 20 February 2017 and paid new rates (1 July 2019 rates) in respect of the period 1 May 2018 – 6 February 2020.

c) On 20 February 2020 the Transport Workers’ Union of Australia (TWU) and the Australian Municipal, Administrative, Clerical and Services Union (ASU) (collectively, the Unions) each appealed the Approval Decision.

d) On 24 April 2020 the Commission (constituted by Vice President Catanzariti, Deputy Present Sams and me) heard the appeal.

e) On 4 May 2020 the Airline Operations – Ground Staff Award 2010 (Ground Staff Award 2010), i.e. the underlying modern award, was replaced by the Airline Operations – Ground Staff Award 2020. (Ground Staff Award 2020). 5 However, the Ground Staff Award 2010 remains the Test Time reference instrument.

f) From 13 July 2020 the employees were paid new increased rates of pay as set out in the 2018 Agreement from that date.

g) On 11 August 2020 the Full Bench issued a decision 6 in which it:

i. granted permission to appeal;

ii. upheld the appeal in respect of ground 1;

iii. quashed the Approval Decision; and

iv. remitted the matter to me for redetermination.

h) By reason of the Full Bench decision the 2018 Agreement operated for 6 months and 5 days.

i) On 2 September 2020 I listed the matter for a mention/directions hearing. At that hearing it was agreed that:

i. by no later than 4:00pm (AEST) on 30 September 2020, Swissport would file in the Commission and serve on any bargaining representatives any submissions, witness statements and any other documents it sought to rely upon in support of the approval of the Proposed Agreement, and

ii. a further mention/directions hearing would be held on 13 October 2020 for further programming.

j) On 30 September 2020 Swissport filed a further statement of Mr Shelley which built upon his two earlier statements. Swissport also filed BOOT data in an excel spreadsheet format.

k) On 13 October 2020 there was a further mention/directions hearing. At that hearing Mr Shelley demonstrated how to navigate around the BOOT data provided in an excel spreadsheet format. In answer to a query from Mr Gibian SC about whether Mr Shelley was providing evidence I responded, “No, he is just giving some IT assistance to an Excel spreadsheet luddite like me.” 7 At the conclusion of the hearing the matter was programmed for hearing on 1, 2 and 3 December 2020.

l) On 23 October 2020 Swissport filed documents in response to an Order to Produce issued by the Commission on 21 October 2020. Documents filed were:

i. A copy of time, classification and wage records for employees in the period 1 April 2019 to 30 June 2019,

ii. A copy of the original rosters for employees for the period 1 April 2019 to 30 June 2019,

iii. A copy of any Jobkeeper enabling stand down directions given to employees in the period March to June 2020,

iv. Information as to the number of changes of a rostered shift for employees, where the roster change occurs within 48 hours of the rostered shift, for the period for 1 April 2020 to 30 June 2020.

v. Information as to the number of changes of a rostered shift for employees, where the roster change occurs within 48 hours of the rostered shift, for the period for 1 April 2019 to 30 June 2019.

m) On 20 November 2020 the Unions filed three witness statements from Mr Robson of the ASU, Ms Metcalf of the TWU and Dr Stanford, Economist and Director of the Centre for Future Work.

n) On 23 November 2020 the Unions filed their submissions to accompany the witness statements filed on 20 November 2020.

o) On 30 November 2020 Swissport filed a further witness statement from Mr Shelley and submissions in reply to the material filed by the Unions on 20 November 2020 and 23 November 2020. Swissport also filed a rate comparison table to be relied upon at the redetermination hearing.

p) On 1 and 2 December 2020 I conducted the redetermination hearing. At the hearing:

i. Swissport was represented by Mr Frank Parry, of Queens Counsel and Mr Matthew Follett of counsel, and

ii. the Unions were represented by Mr Mark Gibian, Senior Counsel and Mr Tony Howell of counsel.

iii. only Mr Greg Shelley was called to give evidence and was cross-examined.

q) On 7 December 2020 Swissport proffered a final form of undertakings (December 2020 Undertakings).

r) On 8 December 2020 the Unions wrote to the Commission explaining their continuing opposition to the approval of the Agreement in the face of the December 2020 Undertakings.

[4] Both the TWU and the ASU were bargaining representatives for the 2018 Agreement (in addition to one employee bargaining representative and one employer bargaining representative). Both unions object to the approval of the 2018 Agreement. Before me the Unions’ submitted that the 2018 Agreement cannot be approved because:

a) the Commission cannot be satisfied that the 2018 Agreement was genuinely agreed to by the employees covered by the 2018 Agreement (s.186(2)(a), s.188 FW Act);

b) the 2018 Agreement does not pass the Better Off Overall Test (BOOT) (s. 186(2)(d), s.193 FW Act);

c) it is not open to the Commission to approve the 2018 Agreement on the various undertakings proffered by the Applicant before Commissioner Wilson:

i. the BOOT data upon which the Applicant relies is irrelevant to the issues arising on the redetermination of the Application and is of no utility in undertaking the sort of assessment required by the Re Loaded Rates Agreements 8 (Re Loaded Rates).

ii. undertakings only arise once the Commission itself forms a “concern” that “the agreement does not meet the requirements set out in sections 186 and 187”, and the Commission may only accept an undertaking and approve an agreement if satisfied acceptance of the undertaking “meets the concern”. The earlier agreement approval has been “quashed” and the application is to be “redetermined”. The undertakings proffered by the Applicant were directed to meeting concerns raised by Commissioner Wilson that were the product of his erroneous approach to the assessment of BOOT compliance. The Commission (as presently constituted or otherwise) has not properly formed or expressed a concern about the 2018 Agreement as made not meeting the requirements of s 186 and/or 187 of the FW Act, and the proffered undertakings have not been crafted to address any such concern. They are irrelevant and cannot be accepted by the Commission (noting the Applicant no longer contends the 2018 Agreement as made passes the BOOT).

iii. In any event, the proffered undertakings are not open to be accepted by the Commission, as the Commission cannot be satisfied they:

A. are “not likely to … cause financial detriment to any employee covered by the agreement”,

B. do not “… result in substantial changes to the agreement”.

[5] Because the Approval Decision was quashed the 2018 Agreement is taken to never have operated. I was required to hear and determine the matter de novo. I made this clear to the parties when the matter first came before me on 2 September 2020. 9

[6] However, the parties agreed that I could have regard to the materials (evidence and submissions) before Commissioner Wilson, in so far as those materials continued to be relevant. I have done so. Notwithstanding that I have had regard to the material before Commissioner Wilson (and the material before me), I have decided the issues relevant to the approval of an enterprise agreement for myself.

[7] For my own reasons (set out below) I, like Commissioner Wilson, have decided to approve the 2018 Agreement.

Matters to be decided

[8] Before deciding to approve the 2018 Agreement, I must be satisfied that that each of the requirements of ss.186, 187, 188 and 190, as are relevant to this application for approval, have been met.

[9] The s.186 matters are as follows:

Section	Requirement	Finding
s.186(2)(a)	That the 2018 Agreement has been genuinely agreed to by the employees covered by the 2018 Agreement.	See below re s.188 of the FW Act.
s.186(2)(c)	That the terms of the 2018 Agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements).	I am satisfied that none of the terms of the 2018 Agreement contravene section 55 of the FW Act.
s.186(2)(d)	That the 2018 Agreement passed the BOOT.	I am not satisfied that the 2018 Agreement passes the BOOT. Swissport concede the same. See further discussion below.
s.186(3)	That the group of employees covered by the 2018 Agreement was fairly chosen.	I am satisfied that the group of employees covered by the 2018 Agreement was fairly chosen.
s.186(4)	That the 2018 Agreement does not include any unlawful terms.	I am satisfied that the 2018 Agreement does not include any unlawful terms.
s.186(5)(a)	That the 2018 Agreement specifies a date as a nominal expiry date (NED).	Clause 4.1 of the 2018 Agreement provides that the 2018 Agreement “shall operate for a period of four years” (after it commences operation). Following a concern raised by me about the length of time that had elapsed and what that meant for the operation of the 2018 Agreement if it were to be approved in 2021, Swissport proffered the December 2020 Undertakings. In the December 2020 Undertakings Swissport has included a nominal expiry date of 18 December 2022. Consequently, I am satisfied that the 2018 Agreement specifies a date as a nominal expiry date.
s.186(5)(b)	That the NED will not be more than 4 years after the day on which the Commission approves the 2018 Agreement.	Noting that the NED is now 18 December 2022 I am satisfied that the NED will not be more than 4 years after the day on which the Commission approves the 2018 Agreement.
s.186(6)	That the 2018 Agreement includes a term: (a) that provides a procedure that requires or allows the FWC, 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 (NES); and (b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.	Clause 43 of the 2018 Agreement provides for dispute resolution. It relates to disputes under the 2018 Agreement and the NES. The Commission is expressly given a role in relation to “arbitration in accordance with the Act.” It allows for representation. Consequently, I am satisfied that the 2018 Agreement includes a term as required by s.186(6) of the FW Act.

[10] The s.187 of the FW Act deals with additional requirements when the Commission must approve an enterprise agreement.

Section

Requirement

Finding

s.187(4)

Definition of shift worker for the purpose of the NES

Before Commissioner Wilson the ASU raised an objection about the failure of the 2018 Agreement to provide a definition of shift worker for the purposes of the NES in accordance with s.196 and s.187(4) of the FW Act.

Having considered the evidence in the matter I am satisfied that the 2018 Agreement does not cover continuous shift workers for the purposes of the NES in accordance with s.196 of the FW Act. Clause 11.2 of the 2018 Agreement states that “the Company operates by non-continuous basis, seven days a week to meet the requirements of its Customer Carriers.” However, there is no evidence that 24/7 roster patterns are in use or likely to be.

Consequently, a definition of shift worker for the purposes of the NES is not required.

