Application by David Mapledoram
[2020] FWCA 4265
•13 AUGUST 2020
| [2020] FWCA 4265 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.225— Application for termination of an enterprise agreement after its nominal expiry date
Application by David Mapledoram
(AG2019/2673)
ACES (PERMANENT EMPLOYEES) ENTERPRISE AGREEMENT 2007
[AC307851]
Cleaning services | |
DEPUTY PRESIDENT BULL | SYDNEY, 13 AUGUST 2020 |
Application for termination of the ACES (Permanent Employees) Enterprise Agreement 2007.
[1] The United Workers’ Union (UWU), previously known as United Voice 1, has filed an application on behalf of Mr David Mapledoram (the applicant) to terminate the ACES (Permanent Employees) Enterprise Agreement 20072 (the Agreement) pursuant to s.225 of the Fair Work Act 2009 (the Act).3
[2] The Agreement was made between the employer, Australian Concert & Entertainment Security Pty Ltd (ACES), and the Media Entertainment and Arts Alliance (MEAA), being a union collective agreement.
[3] The Agreement states at clause 3.1 that it was lodged with the then Office of the Employment Advocate and has a nominal expiry date of five years from the date on which it was lodged. The Agreement commenced operation on 27 June 2007, being the date of lodgement, resulting in the Agreement’s nominal expiry date being 26 June 2012. 4 The Agreement has thus passed its nominal expiry date.
Relevant Legislation
[4] The Agreement is a collective agreement-based transitional instrument as per Item 2(5)(c)(i) of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act).
[5] Schedule 3, Item 16(1) of the Transitional Act states:
“Collective agreement-based transitional instruments: termination by FWC
(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with termination of enterprise agreements after their nominal expiry date) applies in relation to a collective agreement-based transitional instrument as if a reference to an enterprise agreement included a reference to a collective agreement-based transitional instrument.”
[6] Section 225 of the Fair Work Act 2009 (the FW Act) states:
“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.”
[7] Section 226 of the FW Act sets out when the Commission must terminate an expired enterprise agreement where an application to terminate an agreement is made.
“226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”
[8] ACES contends that Mr Mapledoram was employed on a casual basis in 2014 and became a permanent employee on 6 August 2018. 5 ACES has further advised that Mr Mapledoram was dismissed on 19 November 2019 for gross misconduct.6 It is also put by ACES that Mr Mapledoram, being no longer employed, has no residual interest in the outcome of his application.7
[9] Mr Mapledoram, being an employee covered by the Agreement under s.225(b) of the Act at the time of filing the application has the necessary standing to bring the application.
[10] Mr Mapledoram provided an affidavit in support of his application. Mr Mapledoram states that all the known rosters under the Agreement provide a rate of pay less than the Award, without any offsetting benefits in compensation.
[11] A statutory declaration from Mr Justin Davis, Industrial Officer of the UWU was also attached to the application. Mr Davis made similar statements to that of Mr Mapledoram that all the known rosters provide a rate of pay under the Agreement that is well below the Security Services Industry Award 2010 (the Award), 8 and that there are no offsetting benefits which compensate for the loss incurred to employees being paid under the Agreement, and further that there is a commercial advantage enjoyed by ACES over its competition that undermines the minimum industry rates set by the Award.9
[12] On 31 July 2019, my chambers wrote to ACES and MEAA requesting a response to the application. On 21 August 2019, MEAA advised they did not intend to take a position and requested a conference be facilitated.
[13] ACES replied on 7 August 2019, opposing the termination of the Agreement on the basis that:
‘1. Neither the applicant worker nor its representative had proposed or entered into any discussions with the respondent about termination of the EBA prior to the lodgement of the Application with the Commission.
2. The employee organisation representing the applicant was not a party to the EBA.
3. The employee organisation which was a party to the EBA has not yet provided any response to the application and it is not known if that organisation will or will not seek to represent the respondent’s employees.
4. The respondent disputes the assertions made by the applicant in his statutory declaration dated 26 July 2019 at paragraphs 2.1 and 2.3.
