Application for approval of the Lake Imaging Enterprise Agreement (Imaging Staff - Geelong) 2010

[2011] FWA 39

[2011] FWA 39

FAIR WORK AUSTRALIA

INTERIM DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Radploy Pty Ltd T/A Lake Imaging
(AG2010/14940)

LAKE IMAGING ENTERPRISE AGREEMENT (IMAGING STAFF - GEELONG) 2010

Health and welfare services
COMMISSIONER GOOLEY	MELBOURNE, 5 JANUARY 2011

Application for approval of the Lake Imaging Enterprise Agreement (Imaging Staff - Geelong) 2010.

[1] Radploy Pty Ltd trading as Lake Imaging (“Radploy”) lodged an application pursuant to section 185 of the Fair Work Act 2009 (“FW Act”) for approval of the Lake Imaging Enterprise Agreement (Imaging Staff-Geelong) 2010 (“the Agreement”) on 13 October 2010.

[2] On 22 October 2010 the Health Services Union (“the HSU”) lodged a notice for an employee organisation to be covered by an enterprise agreement and a declaration of an employee organisation in support of an application for approval of an enterprise agreement.

[3] The HSU declaration referred to item 2.15 of the Statutory Declaration filed by the Radploy where Radploy attested that the agreement did not contain any objectionable provisions.

[4] The HSU stated that the provisions in clause 22 of the Agreement for the employees to reimburse the employer or have monies withheld on termination of employment for expenses incurred by the employer for professional training and recruitment costs in certain circumstances, were not permitted deductions in accordance with section 326 of the FW Act and regulation 2.12 of the Fair Work Regulations 2009 (“the Regulations”).

[5] On 12 November 2010 I wrote to Radploy and advised as follows:

1. The definition of immediate family in clause 6 of the Agreement was not consistent with the definition of immediate family in the FW Act.

2. The Agreement at clauses 8 and 33 imposed additional obligations on employees not found in the modern award.

3. The shift penalty provisions were less than the modern award.

4. The provision permitting the cashing out of annual leave was inconsistent with the National Employment Standards (“the NES”).

5. The HSU considered clause 22 was not a permissible clause.

[6] The matter was listed for hearing on 6 December 2010.

[7] On 22 November 2010 Radploy responded to my correspondence.

[8] At the hearing, Mr Andrew Farr, a legal practitioner, appeared for Radploy with Mr Greg Hughes, a representative of Radploy. Ms Sandra Bonavia appeared for the HSU.

Submissions of Radploy

Clause 6 - immediate family

[9] Mr Farr indicated that Radploy was prepared to give undertakings about the definition of immediate family.

Clause 8 - professional indemnity insurance

[10] Mr Farr submitted that the Agreement covers employees who must be licensed to practice and it is a licensing requirement that employees carry professional indemnity insurance which is included as part of the cost of professional membership. He submitted that as no additional cost is imposed on employees the clause is neutral as far as the better off overall test (“the BOOT”) is concerned.

Clause 12 - shift penalties

[11] Mr Farr accepted that the shift penalties in the Agreement are below the modern award provisions but submitted a spreadsheet which showed that when the higher rates are taken into account no employee below level 12 is disadvantaged by the arrangement, even if the employee was permanently rostered on afternoon shift, which was not the usual practice. Mr Farr submitted that employees at level 12 and above do not work shift work. He advised that Radploy would provide an undertaking that a person engaged at level 12 or above will not be rostered for shift work during the life of the Agreement.

Clause 27(g) - cashing out of annual leave

[12] While Mr Farr submitted that this clause was not inconsistent with the NES, Radploy was prepared to give an undertaking that at all times annual leave may not be cashed out such that an employee’s annual leave balance falls below four weeks.

[13] Clause 22 provides as follows:

“TRAINING AND OTHER LIKE COSTS

(a) It is important to employees that they receive appropriate training from time to time to ensure that they maintain and expand their professional knowledge and skills (“Professional Training”). To this end, employees may be offered appropriate Professional Training opportunities from time to time as reasonably determined by the Employer.

(b) In addition, the employer may pay a recruitment fee or relocation costs on behalf of an employee as part of the employee’s recruitment to the Employer (“Recruitment Costs”). The Employer meeting these Recruitment Costs directly assists the employee to commence employment with the Employer and/or to relocate to take up a new employment opportunity with the Employer.

