Application by Fanoka Pty Ltd T/A Fairview Orchards & Anor (Ag2009/858), (Ag2009/978), (Ag2009/13526), (Ag2009/13549), (Ag2009/13553)

[2010] FWA 2139

[2010] FWA 2139

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Approval of enterprise agreement

Application by Fanoka Pty Ltd T/A Fairview Orchards & Anor

(AG2009/858), (AG2009/978), (AG2009/13526), (AG2009/13549), (AG2009/13553),

(AG2009/13681), (AG2009/13682), (AG2009/13693), (AG2009/13701), (AG2009/13702), (AG2009/13715), (AG2009/13718), (AG2009/13727), (AG2009/13733), (AG2009/13736), (AG2009/13751), (AG2009/13779), (AG2009/13780), (AG2009/13784), (AG2009/13786), (AG2009/13839), (AG2009/13859), (AG2009/13863), (AG2009/13875), (AG2009/13917), (AG2009/13921), (AG2009/13924), (AG2009/13954), (AG2009/13955), (AG2009/13969), (AG2009/13976), (AG2009/13979), (AG2009/14019), (AG2009/14049), (AG2009/14051), (AG2009/14052), (AG2009/14058), (AG2009/14067), (AG2009/14091), (AG2009/14094), (AG2009/14150), (AG2009/14158), (AG2009/14197), (AG2009/14204), (AG2009/14219), (AG2009/14227), (AG2009/14262), (AG2009/14304), (AG2009/14317), (AG2009/14321), (AG2009/14366), (AG2009/14397), (AG2009/14405), (AG2009/14411), (AG2009/14416), (AG2009/14453), (AG2009/14508), (AG2009/15632), (AG2009/20104), (AG2009/20105), (AG2009/20106), (AG2009/20133), (AG2009/20148), (AG2009/20169), (AG2009/20241), (AG2009/20255), (AG2009/20256), (AG2009/20257), (AG2009/20291), (AG2009/20298), (AG2009/20299), (AG2009/20300), (AG2009/20353), (AG2009/20359), (AG2009/20368), (AG2009/20426), (AG2009/20457), (AG2009/20469), (AG2009/20475), (AG2009/20485), (AG2009/20488), (AG2009/20489), (AG2009/20590), (AG2009/20661), (AG2009/20668), (AG2009/20671), (AG2009/20673), (AG2009/20674), (AG2009/20675), (AG2009/20678), (AG2009/20679), (AG2009/20685), (AG2009/20694), (AG2009/21691), (AG2010/18), (AG2010/20), (AG2010/63), (AG2010/65), (AG2010/76), (AG2010/77), (AG2010/80), (AG2010/90)

Agricultural industry
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 16 MARCH 2010

Application for approval of various single enterprise agreements – voluntary additional hours – an employee’s request to work additional hours – no disadvantage test – Agreements approved by the Workplace Authority and Industrial Relations Commission of Queensland featuring voluntary additional hours clauses – National Employment Standards.

[1] There are 102 single enterprise agreements before me filed pursuant to s.185 of the Fair Work Act 2009 (“the FW Act”). All relate to the agricultural industry, and in particular the growing and harvesting of vegetables and fruit in Queensland.

[2] As each agreement was made during the bridging period 1 and as such the agreements are subject to assessment against the no disadvantage test.2

[3] Most of the agreements have the Fruit and Vegetable Growing Industry Award 2002 (“the Fruit and Vegetable Award”) as its principal reference instrument (for the purposes of assessing the agreements against the no disadvantage test), though a smaller number require reference to the Horticulture Industry (AWU) Award 2002. Some classifications in a smaller number of the agreements need to be read against the Clerical Employees Award 2002, the Engineering Award - State 2002 and/or the Transport, Distribution and Courier Industry Award – Southern Division. The two horticultural related awards, whilst having some points of distinction, are marked by their similarities in respect of their overall terms and conditions.

[4] Each agreement has been lodged by the same industrial consultant (Growcom).

[5] Following the lodgement of the applications and various issues being subject to correspondence from Fair Work Australia (“FWA”), the applicants were assisted by Hall Payne Lawyers and Mr Herbert of Counsel, who also appeared at the hearing of these agreements on 1 March 2010.

VOLUNTARY ADDITIONAL HOURS

[6] There is a common issue in relation every agreement that requires formal determination. This issue concerns the provision in each agreement before me to include voluntary additional hours that are worked outside of the ordinary hours at an employee’s request, but which are remunerated not at overtime rates of pay but at ordinary time rates of pay.