5. The calculations attached to the applicant’s statutory declaration do not identify the employee’s classification grade, the site where the work was performed, or the roster that applied to the selected period. Without that information the respondent cannot check the calculations.
6. The current rates of pay for the respondent’s employees are set out in Schedule B a copy of which is attached.
7. ACES is not a small fly-by-night business, but is a substantial operation with extensive facilities for managing a large workforce, and provides extensive training for all of its employees. The following description of the ACES Group is taken from the respondent’s website:
ACES Group has been instrumental in the provision of integrated crowd control, security, public safety and risk management services for major events, including every City of Sydney New Year’s Eve since 2001. Whether it’s cricket, union, AFL or league at one of Sydney’s sports stadiums, V8 Supercars, or a big name stadium event, our expertise in the management of people is integral to the overall visitor experience. Our professional integrated security services allow us to manage the most iconic Australian tourist destinations such as The Rocks, Darling Harbour, Botanic Gardens, Centennial Parklands and many more favourite destinations. With 30 years’ experience, a highly qualified management team and SAI Global certification, ACES Group is the ideal partner for your business
8. ACES has 355 full-time and part-time employees covered by the EBA.
9. The respondent’s employees may be allocated at any one of 27 sites, most of which are within Sydney city and suburbs, although there are venues in, e.g., Newcastle, Wollongong, and the Blue Mountains. A map showing the locations of sites is attached.
10. Examples of rostered shifts for a four week period have been attached. Four of the rosters are for sites at The Rocks, Circular Quay, and Darling Harbour. The remaining two rosters are for Sydney Olympic Park. A summary table of wage paid to the rostered employees is also attached.
11. Each of the employees identified in the attached rosters is a Ranger level 2. That classification attracts a rate of pay under the Security Services Industry Award 2010 of $856.10 weekly. ACES employees who performed those rostered shifts are paid a flat hourly rate of $28.18 for ordinary hours and additional hours.
12. Some venue sites have their own requirements with regard to rates of pay for contracted employees but generally the EBA rates are applied.
13. The EBA hourly rates are adjusted each year to reflect changes made to the Modern Award rate for ordinary hours.
14. As the application by Mr Mapledoram was lodged with the Commission before there had been any notice given to the employer, ACES has not had adequate time to canvass its employees and obtain evidence to respond to the proposed termination of the EBA. ACES will apply to the Commission for leave to obtain and serve additional evidence.’ 10
[14] During the hearing, the parties were advised that the Commission would undertake its own comparisons of the Agreement and Award and provide it to the parties. Subsequently, my Chambers provided Commission-prepared modelling on pay rates that is ordinarily done when considering approval of an enterprise agreement under the Act.
Applicant’s and UWU submissions and evidence
[15] I have determined that the UWU position in respect of this application will also be considered. I note and endorse the observations of Binet DP in Wilson Security – Western Australian Collective Agreement 2009 11at [38]:
“United Voice is not covered by the Agreement. There is therefore no statutory obligation to take into consideration its views pursuant to section 226(b). However, as the employee organisation with coverage of the security industry, it is well placed to make submissions and lead evidence in relation to the impact of the termination of the Agreement on the public more broadly beyond its impact on those parties covered by the Agreement.”
[16] The applicant provided a number of written submissions, his own witness statement and witness statements of Mr Kujinga and Mr Vance, although it was difficult to ascertain which submissions were being made on behalf of Mr Mapledoram and which were being made by the UWU.
[17] It was submitted that there are a number of conditions in the Agreement that are less beneficial than the Award, such as the notice of variation of rosters and uniform deposit. It was further put that the Agreement contains a number of detrimental provisions that are not in the Award, including a 15 minute unpaid handover time, and the non-payment of public holiday penalties. 12 In addition, the Agreement at clause 13.3.1 allows for a variation of rosters with two hours’ notice without the payment of a penalty whereas the Award provides for the payment of overtime in such circumstances.