[11] The s.188 matters are as follows:

Section	Requirement	Finding
s.188(1)(a)(i)	The employer must have complied with:
• s.180(2) – the employer must take all reasonable steps to give access to the 2018 Agreement/incorporated material during the access period.	On 19 April 2018 Swissport (then Aerocare) “provide a copy of the 2018 Agreement the material referred to in the 2018 Agreement to each employee by AeroNet. This was done by having a “pop up” notice (Aerocare Voting Notice) which appeared when an employee logged into AeroNet.” 10 The Aerocare Voting Notice “attached a complete copy of the 2018 Agreement in electronic format, and hyperlinks to the National Employment Standards … and the model flexibility clause…” 11 I am satisfied that Swissport took all reasonable steps to give access to the 2018 Agreement/incorporated material during access period.
• s.180(3) – the employer must take all reasonable steps to notify the employees of the, time, place, and method of voting.	The Aerocare Voting Notice provided on 19 April 2018 “provided the dates on which voting was to occur, the locations at which voting with occur, and the details of the voting method used. A reminder notice was sent to employees through AeroNet on 26 April 2018 which also set out the dates on which the voting was to occur, located at which voting was to occur, the details of the voting method to be used.” 12 I am satisfied that Swissport took all the steps to notify the employees of time, place and method of voting.
• s.180(5) – the employer must take all reasonable steps to explain the terms of the agreement (including, having regard to the particular circumstances and needs of relevant employees).	Aerocare’s evidence about the meetings that occurred and the explanations given in early 2018 was not challenged. Aerocare also provided employees with an Explanatory Statement. All of that material, on its face, was sufficient and reasonable. The Unions contended that information Aerocare provided to employees prior to the vote concerning: • compliance with the BOOT, • wage rates increasing by 2% per annum commencing on 1 July 2019, and • the continuing availability of split shifts remaining voluntary, eventually turned out to be wrong, and, therefore Aerocare did not take reasonable steps to explain the terms and effect of the 2018 Agreement. I reject that submission. At the time that the statements were made Aerocare believed the statements to be correct. And, in any case, split shifts to continue to be voluntary. Aerocare cannot be held responsible for the fact that the Commission formed a different view about the BOOT and split shifts and the delay in the approval of the 2018 Agreement. There was nothing misleading in what Aerocare stated prior to the vote. Employees understood what they were being asked to agree to in April 2018. There is no evidence that employees did not understand how wages and working conditions might be affected by voting in favour of the 2018 Agreement that was presented to them in April 2018. I am satisfied that Swissport took all reasonable steps as required by s.180(5).
s.188(1)(a)(i)	The employer must have complied with s.181(2). That is employees must not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given.	The last Notice of Employee Representational Rights was served on 12 January 2018. The voting commenced on 27 April 2018. Therefore, voting commenced 105 days after the last NERR. Consequently, I am satisfied that Swissport complied with s.181(2) of the FW Act.
s.188(1)(b)	That the 2018 Agreement was made in accordance with:
• s.182(1) – a majority of employees cast a valid vote approved the agreement.	92% of eligible employees voted in the ballot. 91% voted to approve the 2018 Agreement. Before Commissioner Wilson the TWU advanced an argument that the method of voting lead to intimidation of employees. Commissioner Wilson described the submission as “slight in detail and … not developed in [the TWU’s] evidence.” The same contention was not advanced before me. I am satisfied that the 2018 Agreement was made with the employees to be covered by it on 1 May 2018.
• s.182(2) – Not applicable	N/A
s.188(1)(c)	That there are no other reasonable grounds for believing that the 2018 Agreement has not be genuinely agreed to by employees.	The Unions contended that “what the Commission is now being invited to approve is radically different to the Agreement upon which employees voted. The delay in the finalisation of the Application (and consequent extension of the period of duration of the Agreement), the alteration to the time periods for the alteration of wage rates and the fundamentally altered position with respect to the working of split shifts, provide sound reasons for the Commission to find that the Agreement with Undertakings it is being invited to approve, was not genuinely agreed.” 13 All of that contention may be true, but those matters go to whether the undertakings can properly be accepted or whether they cause detriment to employees or substantial change to the 2018 Agreement (dealt with below). The assessment of genuine agreement is a point in time assessment – in the present case, was the 2018 Agreement genuinely agreed back in 2018? Having regard to my state of satisfaction about the pre-approval steps taken by Swissport and the overwhelming vote in favour of the 2018 Agreement I am satisfied that there are no other reasonable grounds for believing that the 2018 Agreement has not be genuinely agreed to by employees.

[12] The s.190 of the FW Act deals with when the Commission may approve an enterprise agreement with undertakings. I deal with the BOOT and s.190 undertakings below.

How to assess the BOOT

[13] Section 186(2)(d) of the FW Act provides that the Commission “must be satisfied that … the agreement passes the better off overall test”. Section 193 prescribes what is necessary to pass the BOOT. If the Commission is concerned that an agreement does not pass the BOOT, s.190 allows the Commission to approve an agreement if it is satisfied that an undertaking meets the BOOT concern. Section 190(3) provides that the effect of accepting the undertaking must not be likely to cause financial detriment to any employee and must not be likely to result in substantial changes to the agreement.

[14] Last year a Full Bench of the Commission in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v DDP Electrical Services Pty Ltd, t/a DDP Electrical Services 14 usefully set out the established principles relevant to the BOOT as follows:

[50] From previous Full Bench decisions of the Commission, three well-established propositions about the application of the BOOT may be discerned. The first, which is in essence a restatement of s.193(1), is that the BOOT requires a finding that each award covered employee and prospective employee would be better off under the agreement than under the relevant modern award. 15 The requirement that “each” such employee and prospective employee be better off overall is a rigorous one. The ordinary meaning of “each” is “every, of two or more considered individually or one by one”.16 Thus, every award covered employee or prospective employee must be better off overall, with the corollary that if any such employee is not better off overall, the relevant enterprise agreement does not pass the BOOT.

[51] The second proposition is that satisfaction that an employee is better off overall under the agreement than under the award requires an evaluative assessment after considering the provisions of the award and the agreement that may have been more beneficial to employees and those that may have been less beneficial. 17 This assessment was recently described by the High Court of Australia in ALDI Foods Pty Limited v Shop, Distributive & Allied Employees Association18 as follows:

“. . . This assessment is a matter of the kind which has been described in other contexts as:

"a question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds."” 19

[52] The third proposition is that the application of the BOOT requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement. 20

[53] Except for agreements covering small enterprises, the examination of the circumstances of each individual employee to reach a state of satisfaction that the BOOT is passed would be an exhaustive task. Section 193(7) substantially relieves the Commission of this burden by permitting it to assume, if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, that employees would be better off overall in the absence of evidence to the contrary.

[15] I respectfully adopt that reasoning.

[16] For the purposes of assessing the BOOT before Commissioner Wilson, the underlying modern award against which the BOOT was conducted was the Airline Operations – Ground Staff Award 2010 (Ground Staff Award 2010). That modern award is now the Airline Operations – Ground Staff Award 2020. (Ground Staff Award 2020). 21 Notwithstanding, it is the Ground Staff Award 2010 that remains the Test Time reference instrument.

[17] In its F17 Employer’s Declaration Aerocare/Swissport declared that 2018 Agreement contains the following provisions that are less beneficial than the Ground Staff Award 2010:

“a) Rates of Pay - Clerical, administrative and support stream: The rates of pay for the following classifications are less than the applicable rate under the Award for employees performing work in the clerical, administrative and support stream. [tables omitted]

b) Rates of Pay - Aviation transport workers stream: The rates of pay for the following classifications are less than the applicable rate under the Award for employees performing work in the Aviation Transport Workers stream. [tables omitted]

c) Sunday rates: The Sunday rates of pay for the following classifications are less than the applicable Sunday rate under the Award. [tables omitted]

However, the lower Sunday rates are offset by the higher rates of pay on weekdays and Saturdays, which account for the majority of hours worked by employees. No employees work only Sunday shifts. Accordingly, in each Roster Period, Employees are better off under the Agreement than under the Award.

d) Apprentices: Clause 11.6 of the Award contains provisions relating to apprentices. The Agreement does not contain any provisions relating to apprentices. Aerocare does not employ apprentices on apprentice rates and does not intend to do so.

e) Job Search Entitlement: Under clause 12.3 of the Award, an employee who has been given notice of termination is entitled to up to one day's time off without loss of pay during their notice period to search for alternative work. Under clause 13.4 of the Award, an employee who has been informed that their employment will end due to redundancy is entitled to up to one day's time off without loss of pay during their notice period to search for alternative work. The Agreement does not contain equivalent provisions.

f) Allowances: Clause 21 of the Award contains a number of allowances. Of those allowances, the following may be payable to Aerocare employees in certain circumstances under the Award but are not provided under the Agreement:

i. Coffin Allowance (clause 21.6) - applies if an employee required to handle a coffin with human remains. Aerocare estimates that this may occur around 180 times in a year, and is rarely work that is carried out by the same person;

ii. Disability allowance (clause 21.7) - applies if the work premises are affected by construction, reconstruction, alteration, major repair or other like work for 2 weeks or more. These instances are rare;

iii. First aid allowance (clause 21.8) - applies if employees are required to hold a current first aid qualification. Aerocare requires its employees engaged as Supervisors to hold a current first aid qualification, but does not require its other employees to do so. The rate of pay for Supervisors sufficiently compensates for this allowance;

iv. Nightsoil allowance (clause 21.9) applies if an employee is required to handle or dispose of nightsoil or clean aircraft toilets or containers used for animals. This allowance only applies to Aerocare's employees engaged on ramp operations;

v. Laundry allowance (clause 21.13(b)) - applies where an employee is required to launder their uniform. This allowances applies to Aerocare's employees engaged on ramp operations and is included in the rates of pay for these employees;

vi. Money collection allowance (clause 21.15) - applies where an employee is required to handle monies. Aerocare's employees engaged on ramp operations are not required to handle cash, however, some employees may be required to handle cash payments for excess baggage;

Clause 21.10 of the Award provides for travel time allowances including travel pay at ordinary rates up to 12 hours in 24 hours, or 8 hours if a sleeping birth or air travel is provided, and time and a half on Sundays and public holidays. Under clause 26 of the Agreement, employees are not paid for travel time unless they are required to travel by air to another work location, the duration of travel is greater than 2.5 hours flying time from their home location, and the travel is not related to a social activity organised by Aerocare. Employees will be paid their normal rate of pay for the duration of travel from the scheduled time of departure on the flight that they are booked on until the scheduled arrival at the destination airport.

Under clause 6.2.6 of the Agreement, the Company reimburses periodic renewal costs of maintaining an Aviation Security Identification Card, consistent with clause 21.5 of the Award.

No other Award allowances are relevant to the work performed under the Agreement.

The higher rates of pay in the Agreement compensate employees for the non-payment of the relevant allowances.

g) Accident Make-Up Pay: Under clause 23 of the Award, employees engaged in the Maintenance and Engineering Stream and Clerical, Administrative and Support Stream are entitled to claim accident make up pay if injured. There is no equivalent entitlement in the Agreement. However, most workers' compensation legislation sets weekly compensation for a workplace injury at an employee's average weekly pre-injury earnings, and so this clause is unlikely to have application.

h) Split shifts: In his decision in AG2017/1424, Commissioner Wilson determined that split shifts did not provide for Aerocare's employees to be better off overall under the proposed Aerocare Collective Agreement 2017 because split shifts were either impermissible under the Award, or attract overtime for the second tranche of work on the shift. Aerocare's position is that this is incorrect and that the Award does not prevent PSEs from working split shifts, nor does it require payment of overtime for working split shifts.

i) Overtime Meal Allowance: Under clause 29.4 of the Award, employees who work overtime in certain circumstances are entitled to a meal break and a meal allowance. Under the Agreement, breaks are provided for in clause 19, which apply regardless of whether overtime is worked or not. No overtime meal allowance is provided in the Agreement.

j) Consecutive night shifts: A shift loading is payable under clause 30.4 of the Award when an employee is rostered to work night shifts only, remains on night shift for four consecutive weeks, or works on a night shift which does not rotate with another shift or with day work such that the employee has at least 1/ 3rd of their working time off night shift in every roster cycle. The Agreement does not provide for this loading, however, Aerocare's position is that the loading does not apply as employees covered by the Agreement are not rostered to work this way.

k) Continuous afternoon and night shifts: A shift loading is payable under 30.5 of the Award when employees are rostered to work on any afternoon or night shift which does not continue for at least five consecutive afternoons or nights. The Agreement does not provide for this loading, however, Aerocare's position is that the loading does not apply as employees covered by the Agreement are not rostered to work this way, and the loading cannot apply to part time employees.

l) Multiple shift allowance: A shift loading of 0.52% or 0.55% is payable under clause 30.6 of the Award if an employee is required to work three or more consecutive shifts with a starting time that is greater than 30 minutes apart. The Agreement does not express this loading as a separate payment, however, the rates of pay are set at a level which includes this loading.

m) Annual Leave Loading: The Agreement does not specify the annual leave loading in clause 34.5 as a separate payment. The higher rates of pay under the Agreement include this loading.” 22

[18] In its F17 Employer’s Declaration Aerocare/Swissport declared that 2018 Agreement contains the following provisions that are more beneficial that the Ground Staff Award 2010:

“a) Rates of Pay: The tables below compare the hourly rates of pay that are applicable under Schedule A of the Agreement and under clause 15 of the Award.

