Applications by Patterson Enterprises Pty Ltd - [2023] FWCFB 129

[2023] FWCFB 129

FAIR WORK COMMISSION

DECISION

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009

Sch. 3, Item 20A(4)—Application to extend default period for agreement-based transitional instruments

Applications by Patterson Enterprises Pty Ltd

(AG2023/1163 and AG2023/1164)

JUSTICE HATCHER, PRESIDENT

DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS

DEPUTY PRESIDENT SLEVIN

SYDNEY, 26 JULY 2023

Applications to extend the default period for the Patterson Enterprises Pty Ltd Trades Employees (Tradesperson) Collective Agreement and the Patterson Enterprises Pty Ltd Employee Collective Agreement.

Patterson Enterprises Pty Ltd (Patterson Enterprises) has made two applications pursuant to the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth) (Transitional Act) to extend the default period for the Patterson Enterprises Pty Ltd Trades Employees (Tradesperson) Collective Agreement (Trades Agreement) and the Patterson Enterprises Pty Ltd Employee Collective Agreement (Non-Trades Agreement) (together, the Agreements) for a period of four years. The applications, as filed on 21 April 2023, indicated that they were made pursuant to item 30(4) of Sch 7 to the Transitional Act. However, the two agreements the subject of the applications are agreement-based transitional instruments to which Sch 3 to the Transitional Act applies, since they were made as collective workplace agreements under the Workplace Relations Act 1996 (Cth). Accordingly, the applications should have been made pursuant to item 20A(4) of Sch 3 to the Transitional Act. We will allow a correction of the applications pursuant to s 586 of the Fair Work Act 2009 (Cth) (FW Act) to ensure that they are considered under the correct provision.

Item 20A of Sch 3 to the Transitional Act provides for the automatic sunsetting of agreement-based transitional instruments by the end of the default period on 6 December 2023, subject to the capacity to apply to the Commission for an extension of the default period for up to four years in prescribed circumstances. The main features of item 20A of Sch 3, and principles concerning its proper construction and application, are described in detail in the Full Bench decision in Suncoast Scaffold Pty Ltd[1] (Suncoast), and we rely upon, without repeating, what is said in that decision.

The sole ground of the applications is that employees covered by the Agreements will continue to be better off overall if the two Agreements continue to operate. One of the bases for extending the default period under subitems 20A(6)(a) and (9) of Sch 3 is that the Commission is satisfied that the employees covered by a collective agreement-based transitional instrument would be better off overall if the instrument applied to the employees instead of the relevant modern award, and it is otherwise appropriate to do so. The applicable modern award is the Mining Industry Award 2020 (Award).

In Suncoast[2] the Full Bench described the better off overall criterion as follows:

[15] The requirement for the better off overall criterion in subitem 9(b) to be assessed by reference to the award covered employees ‘viewed as a group’ appears to allow for the possibility that the criterion may be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Applications by Patterson Enterprises Pty Ltd [2023] FWCFB 129
Case: [2023] FWCFB 129
Decision Date: 26 JULY 2023

CaseChat Overview and Summary

Patterson Enterprises Pty Ltd applied for extensions to the default periods under the Fair Work Act 2009 (FW Act) for two agreements concerning their employees. The dispute was heard by the Fair Work Commission. The central issue was whether the employees would be better off overall under the agreements compared to the applicable award. The Commission needed to determine if the employees would benefit more under the agreements in terms of pay and conditions than under the award.

The Commission examined the agreements, considering the loaded rates for casual employees, which made it challenging for them to meet the better off overall test. The Commission conducted modelling based on information provided by the employer and concluded that employees were worse off under the agreements due to lost overtime payments. The employer did not contest the accuracy of the modelling but did not provide alternative submissions. Based on the modelling, the Commission found that the employees were unlikely to be better off overall under the agreements.

The Commission concluded that the first condition for extending the default period was not satisfied for either agreement. As a result, the applications for extensions were dismissed. The Commission did not need to consider the other conditions for extending the default period.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

As the Agreements provide for loaded rates for casual employees, the observations made by the Full Bench in the Loaded Rates Agreements[3] decision are relevant. In that decision the Full Bench observed, at [121], that it will be difficult for casual employees with loaded rates to pass the better off overall test in s 193 of the FW Act, because ‘it would always be possible for the casual employee, in a given pay period, to be engaged to work on a day or at a time which would attract the payment of penalty rates under the relevant award and not to be engaged on any other hours or at any other times’. Even though, as the Full Bench observed in Suncoast, the better off overall test in item 20A of Sch 3 to the Transitional Act appears to be less stringent than the test in s 193 of the FW Act,[4] we consider the Full Bench’s observation in Loaded Rates Agreements assists in the broad evaluative judgment required under item 20A in this case. With Mr Patterson’s consent, the Commission’s staff undertook modelling, based on information he provided about the way his employees work, comparing employees’ pay and other entitlements under each of the Agreements compared to under the Award. This modelling concluded, taking into account the overtime penalty rates payable under the Award, that employees were worse off under the Trades Agreement. This was so because even though the hourly rate in the Trades Agreement was higher than the Award hourly rate, the difference was insufficient to compensate for lost overtime payments. This was the case for employees working 12-hour shifts only on weekdays and was even more the case for employees working on weekends. The situation under the Non-Trades Agreement was starker as the hourly rates in this agreement were less than the rates in the Award. The modelling showed that employees were not better off under the Agreements. Mr Patterson was given an opportunity to consider the modelling and make submissions in response. Whilst he initially raised issues with the analysis he did not make submissions that the analysis was wrong or should not be relied upon. For the purpose of subitem 9(b) of item 20A of Sch 3 we are of the view, based on the Commission’s modelling, that it is unlikely,as at the time the applications were made, that the Award-covered employees who are covered by the Agreements, viewed as a group in respect of each of the Agreements, would be better off overall under the Agreements than if the Award applied. Consequently, we have concluded that the first condition of subitem 6(a) is not satisfied in relation to either the Trades Agreement or the Non-Trades Agreement, and we are not required to grant any extensions to the default period. The applications are therefore dismissed.

Ratio Decidendi

Legal Principle Established

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