[18] The applicant submits that as the Agreement was approved before the enactment of the FW Act, the better off overall test at s.193 of the FW Act was not applied during the approval process. It was submitted there is a guaranteed safety net of relevant and enforceable minimum terms and conditions of employment in the Award that will apply upon termination of the Agreement. 13
[19] It is noted that there are no prescribed wage increases in the Agreement after 1 December 2010. 14 The reconciliation of wages of Mr Mapledoram, and Mr Kumbirai Kennedy Kujinga a permanent employee of ACES show that employees on similar rosters would be better off under the Award.15
[20] It is submitted that the witness statements of David Mapledoram and Kumbirai Kennedy Kujinga demonstrate that public holidays are paid at the ordinary rate which is lower than the Award rate. Further, any increase to the hourly rate only occurs for hours in excess of 50 hours per week compared to the Award of 38 hours per week. 16
[21] Mick Vance, an Industrial Officer for the UWU, tendered a witness statement in support of the application which provided calculations that, in his view, demonstrated that employees are better off under the Award. 17
[22] It was submitted that Mr Vance’s calculations demonstrate employees are better off under the Award for standard rosters and rotating rosters. Further, the applicant submits that the calculations of Mr Vance do not take into account additional hours that are worked.
Evidence of Mr Spiros Parissis
[23] Mr Spiros Parissis, a Security Ranger employed by ACES, provided two witness statements 18 and gave evidence. Mr Parissis stated that he believed he was better off under the Agreement than the Award. Mr Parissis stated that he liked working 12-hour shifts over fewer days and having more days off. Mr Parissis states that management and friends in the security industry have explained to him that the roster under the Award would likely be an average of 7.6 or 8 hours a day, 5 days per week.
[24] Mr Parissis stated that he strongly objected to the termination of the Agreement and organised a petition for staff to sign if they also did not want the Agreement terminated. 19 Mr Parissis stated that he had been told by ACES management, including Travis Semmens, that if the Agreement was terminated the rosters would revert to an average 38 hour week.20 Mr Parissis was not examined by any party in relation to his second witness statement.21
Submissions and evidence of ACES
[25] ACES states that it provides security and related services at public facilities, including entertainment/event and recreational activities, and has a number of government contracts for this work.
[26] In opposing the termination of the Agreement, ACES provided written submissions and a statement from Ms Sonja Semmens and Ms Lenette Ison. It was put by ACES that the ‘proffered analysis by the applicant, is logically flawed and the comparisons made are wrong in a number of respects.’ 22
[27] ACES contends that the applicant’s submission misrepresents the statutory scheme. 23 ACES states that the Act does not distinguish between terminating agreements made prior to the BOOT test or afterwards, and the ongoing viability of a pre-BOOT-test agreement was not dependent upon it being able to pass the BOOT test.
[28] It is also submitted that the wrong award classification is referred to. According to the employer’s calculations, Mr Mapledoram and Mr Kujinga would be worse off if the Agreement was to be terminated. It was noted that the Transitional Act incorporates a mechanism at Item 13(2) to prevent base rates of pay in a transitional collective agreement falling below modern award rates. 24
[29] ACES asserted that most applications to terminate an agreement before the Commission take into account pending or ongoing bargaining. The employer maintains that there is no evidence of pending or ongoing bargaining to be considered in this matter. 25
[30] It is put by ACES that there is no indication in the Act that the existence of a previously negotiated enterprise agreement should be regarded as providing particular encouragement to collective bargaining 26 or that there is any basis for concluding that continued operation of an agreement past its nominal expiry date will be a more effective means by which the objects in s.171 – Objects of this Part of the Act will be achieved.