In addition to this, under clauses 21.2 and 21.3 of the Agreement, the rates of pay for all employees, other than those employed as Airline Service Trainee (AST) or Leader 3, increase progressively according to an employee's years of service up to a maximum rate of pay for employees with 7 years of service. The range below represents the range from the Year 1 to Year 7 rate. The Award does not include this service based increase in remuneration. [tables omitted]

The Agreement incorrectly lists:

• the Monday to Friday Year 1 rate for casual employees engaged in the ASA classification as $26.41. The correct rate is $26.70

• the Monday to Friday Year 1 rate for casual employees engaged in the AASA classification as $27.88. The correct rate is $28.05

These are clerical errors in the drafting of the Agreement.

There are no casual employees engaged in classifications other than AST, ASA and AASA, and no intention to employ casual employees in any other classification.

In addition, the above rates of pay for all employees will increase from 1 July 2019, 13 July 2020, 12 July 2021 and 12 July 2022 by the following amounts:

• Airline Service Trainee (AST), Airline Service Agent (ASA), Advanced Service Airline Agent {ASAA), Supervisor/ Special Duties (All classes), and Senior Supervisor - 2% per annum

• Leader 3 - 3.5% per annum

The higher rates of pay in the Agreement also result in higher superannuation contributions than under the Award.

b) Back Pay: Under clause 21 of the Agreement, employees will receive backpay at the rate of the difference between the rate of pay received in the period 20 February 2017 until approval of the Agreement and the higher rates of pay under the Agreement (without loadings, allowances or penalties).

c) Split shifts: Under clauses 17.7 -17.9 of the Agreement, employees can request to work split shifts in writing. This offers flexibility to employees to attend to family or other personal priorities and commitments, including study, sport or other endeavours, and also increases an employee's ability to work more hours on those days when suitable and available to them. Split shifts also offer the benefit of Aerocare being able to arrange work so that employee fatigue can be monitored and rosters can be coordinated without conflicts arising.

d) Pre-Dawn Shift Allowance: Under clause 22 of the Agreement, employees (other than those engaged as a Leader 3) who are rostered to perform duties between midnight and 6am on a weekday are paid a loading of 20% of their ordinary time hourly rate for those hours. Under clause 30.3 of the Award, an employee rostered to work Monday to Friday on an early morning shift is entitled to a shift loading of 15% of the Award rate, or on a night shift is entitled to a shift loading of 22.5% of the Award rate. Given the higher rates of pay in the Agreement, when coupled with the pre-dawn shift allowance, employees are better off under the Agreement in relation to those shifts.

e) Transition to Full-Time: Under clause 12.6.2 of the Agreement, if the operations of a particular workplace will support a Permanent Secure Employee (PSE) working 152 hours in a roster period on an ongoing basis, Aerocare may offer the PSE a full time role. There is no equivalent term in the Award.

f) Transition to PSE: Under clause 14.2 of the Agreement, casual employees who regularly worked over a continuous 12 month period, can request that their employment be converted to employment as a PSE. There is no equivalent term in the Award.

g) Meal Breaks: Under clause 19 of the Agreement, employees are entitled to a 30 minute unpaid break if they work up to 5 hours. Employees who work between 5 and 8 hours are entitled to a second 30 minute meal break by agreement, or one unpaid meal break of between 30 and 60 minutes. Employees who work more than 8 hours are entitled to take a meal break of between 60 and 90 minutes, which can be taken as one break, or two separate breaks. Under clause 29.2(b) of the Award, non-continuous shift workers are entitled to a break of between 30 minutes and 60 minutes, which must be commenced no later than 5 hours after commencing work.

h) Long Tenure Bonus: Under clause 24 of the Agreement, employees receive a bonus cash payment on completion of 10 years' service, 15 years' service and 20 years' service. These bonuses will also be paid on commencement of the Agreement to all employees who have already completed the relevant years of continuous service in employment with Aerocare. There is no equivalent term in the Award.

i) Car Parking: Under clause 25 of the Agreement, where no free parking is available at the workplace, Aerocare will provide parking without charge. If an employee chooses not to access the free parking provided by Aerocare, the employee will receive a car parking allowance of $2.50 per hour up to a maximum of $15 per day instead. There is no equivalent term in the Award.

j) Annual Leave: Under clause 27 of the Agreement, all employees receive 5 weeks of annual leave per annum. This is more beneficial than the Award, which provides that only shiftworkers rostered to work continuously in a 24/7 business get 5 weeks of annual leave per annual, and all other employees get 4 weeks of annual leave per annum.

k) Priority Leave Day: Under clause 28 of the Agreement, long term PSE and Leader 3 employees are entitled to 1 paid leave day on completion of 5 years of continuous service, which takes priority over all other requests for leave. There is no equivalent term in the Award.

l) Domestic Violence Leave: Under clause 30 and clause 34 of the Agreement, employees are permitted to use their personal leave to deal with domestic violence issues, and if they exhaust their personal leave, they are entitled to a further 5 days of leave in a calendar year, non-cumulative, to deal with domestic violence issues. There is no equivalent term in the Award.

m) Other Leave: Under clause 35 of the Agreement, the Company may grant leave with or without pay for any special purpose on request by an employee. There is no equivalent term in the Award.

n) Redundancy Pay: Under clause 40 of the Agreement, employees with at least 10 years of continuous service have a higher entitlement to redundancy pay, being 16 weeks redundancy pay, than they do under the Award, which provides for 12 weeks redundancy pay in accordance with the NES.

o) Training and Meetings Pay: Under clause 44 of the Agreement, employees will be paid at the rate of pay applicable for the actual hours in which they are engaged in training, both on-site and off-site, as well as reasonable expenses uncured in undertaking the training. An employee who is required or directed to attend a meeting will be paid at the applicable rate of pay for the actual hours of attending the meeting. There is no equivalent term in the Award.

p) Overnight Meal Allowance: Under clause 26.3 of the Agreement, an employee who is required to travel will be paid an overnight meal allowance of $60 if a meal is not provided by the Company. There is no equivalent term in the Award.

q) Junior Rates: Clause 17 of the Award contains provisions relating to junior rates for employees under 20 years of age. The Agreement does not contain any provisions relating to junior rates. If Aerocare engages junior employees, they will be paid the full adult rate under the Agreement.” 23

Construction and other issues relevant to an assessment of the BOOT

[19] There are a number of issues that arose in the proceedings before Commissioner Wilson, that, because all of that material was before me, also need to be addressed by me before progressing further:

a) Classification translation as between the Ground Staff Award and the 2018 Agreement – Schedule A “Classifications & Remuneration Table” in the 2018 Agreement which sets out each of the classifications. It includes indicative tasks, responsibilities and experience of employees. In its F17 Aerocare provided classification matching to the Ground Staff Award. The Commission has also undertaken a classification matching process. No alternative classification matching was advance by the Unions. Commissioner Wilson identified an issue with the classification of Senior Supervisors/Leader 3. I share that concern because, having considered the definition in the 2018 Agreement it seems to me that Senior Supervisor/Leader 3 is more senior than as set out in the matching advanced by Swissport. They clearly have additional duties and fuller responsibilities. Senior Supervisors/Leader 3 employees match with Ground Staff Award Level 7 employees. I otherwise adopt, as my own, the classification matching set out by Commissioner Wilson at paragraph [65] of the Interim Decision. This is a BOOT concern.

b) Test time contentions – the initial assessment of the BOOT must be done using the Test Time rates in the 2018 Agreement. The Test Time is 15 May 2018. That BOOT assessment must occur prior to an assessment about whether the 2018 Agreement passes the BOOT with undertakings. It is a staged process.

c) Split shifts – As Commissioner Wilson identified a “determination of the correct approach to split shifts is critical to [the] application of the BOOT assessment.” 24 It was also an issue dealt with by the Federal Court of Australia in Swissport v ASU (No. 3).25 Before Commissioner Wilson, there was a dispute about whether overtime is payable on the second tranche of a split shift. Aerocare objected to the Unions’ contention that overtime was payable. If it is payable under the Ground Staff Award it has significant implications for the BOOT. There is no prohibition on working a split shift. The only issue that arises is whether overtime is payable on the second tranche. Clause 28.3 of the Ground Staff Award 2010 dealt with “Ordinary hours of work—shiftwork”. Clause 28.3(d) provided that, “Except at the regular change-over of shifts, an employee must not be required to work more than one shift in each 24 hours.” That clause is now contained in clause 14.3(d) of the Ground Staff Award 2020 (with a slight change in wording that is not material). Like clause 28.3(d), clause 14.3(d) remains a clause that is (as Commissioner Wilson described it),

“… real and protective and that a requirement (however described) to work more than one shift in a 24-hour period takes the work out of the thing regulated within Clause 28.3, namely the ordinary hours of work of shiftwork. Clause 32 (Overtime) 26 establishes a scheme of payment for “work done outside ordinary hours on any day or shift” (32.1(a)) which I am satisfied applies to the second tranche of work associated with an Aerocare employee’s split shift.”

The consequence of this is overtime rates are payable on the second tranche of work in a split shift. It does not matter that an employee may volunteer to perform the same. This is a BOOT concern.

d) Part time specific entitlements – The Unions contended that the 2018 Agreement failed to safeguard part-time employees’ hours of work and provision for overtime. Aerocare reject the assertions. Having reviewed the respective provisions in the 2018 Agreement and the Ground Staff Award 2010, I am not persuaded that there is a conflict in the entitlements. However, there is difference in how the entitlement to overtime is expressed. This matter can be considered as a part of the BOOT assessment.

e) Casual employee specific entitlements – The Unions raised a concern about the minimum engagement period for casuals and the inclusion of an unpaid meal break. There is a clear difference in wording as between the 2018 Agreement and clause 11.5 of the Ground Staff Award 2010 (now clause 11.3 in the Ground Staff Award 2020). This is a BOOT concern.

f) Saturday and Sunday penalties and overtime – The 2018 Agreement contains reduced weekend penalties when compared with the Ground Staff Award 2010. This is a BOOT concern. However, it may be resolved if, as Swissport submit, the reduction is address as a part of the loaded rates to be paid to employees (in circumstances were around 75% of shifts are worked Monday to Friday and are paid at the higher rate for that work). The reduction in penalties do not necessarily mandate an undertaking. I deal with the BOOT assessment below.

g) Other penalties (early morning, afternoon, night penalties) – these penalties are either included in the loaded rates or replaced by a pre-dawn allowance at clause 22 of the Agreement. This is a BOOT concern.

h) Shift swaps – This issue arises when employees elect to work additional shifts. Under the 2018 Agreement overtime is not payable. Under the Ground Staff Award it would be payable. There is a non-monetary benefit to employees associated with flexibility also to be considered as part of the BOOT assessment.

i) Allowances – There are a range of other allowances that are provided for under the Ground Staff Award, that are not dealt with, or have lesser monetary value, in the 2018 Agreement. These too are to be considered as a part of the BOOT assessment.

j) Redundancy – The agreement does not provide job search entitlements in the event of redundancy or a transfer to lower paid duties entitlement in the event of redundancy. These entitlements are provided in the Ground Staff Award and the absence of these entitlements in the agreement is to be considered as a part of the BOOT assessment.

k) Car parking – The TWU raised a concern that the car parking allowance at clause 25 of the agreement had been misapplied in the initial BOOT analysis spreadsheets provided by Swissport in March 2019. Swissport had applied the car parking allowance to each tranche of a split shift on a per shift basis, rather than once per day as per the agreement. Swissport conceded the allowance was misapplied in the spreadsheets and to resolve the overall argument provided an undertaking that the car parking allowance set out in clause 25 would be paid on a per shift basis rather than a per day basis.