(c) Employees acknowledge and agree that:

(i) Professional Training provided by the Employer (whether internally or externally) or Recruitment Costs paid for by the Employer are beneficial to them personally;

(ii) there are significant direct and indirect costs to the Employer in providing Professional Training and in paying for the Recruitment Costs;

(iii) it is fair and reasonable that an Employee be required to reimburse the Employer for reasonable costs associated with providing Professional Training or paying for the Recruitment Costs if the Employee resigns after receiving the benefit of Professional Training provided by the Employer or where the Employer has paid Recruitment Costs on behalf of the Employee.

(d) The parties agree that the Employer may require an Employee to execute a Deed prior to the Employee receiving Professional Training or the Employer meeting Recruitment Costs which:

(iv) provides for reimbursement of these expenses by the Employee to the Employer if the employee resigns within the stipulated period of time ;

(v) provides that reimbursement must take place within the stipulated period of time; and

(vi) quantifies the cost of Professional Training or the Recruitment Costs.

(e) The stipulated period of time in the Deed must be reasonable in all the circumstances.

(f) The Employer may withhold any final monies or accrued entitlements owing to the Employee in full or partial payment of the amount to be reimbursed under (d) above.”

[14] Mr Farr submitted that the deed referred to in clause 22(d) does not form part of the Agreement and therefore there was no requirement that employees be provided with access to the deed during the access period.

[15] Mr Farr submitted that training costs and recruitment costs are matters that pertain to the relationship between the employer and the employees who will be covered by the Agreement. 1

[16] Mr Farr referred the Tribunal to McLennan v Surveillance Australia 2 and Regional Express Holdings Ltd v Clarke3 where it had been held that training bonds between employers and employees were unenforceable if inconsistent with an enterprise agreement or AWA.4

[17] Mr Farr submitted that the Agreement did not require the employee to enter into a deed. The Agreement merely facilitated the agreement of the employee to repay the training monies if the employee leaves his or her employment before an agreed period of time. 5

[18] Mr Farr submitted that such a provision pertains to the employment relationship. As such Mr Farr submitted that the Tribunal does not need to consider section 172(1)(c) though he submitted that the provisions are permissible because “the employees, by approving the agreement, have brought themselves squarely within section 172(1)(c) in the sense of deductions from wages for any purpose authorised by an employee who will be covered by the agreement.” 6

[19] Mr Farr submitted that similarly recruitment and relocation costs payable by the employer after the employee commences employment pertain to the employment relationship. Mr Farr submitted that it pertained because “it directly provides a tool that the organisation uses as part of its range of employment terms and conditions. So it creates the relationship; it is driven by the relationship. It’s not driven by the fact that these people are unrelated parties; it only arrives through the relationship of employer and employee and strikes at the heart of the matters pertaining.” 7

[20] Further Mr Farr submitted that Fair Work Australia did not need to be concerned with section 326 as that section only had effect if Radploy sought to make the deduction and not at the time of entering into the deed. 8

[21] Mr Farr submitted that Fair Work Australia could have regard to clause 22 in relation to the BOOT. 9 Mr Farr submitted that clause 22 does not disadvantage employees because the employer will not pay for the training if they cannot enforce a period of return.10

[22] I raised with Mr Farr that clause 22(d) appeared to provide that the employer could require an employee to execute the deed. Mr Farr submitted that the word ‘parties’ in clause 22(d) referred to the employer and the individual employees and that an employee could not be compelled to enter into a deed. Radploy have provided an undertaking to the effect that the parties in clause 22(d) of the Agreement are to mean the employer and the individual employee who would be party to the deed.

[23] I further suggested to Mr Farr that clause 22(f) offended section 324 of the FW Act unless the deed itself provided that the employee authorised the deduction. Mr Farr accepted that “the deed will have to bring itself within those terms.” 11

Clause 33 - secondary employment

[24] Mr Farr accepted that there is no provision in the modern award which prevents employees performing work covered by the Agreement with another employer without the consent of Radploy 12. He submitted that an employee is not permitted at common law to engage in such work13 and therefore the Agreement establishes a process for approval for secondary employment and is either a benefit to employees or a neutral effect for the purposes of the BOOT.

Submissions of the HSU

[25] The HSU supported the undertakings proposed by Radploy at the hearing 14.