[31] In support of its response ACES provided a statutory declaration of Ms Sonja Semmens, the Services Executive/Acting Human Resources Manager dated 7 August 2019, and, later, a witness statement dated 5 November 2019. Ms Semmens submitted that the security industry operated on very tight margins and that ACES is often beaten on tenders by other providers who are able to tender at lower labour costs. 27 If the Agreement was terminated ACES could not continue to roster permanent employees in the same manner they currently do.28 Rosters would need to be amended to remove any costs that are not calculated in the tender price and would have to ‘strictly’ apply the modern award and correct classification levels.29
[32] Ms Semmens’ statutory declaration attested to the possibility of ACES having to reduce its workforce or subcontract some work if its quoted rates for tenders are no longer competitive. Contracts are negotiated with tight profit margins and if ACES was to pay substantial increases in pay for its permanent workforce, those increases might not be absorbed by the terms of a supply contract. 30
[33] Ms Lenette Ison the Executive Manager Business also provided a witness statement and gave evidence. Ms Ison’s evidence was that the Agreement does not provide ACES with a commercial advantage over its competitors and ACES has received feedback that their tender pricing is higher compared to the industry. 31 On commencement of the Agreement, a 3% wage increase has been paid each year until 2012.
[34] Ms Ison states that, in 2013, the Agreement rates were reset to index against the base rate of the Award. The ACES wages rates were above the Award from 2011 to 2012 but the phasing in process under the Modern Award meant that the Award rates caught up. Ms Ison’s witness statement contained modelling of various rosters at Attachment A and wage modelling of rosters for the applicant and Mr Kujinga. The result of the modelling was that employees are, in total, receiving amounts over the Award. In the case of the applicant and Mr Kujinga working an 8-week flexible roster, 1.02% and 1.15% respectively above the Award. 32
[35] Since 2013, ACES has applied the precise increase of the Award base rate of pay each year and ensured the base rate was above Modern Award as per the Transitional Act requirements. 33
[36] Following the Commission Annual Wage Review 2019-20 decision handed down on 19 June 2020, ACES decided to pass on the 1.75% increase to all employees effective from the first full pay period commencing on or after 1 July 2020.
[37] Ms Ison stated that certain public holiday rates applicable under the Award commenced being paid in early 2018 and since early 2020 all public holidays are paid at Award rates to employees for any shift that falls on a public holiday and ACES would continue to pay these rates. Ms Ison further stated that ACES undertook to continue to apply the Commission minimum wage increase rates to the Standard rate, Rotate rate and Flexible rate under the Agreement to ensure they are always maintaining the same relativities above the Modern Award.
[38] During cross examination, it was put by the applicant’s representative that there was no cap on shifts more than 10 hours in the Award to which Ms Semmens agreed. Ms Semmens agreed that the 12-hour shifts are a popular arrangement, but the cost of the shift would stop the employer being able to offer them under the Award. Ms Semmens agreed that not all security companies had enterprise agreements and, when considering all security companies, less than half use pre-June 2009 agreements. 34
[39] Ms Semmens submitted that there were consultations with employees which resulted in employees being paid a ‘public holiday rate’ which was equivalent to the Award. Ms Semmens confirmed that this information was circulated in a memo to staff. 35 Ms Semmens also agreed that the Award does not stop people from working an 8-hour day and people could work a 10-hour shift over 8 weeks and still work an average of 38 hours a week. 36
[40] While the Agreement has some inferior conditions compared to the Award, the Act does not require that continuance of an agreement made prior to the commencement of the Act being contingent upon the agreement being able to pass a later statutory test, namely the better off overall test. 37
[41] ACES relies upon the petition organised by Mr Parissis as reflecting the views of a significant number of employees who do not want the Agreement terminated. 38
Determination under s.226 of the FW Act
[42] As stated by VP Watson in Energy Resources of Australia Ltd v Liquor, Hospitality and Miscellaneous Union,39 the formulation of s.226 of the FW Act directs the Commission to the nature of considerations to be taken into account and the test to be applied to determine the matter.
[43] The FW Act provides that, upon application by a person covered an agreement that is past its nominal expiry date, the agreement must be terminated if the Commission is satisfied it is not contrary to the public interest and the Commission considers it appropriate to terminate the Agreement taking into account all the circumstances including those set out in sub-ss.226(b)(i) and (ii) of the FW Act.
[44] As set out above, sub-ss.226(b)(i) and (ii) of the FW Act require the Commission to take into consideration the views of the employees, each employer, and each employee organisation covered by the Agreement and the circumstances of the employees, the employer and employee organisation including the likely effect that the termination will have on each of them.
