AKN Pty Ltd T/A Aitkin Crane Services

[2014] FWC 8690

[2014] FWC 8690

FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009
s.185—Enterprise agreement

AKN Pty Ltd T/A Aitkin Crane Services
(AG2014/8089)

COMMISSIONER RYAN MELBOURNE, 3 DECEMBER 2014

Application for approval of the AKN Pty Ltd National Employee Services Agreement 2014.

[1] The Commission is currently considering the application for approval of the AKN Pty Ltd National Employee Services Agreement 2014 (the Agreement). The Commission has a number of concerns with the content of the Agreement.

Hours of Work

[2] Clause 14 of the Agreement deals with Hours of Work. The clause provides for patterns of work which appear to be significantly less beneficial to employees than the pattern of hours of work permitted under any of the three relevant modern awards. For example the clause permits the employer to require the employee to work ordinary time comprising 28 consecutive days each of 12 hours. In addition the clause permits the employer to require the employee to work reasonable additional hours “according to a Site’s and/or the Company’s operational requirements”. As the clause also permits the employer to average the ordinary hours worked over a 26 week period the patterns of work specifically mentioned within the clause, e.g. 28 days on, 7 days off, would permit the employer to repeat this cycle 3 times with each cycle requiring the employer to work 28 consecutive days each of 12 hours.

[3] Clause 15 of the Agreement permits the employer to require an employee to work night shift of up to 12 consecutive hours without the need to give the employee any notice of the commencement of night shift work, or any notice of the cessation of night shift work.

The combined effect of both clauses 14 and 15 is to remove many of the protections found in the three relevant awards in relation to hours of work and shift work.

[4] The Commission notes that the Agreement contains rates of pay which are higher than the award rates but the impact and operation of clauses 14 and 15 raise significant issues as to whether the Agreement passes the Better Off Overall Test (BOOT).

[5] How does the employer contend that the Agreement passes the BOOT?

Deduction from pay

[6] Clause 16.5 authorises the employer to make deductions from the pay of employees where the employer asserts that the employee has caused damage to company property or any accommodation provided by the company. How does the employer contend that this is not an unreasonable deduction for the benefit of the employer and that s.326 does not apply?

[7] Clause 16.6 provides the employer with an entitlement to deduct from the final wages of an employee “a proportion of the training costs incurred by the Company”. How does the employer contend that this is not an unreasonable deduction for the benefit of the employer and that s.326 does not apply?

[8] Clause 18.12 is as follows:

“18.12 If an Employee:

• fails to give the required period of notice; or

• gives notice but leaves before the end of the notice period; or

• is given notice but leaves before the end of the notice period;

the Employee will forfeit an amount to the Company equal to the total of all amounts that, if the employment had continued until the end of the required notice period, the Company would have become liable to pay ..”.

[9] I refer the employer to the decision in Hydro Chem Pty Ltd, [2014] FWCA 5163. How does the employer argue that this provision of the Agreement is permitted by the Act and should be retained in an approved agreement?

Part-time employment

[10] Clause 18.2 provides for part time employment as follows:

“18.2 Part-time Employment

(a) A part-time Employee is one who is engaged to perform less than 38 hours per week on a regular basis.

(b) Subject to this sub-clause, part-time employees are entitled to equivalent pay and conditions to those of full-time employees on a pro-rata basis.

(c) The Company is required to roster a part-time employee for a minimum of 3 consecutive hours on any shift.

(d) Part-time employees may be required to work reasonable additional hours up to, and in excess of, 38 hours per week.

Unless engaged under Appendix B or C of this Agreement, time worked in excess of 38 hours per week under this sub-clause will be treated as overtime and paid at the rates prescribed in this Agreement.”

[11] The Mobile Crane Hiring Award does not permit part time employment.

[12] The provisions of clause 18.2 are significantly less beneficial to employees than the provisions of clause 13 of the Manufacturing and Associated Industries and Occupations Award 2010 and clause 12.4 of the Road Transport and Distribution Award. Clause 13 of the Manufacturing Award provides as follows:

“13. Part-time employment

13.1 An employee may be engaged to work on a part-time basis involving a regular pattern of hours which average less than 38 ordinary hours per week.

13.2 A part-time employee must be engaged for a minimum of three consecutive hours a shift. In order to meet their personal circumstances, a part-time employee may request and the employer may agree to an engagement for less than the minimum of three hours.

13.3 Before commencing part-time employment, the employee and employer must agree in writing:

(a) on the hours to be worked by the employee, the days on which they will be worked and the commencing and finishing times for the work; and
(b) on the classification applying to the work to be performed in accordance with Schedule B.


13.4 The terms of the agreement in clause 13.3 may be varied by consent in writing.

13.5 The agreement under clause 13.3 or any variation to it under clause 13.4 must be retained by the employer and a copy of the agreement and any variation to it must be provided to the employee by the employer.

13.6 Except as otherwise provided in this award, a part-time employee must be paid for the hours agreed on in accordance with clauses 13.3 and 13.4.

13.7 The terms of this award will apply pro rata to part-time employees on the basis that ordinary weekly hours for full-time employees are 38.

13.8 A part-time employee who is required by the employer to work in excess of the hours agreed under clauses 13.3 and 13.4 must be paid overtime in accordance with clause 40—Overtime.