[26] Ms Bonavia submitted that the effect of clause 22 was to incorporate a common law deed into the Agreement. Ms Bonavia submitted that such a clause is not a permitted matter because it does not pertain to the employment relationship and it provides for deductions which are unreasonable. 15

[27] The primary submission of Ms Bonavia was that clause 22 is not about a matter pertaining to the employment relationship. In respect of recruitment costs Ms Bonavia submitted that they relate “to the employer in its capacity of a consumer of recruitment services and it’s dependent on the terms of a commercial contract held by the employer with the recruitment agency to which the employee is not a party.” 16

[28] Further Ms Bonavia submitted that the deductions are unreasonable deductions and are therefore not permitted deductions in accordance with section 324(1) and (2) of the FW Act and regulation 2.12 of the Regulations.

[29] Ms Bonavia submitted that the deductions are not principally for the employee’s benefit as training is for the mutual benefit of both the employer and the employee. 17 Recruitment costs she submitted are for the employer’s benefit.18

[30] Ms Bonavia submitted that clause 22 imposed obligations on employees not found in collective agreements. She submitted that this went to the BOOT. 19

[31] Ms Bonavia submitted that employees were not made aware of the consequences of a breach of the deed and/or breach of the Agreement as the deed sits within the Agreement. 20

[32] Ms Bonavia submitted that the deductions are not for any of the purposes set out in regulation 2.12 of the Regulations. 21 Ms Bonavia submitted that therefore by virtue of section 326 of the FW Act clause 22 is of no effect.

The statutory context

[33] Section 172 of the FW Act provides for the making of enterprise agreements as follows:

“Enterprise agreements may be made about permitted matters

(1) An agreement (anenterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:

(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;

(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d) how the agreement will operate.”

[34] Sections 186 and 187 of the FW Act provide for Fair Work Australia to approve agreements if certain preconditions are met:

“186 When FWA must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(2) FWA must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and

(b) if the agreement is a multi-enterprise agreement:

(i) the agreement has been genuinely agreed to by each covered by the agreement; and

(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d) the agreement passes the better off overall test.

Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.

Note 2: FWA may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).

Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4) (b)).

Requirement that the group of employees covered by the agreement is fairly chosen

(3) FWA must be satisfied that the group of employees covered by the agreement was fairly chosen.

(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Requirement that there be no unlawful terms

(4) FWA must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).

Requirement that there be no designated outworker terms

(4A) FWA must be satisfied that the agreement does not include any designated outworker terms.

Requirement for a nominal expiry date etc.

(5) FWA must be satisfied that:

(a) the agreement specifies a date as its nominal expiry date; and

(b) the date will not be more than 4 years after the day on which FWA approves the agreement.

Requirement for a term about settling disputes

(6) FWA must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows FWA, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

Note 1: FWA or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).

Note 2: However, this does not prevent FWA from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).

187 When FWA must approve an enterprise agreement—additional requirements

Additional requirements

(1) This section sets out additional requirements that must be met before FWA approves an enterprise agreement under section 186.

Requirement that approval not be inconsistent with good faith bargaining etc.

(2) FWA must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.

Requirement relating to notice of variation of agreement

(3) If a bargaining representative is required to vary the agreement as referred to in subsection 184(2), FWA must be satisfied that the bargaining representative has complied with that subsection and subsection 184(3) (which deals with giving notice of the variation).

Requirements relating to particular kinds of employees

(4) FWA must be satisfied as referred to in any provisions of Subdivision E of this Division that apply in relation to the agreement.

Note: Subdivision E of this Division deals with approval requirements relating to particular kinds of employees.

Requirements relating to greenfields agreements

(5) If the agreement is a greenfields agreement, FWA must be satisfied that:

(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and

(b) it is in the public interest to approve the agreement.”

[35] Section 253 of the FW Act deals with the consequences if an agreement contains non permitted matters:

“253 Terms of an enterprise agreement that are of no effect

(1) A term of an enterprise agreement has no effect to the extent that:

(a) it is not a term about a permitted matter; or

(b) it is an unlawful term; or

(c) it is a designated outworker term.

Note 1: A term of an enterprise agreement has no effect to the extent that it contravenes section 55 (see section 56).

Note 2: A term of an enterprise agreement permitting or requiring deductions or payments to be made has no effect if it benefits the employer and is unreasonable in the circumstances (see section 326).

(2) However, if an enterprise agreement includes a term that has no effect because of subsection (1), or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement.”