S.226(a) - Is termination of the Agreement contrary to the public interest?
[45] The nature of the public interest test contained in s.226(a) of the FW Act is such that the test is a negative one, in that it is only considerations that are contrary to the public interest that go to the Agreement termination issue.
[46] In Tristar Steering and Suspension Australia Limited (Tristar),40 and as adopted in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd41 (Aurizon), the Full Bench stated and reaffirmed the approach adopted by the Full Bench in Kellogg Brown and Root Pty Ltd and others (Kellogg).42 The approach adopted by the Full Bench in Kellogg deals with the public interest test, although with reference to the Workplace Relations Act 1996, which is couched in the same terms as the current public interest test under s.226 of the FW Act and remains apposite. The Full Bench in Kellogg stated:
“[27] It should be emphasized that the Commission’s consideration of the public interest for the purpose of s.170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences.”
[47] In Coca-Cola Amatil (Aust) Pty Ltd v Liquor, Hospitality and Miscellaneous Union-South Australian Branch and Others43 the Full Bench emphasised the notion of public interest as not only matters that might affect the public as a whole, but one that is distinct in nature from the interests of the parties themselves.
[48] The Full Bench in Aurizon reiterated this public interest approach at paragraph [129] of that decision, stating:
“Section 226(a) requires a consideration of whether termination of the agreements is not contrary to the public interest. It seems to us that a consideration of the public interest will involve something that is distinct from the interests of the persons and bodies covered by the agreements. This distinction seems to be reflected in the structure of s. 226. The question of how the public interest is to be assessed was considered by a Full Bench of the Australian Industrial Relations Commission in Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000.44 The decision in Kellogg Brown concerned an application to terminate a certified agreement pursuant to s. 170MH of the WR Act. The Full Bench observed:
“The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.
The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.”45
[49] ACES contends that, in considering wider public interest matters such as the objects of the Act, employment levels, inflation and maintenance of proper industrial standards, it would be contrary to the public interest to terminate the Agreement on the basis of the views of one ex-employee and one current employee, and a union not party to the Agreement. 46 On the other hand, the applicant submits that the Agreement is below minimum standards as set by the Award and provides an inappropriate commercial advantage to ACES and is unfair to employees, as such it would not be contrary to the public interest to terminate the Agreement.
[50] I have had regard to the submissions of the parties in relation to whether termination of the Agreement would be contrary to the public interest. I am not satisfied that the arguments put forward by ACES result in a conclusion that it would be contrary to the public interest to terminate the Agreement. On the submissions of the parties, there are benefits for and against the termination of the Agreement, however no factor(s) push the weight of public interest considerations to concluding that terminating the Agreement would not be in the public interest.
S.226(b)(i) - Views of the employees, employer, and any employee organisation covered by the Agreement
[51] The Commission received evidence from the applicant, Mr Mapledoram (now an ex-employee) and Mr Kujinga, a current employee, supporting the termination of the Agreement. Mr Parissis is also a current employee, who gave evidence opposing the Agreement’s termination and provided a copy of a petition signed by a number of employees who also did not want the Agreement terminated. ACES itself did not present any evidence to the Commission as to the views of its employees.
[52] In the Commission’s observation, Mr Parissis who provided evidence independent of the employer did not appear to have a full grasp of the Agreement vis a vis Award conditions. 47 Mr Parissis’ calculations of 22 November 2019, for example, make no reference to the non-payment of a number of benefits that would be payable under the Award. On the basis of Mr Parissis having also organised the petition of employee signatures opposing the application, I am not satisfied the understanding of employees who signed the petition is based on being fully informed on the consequences of the Agreement remaining in operation or the Award becoming the basis for their terms and conditions. Little evidence was produced on the understanding held by those who signed the petition.48 Other than Mr Parissis, no other employee gave evidence opposing the termination of the Agreement.