[7] The Fruit and Vegetable Award states as follows:

“6.4.1 Subject to clause 4.3 (part-time employment) all time worked by employees, other than casuals, in excess of 8 hours per day or 40 hours per week shall be deemed overtime and paid for at the rate of time and a half for the first three hours and double the ordinary rate of pay thereafter.

6.4.2 All time worked by casual employees in excess of 40 hours in any seven days shall be deemed overtime and paid for at the rate of time and a half for the first three hours and double the ordinary rate of pay thereafter.”

[8] I note the Fruit and Vegetable Award does not contain any scope for the averaging of employees’ hours.

[9] A relatively standardised clause in the agreements before me reads as follows:

“Voluntary additional hours are where the employer states that there is additional work available. Employees must make written and signed application to undertake voluntary additional hours, where such work is available. No employee can be required or directed to undertaking (sic) additional voluntary hours under this clause. All time worked by an employee in excess of their ordinary working hours, at the employee’s specific request, shall be deemed voluntary additional hours. Such additional hours shall only be worked by the employee with the consent of the employer. The application shall remain in force until varied in writing by the employee. Additional hours shall be paid at the employee’s ordinary time rate.

The relevant pro forma for making an application to undertake voluntary hours is at Schedule 2.” 3

[10] Schedule 2, to which reference has been made immediately above, comprises of a standardised employee application for voluntary additional hours. The content of the schedule has been the subject to discussion over the course of these proceedings. The standardised schedule reads as follows:

“The employee declares that the employer has not asked and does not require the employee to work additional voluntary hours.

The employee understands that if the employer asks or requires the employee to work more than 38 hours per week, these hours are deemed to be overtime and are paid for at the rate of time and half for the first three hours and double the ordinary rate of pay thereafter.

Should the employer accede to any request to work voluntary additional hours, the employer will only allow an employee to work additional hours that are consistent with the employer’s Occupational Health & Safety obligations and will pay particular regard to the fatigue issues relevant to the employee who has made the request.”

[11] It appears to me that an agreement that purports to introduce under its terms voluntary additional hours (which are hours worked outside the ordinary hours and which are paid at ordinary hourly rates) may be at some risk of not meeting the no disadvantage test unless there is an appropriate consideration for the entitlement foregone, or discernible financial or other benefit to the employee. This is particularly the case here where the reference instrument cited provides for paid overtime for all hours worked.

[12] The majority of a Full Bench of the Australian Industrial Relations Commission in PR937654 4 suggests that such a provision (presumably where there is no accepted countervailing benefit) may represent the diminution of an entitlement under the applicable award.

[13] In this respect the majority of the Full Bench considered a clause for hours outside of ordinary hours (paid at ordinary rates) in an agreement that was approved by then His Honour, Senior Deputy President Polites, and stated relevantly as follows:

“The jurisdictional error was said, by the LHMWU, to be found inthe approach of Polites SDP to the no-disadvantage test in relation to a number of issues. Relevant provisions of the Agreement and relevant Award - the Security Officers (Western Australia) Award 2002 - are set out below. It is necessary to consider those provisions and the approach and reasoning of Polites SDP in relation to each of them.

Overtime

The Security Officers (Western Australia) Award 2002 states:

"16. OVERTIME

16.1 All work done outside ordinary hours prescribed by clause 15 - Hours, must be paid for at the rate of time and one-half for the first two hours and double time thereafter. An employee working continuous shifts must be entitled to double time for all overtime. In computing overtime, each day of work must stand alone.

16.1.1 A person working `continuous shifts' means an employee who is required to work ordinary hours of duty In accordance with a roster where the employee is rostered for duty over seven days of the week, and is required to work and works regularly on every day of the week, including public holidays and Sundays."

The Agreement provides, in clause 21 - Overtime and shift work - comparable overtime rates, however provides for extra hours to be worked by agreement at ordinary rates of pay. Subclause 21.1(d) provides:

"Notwithstanding the provisions of subclause (b) above, by agreement between the Employer and the Employee, extra hours or shifts may be worked at the ordinary rates of pay detailed in clause 14 - Classification Structure and Wage Rates. The employee will not unreasonably withhold agreement for such arrangements."

In the proceedings below, the appellant submitted that the working by agreement of additional hours, which attract the overtime provisions of the Award, would result in a disadvantage to employees given clause 15 of the Award provides for overtime done outside of ordinary hours to be paid at the rate of time and a half for the first two hours and double time thereafter.