Towards the end of the proceedings before Commissioner Wilson there was some debate between the ASU and Swissport as to whether superannuation would be payable on the car parking allowances. The ASU contended that superannuation was not payable on the car parking allowances which they said would then cause some employees to fail the BOOT. Swissport contended superannuation was payable on the car parking allowances because it would be considered part of an employee’s ordinary earnings. Thus, Swissport suggested the employees the ASU said would fail the BOOT would pass the BOOT. Commissioner Wilson requested an undertaking confirming superannuation would be paid on the car parking allowance to provide clarity to the parties under the agreement and to address the BOOT issue put forward by the ASU.

Having reviewed the material before Commissioner Wilson I also have those concerns.

Plainly the application of the car parking allowance is to be considered as part of the BOOT assessment, given how the allowance is paid can impact on whether employees pass the BOOT.

[20] It will be noted that the concerns above mirror those of Commissioner Wilson. It was not unreasonable of Swissport to assume that would be the case. In fact, on 2 December 2020 I told the parties that “there may be some underlying assumption that I might form the same view about some of these issues as Commissioner Wilson.” 27

[21] The Commission having “a concern that the agreement does not meet the requirements set out in sections 186 and 187” is a necessary precondition to the operation of s.190 of the FW Act. The FW Act does not prescribe how the Commission is to communicate its concern. There is no prescription about how that is to be done. It is not necessarily some formal process. It can be done informally. Often times it is done by providing the employer with a copy of the administrative checklist prepared by Commission staff. In this matter the concerns of the Commission (including concerns about the BOOT) were first expressed in the administrative checklist dated 17 September 2018. Aerocare responded to those concerns before Commissioner Wilson. The parties agreed that all of that material was before me.

[22] Swissport then fashioned its case before me accordingly. Like Beth Harmon, the orphaned chess prodigy character in “The Queen’s Gambit”, 28 Swissport anticipated the play and moved to offer up pre-emptive undertakings. There was nothing improper in that process.

Does the 2018 Agreement pass the BOOT?

[23] First it is necessary to conclude a view about whether the 2018 Agreement passes the BOOT.

[24] When it filed the application for approval Aerocare/Swissport contended that the 2018 Agreement passed the BOOT. However, it later came to a view, that it should concede the 2018 Agreement does not pass the BOOT. That concession was maintained before me. 29

[25] I am also not satisfied that the 2018 Agreement passes the BOOT. This is because of the concerns I have identified above.

[26] Principal amongst those concerns is that the 2018 Agreement contains Test Time rates that are inadequate.

[27] In the face of the concession made by Swissport that the 2018 Agreement does not pass the BOOT, there was nothing wrong with Swissport proffering undertakings pre-emptively. In fact, it was Mr Gibian SC who, at the 2 September 2020 directions hearing said “we perhaps think what ought to be done is Swissport should indicate what undertakings it proposes to give so we can assess those.” 30

[28] On 7 December 2020 Swissport filed the December 2020 Undertakings, in final answer to the concerns raised about the 2018 Agreement.

[29] While the undertakings largely mirror those that were accepted by Commissioner Wilson, it would be wrong to characterise them as such. The undertakings provided on 7 December 2020 were in response to the concerns that I/the Commission raised about the 2018 Agreement.

[30] The differences between the undertakings accepted by Commission Wilson as opposed the undertakings proffered to me are as follows:

29 Jan 2020 Undertaking	Accepted by Wilson C	7 Dec 2020 Undertaking	Proffered to me
UT3 – Nominal Expiry date	4 years from approval (i.e. 30 January 2024)	UT3 – Nominal Expiry date	18 December 2022
UT4 – Test time rates	Rates as from 1 July 2019	UT4 - Rates of pay	Replacement schedule A rates from the first full pay period commencing on or after the Agreement commences.
UT5	Back pay arrangements	UT 5	Removal of Clause 21.1 backpay arrangements because these arrangements were fulfilled when the agreement was approved by C Wilson, before it was quashed by the Full Bench.
UT6	Sunday test time rates	NA
UT7 – On operation rates	From first full pay commencing on or after Agreement commences operation (i.e. from 6 February 2020) – Permanent Secure Employees (PSEs)	NA
UT8	Casual rates	NA
UT9 – Leader 3s	Reconciliation clause	UT6 – Leader 3s	As per Wilson C UT9
UT10 – Hours of work/rostering	“Split shifts will generally not be used. If the Company requires or directs that a split shift be worked, the second tranche of the split shift will be paid at the Employee’s applicable Award overtime rate.”	UT7 – Split shifts	As per Wilson C UT10, but with deletion of, “Split shifts will generally not be used.”
UT11	Casual employees engaged under the 2018 Agreement	UT8 - Casual employees engaged under the 2018 Agreement	As per Wilson C UT11
UT12	Afternoon and night shift employees	UT9 - Afternoon and night shift employees	As per Wilson C UT12
UT13 – Redundancy	Time off to search for alternative work	UT10 - Time off to search for alternative work	As per Wilson C UT13
UT14	Transfer to lower paid duties	UT11 - Transfer to lower paid duties	As per Wilson C UT14
UT15 – Car parking	Car park allowance of $15 per shift	UT12 - Car park allowance of $15 per shift	As per Wilson C UT15
UT16	Inclusion of car park allowance in calculation of superannuation	UT13 - Inclusion of car park allowance in calculation of superannuation	As per Wilson C UT16

What are the undertakings?

[31] A copy of the undertakings is attached in Annexure A to this decision. However, there is utility in setting the undertakings out in full (pay tables omitted):

Nominal Expiry Date

3. For the purposes of clause 4.1 of the Agreement, the Agreement will commence operation on the seventh day after it is approved by the Fair Work Commission and shall nominally expire on 18 December 2022.

Rates of pay

4. From the first full pay commencing on or after this Agreement commences operation, the rates of pay are set out in replacement Schedule A, clauses 2.1 – 2.3

5. Clause 21.1 of the Agreement is no longer operational.

Leader 3s

6. For each calendar quarterly period of employment of all Leader 3s engaged under the Agreement, the Company will conduct a comparison of the total remuneration received for that calendar quarterly period under the Agreement and the total remuneration they would otherwise have been provided with under the Award. Any shortfall in total remuneration which would otherwise have been payable under the Award plus an additional amount equal to 2.5% of the total shortfall, will be paid to the Leader 3 in the next pay period after each review is completed. If the Leader 3 and the Company cannot reach agreement on the total amount which should be paid by the operation of this undertaking, the amount calculated by the Company will be paid (as per the above) and the Dispute Resolution Procedure in clause 43 of the Agreement will thereafter be followed.

Hours of work/rostering

7. If the Company requires or directs that a split shift be worked, the second tranche of a split shift will be paid at the Employee’s applicable Award overtime rate.

8. Casual employees engaged under the Agreement:

a. will be paid for a minimum of four hours work for any shift;

b. will not be rostered to commence ordinary hours prior to 7.00am, Monday to Friday;

c. will be paid overtime in accordance with clause 16.2 if they work in excess of the hours provided at clause 17.3 of the Agreement, which is amended as follows:

17.3 The Company’s management of fatigue is a key consideration in rostering. This means that a PSE or casual employee will not normally be rostered to perform work:

17.3.1 more than 12 hours in any day, or

17.3.2 more than 20 days in the same Roster Period, or

17.3.3 more than 152 hours in the same Roster Period.

9. If applicable, Employees who work on any afternoon shift or night shift which does not continue for at least five consecutive afternoons or nights (including Saturdays and Sundays), must be paid at the rate of time and a half of the Employee’s applicable Award rate for all such shifts worked.

Redundancy

10. An Employee who has been informed that their employment will end due to redundancy is entitled to up to one day’s time off per week without loss of pay during their notice period, to search for alternative work.

11. Where an Employee is transferred to lower paid duties by reason of redundancy, the same period of notice will be given as the employee would have been entitled to if the employment had been terminated and the Company may, at its direction, make payment instead of an amount equal to the difference between the former ordinary time rate of pay and the ordinary time rate of pay for the number of weeks of notice still owing.

Car Parking

12. Employees will be provided with a car parking allowance up to a maximum of $15 per shift.

13. For the purposes of clause 23 (Superannuation), superannuation contributions made by the Company on behalf of an Employee will be calculated in such a way that payments made to the Employee for the car parking allowance provided for in clause 25 are included in the calculation of ordinary time earnings.

[32] Undertaking 6 is akin to a Beechworth 31“make good” undertaking. That is to say, the clause provides for a reconciliation of payments made under the 2018 Agreement compared to what would otherwise have been paid under the Ground Staff Award and then an additional payment if there is a shortfall to ensure that employees are better off. I invited Swissport to extend the operation of Undertaking 6 to all employees, not just Leader 3s. It seemed to me, the perfect answer to any concerns about the BOOT.32 As it was entitled to do, Swissport rejected my invitation.33

Which concerns do the undertakings seek to address?

[33] I identified above the concerns I had with the 2018 Agreement. The undertakings match the concerns in the following way.