[53] It is submitted by ACES that both Mr Mapledoram and Mr Kujinga who seek to have the Agreement terminated only became dissatisfied with the Agreement after receiving advice from Mr Vance of the UWU. 49
[54] I am satisfied that the views of Mr Mapledoram, Mr Kujinga and Mr Parissis are genuinely held, although whether their views were formed having a full comprehension of the rosters worked and the rates and conditions payable under both instruments was less than clear. 50
[55] The employer does not support termination of the Agreement for the reasons that have been described above.
[56] It is common ground that the UWU is not covered by the Agreement. The employee organisation covered by the Agreement is the Media Entertainment and Arts Alliance which has chosen not to file any material or attend at the listed hearing dates.
s.226(b)(ii) - The circumstances of employees the employer and organisations and the likely effect that the termination will have on each of them
[57] ACES submitted that it currently conducts its business based on the terms of the existing Agreement. Ms Semmens’ evidence on behalf of ACES was that ACES could not continue rostering employees in the manner it currently does if the Agreement was terminated. Ms Semmens stated that terminating the Agreement would result in having to amend rosters to remove any costs that are not calculated in the tender price and strictly apply the Award conditions and correct classification levels.
[58] The applicant submits that employees are entitled to the benefits of the Award.
[59] Mr Parissis stated that he had been told by management that if the Agreement was terminated his roster would revert to an average of 38 hours a week.
[60] I adopt in respect of the need to vary rosters the observations of SDP Hamberger when terminating the Secom Security Australia – Employee Enterprise Agreement 2014– 2017 which resulted in the Security Services Award 2010 applying to employees:
“It is not entirely clear that moving to the award would necessitate replacing 12-hour shifts with 8-hour shifts, as suggested by Mr Gillani. After all, the award does make specific provision for 12-hour shifts, though I acknowledge that they might be more difficult to administer in the absence of loaded rates.
There is no doubt that employees would be somewhat better off under the award than the 2014 agreement – though to the extent that the respondent winds back the use of 12-hour shifts some employees may in practice take home less pay each week, while working shorter hours.” 51
[61] It is submitted by ACES that while the FW Act does not intend that agreements operate in perpetuity, the fact that an agreement is old is not of itself a proper basis for its termination. This issue was canvassed by the Full Bench in Aurizon at [176]:
“….Ultimately, it cannot be expected that terms and conditions of employment contained in an enterprise agreement with (will) continue unaltered in perpetuity after the agreement has passed its nominal expiry date. Terms and conditions may be altered by making a new agreement or by terminating the existing agreement. The statute guarantees the continuation of the safety net, not the terms and conditions contained in a nominally expired enterprise agreement.”
[62] Under the current legislation, the Agreement is able to operate past its nominal expiry date indefinitely until it is either replaced or terminated. This application seeks to have the Agreement terminated and, having been made, must be terminated where the Commission is satisfied that it is appropriate to do so when applying the provisions of s.226 of the FW Act.
[63] The Agreement having been made prior the FW Act was not required to satisfy what is now prescribed under the enterprise agreement approval process of the FW Act. However, I consider that a factor in taking into account all the circumstances as required under s.226(b) of the FW Act includes a comparison of the Agreement vis a vis the Award.
[64] The Agreement, being an agreement based transitional instrument, is covered by the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Transitional legislation) which at Schedule 9 Items 13.1 and 13.2 require where a modern award covers the employees that the base rate of pay payable to an employee must not be less than the base rate of pay that would be payable to the employee under the modern award.
[65] The Agreement contains six classifications as compared to the Award’s five classifications, however they are broadly analogous with the Agreement, with levels 4 and 5 differing only in the number of persons supervised.
[66] There is a dispute over what classification level Mr Mapledoram and Mr Kujinga would occupy under the Award, with ACES submitting that the Level 1 classification is the appropriate comparator, whereas the applicant submits that the Award Level 2 is the appropriate comparator. No substantive submissions were made on this issue by the applicant and, for the purposes of this decision, I have adopted the employer’s position.
[67] The Agreement at clause 12.1 states that wage rates are expressed as composite hourly rates of pay that include compensation for penalty rates, loadings and public holidays unless otherwise expressly provided.