In the proceedings before Polites SDP, the respondent relied on a distinction between hours which are worked in line with the employee's preference to work additional hours and to earn extra income, versus hours which are worked at the request or instruction of the employer and submitted that the ability to work to earn extra income is something that is one of the beneficial parts of the Agreement.

In his Decision, Polites SDP appears to have accepted this distinction, assuming that the provision in the Agreement which provides that consent to working voluntary should not be unreasonably withheld does not mean that an employee may be pressured over his or her reasons for refusing consent.

We fail to see how the distinction between hours performed beyond ordinary hours at the employer's direction and hours performed with the voluntary agreement of the employee is available for the purpose of applying the no-disadvantage test, given the terms of the Award. To the extent it was relied upon, Polites SDP relied on an irrelevant matter and misconstrued and misapplied the no-disadvantage test. That test is to be applied by reference to the terms and conditions of the competing instruments - the Award and the Agreement.

The terms of the Award in relation to work performed in excess of the ordinary hours prescribed by the Award do not distinguish between voluntary and directed work. On the contrary, the Award, in clause 16.1, specifically used the term "All work done outside ordinary hours prescribed by clause 15". Had the Award described the basis for payment of overtime rates differently, providing, for example, that the rates applied in circumstances where the employee was required to work hours in excess of those in clause 15, the situation may have been different. However, it is not a situation which we need consider further given the particular terms of the relevant Award in the present circumstances. In applying the statutory test by reference to the terms and conditions of the competing instruments in the circumstances of the present matter, the Award is clear in its requirement for the payment of overtime rates prescribed in relation to all work done outside ordinary hours prescribed by clause 15.

Further, the consideration in relation to work undertaken in excess of those prescribed as ordinary hours by the Award, which led Polites SDP to consider the effect of clause 28 of the Agreement on the no-disadvantage test seems to have included an assumption that by working an additional number of hours at a significantly lesser rate of pay (the ordinary time rate) than that prescribed by the Award (time and a half for the first 2 hours and double time thereafter) employees would not be disadvantaged. The assumption reflects the respondent's contention that the opportunity to work more hours, in addition to the ordinary hours prescribed in the Award, would offset the disadvantage arising from the lesser rates prescribed in the Agreement. We fail to see the relevance of this proposition to the application of the no-disadvantage test. This is because the no-disadvantage test does not involve an analysis of matters other than the terms and conditions of the Award as against the Agreement. The number of hours of work which may be performed by the employees, as opposed to what they will be paid for hours worked, is not a matter prescribed by the Agreement. The subject matter addressed by the respondent concerned the operational possibilities of the employers business to provide additional working hours at rates of pay less than those prescribed by the Award. By having regard to the employers prediction of what the operational circumstances of the business would or might be Polites SDP departed from the statutory test. What was being compared was not the terms of the Award and the Agreement. By relying upon what was put to him by the respondent, SDP Polites was comparing the terms of the Award with the effects of the potential operational arrangements of the employer, rather the terms of the Agreement in relation to the amounts payable to employees for hours worked compared to the terms of the Award in that respect.

Consequently Polites SDP failed to properly take into account the relevant consideration of disadvantage arising from a real reduction in the terms and conditions of employment concerning hours of work under the Agreement, by reliance on the employers operational intentions to provide longer hours of work under the inferior terms of the Agreement.” [my emphasis]

[14] Counsel for the Applicants submitted that the reasoning of the majority in the above Full Bench decision was flawed because it did not reflect the global and evaluative nature of the manner in which the No Disadvantage Test applied. Counsel submitted that in such circumstances I should not adopt the approach of the Full Bench for reason that the doctrine of stare decisis does not apply to FWA or its predecessors.

[15] I note that the clause that was before the Full Bench is distinguishable from the clause that is before me. In the former case, the clause provided for agreement between the employer and an employee for the employee to work additional hours at ordinary rates of pay, subject to the employee not unreasonably withholding consent.

[16] In contrast, the clauses before me are premised on the initiative of the employee alone, and have no element of direction within it at all. That is, there appears to me to be an element of employer directive in the clause that was before the majority of the Full Bench that is not evident in the clause that is before me.

[17] That said the majority of the Full Bench, it appears, did not consider this distinction in its own right to be important in respect of its considerations.