[36] Sections 324 and 326 of the FW Act deal with deductions from wages:

“324 Permitted deductions

(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:

(a) the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or

(b) the deduction is authorised by the employee in accordance with an enterprise agreement; or

(c) the deduction is authorised by or under a modern award or an FWA order; or

(d) the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

Note 1: A deduction in accordance with a salary sacrifice or other arrangement, under which an employee chooses to:

(a) forgo an amount payable to the employee in relation to the performance of work; but

(b) receive some other form of benefit or remuneration;

will be permitted if it is made in accordance with this section and the other provisions of this Division.

Note 2: Certain terms of modern awards, enterprise agreements and contracts of employment relating to deductions have no effect (see section 326). A deduction made in accordance with such a term will not be authorised for the purposes of this section.

(2) An authorisation for the purposes of paragraph (1) (a):

(a) must specify the amount of the deduction; and

(b) may be withdrawn in writing by the employee at any time.

(3) Any variation in the amount of the deduction must be authorised in writing by the employee.

325 Unreasonable requirements to spend amount

(1) An employer must not directly or indirectly require an employee to spend any part of an amount payable to the employee in relation to the performance of work if the requirement is unreasonable in the circumstances.

Note: This subsection is a civil remedy provision (see Part 4-1).

(2) The regulations may prescribe circumstances in which a requirement referred to in subsection (1) is or is not reasonable.

326 Certain terms have no effect

Unreasonable payments and deductions for benefit of employer

(1) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:

(a) permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work; or

(b) requires, or has the effect of requiring, an employee to make a payment to an employer or another person;

if either of the following apply:

(c) the deduction or payment is:

(i) directly or indirectly for the benefit of the employer, or a party related to the employer; and

(ii) unreasonable in the circumstances;

(d) if the employee is under 18—the deduction or payment is not agreed to in writing by a parent or guardian of the employee.

(2) The regulations may prescribe circumstances in which a deduction or payment referred to in subsection (1) is or is not reasonable.

Unreasonable requirements to spend an amount

(3) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:

(a) permits, or has the effect of permitting, an employer to make a requirement that would contravene subsection 325(1); or

(b) directly or indirectly requires an employee to spend an amount, if the requirement would contravene subsection 325(1) if it had been made by an employer.”

[37] The Regulations provide what is a reasonable deduction for the purposes of section 326 of the FW Act:

“2.12 Certain terms have no effect — reasonable deductions

(1) For subsection 326 (2) of the Act, a circumstance in which a deduction mentioned in subsection 326 (1) of the Act is reasonable is that:

(a) the deduction is made in respect of the provision of goods or services:

(i) by an employer, or a party related to the employer; and

(ii) to an employee; and

(b) the goods or services are provided in the ordinary course of the business of the employer or related party; and

(c) the goods or services are provided to members of the general public on:

(i) the same terms and conditions as those on which the goods or services were provided to the employee; or

(ii) on terms and conditions that are not more favourable to the members of the general public.

Examples

1 A deduction of health insurance fees made by an employer that is a health fund.

2 A deduction for a loan repayment made by an employer that is a financial institution.

(2) For subsection 326(2) of the Act, a circumstance in which a deduction mentioned in subsection 326(1) of the Act is reasonable is that the deduction is for the purpose of recovering costs directly incurred by the employer as a result of the voluntary private use of particular property of the employer by an employee (whether authorised or not).

Examples of costs

1 The cost of items purchased on a corporate credit card for personal use by the employee.

2 The cost of personal calls on a company mobile phone.

3 The cost of petrol purchased for the private use of a company vehicle by the employee.”

Consideration

[38] Radploy have met all the procedural prerequisites for the approval of the Agreement.

Is the deed incorporated into the Agreement?

[39] I do not accept the submissions of the HSU that the deed is incorporated into the Agreement.

Is clause 22 about permitted matters?

[40] Section 172 of the FW Act provides that an agreement that is about permitted matters may be made in accordance with Part 2-4 of the FW Act.

[41] Clause 22 is the vehicle whereby the employee can require an employee to enter a deed to repay training costs and recruitment costs. It is also provides at clause 22(f) for deduction from monies payable to the employee.

[42] Mr Farr submitted that a clause which provides that the employer may require an employee to meet the costs of training in certain circumstances pertains to the relationship between the employer and employee. I accept that submission.