[68] It is noted that clause 4.3 of the Agreement excludes protected award conditions as set out in the Workplace Relations Act 1996. Section 354 of the Workplace Relations Act 1996 included as protected award conditions annual leave loading, penalty rates, rest breaks and loadings for overtime and shift work. Consistent with s.354 of the Workplace Relations Act 1996 clause 12.8 of the Agreement specifies the excluded protected award conditions as conditions dealing with penalty rates, public holidays, overtime, shiftwork, monetary allowances, incentive-based payments and bonus and annual leave loading.
[69] No overtime in excess of agreed hours for part time employees is paid as per clause 19.2(b) of the Award and the setting of regular hours for part time employees as per clause 10.3 of the Award is not provided for. At clause 13.9 and 13.10 employees are required to attend for work 15 minutes prior to their rostered start time for a hand over and shift briefing; this time is unpaid. The Award does not contain the same or a similar provision.
[70] Despite the calculations provided by Ms Ison in her evidence, it is not clear to the Commission that the Agreement benefits employees overall in comparison with the Award. For example, Ms Ison confirmed in her oral evidence that employees are not entitled to the ‘Additional Hours’ rate in the Agreement at 12.1.3 until they have worked 50 hours, as clause 13.1.3 provides that employees may be required to work 12 additional hours at the ‘Ordinary Hours’ rate.
[71] As attested to by Ms Ison, I accept that wage rate increases have been applied to employees administratively since the last Agreement provided increase on 1 December 2010 in conjunction with the legislative requirement to maintain the Agreement base rates at not less than the Award base rates. ACES, through Ms Ison, has also provided undertakings in relation to future wage increases and to the payment of the Award public holiday rate.
[72] The difficulty with this approach, however, is that employees are relying not only on the terms of the Agreement and the wage guarantees provided by the transitional legislation to ascertain their minimum entitlements, but also on employer undertakings which do not have the same enforceable rights as an agreement term or undertaking provided for example pursuant to s.190 of the FW Act. The undertakings are for the purpose of either matching Award conditions or for the purpose of maintaining what is said to the same relativities above Award. The fact that undertakings are proffered by the employer reflects an acceptance that the Agreement contains conditions inferior to the Award.
[73] There is also the further issue of the Agreement having been approved in 2007 not containing a number of non-monetary benefits that are contained in the Award. These include clauses in the Award such as individual flexibility arrangements, requests for flexible working arrangements, facilitative provisions and consultation about major workplace changes, consultation about changes to rosters or hours of work or change of contract.
[74] This is not to discount the ACES submission that an agreement should be not terminated simply because the relevant award has been amended.
[75] The Agreement was made in 2007 and at the expiration of five years passed its nominal expiry date and has continued to operate for a further eight years.
Is it appropriate to terminate the Agreement?
[76] The Full Bench decision in Construction, Forestry, Mining and Energy Union v Peabody Energy Australia PCI Mine Management Pty Ltd 52explained the discretionary nature of the decision the Commission is required to make under s.226 of the FW Act as follows:
“[17] In identifying that s.226 required the exercise of a discretion, the Full Bench in AWX Pty Ltd referred to the following passage in the High Court decision in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 53 (footnotes omitted):
“[19] “Discretion” is a notion that “signifies a number of different legal concepts”. In general terms, it refers to a decision-making process in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result.” Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.”
[18] Section 226 involves the exercise of a “narrow” discretion of the type described in the last sentence of the above passage. Notwithstanding this, it remains the case that the evaluative assessments required by s.226(a) and (b) allow a degree of latitude on the part of the decision-maker as to the conclusions to be reached. …”
[77] I have had regard to all of the material and evidence provided to me, and I have taken into account the views of the employer and employees who expressed a view.
[78] The requirements of s.225 of the FW Act have been met and there is no evidence before me that indicates that, on the approach endorsed by the Full Bench of the Commission in Kellogg,andenunciated in Aurizon, it would not be appropriate taking into account all the circumstances including those listed at s.226(b)(i) and (ii) of the FW Act to terminate the Agreement.