[18] That important distinction aside, on a fair reading, arguably at least, the Full Bench majority appears not to have been able to discern any evidence of fact about the working arrangements and employees’ views about the provisions that were before it.

[19] The Member under appeal therefore was found to have relied upon an “assumption” and speculation (or “predictions”, as the Full Bench commented) about the employer’s operational circumstances and whether there was any detriment or disadvantage for the employees for purposes of his determination of the No Disadvantage Test.

[20] That is, because there was no evidence at hand to which the Full Bench could have referred, it was left to make a textual comparison between the relevant award and the terms of the agreement.

[21] The evidentiary basis of the applications now before me is different from that before the Full Bench.

[22] I have before me sworn, representative evidence (derived from what I believe to be a representative sample of growers and employees, across a range of growing regions and crops, such as melons, strawberries, watermelons, broccoli, avocados, apples, pumpkins etc) to the following effect:

• The growers’ margins are modest and they are price takers who supply the likes of Coles and Woolworths;



• The prices paid for crops do not contemplate any other than ordinary rates of pay as farm cost or production costs inputs;



• The labour cost impact of making overtime paid at 150% and 200% penalties in order to complete harvesting within the narrow time frame before the fruit looses its marketable value is commercially untenable;



• Consequently, overtime paid at penalty rates is uncommon;



• The availability of hours is affected by climate and harvest conditions (product size and ripeness) that directly impact upon the commercial value of the relevant crop along with increased spoilage rates;



• Consequently, crops must be harvested and packed and delivered within small windows of opportunity by intensive efforts (sometimes within two days); but



• When the maximum number of ordinary hours are reached, production (both harvesting and packing) is shut down and employees are required to sit out the remainder of the working week, or else move to other properties to work or leave the industry;



• There are also productivity issues for the growers’ as new employees are employed to continue the harvesting duties and require training in picking techniques, familiarisation with machinery and wider acculturation.

[23] One statutory declaration gave evidence to the following effect:

“The employees work a set limit of 38 hours per week. Once the employees hit that 38 hour mark which is at lunch time on Fridays, we stop work and the employees go home. [Our] shed only operates for 38 hours per week to ensure that no employees work more than 38 hours per week. I am aware that this is the practice being adopted by the farms in our area.

It is not financially viable for [us] to pay employees overtime rates to continue working on Friday, or to work on the weekend.

Implicit in these economical concerns is the fact that farmers are not able to put a price on their produce. What we can sell our produce for is dictated to us by the retail chains and as a result we don’t have the opportunity to try and make up any additional wage costs by increasing our prices. The nature of the industry is that it is a price taking industry. One of the ways of minimising the overheads is to not have anyone working overtime. There are a lot of things we can’t control, but this is one we can.” 5

[24] The evidence before me also states:

• The workforce is highly transient (principally made up of backpackers and ‘gray nomads’) with only a very small number of permanent employees);



• Employees consider they would benefit from access to extended hours of work paid at ordinary time rates of pay to enhance remuneration where there is no opportunity at all for additional hours paid at overtime rates of pay;



• Because of climate, spoilage rates and market pressures, the windows within which earnings can be increased significantly by working voluntary additional hours are narrow;



• Currently, the transient workforce moves from farm to farm working the maximum number of hours at each farm at ordinary rates before moving to the next;



• There are transaction costs for the transient workforce associated with such practices, including taxation issues (such as the tax fee threshold and withholding tax);



• These transaction costs would be reduced and the taxation issues simplified if the transient workforce could have access to voluntary additional hours at the one farm and did not need to move to the another farm to access further hours at ordinary time rates of pay;

• Where an employer requests or directs overtime to be worked the employees will be paid at overtime (penalty) rates of pay consistent with the award.

[25] One employee’s statutory declaration put the issues as follows:

“I understand what a voluntary hours clause is that it is something that is up to me to determine as to whether or not I work the extra hours. That is, my employer cannot dictate those hours to me and if they want me to work extra hours at their direction and request, then I understand that the overtime payments would be applicable.” 6

[26] Similarly, another employee gave the following evidence:

“At the moment my income is limited to the 38 hours per week as [the farm] will not have any employees work at overtime rates, but during the harvest there could be extra hours available if I wanted to take them up and if the agreement permitted it. In relation to this option I understand that it would be up to me to initiate it and that I cannot be forced to work extra hours at ordinary rate.” 7

[27] In relation to the benefits afforded the employees under such a clause, one employee says:

“[…] There is no overtime worked on the farm. When the 38 hours is completed that is the end of work. This results in a half day on a Friday and no-one working weekends.

