Application by Samjack Pty Ltd T/A Samjack Pty Ltd
[2010] FWA 78
•13 JANUARY 2010
[2010] FWA 78 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
(AG2009/16752)
COMMISSIONER LEWIN | MELBOURNE, 13 JANUARY 2010 |
The Samjack Enterprise Agreement 2009.
[1] An application has been made for approval of an enterprise agreement known as the Samjack Enterprise Agreement 2009 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Samjack Pty Ltd. The agreement is a single-enterprise agreement.
[2] The Agreement was made during the bridging period 1 as defined in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), accordingly, when considering whether to approve the Agreement I have taken into account the provisions of Part 2–4 of Chapter 2 of the Act as modified by Schedule 7 of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009.
[3] The Tribunal identified various concerns arising from the application of the no-disadvantage test to the terms of the Agreement as provided for in Schedule 7, Part 2, Division 2 of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009.
[4] On 3 December 2009, the Tribunal wrote to Ms Gerke of Samjack who is the person named as the contact person for Samjack in the Form 16—Application for approval of enterprise agreement, to identify those concerns at length and in detail. A comparative synopsis of the terms of the Agreement and the reference instrument for the pruposes of the no-disadvantage test was provided. Ms Gerke was advised that the Tribunal was not inclined to approve the Agreement in light of those concerns as it was not satisfied that the Agreement passed the no-disadvantage test. Ms Gerke was advised that any submission in relation to the application of the no-disadvantage test should be made by 11 December 2009.
[5] In response, Ms Gerke submitted a document which was in the form of an agreement which included new and different terms in substitution for the agreement which was originally submitted for approval.
[6] Section 190 of the Act allows that an agreement may be approved notwithstanding that it does not meet the no-disadvantage test where an employer offers written undertakings which meet the concerns of the Tribunal. However, it is not appropriate to replace an agreement submitted for approval which has been the subject of the procedures prescribed by s.186 of the Act with a different agreement which has not been made with employees whose employment is to be covered by the proposed agreement but rather unilaterally substituted by the employer.
[7] The matter was listed for Hearing by video link between Melbourne and Launceston on 22 December 2009. At the Hearing Ms Gerke appeared for Samjack. There was no appearance on behalf of the employees whose employment would be covered by the Agreement.
[8] Ms Gerke sought to have the Agreement approved on the basis that written undertakings of the various additional and different terms reflected in the document submitted in response to the Tribunal’s letter of 3 December 2009 would be given by Samjack.
[9] The discretion to accept the proposed undertakings and issues concerning the extent of the undertakings and the Tribunal’s concerns arising from the application of the no-disadvantage test were addressed at the Hearing.
[10] Two issues were identified in respect of which the Tribunal indicated a decision would be required. The first issue concerns whether or not the very extensive undertakings proposed would, if accepted, satisfy the Tribunal that the approval of the Agreement, with the undertakings, would not disadvantage the Employees to be covered by the Agreement. Second, The Tribunal’s discretion to accept undertakings where an Agreement does not meet the no-disadvantage test is limited by the relevant statutory provisions which are contained in s.190 of the Act and are set out below:
“190 FWA may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made under section 185; and
(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.
Undertakings
(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
FWA must seek views of bargaining representatives
(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.”
[11] Therefore, in order to determine to accept the undertakings the Tribunal would be required to:
- be satisfied that the undertakings met the concerns about any disadvantage arising from the terms of the agreement under consideration;
- be satisfied that the undertakings do not “result in substantial changes to the agreement”.
[12] I shall now deal with the first of the two considerations set out above.
[13] In my view the undertakings would still fall short of overcoming the cumulative disadvantage arising under the terms of the agreement, when compared to the reference instrument. Clause 5.1 of the agreement is as follows:
“5.1 Wage Rates
(a) The hourly rates contained in this Agreement are all inclusive and paid for all hours worked, irrespective of the day of the week or time of day, and take into account the specific requirements of the Company’s log haulage operations.
(b) The hourly rate is paid from the time an employee arrives at a loading site for loading and returns to the loading site unloaded.”
[14] It is clear that the work may be performed at any time of day on any day of the week, Monday to Friday without addition of penalty or overtime rates. While the company stated that work is usually performed between Mondays and Fridays, on my understanding of the proposed undertakings, the undertakings do not extend to the provision of commensurate penalty or overtimes rates with those provided for by the reference instrument in the event that work is performed on Saturdays or Sundays. While the terms of the Agreement provide for hourly rates significantly in excess of the base rate of pay prescribed by the reference instrument, on the calculations set out in the synopsis provided to Ms Gerke, situations of disadvantage will arise if work is performed on Saturdays and Sundays and will always arise where more than 55 hours of work are performed in any week. There are other matters which also remain unaddressed to my satisfaction by the proposed undertakings.
[15] In order to remedy the disadvantages which could arise under the terms of the agreement depending upon the time of day and the day of the week when work was performed, the duration of the working day and a number of other matters the undertakings would necessarily affect:
- the rate of pay or working arrangements on Saturdays and Sundays;
- rates of pay for days upon which extensive hours of work were performed;
- rates of pay for casual employees;
- the potential for the performance of shiftwork;
- an increase in the sick leave entitlement prescribed by the Agreement;
- the inclusion of provision for personal and carers’ leave;
- provision for unpaid compassionate leave;
- different provisions concerning notice and payment in lieu of notice on termination of employment;
- the inclusion of an additional public holiday entitlement; and
- a provision for a 17.5% loading on annual leave payment.
[16] I now turn to consider whether or not the proposed undertakings would constitute “substantial changes to the agreement”. If the answer is in the affirmative acceptance of the undertakings is not within the discretionary power of the Tribunal.
[17] The catalogue of concerns set out in the Tribunal’s letter of 3 December 2009 to Ms Gerke of Samjack is extensive. Also, in my view, when considered in total the proposed undertakings and those that would be additionally required are of critical significance to the fundamental terms of the agreement in respect of which approval is sought.
[18] In my view, the sum of the written undertakings, both in terms of their significance and extent, as would be required in order to satisfy me that the employees whose employment would be covered by the Agreement would not be disadvantaged by comparison with the reference instrument, would result in substantial changes to the terms of the agreement.
[19] For all of the above reasons, I have decided not to accept the undertakings and not to approve the agreement.
COMMISSIONER
Appearances:
Ms Yvonne Gerke, for Samjack Pty Ltd
Hearing details:
2009
22 December
Melbourne
1 Item 2, Part 1, of Schedule 2.
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