[43] However I do not accept that a clause which provides that the employer may require an employee to pay recruitment costs pertains to the relationship of employee and employer. Recruitment costs are not defined in the Agreement but Mr Farr submitted that they could include relocation costs and costs paid to recruitment agencies. He submitted that as these costs were only payable by the employer after the employment commenced they pertained to the employment relationship. He submitted that it pertained to the relationship of employer and employee “because that’s the only way that the relationship of these two people comes about.” 22

[44] I do not accept these submissions. Costs incurred by an employer prior to the employment payable to a recruitment agency albeit after employment do not pertain to the relationship between the employer and employee. They pertain to the relationship between the employer and the recruitment agency. To the extent that clause 22 deals with recruitment costs I find that it is not a permitted clause.

[45] Clause 22(f) provides for deductions from monies payable to the employee without their consent. I do not accept Mr Farr’s submission that employees by approving the agreement have brought themselves within section 172(1)(c) of the FW Act. The words “authorised by an employee” in that section would have been unnecessary if the very act of approving the agreement constituted authorisation. Section 172(1)(c) provides that deductions authorised by an employee are permitted terms and therefore a term of an agreement which allowed for deductions without an individual employee’s approval would not be a permitted term. As such I find that clause 22(f) is not a permitted term.

[46] The parties did not make any submissions about the consequences of a finding that the Agreement contains non permitted matters. While section 253 of the FW Act, which provides that the inclusion of a non permitted term in an agreement does not prevent the agreement from being an enterprise agreement, puts beyond doubt the validity of an agreement which contains non permitted terms, it is not clear whether Fair Work Australia should disregard the inclusion of a non permitted term when approving an agreement.

Does clause 22 offend section 324 or section 326 of the FW Act?

[47] I do not accept the submissions of Radploy that clause 22 of the Agreement is consistent with section 324 of the FW Act. Section 324 treats deductions from award entitlements differently to deductions from agreement entitlements. Deductions may be made from an amount payable under section 323 if it is authorised by or under a modern award. However a deduction from an amount payable under section 323 may only be made if it is authorised by the employee in accordance with the enterprise agreement. So in addition to the enterprise agreement permitting the deduction, the individual employee must authorise the deduction and this authorisation does not arise simply from the approval of the Agreement.

[48] I therefore consider that clause 22, to the extent that it permits the deduction of monies without the individual employee’s authorisation, is unenforceable.

[49] I also do not accept that clause 22 is consistent with section 326 of the FW Act. I accept the HSU submissions that payments by employees to an employer for recruitment costs incurred by the employer are directly for the benefit of the employer and are not reasonable in the circumstances. I therefore consider that clause 22, to the extent that it permits the employer to deduct monies from the employee for recruitment costs, is unenforceable.

[50] Fair Work Australia is not required, as part of the approval process, to determine if terms of an agreement offend sections 324 or 326 of the FW Act. It is not necessary for the approval process for Fair Work Australia to determine if clause 22 is or is not enforceable. Even if it is not, Fair Work Australia is not entitled on that basis to decline to approve the agreement.

The BOOT

[51] In deciding whether to approve the Agreement Fair Work Australia must be satisfied that the Agreement would result in each employee being better off under the Agreement then she or he would be under the relevant modern award.

[52] Radploy has provided undertakings that address some concerns raised by the Fair Work Australia.

[53] The Agreement provides for both less beneficial conditions and more beneficial conditions than the Health Professionals and Support Services Award 2010 (“the Award”) 23.

[54] Radploy does not consider that clause 22 has a negative effect on employees. Radploy submitted that employees are not compelled to enter into a deed. Further, Radploy considers that clause 22 is a positive benefit for employees because Radploy will not invest in training if it cannot enforce a period of return on that investment.

[55] Clause 22(d) as it is currently worded, taking account of the proposed undertaking, provides that the employee may be required to execute a deed. The undertaking proposed by Radploy would make the clause read as follows:

The Employer and the individual Employee agree that the Employer may require an Employee to execute a Deed prior to the Employee receiving Professional Training or the Employer meeting Recruitment costs which:

(iv) provides for reimbursement of these expenses by the Employee to the Employer if the employee resigns within the stipulated period of time;

(v) provides that reimbursement must take place within the stipulated period of time; and

(vi) quantifies the cost of Professional Training or the Recruitment Costs.

[56] I assume for the purpose of the BOOT that clause 22 is a permitted term and that any deduction is enforceable.

[57] Mr Farr submitted that an employee cannot be compelled to enter the deed. 24

[58] Clause 22 uses the word ‘require’. The definition of ‘require’ in the Macquarie dictionary is relevantly as follows:

“to call on authoritatively, order, or enjoin (a person, etc.) to do something.”