When I knock off lunchtime on Friday, I believe pretty much all the other local farms knock off work at that time as well. […]

My budget is very tight and my pay does not go far enough. It is really difficult to cope in the weeks I cannot work at least 38 hours and it would help if, from time to time, I could work the extra hours and put some money aside for the times I can’t work.” 8

[28] Still another gave evidence as follows:

“The other issue with a second job is it’s already hard enough to balance all the various things that you have to do in your family life and having a second job makes it extremely difficult because there’s other specific commitments. It’s much easier if you could work the extra hours in the one place if they were available and then put those monies to one side for use when work isn’t available.” 9

[29] Pursuant to each Agreement, voluntary additional hours may only be worked where the employee expressly asks (by a formal written request) the employer to work such additional hours (and the employer may only accede to such hours being worked if any hours are worked are consistent with its OHS obligations and has regard to any fatigue issues).

DO THE AGREEMENTS BEFORE ME MEET THE NO DISADVANTAGE TEST?

[30] Schedule 7 Division 2 of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009 states as follows:

“4 When does an agreement pass the no-disadvantage test?

(1) An enterprise agreement passes the no-disadvantage test if FWA is satisfied that the agreement does not, or would not result, on balance, in a reduction in the overall terms and conditions of employment of the employees who are covered by the agreement under any reference instrument relating to one or more of the employees.”

[31] It appears to me that the No Disadvantage Test requires a judgement (reached on the basis of an objective consideration of all the relevant considerations) by FWA as to whether, on balance, the employee working under an agreement would not be disadvantaged relative to the reference instrument or other relevant instrument. An agreement might embody a number and a range exchanges that depart from conditions specified in the reference instrument, and that is the very purpose of agreement making focused at the level of the single enterprise.

[32] The substance of those exchanges is a matter of evidence. That may be found in the text of the agreement or by what is put before FWA at the time of the approval proceedings. Whether the exchanges across an agreement reduce overall terms and conditions of employment, or else provide for a neutral exchange or result in a net benefit to an employee to be covered by the agreement, is a matter for FWA’s satisfaction, founded as it is upon the evidence before it.

[33] On the evidence before me, and not as a matter of speculation, I am satisfied that the inclusion of the voluntary additional hours clause represents a tangible benefit for the employees to be covered by the agreement. This is because:

• the provision will permit an employee to elect voluntarily to earn more than they would otherwise have earned (if their employment was regulated by the reference instrument) for reason that as a matter of evidence there are no or negligible hours available that could be paid at overtime rates of pay 10;



• it appears that the employees electing to work additional hours at their ordinary rate of pay will have the benefit of earning additional income to offset periods when their hours (and consequently income) are decreased due to factors outside the employees control (for example weather, harvesting periods etc);



• reduce the transactions and other costs arising from having to move to new employers to work additional hours at ordinary rates of pay;



• allow for greater flexibility in hours of work than would otherwise be available; and



• the agreements provide for overtime to be paid at penalty rates (which accord with the reference instrument) where the employer requests or directs such overtime to be worked.

[34] I note that voluntary additional hours arrangements – where employees volunteer or request to work additional time at ordinary rates of pay – have been a feature of the State and Federal jurisdictions, and have had application specifically in such areas as agriculture and harvesting.

AGREEMENTS APPROVED BY THE WORKPLACE AUTHORITY

[35] Agreements containing voluntary additional hours have been a feature of the federal workplace relations system, including the predecessor to the FWA, the Australian Industrial Relations Commission. 11

[36]  The Workplace Authority, I should add, approved agreements which included voluntary additional hours clauses or preferred hours clauses. Schedule 15 of the Applicant’s submissions gave the titles of some 60 relevant agreements which appear to have been made in the horticultural sector, and which were approved by the Workplace Authority.

[37] The Workplace Authority appears to have adopted and published a No Disadvantage Test Policy Guide which, in respect of collective agreements, provided the following information:

“Collective agreements may contain preferred hours clauses that provide that where an employee seeks to work hours other than ordinary hours and the employee agrees, then payment need only be made at ordinary rates of pay.

A workplace agreement would fail the NDT if such a clause did not allow for an employee to revert to his or her usual arrangements at any time.

In order to pass the NDT, the agreement must not result on balance in a reduction in the overall terms and conditions of employment of the employees under any reference instrument.