Concern	UT	Content of Undertaking	Level of satisfaction
As drafted, it is unclear whether the 4 years referred to in clause 4.1 relates to the date of approval or operation. Also, having regard to the passage time since the employees voted on the 2018 Agreement, a further 4 year period would deny them the opportunity to seek to negotiate a new agreement for a period of 7 years (i.e. 2018 – 2025). I expressed this concern in the hearing before me. 34 I expressed the view that it would be more appropriate if the 2018 Agreement had a nominal expiry date more akin to when it would have ordinarily expired (i.e. in 2022 – that being 4 years from when the 2018 Agreement was made). 35	3	Nominal Expiry Date For the purposes of clause 4.1 of the Agreement, the Agreement will commence operation on the seventh day after it is approved by the Fair Work Commission and shall nominally expire on 18 December 2022.	Satisfies concern.
The Test Time rates are those as at 15 May 2018. Those rates are inadequate to satisfy the BOOT.	4	Rates of pay From the first full pay commencing on or after this Agreement commences operation, the rates of pay are set out in replacement Schedule A, clauses 2.1 – 2.3	Requires BOOT assessment (see below).
N/A	5	Clause 21.1 of the Agreement is no longer operational.	N/A (although considered further below in a different context)
Leader 3s may not be better off overall under their annualised salary arrangements	6	Leader 3s For each calendar quarterly period of employment of all Leader 3s engaged under the Agreement, the Company will conduct a comparison of the total remuneration received for that calendar quarterly period under the Agreement and the total remuneration they would otherwise have been provided with under the Award. Any shortfall in total remuneration which would otherwise have been payable under the Award plus an additional amount equal to 2.5% of the total shortfall, will be paid to the Leader 3 in the next pay period after each review is completed. If the Leader 3 and the Company cannot reach agreement on the total amount which should be paid by the operation of this undertaking, the amount calculated by the Company will be paid (as per the above) and the Dispute Resolution Procedure in clause 43 of the Agreement will thereafter be followed.	Satisfies concern
Overtime should be paid on second tranche of split shift.	7	Hours of work/rostering If the Company requires or directs that a split shift be worked, the second tranche of a split shift will be paid at the Employee’s applicable Award overtime rate.	Satisfies concern (although considered further below in a different context)
Casuals - need to be paid for a minimum of four hours (i.e. do not include unpaid meal break), rostered hours, overtime.	8	Casual employees engaged under the Agreement: a) will be paid for a minimum of four hours work for any shift; b) will not be rostered to commence ordinary hours prior to 7.00am, Monday to Friday; c) will be paid overtime in accordance with clause 16.2 if they work in excess of the hours provided at clause 17.3 of the Agreement, which is amended as follows: “17.3. The Company’s management of fatigue is a key consideration in rostering. This means that a PSE or casual employee will not normally be rostered to perform work: 17.3.1 more than 12 hours in any day, or 17.3.2 more than 20 days in the same Roster Period, or 17.3.3 more than 152 hours in the same Roster Period.	Satisfies concern.
Penalty not payable in the agreement for employees who work any afternoon shift or night shift which does not continue for at least five consecutive afternoons or nights (including Saturdays and Sundays).	9	If applicable, Employees who work on any afternoon shift or night shift which does not continue for at least five consecutive afternoons or nights (including Saturdays and Sundays), must be paid at the rate of time and a half of the Employee’s applicable Award rate for all such shifts worked.	Satisfies concern.
The agreement does not provide job search entitlements in the event of redundancy or a transfer to lower paid duties entitlement in the event of redundancy. The Ground Staff Award provides these entitlements.	10 & 11	Redundancy An Employee who has been informed that their employment will end due to redundancy is entitled to up to one day’s time off per week without loss of pay during their notice period, to search for alternative work. Where an Employee is transferred to lower paid duties by reason of redundancy, the same period of notice will be given as the employee would have been entitled to if the employment had been terminated and the Company may, at its direction, make payment instead of an amount equal to the difference between the former ordinary time rate of pay and the ordinary time rate of pay for the number of weeks of notice still owing.	Satisfies concern.
Application of the car parking (especially in the context of split shifts). Treatment of car parking allowances for the purposes of superannuation.	12 & 13	Car Parking Employees will be provided with a car parking allowance up to a maximum of $15 per shift. For the purposes of clause 23 (Superannuation), superannuation contributions made by the Company on behalf of an Employee will be calculated in such a way that payments made to the Employee for the car parking allowance provided for in clause 25 are included in the calculation of ordinary time earnings.	Satisfies concern.

[34] Noting the advance pre-emptive nature of the undertakings the Unions have had every opportunity to comment on whether the undertakings meet the concerns. They last did so on 8 December 2020. Other than in respect of the matters I deal with below, the Unions did not contend that I could not be satisfied with the matters I have identified as “Satisfies concern” above.

Does the 2018 Agreement with the undertakings pass the BOOT?

[35] Although the undertakings match the concerns, that does not mean that the 2018 Agreement with the undertakings necessarily passes the BOOT. The BOOT assessment needs to be re-done.

[36] In Beechworth at first instance 36 Deputy President Sams correctly set out the requirements of the BOOT as follows,

[62] A major consideration as to whether the Commission can approve an agreement is a determination that the agreement passes the ‘better off overall test’ (BOOT). That requirement is set out at s 186(2)(d) of the Act.

….

[64] It is trite to observe that an agreement does not necessarily fail the BOOT because employees do not receive weekend penalty rates, public holiday loadings or any other Award term or condition. Such a simplistic test would be to adopt an incorrect approach to the exercise of ensuring employees (and prospective employees) are ‘better off overall’ under the Agreement, rather than the relevant reference instrument. It is not an exercise in which the Commission ‘negotiates’ with the parties over remotely unlikely ‘what if’ scenarios about implausible or fanciful work patterns or rosters which the employer has never utilised and never intends to. This would be a barren and wasted exercise, perhaps of some obscure academic novelty, but of no practical utility.

[65] The BOOT is a balancing exercise - not a ‘line by line’ comparison. In NTEU v UNSW 37, Lawler VP said as follows:

‘It is trite to observe that awards typically contain both monetary and non-monetary terms and conditions. Obviously enough, the BOOT calls for an overall assessment. Comparing monetary terms and conditions is, at the end of the day, a matter of arithmetic. There is an obvious problem of comparing apples with oranges when it comes to including changes to non-monetary terms and conditions into the “overall” assessment that is required by the BOOT. In such circumstances the Tribunal must simply do its best and make what amounts to an impressionistic assessment, albeit by taking into account any evidence about the significance to particular classes of employees covered by the Agreement of changes to particular non-monetary terms that render them less beneficial than the equivalent non-monetary term in an award. In my view, it may also be relevant to consider the terms of any existing agreement and whether there is a relevant change of position when compared to that existing agreement.’

[66] In the present case, the assessment of the BOOT is relatively straightforward. This is so because the Agreement does not provide any other terms or conditions which are more beneficial than the reference instrument, other than the higher loaded rates of pay which apply for ordinary time worked during the week and on the weekend and public holidays.

….

[68] It cannot be ignored (for the purposes of the BOOT) that a higher base rate of pay applies for all purposes. In other words, other terms and conditions such as annual leave, personal and long service leave, superannuation, overtime, casual loadings etc. will all be calculated by reference to the higher base rate, thereby making those terms more beneficial than if they are calculated at the Award rate. In my opinion, this is an appropriate matter to be taken into account when balancing all the relevant matters to ensure employees are ‘better off overall’.

[69] I would add that, in some ways, the comparison between the Agreement and the relevant Awards, at the ‘test time’ is an artificial and unreliable guide as to whether the Agreement throughout its nominal term, will be able to guarantee all employees, (let alone prospective employees), will be ‘better off overall’. Given the ‘test time’ is a snapshot in time; that is, when the application to approve the Agreement is filed with the Commission (s193(6)), it is difficult to imagine in a dynamic business environment, that rosters which exist at the ‘test time’ will remain static and unchanged for the nominal term of the Agreement, of up to four years. Moreover, it seems to me there would be nothing to prevent an employer from changing rosters, subject to lawful notice, within weeks of the Agreement being lodged and which might result in employees not being ‘better off overall’ for the balance of the Agreement’s nominal term. Of course, an appropriate reconciliation undertaking may ensure that this scenario is not possible under this Agreement.”

[37] It is common ground that the principles established in Re Loaded Rates 38 apply in the present matter. Before me Mr Shelley’s evidence was that,

“7. A 2013 Agreement applies loaded rates which are calculated to provide the Employees the greatest benefits during the period Monday to Friday, with the bulk (approximately 75%) of the total number of shifts are worked.” 39

[38] There is merit in setting out the general propositions established by the Full Bench (footnotes omitted),

[100] There are two well-established propositions concerning the application of the BOOT which may be derived from previous Full Bench decisions. The first, which is essentially a restatement of s 193(1), is that the BOOT requires a finding that each award covered employee and prospective employee would be better off under the agreement than under the relevant modern award. The requirement that “each” such employee and prospective employee be better off overall is a rigorous one. The ordinary meaning of “each” is “every, of two or more considered individually or one by one”. Thus, every award covered employee or prospective employee must be better off overall, with the corollary that if any such employee is not better off overall, the relevant enterprise agreement does not pass the BOOT. Thus, in an agreement containing loaded rates in whole or partial substitution for award penalty rates, it is not sufficient that the majority of employees - even a very large majority - are better off overall if there are any employees at all who would not be better off overall.

[101] In the case of anything other than small employers, it would be an exhaustive task to examine the circumstances of each individual employee to reach a state of satisfaction that the BOOT is passed. Section 193(7) substantially relieves the Commission of this burden by permitting it to assume, if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, that the employees would be better off overall in the absence of evidence to the contrary. Paragraph 818 of the Explanatory Memorandum to the Fair Work Bill 2008 contains some information as to how this provision was envisaged to operate as follows (emphasis added):

“818. Although the better off overall test requires FWA to be satisfied that each award covered employee and each prospective award covered employee will be better off overall, it is intended that FWA will generally be able to apply the better off overall test to classes of employees. In the context of the approval of enterprise agreements, the better off overall test does not require FWA to enquire into each employee's individual circumstances.

Illustrative example

Moss Hardware and Garden Supplies Pty Ltd makes an enterprise agreement to cover approximately 1800 employees working at its national chain of retail garden and hardware supplies outlets. All of these employees are 'award covered employees'. The seven classifications under the agreement broadly correlate to seven classifications under the relevant modern award. Because there will be many employees within each classification under the agreement and the agreement affects each employee within a classification in the same way, FWA could group employees together when assessing the employees against the better off overall test. It is intended that FWA could assess a hypothetical employee in each of the classifications under the agreement against the relevant classification under the modern award.

If FWA were satisfied that the agreement affected each employee within the classification in the same way, and that the agreement passed the better off overall test for the hypothetical employee within the classification, FWA could be satisfied that the agreement passed the better off overall test for each award covered employee and prospective award covered employee within that classification.”

[102] Section 193(7) is not prescriptive as to the nature of the classes of employees that might be selected for the purpose of applying the BOOT, so that the Commission has to make an evaluative judgment in that respect. However the selection of a class for the purpose of s 193(7) will only be of utility if, as the emphasised parts of the above extract from the Explanatory Memorandum explain, the enterprise agreement affects the members of the class in the same way such that there is likely to be a common BOOT outcome. The example used is a class consisting of employees in a common classification, but in the case of an agreement providing for loaded rates this class would likely not be suitable if the employees in the classification worked a variety of roster patterns some of which attracted penalty rates under the relevant modern award and some of which did not. Such a class would have to be further divided into subclasses based on common patterns of working hours, taking into account evening, weekend and/or overtime hours worked, in order to apply the BOOT to a loaded rate remuneration structure which incorporated compensation and supplanted modern award penalty rates which would otherwise be applicable. Thus the effective application of s 193(7) to existing employees would necessarily require an examination of existing roster patterns worked by various categories of employees as at the test time.