13.9 Public holidays

(a) Where the part-time employee’s normal paid hours fall on a public holiday prescribed in the NES and work is not performed by the employee, such employee must not lose pay for the day.
(b) Where the part-time employee works on the public holiday, the part-time employee must be paid in accordance with clauses 32.4(e), 36.2(f), 37.5 and 40.9.”

[13] How does the employer contend that the Agreement passes the BOOT in relation to part time employees?

Casual employment

[14] Clause 18.4 deals with casual employment and contains the following provision:

(c) The starting times set out in this Agreement do not apply to casual Employees, who may be required to start work at any time.

[15] It would appear that casual employees would not be entitled to any penalties or loadings for working outside the ordinary hours of work set by clause 14. This would appear to be a less beneficial provision than found in the relevant modern awards.

[16] How does the employer contend that the Agreement passes the BOOT in relation to casual employees?

Restraint of trade

[17] Clause 18.7 contains a restraint of trade provision in the following terms:

“18.7 Employees agree that during the course of their employment they will not, without prior written consent of the Company, enter the service of, or be employed in any capacity for any purpose whatsoever, by any person, firm or company; or will not be engaged or interested in any undertaking or carrying on business; of a similar nature or competing with the Company.”

[18] Given that there is no equivalent provision in any of the three relevant awards and given that casual employees employed by the employer have no guarantee of employment with the employer and given that part time employees are only employed for part of the working week with the employer how does the employer contend that the Agreement passes the BOOT?

National Employment Standards

[19] Clause 19 generally provides for redundancy but contains an exemption as follows:

“b) However; for the avoidance of doubt, the Company may not be obliged to make any redundancy payment if the Company obtains suitable alternative employment for an Employee, and the Employee unreasonably rejects that offer of employment.”

[20] Sections 120 and 122 of the NES also deal with redundancy pay and exemptions to paying redundancy pay.

“120 Variation of redundancy pay for other employment or incapacity to pay

(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(b) the employer:

(i) obtains other acceptable employment for the employee; or
(ii) cannot pay the amount.

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.

“122 Transfer of employment situations that affect the obligation to pay redundancy pay

Transfer of employment situation in which employer may decide not to recognise employee’s service with first employer

(1) Subsection 22(5) does not apply (for the purpose of this Subdivision) to a transfer of employment between non-associated entities in relation to an employee if the second employer decides not to recognise the employee’s service with the first employer (for the purpose of this Subdivision).

Employee is not entitled to redundancy pay if service with first employer counts as service with second employer

(2) If subsection 22(5) applies (for the purpose of this Subdivision) to a transfer of employment in relation to an employee, the employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with the first employer.

Note: Subsection 22(5) provides that, generally, if there is a transfer of employment, service with the first employer counts as service with the second employer.

Employee not entitled to redundancy pay if refuses employment in certain circumstances

(3) An employee is not entitled to redundancy pay under section 119 in relation to the termination of his or her employment with an employer (the first employer) if:

(a) the employee rejects an offer of employment made by another employer (the second employer) that:

(i) is on terms and conditions substantially similar to, and, considered on an overall basis, no less favourable than, the employee’s terms and conditions of employment with the first employer immediately before the termination; and
(ii) recognises the employee’s service with the first employer, for the purpose of this Subdivision; and

(b) had the employee accepted the offer, there would have been a transfer of employment in relation to the employee.

(4) If the FWC is satisfied that subsection (3) operates unfairly to the employee, the FWC may order the first employer to pay the employee a specified amount of redundancy pay (not exceeding the amount that would be payable but for subsection (3)) that the FWC considers appropriate. The first employer must pay the employee that amount of redundancy pay.”

[21] It appears that clause 19(b) provides the employer with an exemption from paying redundancy pay which may be inconsistent with the NES.

[22] It would appear that clause 19(b) may be a term that contravenes s.55 of the Act and if so it would appear that the Agreement cannot be approved given s186(2)(c) of the Act. Does the employer contend that clause 19(b) does not contravene s.55?

[23] Clause 21.5 provides that the employee must notify the employer when taking personal/carers leave and is in the following terms:

“21.5 An Employee will as soon as reasonably practicable, and before his/her scheduled start· time, advise their direct Supervisor of his/her inability to report for duty, in order for alternative arrangements to be made to ensure that operations continue.

The Employee should as far as practicable state the nature of the injury or illness and the estimated duration of absence.”

[24] Section 107 of the Act deals with the notice and evidence requirements for personal/carers leave. Section 107(5) permits an enterprise agreement to contain “terms relating to the kind of evidence that an employee must provide in order to be entitled to paid personal/carers leave”. However, there is nothing in s.107 which permits an enterprise agreement to contain terms relating to the notice that an employee must give an employer. Section 55(4) permits an enterprise agreement to contain terms that are ancillary or incidental to the operation of an NES entitlement “but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the NES”.

[25] How does the employer contend that the above provision of clause 9.3.2 is permitted to be in an enterprise agreement?

[26] Clause 22 provides for compassionate leave but appears to limit the entitlement to a maximum of 2 days. The NES entitlement is for up to 2 days per occasion. If clause 22 is intended to reflect the NES then it may be appropriate for an undertaking to be given to make this clear

[27] Any submissions or undertakings should be filed in the Commission by noon on Friday 12 December 2014.

COMMISSIONER

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