However, during the life of the of the agreement, a preferred hours clause may operate as specified above to allow employees to negotiate flexible working arrangements under which they work outside ordinary hours while not obliging the employer to pay penalty rates of pay where the employer has specifically agreed to a request by the employer to work those hours.

Consistent with that approach, an agreement that has failed the NDT will not subsequently pass the NDT if it is varied merely to include a preferred hours clause in the agreement.”

[38] It appears that the Workplace Authority (as it was) considered a preferred hours clause to involve a neutral exchange between the (then) NAPSA entitlement and the employees’ preference in relation to the hours they wish to work at ordinary rates.

[39] Some examples of the clauses within agreements approved by the Workplace Authority are as follows:

Example 1: Howe Farming Enterprises Collective Agreement 2009 Agreement ID: AC328925

“1.3 Parties Bound

This Agreement shall be binding on the “Parties” being, Howe Farming Enterprises Ptd (sic) Ltd (hereinafter referred to as “the Employer”), the Employees of the employer (hereinafter referred to as “the Employees”) and the Australian Workers’ Union of Employees, Queensland Branch (hereinafter referred to as “the Union”).

[…]

“2.12 Employee Requested Additional Hours

All time worked by employee/s at the employee/s’ specific request, in excess of their ordinary working hours on any one day or in any one week shall be deemed to be additional hours. Such additional hours shall only be worked by the employee/s subject to approval by the employer of the application to work such additional hours. Such application shall remain in force and effect until varied in writing by the employee. All time worked as additional hours shall be paid at the employee’s ordinary time rate specified in Clause 2.16.1 for weekly (full time) employees and Clause 2.16.2(a) for casual employees.”

Example 2:   Elf Farm Supplies Pty Ltd Employee Collective Agreement 2009 Agreement ID: AC325190

“16.3 Voluntary Additional Hours

An employee may request to work additional hours at their ordinary hourly rate and the employer agree provided that:

(a) The request is in writing;

(b) Additional work is available:

(c) Any additional hours, in excess of 38 hours per week, performed by the Employee in accordance with this clause will not result in the accrual of leave of any kind; and

(d) The request may be withdrawn at any time with reasonable notice.”

Example 3: Sugarloaf Farming Pty Ltd Employee Collective Agreement 2008 Agreement ID: AC319681

Clause 3.9 […]

“(c) Voluntary Additional Hours

Voluntary Additional Hours are where the employer states that there is additional work available and asks who would be interested in performing extra work. Employees may make written and signed application to undertake additional work. No employee may be required or directed to undertake additional voluntary hours. All time worked by an employee/s in excess of their ordinary working hours at the employee's specific request shall be deemed voluntary additional hours. Such additional hours shall only be worked by the employee with the approval of the employer. The application shall remain in force until varied in writing by the employee. All voluntary additional hours shall be paid at the employee's ordinary time rate.”

AGREEMENTS APPROVED BY THE QIRC

[40] Agreements certified at the Industrial Relations Commission of Queensland (“QIRC”) have also incorporated voluntary additional hours clauses. There are a very large number of these. Schedule 15 to the Applicant’s submissions demonstrates that there were some 70 such agreements (which appear to relate to the horticultural sector).

[41] Some recent examples of such agreements from the agriculture\harvesting industry are as follows:

Example 1: TheTaylor Family Produce Certified Agreement 2009 – CA/2009/232 certified by Commissioner Thompson on 23 December 2009

“3.10 ADDITIONAL HOURS

All hours worked beyond the specified ordinary hours of work will be considered as additional hours. Additional hours will take one of the following forms:

3.10.1 Overtime

The Employer may require an Employee to work reasonable additional hours outside the 40 hour week average in order to meet operational requirements of the business.

All time worked by an Employee at the specific direction of the Employer, in excess of the standard ordinary hours as set out in 3.9 above will be paid for at the rate of time and a half for the first three hours and double time thereafter.

An Employee may decline to work additional hours in circumstances where the working of such hours would result in the Employee working hours which are unreasonable having regard to:

• any risk to Employee health and safety that might reasonably be expected to arise if the Employee worked the additional hours;

• the Employee’s personal circumstances including any family responsibilities;

• the operational requirements of the workplace;

• the notice (if any) given by the Employer of the additional hours and by the Employee of his/her intention to refuse it;

• whether the additional hours are on a public holiday; and

• the Employee’s hours of work over the 7 days ending immediately before the Employee is required or requested to work the additional hours.