[59] On my reading clause 22 provides that Radploy can compel an employee to enter the deed.

[60] Clause 22 imposes obligations on the employees not found in the Award. The Award does not provide for an employee to meet any of the costs provided for in clause 22.

[61] Further the Award provides at clause 11 that an employee can terminate his or her employment by giving a period of notice based on the employee’s years of service. If the employee fails to give notice the employer may withhold “an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by this clause less any period of notice actually given by the employee.” 25

[62] Under clause 22(f) of the Agreement the employer may withhold an amount of monies from any final monies or accrued entitlements owing to the Employee in full or partial payment of the amount to be reimbursed under the deed.

[63] While Mr Farr submitted that the clause was intended to re-coop the costs to the employer in circumstances where the employer had made a substantial investment 26 and the employee resigns, the Agreement does not limit in any way what training and recruitment costs are covered by clause 22. Nor does it limit the costs for both training and recruitment that may be recovered as clause 22(c) (ii) refers to both direct and indirect costs.

[64] Mr Farr submitted that the costs of training could be substantial. 27 Recruitment costs, he submitted, could also be substantial.28

[65] An employee may resign their employment for a range of reasons. Under the Award an employee who resigns their employment, provided they give the requisite notice, suffers no financial impost.

[66] Therefore the potential impost of clause 22 is a significant matter in determining if the Agreement passes the BOOT.

[67] While it is not possible to accurately estimate the costs that may be recoverable from employees, the following calculations show the potential impact on the employees.

[68] The Agreement provides for an employee to be paid between $114.54 and $382.20 per week more than the rate in the Award. Mr Farr submitted that recruitment costs could be as high as $15,000 - $20,000 29. Taking $15,000 as the costs, an employee who left their employment before 130 weeks in the case of someone earning $114.54 over the Award or before 39 weeks in the case of someone earning $382.20 over the Award who was required to repay the recruitment costs would be worse off under the Agreement compared with the Award.

[69] This impost is higher if, as was submitted by Mr Farr, training costs can be as high as $40,000. 30

[70] Clause 33 imposes obligations on employees not found in the Award. I do not accept Mr Farr’s submissions that an employee who performs work covered by the Agreement for another employer breaches their common law obligations to Radploy. The imposition of a restraint of trade on employees via a collective agreement is a matter to be considered in assessing whether the Agreement pass the BOOT. The inclusion of such a provision in an enterprise agreement imposes on existing employees and future employees an obligation not imposed at common law and potentially exposes employees to civil penalties if she or he breaches the provision.

[71] Despite the substantial increases provided for in the Agreement and the other benefits afforded employees under the Agreement, taking into account clause 22 and the other less beneficial provisions in the Agreement, I am unable to be satisfied that the Agreement provides that each award covered employee and each prospective award covered employee would be better off if the Agreement applied to the employee than if the Award applied to the employee.

[72] However before dismissing the application I consider it appropriate to provide Radploy with an opportunity to put forward any further undertakings it may wish the Tribunal to consider. If the Applicant does not wish to do so I will dismiss the application. If the Applicant wishes to provide further undertakings I will seek the advice of the HSU about the undertakings prior to determining if the undertakings meet my concerns. Undertakings should be provided in writing within 21 days of the date of this decision. Should any undertakings resolve the issue about the BOOT but leave unresolved the issue of permitted terms I would ask the parties to address me on whether the inclusion of non permitted terms in the Agreement is a barrier to its approval.

COMMISSIONER

 1 See section 172 (1)(a)

 2 [2005] FCAFC 46

 3 [2007] FCA 957

 4   Transcript PN 77

 5   Ibid PN 80

 6   Ibid PN 76

 7   Ibid PN 86

 8   Ibid PN 90

 9   Ibid PN 94

 10   Ibid PN 99

 11   Ibid PN 123

 12   Ibid PN 127

 13   Letter to Fair Work Australia 22/11/2010

 14   Transcript PN 37

 15   Ibid PN 39

 16   Ibid PN 50

 17   Ibid PN 53

 18   Ibid PN 54

 19   Ibid PN 55

 20   Ibid PN 58

 21   Ibid PN 59

 22   Transcript PN 149

 23   Statutory Declaration of June Cherry at 3.4

 24   Transcript PN 117-118 and 154

 25   MA000027

 26   Transcript PN 101

 27   Ibid PN 100

 28   Ibid PN 145

 29   ibid

 30   Ibid PN 100

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