[103] Greater difficulty potentially arises with respect to the requirement to apply the BOOT to every prospective award covered employee. This requires consideration of the position of potential employees to whom the agreement might apply in the future, and thus necessarily involves a degree of conjecture. In the case of an agreement applying to a defined workplace or workplaces in a substantial and mature business - for example, a major supermarket chain - the degree of conjecture may be small because it is safe to assume that any future employees will be employed on a type of roster pattern already applied in the business to an existing class of employees. That is, the Commission will be in a position to make sensible predictions about the basis upon which prospective employees might be engaged. However the position will necessarily be different where the business is small and/or still in a developmental stage or the agreement for which approval is sought permits employees to be engaged in a wider range of classifications, work locations and/or roster patterns than the workforce existing as at the test time. In that situation the basis of employment of prospective employees will not readily be able to be extrapolated from the characteristics of any identifiable classes in the existing workforce.

[104] The task of applying the BOOT in respect of prospective employees was discussed in the Explanatory Memorandum as follows:

“824. The better off overall test also refers to prospective award covered employees because sometimes an agreement may cover classifications of employees in which no employees are actually engaged at the test time. Extending the application of the better off overall test to these types of employees guarantees the integrity of the safety net. Note that where an agreement covers a large number of classifications of employees in which no employees are actually engaged there may be a question as to whether the agreement has been genuinely agreed – see clause 188.

Illustrative example

The Moss Hardware and Garden Supplies Pty Ltd Enterprise Agreement 2010 covers the classification of Assistant Store Manager. At the test time for the better off overall test, Moss Hardware and Garden Supplies Pty Ltd does not employ any Assistant Store Managers. However, it has recently announced that it will restructure its staffing arrangements to introduce this new position. The Assistant Store Manager classification is covered by the relevant modern award. Assistant Store Managers employed after the agreement commences operation would therefore be prospective award covered employees. FWA would need to be satisfied that the agreement passed the better off overall test in respect of these persons.”

[105] The scenario described above may not present significant difficulty because the prospective employment of persons in a classification not currently utilised has partially crystallised to the extent that the basis upon which such persons will be employed is actually knowable, or is at least readily foreseeable in the sense that they will be fitted into an existing business with existing patterns of working hours. The assessment involved will be more difficult, however, where the agreement the subject of the application for approval is of the type described in the Full Bench decision in KCL Industries Pty Ltd: “In summary, the position is that the Agreement covers a wide range of classifications most of which have no relevance to the work performed by KCL’s three existing employees, encompasses industries in which KCL does not currently operate, and contains rates of pay which, even in respect of those classifications relevant to the current employees, are not to apply to those employees. The agreement under consideration in KCL Industries Pty Ltd was held not to have been genuinely agreed to by the employees who made it for a range of reasons, but as was made clear in the Federal Court Full Court decision in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd and confirmed by the High Court in ALDI Foods Pty Limited v Shop, Distributive & Allied Employees Association, there is no inherent reason why an agreement made with a very small number of employees working at a particular location which covers a much broader range of classifications and occupations with a wide geographic area, and which might in future cover a much larger number of employees, could not be approved under the FW Act (provided of course that the requirement for genuine agreement is satisfied). In John Holland, Buchanan J interpreted the expression “the group of employees covered by the agreement” used in relation to the “fairly chosen” approval requirement in s 186(3) as referring to the “whole class of employees to whom the agreement might in future apply”, and said that this class “may be very difficult to evaluate or assess, depending on the breadth of coverage specified by the terms of the agreement and, perhaps, the nature and complexity of the employer’s business”. Buchanan J also referred to “The virtual impossibility of knowing with certainty the composition of the whole group within the potential coverage of the agreement …”. These observations are equally apposite to the task of applying the BOOT to prospective employees in respect of an agreement with a scope of coverage, classification structure and hours of work provisions which have a potential operation that is significantly wider than the existing workforce.

[106] Where a substantial disparity of this nature exists between the current workforce as at test time and the class of prospective employees to whom the agreement might apply in the future, such that useful predictions as to future employment patterns may not readily be drawn from the way in which the existing workforce operates, the starting point must necessarily be an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment which the agreement provides for or permits. In accordance with established principles of the construction of agreements, the express provisions of an enterprise agreement may be approached on the basis that they were intended to establish binding obligations and have a practical field of operation and are not otiose. Thus, for example, if an enterprise agreement makes express provision for employees to be required to work ordinary hours on weekends, that provision cannot be ignored for BOOT purposes simply on the basis that the employer asserts that it does not currently, and does not intend to, make use of that provision. There may be objective evidence available which might support the conclusion that, notwithstanding an express provision of the agreement which apparently permits something to be done, it cannot in fact be done or is extremely unlikely to be done. For example, a provision in an agreement applying to a retail business allowing for ordinary hours of work to be performed at identified unsociable hours might reasonably be disregarded for BOOT purposes if applicable laws concerning retail trading hours prohibits work being done at the relevant times. However this is not likely to be a common circumstance.

[107] The distinction made in the Ai Group’s submissions between the terms of an enterprise agreement and “the practices and working arrangements that may flow from those terms” is illusory and must be rejected. The primary, and often the only, consideration which arises in the assessment of the BOOT is a comparison between the total remuneration which would be earned by existing and prospective employees under the agreement as compared to the modern award. In the case of agreements which mimic the award structure of base hourly rates and penalty rates for working ordinary hours at unsociable times and for working overtime, the required BOOT comparison may be capable of being conducted simply by comparing the dollar amounts of the base rates and penalty rates in the agreement as compared to the award. However where the agreement has a different pay structure than the award, particularly a loaded rate structure which incorporates some or all of the penalty rates which would be payable if the award applied, no meaningful comparison can be conducted without applying the loaded rates to the working hours patterns actually worked or reasonably capable of being worked under the agreement. Such an exercise necessarily requires examination of the practices and arrangements concerning the working of ordinary and overtime hours by existing and prospective employees that flow from the terms of the agreement.

[108] This was the approach taken by the Full Bench in Hart. Hart involved a challenge, on BOOT grounds, to the approval of an enterprise agreement which applied to Coles and Bi-Lo supermarkets across Australia, which may be regarded as constituting a large, well-established and mature business. The nature of the remuneration structure in the agreement under consideration was described in the following terms:

“[7] The parties understandably commenced their analysis with a consideration of the monetary benefits under the respective instruments for working at particular times of the day. The evidence deals with the comparison of payments under the instruments in isolation, as well as the impact of these comparisons on actual employee rosters over the period of the roster. Much of this evidence is non-contentious. In essence, the Agreement provides for a higher hourly rate than the relevant award rate, but applies lower penalty payments for evenings, weekends and public holidays.”

[109] The parties advanced their submissions, and the Full Bench determined the appeal, on the basis of a number of sample rosters worked by existing employees of the employer. The Full Bench described the approach it took as follows:

“[9] For the purposes of the analysis the parties led evidence regarding rosters and earnings comparisons for employees working actual rosters at the Coles Northcote and Benalla stores. Neither of these stores operates on a 24 hour basis, as some other stores do, but they can be regarded as generally representative of operating circumstances and rostering practices at most Coles stores. The data in relation to these stores is therefore a convenient basis on which to apply the BOOT and assess the relative entitlements under the Award and the Agreement from a practical perspective. It would only be necessary to consider other rosters which may be worked under the Agreement in the event that we consider that employees working under the Northcote and Benalla store rosters all pass the BOOT.

67. The Split-Shift Undertaking goes one step further. What it denies is not merely a “discretionary power conferred” on the Applicant to roster an employee to work split shifts, it denies employees, who have specifically opted in to that system of working, “a mechanism for the Employee to increase their earnings with the Company by working non- consecutive hours of work in any one day”, and a mechanism that offered them “flexibility for them to attend to family or other personal priorities and commitments including study, sport or other endeavours”: clause 17.7 and 17.8. The Split Shift Undertaking significantly alters the nature of the bargain upon which employees voted. Alone, it is a “substantial change” to the Agreement and cannot be accepted for that reason.

68. Another significant change as between the undertakings and the Agreement made applies to casual employees, in Undertaking 11(b). Under the Agreement as made, a casual employee would have had the opportunity to work a span of hours between 0000 and 0600, entitling them to the Pre-Dawn Shift Allowance, being a loading of an additional 20% of their Ordinary Time Hourly Rate for hours worked in that span. Undertaking 11(b) provided casual employees “will not be rostered to commence ordinary hours prior to 7.00am Monday to Friday”. That undertaking impacted in a material way on the working patterns permissible for casual employees under the Agreement as made. Again of itself, but certainly taken together with the Split Shift Undertaking, this undertaking gave rise to substantial change to the Agreement as made. Again, it is an Undertaking not capable of acceptance.

69. The undertakings result in radical changes to the salary scales under the Agreement as made. The relevant undertakings in this connection included Undertakings 4, 6, 7, 8 and 9. Undertakings 4 and 6 purport to adjust the salary rates payable under the Agreement as at the “test time” in a manner which is impermissible. Undertakings 7 and 8 then purport to impose yet further changes to the structure of the salaries to be paid “On Operation” of the Agreement (which in substance operate to modify the effect of Undertakings 4 and 6, which themselves operate to change the salary rates from the commencement of the Agreement albeit styled as a change to the rates payable at the ‘test time’).

70. Undertaking 7 applies to part-time employees and undertaking 8 to casual employees. Undertaking 7 operates to increase the rates of pay for identified classifications of workers from those contemplated by the 1 July 2019 salary rates (which, because of Undertaking 4, operate from commencement) and Undertaking 6, but otherwise does not disturb the structure of the classification scale under the Agreement as “made”.

71. By contrast, Undertaking 8 fundamentally alters the structure of the remuneration paid to casual employees under the Agreement as made. Undertaking 8 sets the same rate of pay for “All” of the ASA and AASA classifications, whereas the classification scales under the Agreement as made provide seven salary bands within each of the broad ASA and AASA classifications. The significance of the salary bands under the Agreement as made arises from cl 21.2 to 21.4 of the Agreement (emphasis added):

“21.2 Other than in respect of Leader 3s, an Employee’s remuneration will be reviewed on an annual basis and will be increased on the anniversary of appointment to the respective classification. The automatic increase will be in accordance with the year of service in that classification as set out in Schedule A.

21.3 The successive anniversary of appointment to a classification indicates that the Employee has gained experience and knowledge, along with skills and expertise in relation to Company process and requirements. As this succession provides for increased remuneration, it is expected that Employees who gain these skills, knowledge and experience provide assistance and peer support to less skilled and experienced employees, to continue building service skills and positive developments in employee performance, behaviours and culture.

21.4 Any variation in Employee pay rates will automatically have effect from the first pay period on or after the anniversary of appointment to the respective classification”.

72. The impact of this structural change to the salary banding for casual ASA and AASA employees, is that there will be no annual increase upon the anniversary of a casual employees appointment, despite them having “gained experience and knowledge, along with skills and expertise in relation to Company process and requirements” and being expected to provide assistance and peer support to less skilled and experience employees. The alteration to the remuneration structure for casual employees arising from Undertaking 8 is a substantial (indeed radical) change.

73. Undertakings 7 and 8 result in rates of pay “On approval”, that drop on and from 1 July 2021 for both PSEs and casual employees: compare the rates in Undertaking 7 to the rates of pay for PSEs on and from 13 July 2020, and in relation to casuals Undertaking 8 with the rates of pay on and from 13 July 2020. For casual employees, the rates “On Operation” under Undertaking 8 are in fact more than those operative for the life of the Agreement: the rates for all casual employees drop from those paid on approval from July 2020, and remain below the rates paid On Operation after the increase in July 2021, and for a number of classifications (albeit not all) will continue to be less than those On Operation even after the increases in July 2022.