[…]

3.10.3 Voluntary Additional Hours

Voluntary Additional Hours may be undertaken by employees where the employer states that additional work is available to employees. Employees must make written and signed application to undertake voluntary additional hours, where such work is available. No employee can be required or directed to undertake additional voluntary hours under this clause. All time worked by an employee in excess of their ordinary working hours, at the employee’s specific request, shall be deemed voluntary additional hours. Such additional hours shall only be worked by the employee with the consent of the employer.

The application shall remain in force until varied in writing by the employee. Additional hours shall be paid at the employee’s ordinary time rate. The relevant pro-forma for making an application to undertake voluntary hours is at Schedule 2.”

Example 2: The Walker Farms Certified Agreement 2009 (CA/2009/132) certified by Deputy President Swan on 20 November 2009

“3.7 Additional Hours

3.7.1 All time worked by employees' at the employees' specific request, in excess of their ordinary working hours on any one day or in any one week shall be deemed to be additional hours. Such additional hours shall only be worked by the employees subject to approval by the employer of the application to work such additional hours. Such application shall remain in force and effect until varied in writing by the employee. All time worked as additional hours shall be paid at the employee's ordinary time rate as specified in Clause 3.1.1

3.7.2 Employees wishing to work additional hours under this provision should complete an application to undertake additional hours prior to such arrangements being entered to.”

Example 3: The Top End Pineapples Certified Agreement 2009 (CA/2009/104) certified by Commissioner Asbury on 12 November 2009

“3.10.3 Voluntary Additional Hours

Voluntary Additional Hours are where the employer states that there is additional work available. Employees must make written and signed application to undertake voluntary additional hours, where such work is available. No employee can be required or directed to undertaking additional voluntary hours under this clause. All time worked by an employee in excess of their ordinary working hours, at the employee’s specific request, shall be deemed voluntary additional hours. Such additional hours shall only be worked by the employee with the consent of the employer. The application shall remain in force until varied in writing by the employee. Additional hours shall be paid at the employee’s ordinary time rate. The relevant pro-forma for making an application to undertake voluntary hours is at Schedule 2.”

[42] The above clauses appear broadly representative of the wider set of clauses that appear in agreements approved by the QIRC. 12

NATIONAL EMPLOYMENT STANDARDS

[43] Finally, I note in passing that the National Employment Standards embodied within the FW Act had effect from 1 January 2010.

[44] The agreements that are before me were lodged in the bridging period, and the National Employment Standards do not have application for the current purposes.

[45] Notwithstanding this, I observe that s.62 of the FW Act, which deals with the maximum weekly hours National Employment Standard reads, in part, as follows:

“62 Maximum weekly hours

Maximum weekly hours of work

(1) An employer must not request or require an employee to work more than the following number of hours in a week unless the additional hours are reasonable:

(a) for a full-time employee—38 hours; or

(b) for an employee who is not a full-time employee—the lesser of:

(i) 38 hours; and

(ii) the employee’s ordinary hours of work in a week.”

[46] It appears the s.62 of the FW Act does not concern itself with hours worked by an employee which are voluntary hours and which an employer does not “request or require an employee to work”.

[47] In any event, the averaging of hours provisions of the NES would permit, in their effect, employees to work in excess of 50 hours per week in three weeks within a four week cycle, which would generate much the same results (other than the fourth week being unproductive or new labour being utilised). The result would be much like the arrangements anticipated in the agreements before me. An argument in a similar vein was put to me by Counsel for the Applicants.

CONCLUSION

[48] In my view, in the context of the (eventual) receipt of the agreed undertakings in each instance (about which there is some general discussion below), I will be satisfied that the agreements now before me, on balance, will not result in a reduction in the overall terms and conditions of employment of the employees who are to be covered by the agreement under the reference instruments relating to one or more of the employees.

[49] The representative evidence before me (as summarised above) demonstrates that the voluntary additional hours clauses in the agreements have tangible value to the employees to be covered by the agreements, particularly so where the arrangements are only able to be initiated by the employee and where there is no meaningful loss of an opportunity for paid overtime (for reason there is no demonstrable pattern of paid overtime in the industry sector in which these agreements are to operate). That is, the voluntary additional hours clauses only allow employees voluntarily to take advantage of hours of work which would otherwise not be accessible to them.

[50] The evidence in relation to the pattern of the Agreement making approved by the State and Federal tribunals and authorities in the industry supports this conclusion.