[79] The Agreement is not underpinned by the Award and is without a number of modern award requirements. No party advised the Commission that there are any current or future negotiations planned for a replacement agreement. On this basis, there would not appear to be any prejudice to any enterprise bargaining discussions should the Agreement be terminated.
[80] I am thus satisfied pursuant to s.226 of the FW Act that the ACES (Permanent Employees) Enterprise Agreement 2007 should be terminated.
[81] Accordingly, an Order [PR721809] to this effect will be issued.
[82] In an attempt to mitigate the impact ACES has stated would result in the Agreement’s termination, and pursuant to s.227 of the FW Act, I will provide that the Agreement’s termination take effect four months from the date of the Order to enable ACES sufficient time to accommodate any changes that may need to be made within its business, which may include the negotiation of a replacement agreement and/or the variation of rosters worked or contract variations etc.
DEPUTY PRESIDENT
Appearances:
Mr A Aghazarian on behalf of the applicant and the UWU
Mr M Easton of counsel on behalf of ACES
Hearing details:
2019
18 November
2020
13 February
By telephone
22 July 2020
1 Application refers to United Voice as the applicant’s representative
2 AC307851
3 Application form lodged on 23 July 2019
4 Statement of Sonja Semmens of 5 November 2019 at [6] Exhibit B5, and pursuant to Fair Work Commission records
5 Statement of Sonja Semmens of 5 November 2019 at [27] Exhibit B5
6 Affidavit of Ms Lenette Ison of 23 March 2020 at [9]
7 Written submissions of 6 July 2020 at [11]
8 Noting at the day of this decision the Award is known as the Security Services Industry Award 2020
9 Statutory Declaration from Justin Davis dated 24 July 2019
10 Employer’s response filed on 7 August 2019
11 [2017] FWCA 1595
12 Written submissions dated 12 October 2019 at [16 and [19]
13 Applicant’s submissions filed on 14 October 2019 at [5]
14 Ibid at [6]
15 Applicant’s submissions filed on 14 October 2019 at [9] and 12]
16 Witness Statement of David Mapledoram dated 11 October 2019 and Statement of Kumbirai Kennedy Kujinga dated 14 October 2019
17 Statement of Mr. Vance 12 November 2019 Exhibit A3
18 Exhibit B1 14 November 2019 Exhibit B4 22 November 2029, Exhibit B4
19 Exhibit B4
20 PN1228, PN 1409
21 PN1599 - 1601
22 Written submissions of 5 November 2019 at [8]
23 Written submissions of 6 July 2020 at [26]
24 ACES response to Commission dated 31 January 2020 titled ‘Issues Document’
25 Written submissions of 6 July 2020 at [52]
26 Written submissions of 6 July 2020 at [17e]
27 Witness statement of 5 November 2019 at [57] Exhibit B5
28 Ibid at [59]
29 Ibid at [60]
30 Statutory declaration by Sonja Semmens filed on 7 August 2019 at 2.3
31 Witness statement of 6 July 2020 at [8] Exhibit B6
32 Ibid at [6]
33 Ibid at [9(c)]
34 PN1845.
35 PN1954
36 PN2000-2006
37 Written submissions of 6 July 2020 at [26-27]
38 Ibid at [43]
39 [2010] FWA 2434
40 [2007] AIRCFB 273
41 [2015] FWCFB 540
42 (2005) 139 IR 34 PR955357
43 [2009] AIRC 438
44 (2005) 139 IR 34
45 (2005) 139 IR 34 at 40
46 Written submissions of 6 July 2020 at [44]
47 PN1420
48 See PN1314 - PN1317
49 Written submissions of 6 July 2020 at [8]
50 See PN1319
51 [2018] FWCA 4549 at [32]. See also clause 13.3(c) of the Security Services Industry Award 2020
52 [2016] FWCFB 3591
53 [2000] HCA 47; (2000) 203 CLR 194 at [19] per Gleeson CJ and Gaudron and Hayne JJ
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