74. The impact of the acceptance of Undertakings 7 and 8 would be to turn the Agreement from one that provided for increases in rates of pay across each year of its operation (as was represented to the employees prior to the vote: First Shelley Statement GS5, GS7 cl 21, GS8) to something fundamentally different, and in particular for the several hundred casual employees covered by the Agreement at the time of the vote. Again, the alteration to the remuneration structure arising from these undertakings would visit significant changes on the Agreement as made. They are not open to be accepted.” 106

[73] Swissport submitted that,

“Substantial changes: section 190(3)(b)

58. This contention is addressed in the Union Submissions at [57]-[74]. The Amended Undertakings do not materially depart from the undertakings accepted by Commissioner Wilson, who accepted that they satisfied section 190(3)(b) of the FW Act. They are consistent with undertakings regularly given in, and accepted by, the Commission, if not more modest in number and effect. 107

59. More importantly (and putting aside technical compliance undertakings), almost all of the undertakings were (and are now) offered to address BOOT concerns, with the effect that they improve or increase terms and conditions for relevant employees. As was said in CFMEU v Kaefer Integrated Services Pty Ltd:

“In our view, simply increasing the quantum of various benefits will not ordinarily result in “substantial changes” for the purposes of s 190(3). It seems to us that the legislative concern is to avoid imposing on employees arrangements that they have not approved; employees are not likely to object to higher monetary amounts.” 108

60. The nature of the test in section 190(3)(b) of the FW Act was recently considered in some detail in CFMMEU v C&H Acquisition Pty Ltd. 109 The Full Bench noted that all changes to an agreement, in the context of section 190, were of substance and materiality. That is the point of them.110 However when read in context, “substantial” was to be read “in the sense that the undertaking would change the essence of the agreement”.111 Given the protective nature of section 190(3)(b) and its purpose (as identified in Kaefer):

“Whether accepting an undertaking would result in “substantial changes” to an agreement is not assessed simply by examining the number of undertakings given or the number of resulting changes. “Substantial changes” does not mean a numerically large number of changes to the agreement simpliciter. In the context of the Act and the agreement making provisions of Part 2-4, it is the quality of the changes with which the word “substantial” is concerned. It follows, in our view, that the word ‘substantial’ in s.190(3)(b) signifies a degree or quality of change that is substantial in the sense that it would alter the essence or nature of the agreement. It is concerned with change that is transformative of the agreement so as to raise concern that change may have affected the way in which employees chose to vote in approving the agreement.” 112

61. The Unions identify some undertakings of particular significance. The first is the Split Shift Undertaking (Union Submissions at [63]-[67]). In light of the Amended Undertakings, those comments fall away. The only change brought about by Amended Undertaking 7 is to ensure that when split shifts are worked, the second tranche is paid at overtime rates.

62. Union Submissions at [68] deal with undertaking 11(b), to the effect that casual employees will not be rostered to work before 7.00am on Monday to Friday. The Unions do not appear to contend that by itself, this undertaking is substantial (they seek to join it with the Split Shift Undertaking, before attaching that description to it). Given that the alleged issues with the latter undertaking fall away, so must this contention about undertaking 11(b). In any event, Swissport only presently employs 17 casual employees, only one of whom worked during the BOOT data period. 113 The Commission would be well satisfied that undertaking 11(b) is not likely to result in substantial changes.

63. The contentions advanced in the Union Submissions at [69]-[70] and [73]-[74] also fall away in light of the Amended Undertakings. The salary scales and structure in replacement Schedule A are in the same form as those already in the 2018 Agreement, except that instead of replicating the July 2021 and July 2022 tables (embedding the 2% pay increase), the pay increases are just stated. That is a change of appearance – not a change of substance or effect. Nor do any of the effects in paragraphs [73]-[74] arise.

64. As to the Union Submissions at [71]-[72], whilst it is true that the Sunday rates of pay for casual employees (and now also PSEs) are the same for all of the ASA and AASA classifications, the rates (in the Amended Undertakings) are between $3 and $8 per hour higher (at every level) for PSEs (than under the 2018 Agreement) and between $6 and $14 per hour higher for casuals. The employees will not get a higher Sunday rate each year they move up a band, but will always receive substantially higher Sunday rates at every band for every year. Who would have not voted for that? 114”115

[74] On 8 December 2020 the Unions wrote to the Commission explaining their continuing opposition to the approval of the Agreement in the face of the December 2020 Undertakings. They wrote:

“The Unions note Swissport’s email below and the amended undertaking 3. We make the following submissions in reply;

1. The Unions repeat that the Agreement cannot be approved with undertakings, for all the reasons advanced during the hearing; and

2. In relation to the new undertaking, again the Agreement cannot be approved with that undertaking as the undertaking itself gives rise to a substantial change to the Agreement. It will result in an Agreement that is of a materially different kind to that upon which employees voted:

b. The duration, a mandatory term, will no longer be 4 years (with 2% pay increases each year) but rather will be (at best, depending upon when the Commission published its decision), a little over 2 years.

c. It will provide pay increases over those two years, but the Agreement they vote to approve contemplated a four year duration, with pay increases on 1 July 2019 and each year thereafter. Approving the Agreement with undertakings will not provide a four year agreement at all, and would result in workers receiving nothing more than the safety net award rates of pay for the period of months between Wilson C’s decision being quashed and the approved agreement operating: that is a significant and material change to the Agreement voted on.

4. Point 2b above also results in acceptance of the undertaking causing workers to suffer a financial detriment.”

[75] The leading authorities concerning substantial change are Construction, Forestry, Mining and Energy Union v KAEFER Integrated Services Pty Ltd 116 and Construction, Forestry, Maritime, Mining and Energy Union v C&H Acquisition Pty Ltd.117 Swissport and the Unions each relied upon them. The legislative concern (that mandates that the Commission cannot accept undertakings that result in substantial change) is to avoid imposing on employees, arrangements that they have not approved.118 With respect I adopt the reasoning in both KAEFER and C&H Acquisitions.

[76] It is useful to consider each undertaking separately to determine whether a substantial change is likely:

UT	Content of Undertaking	Is there a substantial change?
3	Nominal Expiry Date For the purposes of clause 4.1 of the Agreement, the Agreement will commence operation on the seventh day after it is approved by the Fair Work Commission and shall nominally expire on 18 December 2022.	In 2018 the employees voted for an agreement that would have, in normal circumstances, resulted in an agreement with a nominal expiry date in the second half of 2022. Undertaking 3 delivers on the expectation employees would have had. It does not impose new arrangements on the employees.
4	Rates of pay From the first full pay commencing on or after this Agreement commences operation, the rates of pay are set out in replacement Schedule A, clauses 2.1 – 2.3	This undertaking is a change for the better. It is an increasing benefit. It is inconceivable that employees who voted for lesser rates in 2018, would not vote for the rates provided for in the undertaking.
5	Clause 21.1 of the Agreement is no longer operational.	Having regard to the fact that, in the real world, the employees have already received this benefit, it is not a substantial change to now remove it.
6	Leader 3s For each calendar quarterly period of employment of all Leader 3s engaged under the Agreement, the Company will conduct a comparison of the total remuneration received for that calendar quarterly period under the Agreement and the total remuneration they would otherwise have been provided with under the Award. Any shortfall in total remuneration which would otherwise have been payable under the Award plus an additional amount equal to 2.5% of the total shortfall, will be paid to the Leader 3 in the next pay period after each review is completed. If the Leader 3 and the Company cannot reach agreement on the total amount which should be paid by the operation of this undertaking, the amount calculated by the Company will be paid (as per the above) and the Dispute Resolution Procedure in clause 43 of the Agreement will thereafter be followed.	This undertaking is a change for the better. It is an increasing benefit.
7	Hours of work/rostering If the Company requires or directs that a split shift be worked, the second tranche of a split shift will be paid at the Employee’s applicable Award overtime rate.	This is not a substantial change. The undertaking does not limit the ability of Swissport to offer split shifts. Split shifts remain available. The Agreement still expressly permits the use of split shifts. Employees can still volunteer for them. Employees can still opt in. Now that there is a requirement to pay overtime on the second tranche of the split shift, an employee working a split shift is better now than they would have been without the undertaking. It is a change for the better. If employees no longer see a benefit in opting-in to split shifts, they can opt-out. I disagree that the split-shift undertaking significantly alters the bargain upon which employees voted. They never had a guarantee to a split shift.
8	Casual employees engaged under the Agreement: a) will be paid for a minimum of four hours work for any shift; b) will not be rostered to commence ordinary hours prior to 7.00am, Monday to Friday; c) will be paid overtime in accordance with clause 16.2 if they work in excess of the hours provided at clause 17.3 of the Agreement, which is amended as follows: “17.3. The Company’s management of fatigue is a key consideration in rostering. This means that a PSE or casual employee will not normally be rostered to perform work: 17.3.1 more than 12 hours in any day, or 17.3.2 more than 20 days in the same Roster Period, or 17.3.3 more than 152 hours in the same Roster Period.	I do not accept that undertaking 8(b) materially impacts the working pattern permissible for casuals. It is not significant when, so few casuals are employed.
9	If applicable, Employees who work on any afternoon shift or night shift which does not continue for at least five consecutive afternoons or nights (including Saturdays and Sundays), must be paid at the rate of time and a half of the Employee’s applicable Award rate for all such shifts worked.	This undertaking is a change for the better. It is an increasing benefit.
10 & 11	Redundancy An Employee who has been informed that their employment will end due to redundancy is entitled to up to one day’s time off per week without loss of pay during their notice period, to search for alternative work. Where an Employee is transferred to lower paid duties by reason of redundancy, the same period of notice will be given as the employee would have been entitled to if the employment had been terminated and the Company may, at its direction, make payment instead of an amount equal to the difference between the former ordinary time rate of pay and the ordinary time rate of pay for the number of weeks of notice still owing.	This undertaking is a change for the better. It is an increasing benefit.
12 &13	Car Parking Employees will be provided with a car parking allowance up to a maximum of $15 per shift. For the purposes of clause 23 (Superannuation), superannuation contributions made by the Company on behalf of an Employee will be calculated in such a way that payments made to the Employee for the car parking allowance provided for in clause 25 are included in the calculation of ordinary time earnings.	This undertaking is a change for the better. It is an increasing benefit.

[77] Having considered each undertaking separately it is necessary to then consider the undertakings together to assess whether, as a whole the undertakings result in a substantial change to the 2018 Agreement. I have decided they do not. This is because when considered separately and together the undertakings improve upon and or increase terms and conditions for employees. The quality of the changes, individually and together, improve the quality of the agreement.

[78] For these reasons I am satisfied that the undertakings will not result in substantial changes to the 2018 Agreement.

Conclusion

[79] As stated, the Employer has provided written undertakings. A copy of the undertakings is attached in Annexure A. The undertakings are taken to be a term of the agreement.