[51] I have also taken into account the pro-forma written request for voluntary additional hours (which forms Schedule 2 to the agreements). The text of Schedule 2 is set out above and serves to ensure that an employee understands his or her rights to paid at overtime rates in the event they are requested to perform reasonable additional hours, and that an employer who approves a request by an employee to work voluntary additional hours must have regard in doing so to its health and safety obligations, including fatigue issues.

[52] Taken together with the wider terms of the agreements, the agreements therefore will meet the no disadvantage test, conditional upon the receipt of the applicable undertakings and any further documentation as requested by FWA in each instance.

[53] Upon receipt of these undertakings, a separate decision, referable to the reasoning in this overarching decision, will be published for each agreement, incorporating the relevant undertakings.

[54] The agreements, I should point out, have given rise to a wide range of matters which may be addressed by undertakings. I have taken the approach that the provisions of the FW Act are intended to be curative, particularly when read in conjunction with the objects to the FW Act.

[55] The issues to which undertakings have been required relate to such matters as:

• Allowances (various, e.g. work in rain allowance, leading hand allowance, tree pruning allowances)



• Rates of pay



• Voluntary additional hours



• Penalty rates for work performed on a public holidays



• Saturday penalty rates;



• Shift overtime penalty rates



• Personal leave



• Averaging of hours



• Weekend hours of work



• Weekend rates



• Right to representation



• Banked Hours

[56] Some applications also need to be made to be compliant with Regulation 2.06A of the Fair Work Regulations 2009.

[57] Others require clarification (or rectification) as to nominal expiry dates, which have been inadvertently affected by misunderstandings of the interaction of s.54 of the FW Act and s.186(5) of the FW Act.

[58] I have also agreed to accept amended Form 17 forms where they have included typographical errors.

[59] There are several hundred undertakings relevant to the applications that are before me. I have explored the various circumstances of the above issues in writing prior to the hearing and then again thereafter in respect of each of the agreements.

[60] The Applicants have all consented to provide their respective undertakings as required and in the form requested and agreed. Consistent with s.190 (3) of the FW Act (and Item 807 of the Explanatory Memorandum to the FW Act) the undertakings are such that they do not constitute any financial detriment to the employees concerned, and in most cases may operate to benefit the employees to be covered by the agreement (other than being of neutral consequence).

[61] For the purposes of s.201(3) of the FW Act, the undertakings in each instance must form part of the approval decision, such that they are taken to be a term, in effect, of the agreement.

[62] For this reason, upon receipt of the outstanding documentation it is my intention to publish an approval decision in respect of each of the above cited agreements, which is to be read in conjunction with this decision.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr A Herbert of Counsel instructed by Hall Payne Lawyers for the Applicant

Hearing details:

2010.

Brisbane:

March, 1.

Final written submissions:

The Applicant filed final written submissions settled by Counsel on 12 March 2010

 1   See Item 2, Part 1, of Schedule 2 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

 2   See Item 4, Schedule 7, Division 2, of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009

 3   For example see the proposed Smerdon Enterprises Pty Ltd Enterprise Agreement 2009 (AG2009/13701) and the proposed Riverdale Herbs Enterprise Agreement 2009 (AG2009/14091)

 4   Appeal by the Australian Liquor, Hospitality and Miscellaneous Workers Union (C2003/147) against Decision [PR930722] and certification of agreement [PR930723] issued by Senior Deputy President Polites on 28 April 2003

 5   Statutory Declaration by Rodney Owen Wren dated 8 March 2010 at PN 28-30

 6   Statement of Aurelia Rosa Skilton (undated) at PN 9

 7   Statement of Greg Phillip Kent (undated) at PN 12

 8   Statement of Julie Maree Williams dated 8 March 2010 at PN 10-11 and 16

 9   Statement of Aurelia Rosa Skilton (undated) at PN 15

 10   I will discuss further below the historical pattern of agreement making (and approval) in the industry as it relates to voluntary additional hours.

 11   For example see the decision of Senior Deputy President Lacy in relation to the Application by Chubb Security Australia Pty Ltd (AG2001/5972) concerning the Chubb Protective Services Voluntary Additional Hours Monash University (Caulfield) Enterprise Agreement 2001 dated 29 November 2001

 12   This clause is taken from the proposed Mirrabooka Farm Produce Pty Ltd Enterprise Agreement 2009 (AG2009/13553)

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