Application by Chakib Yacoub
[2023] FWCFB 256
•14 DECEMBER 2023
| [2023] FWCFB 256 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional instruments
Application by Chakib Yacoub
(AG2023/4181)
| Education services (post-secondary) industry | |
|
COMMISSIONER CRAWFORD | SYDNEY, 14 DECEMBER 2023 |
Application to extend the default period for the Macquarie Community College Collective Agreement General Program 2008 – 2010
Background
Chakib Yacoub (Mr Yacoub) has made an application under subitem 20A(4) of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to extend the default period for the Macquarie Community College Collective Agreement General Program 2008 - 2010 (Agreement). The application seeks to extend the default period to 6 December 2027.
The Agreement was made in 2007 and approved under the Workplace RelationsAct 1996 (Cth) (WR Act) by the Workplace Authority. The Agreement is a ‘WR Act instrument’ within the meaning of item 2(2) of Sch 3 to the Transitional Act. It is classified by item 2(5)(c)(i) of Sch 3 as a ‘collective agreement-based transitional instrument’. Agreements of this kind are commonly referred to as ‘zombie agreements’.
The Transitional Act was amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (SJBP Act) to provide for the automatic termination of all remaining transitional instruments. Pursuant to items 20A(1) and (2) of Sch 3 to the Transitional Act, the Agreement was to terminate on 6 December 2023 (the end of the default period) unless extended by the Commission. Item 11 of Sch 3 provides that for applications made on or before 6 December 2023 but not determined by that date, any decision in relation to the agreement-based transitional instrument is taken to have been made on that date, or if the extension is refused, on the date of the refusal decision or a later date specified in the decision. The main features of item 20A of Sch 3 to the Transitional Act are described in detail in the Full Bench decision in Suncoast Scaffold Pty Ltd.[1]
Under Subitem 20A(6) of Sch 3, where an application is made under subitem 20A(4) for the default period to be extended, the Commission must extend the default period for a period of no more than four years if either (a) subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to do so, or (b) it is reasonable in the circumstances to do so.
Mr Yacoub’s application states:
“I would be better off overall if the Zombie Agreement continued to apply to me than if the relevant modern award applied.
As French Tutor in Macquarie Community College since 1996, I have been at Level 2I, Grade 2 of the General Program Step 9 hourly rate for more than 20 years which is currently at $63.22 due to annual CPI increases.”
Schedule 1 to the Agreement prescribes a casual hourly rate of $44.41 for Mr Yacoub’s classification of Level 2I, General program step 9. Clause 6.7 of the Agreement states: “Course facilitators under Grades 1 – 4 will receive the annual CPI adjustment, subject to a maximum of 3% in any one year.” Mr Yacoub’s application suggests this provision has operated to increase his hourly rate to $63.33 and he is concerned his rate may “stagnate” if the Agreement terminates.
Macquarie Community College (MCC) opposes Mr Yacoub’s application. In a submission filed on 20 November 2023, MCC provided the following justification for its opposition:
(a)The Agreement covers 88 casual employees and 76 of these employees are classified at Grade 5. The Agreement does not prescribe a minimum rate of pay for Grade 5 employees. It states the rate is “negotiated”.
(b)There are no terms in the Agreement that are more beneficial than the Educational Services (Post Secondary) Award 2020 (Award).
(c)MCC employees have written contracts of employment with all employees that set out the employment terms and conditions, including their rate of pay and any additional payments they may be entitled to, such as the marking and practical assessment payment.
Consideration
Although Mr Yacoub’s application refers to him personally being better off overall under the Agreement, the Agreement is a collective agreement-based transitional instrument. That means it is subitem 20A(9) of Sch 3 to the Transitional Act that must be considered, as opposed to subitem (8), which applies in relation to an individual agreement-based transitional instrument. There is an important practical difference between the two provisions. Unsurprisingly, subitem (8) is only concerned with the consequences for the relevant individual employee. In contrast, subitem (9) applies where:
“… it is likely that, as at the time the application is made, the award covered employees for the instrument under subitem (10), viewed as a group, would be better off overall if the instrument applied to the employees than if the relevant modern award or awards referred to in that subitem applied to the employees.”
The difficulty for Mr Yacoub’s application is that it relies on his own personal circumstances and not the circumstances of the employees covered by the Agreement “viewed as a group”. The material filed by MCC indicates 76 of the employees covered by the Agreement are at Grade 5 and do not have a minimum rate of pay prescribed by the Agreement. To the extent that the Agreement Grade 5 classification has an equivalent in the Award, item 13 of Sch 9 of the Transitional Act provides that the base rates of pay under the Agreement are not to be less than those in the Award.
It is also clear on the face of the Agreement that it contains further conditions that are inferior to the Award:
(a)a reduced casual loading of 20% under the Agreement, compared to 25% under the Award;
(b)a minimum engagement of one hour under the Agreement, compared to two hours under the Award; and
(c)the Agreement does not contain any allowances whereas the Award provides for various additional allowance payments.
Given these significantly inferior conditions, we do not consider subitem 20A(9) applies in relation to the Agreement. That means the default period cannot be extended under subitem 20A(6)(a) of Sch 3.
We also do not consider that it is reasonable in the circumstances to extend the default period under subitem 20A(6)(b) of Sch 3, given it appears that one important consequence of that would be to disadvantage the majority of employees covered by the Agreement.
We note Mr Yacoub’s application appears to be driven by his concern that his hourly rate will “stagnate” if the Agreement terminates. That concern appears justified given MCC’s submission that:
“MCC will not reduce any employee’s rate of pay as part of the transition process. However, where the rate of pay is above the minimum applicable under the Award, MCC may choose to absorb any award increases (such as the Annual Wage Review) into the above award rate.”
Given that MCC has also submitted Mr Yacoub is paid “more than the minimum rate of pay applicable to him under the relevant modern award”, it appears that MCC foreshadows the possibility that Mr Yacoub’s hourly rate will be frozen until the minimum rate in the Award exceeds it.
MCC’s submission above does not appear to take account of clause 19.2.1 of the Agreement which states:
“A Contract of Employment will be entered into between the employer and the employee on appointment and shall operate under the terms of this agreement. The signature of both parties is confirmation of employment and acceptance of the terms of employment.
A signed Contract of Employment shall be required for all employees on appointment and shall operate for the duration of the employment or until there is a mutually agreed change in the conditions of employment. If the employment conditions do change, the employees will be required to authorise the change by signing relevant documentation.”
It is not our role here to finally determine the content of the contractual relationship between the parties. It may be that the reference to a contract operating “under the terms of this agreement” was intended to incorporate the terms of the Agreement, including the entitlement to an annual increase in clause 6.7, into the contract of employment. In that case, Mr Yacoub may have an existing contractual entitlement to the annual increase which would not be impacted by the termination of the Agreement. This is consistent with MCC’s submission that “MCC employees have written contracts of employment… that set out the employment terms and conditions, including their rates of pay and any additional payments they may be entitled to…”. Even in the absence of a contractual protection of this kind we do not consider it would be reasonable in the circumstances to extend the default period given the negative impact an extension would have on other employees covered by the Agreement.
As our decision is to refuse to extend the default period under subitem 20A(6) of Sch 3 and our decision is made after the sunset date in the Transitional Act, subitem (11)(e) provides that we must extend the default period to the day of this decision or specify a day that is not more than 14 days after the day of this decision. We have decided that, to enable the parties to make the necessary administrative arrangements to give effect to the sunsetting of the Agreement, the default period is extended to 28 December 2023.
The application is dismissed.
DEPUTY PRESIDENT
[1] [2023] FWCFB 105, [3]–[18].
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