[80] Subject to the undertakings referred to above, and for the reasons above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[81] Before Wilson C Aerocare acknowledged a need for the insertion of both the model consultation and model flexibility terms should the 2018 Agreement be approved. 119

[82] Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Fair Work Regulations 2009 is taken to be a term of the 2018 Agreement. This is because, in relation to changes to regular roster/ordinary hours of work, the consultation term at clause 45 of the 2018 Agreement does not state that the employer must give genuine consideration to views provided by employees.

[83] Pursuant to s.202(4) of the Act, the model flexibility term prescribed by the Fair Work Regulations 2009 is taken to be a term of the 2018 Agreement. This is because clause 46 of the 2018 Agreement states the model flexibility term in the Act is taken to be a term of the 2018 Agreement. As such the 2018 Agreement does not contain an actual flexibility term.

[84] The Transport Workers’ Union of Australia and The Australian Municipal, Administrative, Clerical and Services Union being bargaining representatives for the 2018 Agreement, have given notice under s.183 of the Act that they want the 2018 Agreement to cover them. In accordance with s.201(2) I note that the 2018 Agreement covers the organisations.

[85] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 5 February 2021. The nominal expiry date of the 2018 Agreement is 18 December 2022.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Annexure A

1 In around July 2018 Aerocare was rebranded as Swissport Australia Pty Ltd (Swissport) following an acquisition that had occurred in March 2018 by Swissport International Ltd.

2 [2020] FWCA 251.

3 [2019] FWC 8614.

4 The Agreement voted on by employees in May 2018 contemplated rates of pay on approval, and then pay increases on 1 July 2019, 13 July 2020, 12 July 2021, and 12 July 2022.

5 MA000048 PR716555.

6 [2020] FWCFB 4232.

7 Transcript PN21.

8 [2018] FWCFB 3610.

9 Transcript PN18 (2 September 2020).

10 F17 Employer’s Declaration at question 2.4

11 Ibid

12 Ibid at question 2.5

13 Unions’ Submissions 23 November 2020

14 [2020] FWCFB 18

15 Solar Systems Pty Ltd [2012] FWAFB 6397 at [11]; Hart v Coles Supermarkets Australia Pty Ltd[2016] FWCFB 2887 at [6], [15]; Shop, Distributive and Allied Employees Association v Beechworth Bakery[2017] FWCFB 1664 at [11]

16 Macquarie Online Dictionary

17 Re Armacell Australia Pty Ltd (2010) 202 IR 38 at 49 at [41]

18 [2017] HCA 53

19 Ibid at [99]

20 Ibid at [92]; Armacell Australia Pty Ltd [2010] FWAFB 9985 at [41]

21 MA000048 PR716555.

22 Question 3.5

23 Question 3.4

24 [2019] FWC 8614, [74].

25 [2019] FCA 37.

26 Now clause 24 in the Ground Staff Award 2020.

27 Transcript PN799.

28 The brilliant and entertaining Netflix coming-of-age period drama miniseries based on Walter Tevis's 1983 novel of the same name.

29 Transcript PN125, PN132 (13 October 2020).

30 Transcript PN85, (2 September 2020).

31 Shop, Distributive and Allied Association v Beechworth Bakery Employee Co Pty Ltd T/A Beechworth Bakery[2017] FWCFB 1664.

32 Transcript PN37.

33 Transcript PN678 –710.

34 Transcript PN835, PN946, PN983-1027.

35 Transcript PN983-1027, PN1049.

36 Beechworth Bakery Employee Co Pty Ltd T/A Beechworth Bakery[2016] FWCA 8862.

37 [2010] FWAA 9588.

38 [2018] FWCFB 3610.

39 Witness (third) Statement of Gregory Shelley, dated 30 September 2020.

40 Witness Statement Gregory Shelley, 20 March 2019, [5].

41 Ibid, [36].

42 Ibid, [37] – [38].

43 [2019] FWC 8614 at [137] – [138]

44 Witness (third) Statement of Gregory Shelley, dated 30 September 2020.

45 Transcript PN61 (2 September 2020).

46 Exhibit 22

47 First Shelley Statement at [8] and [9]

48 See s 190(4)

49 Loaded Rates Decision [2018] FWCFB 3610 at [103]

50 Third Shelley Statement at [6(b)]

51 Hart v Coles Supermarkets Australia Pty Ltd[2016] FWCFB 2887 at [9]; expressly adopted by the Full Bench in Loaded Rates Decision at [110]

52 Loaded Rates Decision at [100]

53 Loaded Rates Decision at [102], adopting the language of the “Illustrative Example” described at paragraph 818 of the Explanatory Memorandum to the Fair Work Bill 2008, extracted in Loaded Rates Decision at [101]

54 Loaded Rates Decision at [102]

55 Loaded Rates Decision at [103], [115(6)]

56 Loaded Rates Decision at [105], [115(6)]

57 Loaded Rates Decision at [115(6)]

58 Loaded Rates Decision at [110]

59 Hart v Coles Supermarkets Australia Pty Ltd[2016] FWCFB 2887 (Hart) at [9]; expressly adopted by the Full Bench in Loaded Rates Decision at [110]

60 Stanford Report at [3]

61 Hart v Coles Supermarkets Australia Pty Ltd[2016] FWCFB 2887 (Hart) at [9]; expressly adopted by the Full Bench in Loaded Rates Decision at [110]

62 Unions submissions 23 November 2020

63 The Amended Undertakings may well alter some hourly rates of pay and some rosters, but only in a way which increases the take home pay under the 2018 Agreement, thereby expanding the extent to which the 2018 Agreement (with those undertakings) passes the BOOT.

64 Contrast this with clause 11.3 regarding casual employees: “Casual employees are entitled to a minimum payment of 4 hours’ work”.

66 Transcript, 13 October 2020 at PN99

67 Ibid

68 Significantly less than 1% of all shift hours worked, whether in 2019 or 2020: Statement of Gregory Shelley dated 30 November 2020 at [32].

69 Loaded Rates Decision [2018] FWCFB 3610 at [103].

70 Ibid at [108]-[110]. Echoing earlier comments in Re McDonald’s Australia Enterprise Agreement 2009[2010] FWAFB 4602; (2010) 196 IR 155 at [13] (“In general we believe that the requirements for approval should be considered in a practical, non-technical manner”).

71 Unions Submissions at [34]-[35].

72 Swissport Submissions 30 November 2020

73 Witness (third) Statement of Gregory Shelley, dated 30 September 2020.

74 To illustrate that this employee’s hours of work have decreased in the April to June 2020 rostering period when compared with the same rostering period in 2019.

75 To illustrate that this employee’s hours of work have decreased in the April to June 2020 rostering period when compared with the same rostering period in 2019.

76 To illustrate that this employee’s hours of work have decreased in the April to June 2020 rostering period when compared with the same rostering period in 2019.

77 To illustrate that this employee’s hours of work have decreased in the April to June 2020 rostering period when compared with the same rostering period in 2019.

78 To illustrate that even though the Unions noted errors in the BOOT data with respect to the payment of superannuation and public holidays, employees were actually paid their entitlements correctly based on using this employee’s payslip as an example.

79 To illustrate that even though the Unions noted errors in the BOOT data with respect to the payment of overtime for shifts beyond 12 hours, employees were actually paid their entitlements correctly based on using this employee’s payslip as an example.

80 To illustrate that this employee will be worse off under the agreement when the Ground Staff Award rates of pay increase from the first full pay period on or after 1 February 2021. (Note: The Ground Staff Award conditions from 1 February 2021 are irrelevant for a consideration of the BOOT by the Commission in this matter.)

81 To submit this employee will not be worse off under the agreement when the Ground Staff Award rates of pay increase from the first full pay period on or after 1 February 2021. (Note: The Ground Staff Award conditions from 1 February 2021 are irrelevant for a consideration of the BOOT by the Commission in this matter.)

82 To explain the BOOT data submitted to the Commission.

83 To explain the BOOT data submitted to the Commission.

84 To explain the BOOT data submitted to the Commission. Swissport also acknowledged that this employee did not appear to be better off overall based on the BOOT data. However, they submitted this employee would be better off overall once undertakings were applied.

85 To submit that only one casual was employed by Swissport throughout the April 2020 – June 2020 roster period.

86 First Shelley Statement at [43]

87 First Shelley Statement at [40]

88 First Shelley Statement at [40]

89 Second Shelley Statement at [23]

90 First Shelley Statement at [56(g)]

91 Third Shelley Statement at [5]

92 Cf Minister for Industrial Relations v Metropolitan Fire and Emergency Services Board (2019) 291 IR 1; [2019] FWCFB 6255 at [52]

93 Unions Submissions 23 November 2020

94 Ironic given that Swissport has all along contended that split shifts are beneficial and advantageous to employees, whilst the Unions have vociferously objected to them for years on the basis of asserted negative impacts on employees.

95 Swissport Submissions 30 November 2020

96 Minister for Industrial Relations v Metropolitan Fire and Emergency Services Board (2019) 291 IR 1; [2019]

FWCFB 6255 at [52]

97 Cf Second Decision at [12],[47], and First Decision at [232], [236] – [237]

98 Macquarie Dictionary, 3rd Ed, pg 2111-2112

99 Section 171(a) FW Act

100 Section 173 – 174 FW Act

101 Section 180(2) FW Act

102 Section 180(5) FW Act

103 CFMEU v KAEFER Integrated Services Pty Ltd[2017] FWCFB 5630; (2017) 271 IR 273 at [40]

104 indeed, Commissioner Wilson observed “their absence [would be] important to some employees”: First Decision at [237])

105 See, for example, Construction, Forestry, Maritime, Mining and Energy Union v KAEFER Integrated Services Pty Ltd [2017] FWCFB 5630; (2017) 271 IR 273 at [40].

106 Unions Submissions 23 November 2020

107 See for example, Re Horizon Power & CEPU Wages Employees Enterprise Agreement 2018 [2019] FWCA 854; Re Flowrite Earthworks and Civil Single Enterprise Agreement 2017 [2018] FWCA 6103; Re Chevron Glass Pty Ltd Royal Park Collective Bargaining Agreement 2018 [2019] FWCA 3088; Re RSPCA SA Consolidated Enterprise Agreement 2017 [2019] FWCA 178; Re Regional Express Aircraft Engineers Agreement 2018-2021 [2019] FWCA 3343. See also at Hart v Coles Supermarkets Australia Pty Ltd [2016] FWCFB 2887 at [8].

108 [2017] FWCFB 5630; (2017) 271 IR 273 at [40]. See also CFMMEU v Specialist People Pty Ltd [2019] FWCFB 6307 at [56].

109 [2020] FWCFB 3134; (2020) 296 IR 294 at [27]-[45].

110 Ibid at [36]

111 Ibid at [37]

112 Ibid. See also [39]

113 Statement of Gregory Shelley dated 30 September 2020 at [17]-[18].

114 See the extracts from both Kaefer and C&H Acquisition in paragraphs 59-60 above.

115 Swissport Submissions 30 November 2020

116 [2017] FWCFB 5630.

117 [2020] FWCFB 3134.

118 [2017] FWCFB 5630, [40].

119 Aerocare Outline of Submissions, 20 March 2019, [20].

Aerocare Flight Support Pty Ltd T/A Aerocare

[2021] FWCA 103

29 JANUARY 2021

DECISION

Conclusion