Armest Pty Ltd T/A Miles Witt Partnership

[2020] FWC 3944

[2020] FWC 3944

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Armest Pty Ltd T/A Miles Witt Partnership
(AG2019/3910)

DEPUTY PRESIDENT ASBURY BRISBANE, 28 JULY 2020

Application for approval of the Good Shepherd Home Enterprise Agreement 2019.

Background

[1] This decision relates to an application by Armest Pty Ltd T/A Miles Witt Partnership (the Applicant) to the Fair Work Commission (the Commission) for approval of an enterprise agreement known as The Good Shepherd Home Enterprise Agreement 2019 (the Agreement). The Employer to be covered by the Agreement is The Good Shepherd Limited as Trustee for the Good Shepherd Nursing Homes Charitable Trust T/A The Good Shepherd Home (the Employer). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

[2] The Australian Nursing and Midwifery Federation (ANMF) lodged a form F18 declaration in relation to the application in which it declared that it did not support the approval of the Agreement and contended that it did not pass the better off overall test (BOOT) as required by s. 186(2)(d).

[3] In a Decision issued on 24 December 2019, 1 I approved the Agreement and accepted undertakings from the Employer which had been provided to the ANMF in correspondence from the Employer sent on 26 November 2019. On appeal by the ANMF, a Full Bench of the Commission quashed the decision and remitted it to me to deal with, consistent with the reasons of the Full Bench in the appeal. In summary, the Full Bench found that I failed to provide reasons for rejecting the BOOT concerns raised by the ANMF in its Form F18 and that I did not seek the views of the ANMF as a bargaining representative, in relation to undertakings I accepted in relation to the approval.2

[4] The ANMF did not seek to be heard in relation to my original approval of the Agreement and has not communicated a request to be heard in relation to the remittal of the Agreement to me to deal with in accordance with the reasons of the Full Bench. When I approved the Agreement on 24 December 2019, I was of the view that it passed the BOOT notwithstanding the issues raised by the ANMF in its Form F18. I was also of the view that undertakings offered by the Employer rectified BOOT concerns which I held. I continue to maintain my view in this regard and herewith provide my reasons for having reached this view.

BOOT issues

[5] The reference instruments for the purposes of the BOOT are the Nurses Award 2010 and the Aged Care Award 2010. In correspondence sent to the Applicant and copied to the bargaining representatives, I raised the following concerns in relation to pre-approval requirements, the operation of certain clauses and whether the Agreement passed BOOT, which are summarised as follows:

•  The Form F17 did not provide sufficient information in response to questions 2.7 and 2.8 with respect to information sessions for the purpose of explaining the terms of the Agreement and their effect, and further information was sought;

•  The definition of “shift worker” in the Agreement, appeared to place additional requirements on shift workers than those contained in the Awards;

•  The wage for Trainees under the Agreement is set in accordance with the National Training Wage Schedule so that trainees are not better off overall under the Agreement; and

•  Part-time employees working overtime under the Agreement are entitled to overtime for hours in excess of the rostered daily ordinary full-time hours compared to hours in excess of agreed hours as provided in the Aged Care Award 2010 with the result that employees classified at Environmental Level 1.1 under the Agreement receiving the smallest increase, will be worse off in certain circumstances.

[6] On 29 November 2019 the Australian Nursing and Midwifery Federation (ANMF) filed a Form F18 statutory declaration stating that it objected to the approval of the Agreement. In summary, the ANMF contended the Agreement did not pass the Better Off Overall Test (BOOT) on the basis that the Agreement contained the following detriments compared to the Nurses Awardwhich were said to outweigh any more beneficial terms in the Agreement. As noted by the Full Bench in the Appeal, some of the matters raised by the ANMF are relevant to whether the Agreement contravenes s. 55 which deals with the interaction between the Agreement and the NES:

1. The Agreement provides for fixed-term employment whereas the Award does not;

2. Part-time employees are, under the Agreement, required to be available across all shifts, whereas under the Award part-time employees have fixed hours and a fixed roster agreed at the outset of their employment;

3. The Agreement provides that the casual loading does not compound on penalty rates, whereas it does under the Award in respect of weekend, public holiday and overtime penalty rates;

4. The Agreement disentitles employees from being paid at the pay point which reflects their experience if they do not provide evidence of their previous experience within four weeks of commencing employment;

5. The Agreement provides that ordinary hours may be averaged over an unspecified period, meaning there is no effective maximum limit on ordinary hours;

6. The Award provides that weekend penalty rates are calculated on the employee’s ordinary wage inclusive of allowances and loadings, whereas the Agreement provides that they are calculated on the base rate only;

7. The Agreement does not contain the requirement in the Award that meal breaks must be taken between the fourth and sixth hour after beginning work where reasonably practicable;

8. Employees who are regularly rostered over seven days of the week (and who therefore also regularly work on weekends), but who do not work a combination of day, afternoon and night shifts over more than 2 roster periods, are entitled to one week less of annual leave under the Agreement than under the Award;

9. The Agreement requires that four weeks’ notice of the taking of annual leave be given by the employee except where otherwise agreed, but the Award does not contain this requirement;

10. The Agreement does not require part-time employees to be paid for all ordinary hours not worked on a public holiday, contrary to the NES;

11. The Agreement contains requirements for the provision of a medical certificate or a statutory declaration in certain circumstances in order to access personal leave entitlements which are inconsistent with the NES requirement for the provision of “evidence that would satisfy a reasonable person of an illness or injury etc”;

12. The Agreement requires attendance at training at hours outside the employee’s rostered ordinary hours, with a threat of disciplinary action in cases of non-attendance;

13. Under the Agreement, there is an implied term that an employee with less than six months’ service is liable for the cost of Police checks;

14. Employees may be required to attend wing meetings and meetings of all nurses outside of their rostered ordinary hours; and

15. Trainees may be employed in accordance with the National Training Wage Schedule, and are therefore not better off in their wage rate overall than under the Award, which does not contain a National Training Wage Schedule.

[7] The Australian Workers’ Union filed a Form F18 statutory declaration stating that it supported approval of the Agreement at the time the Agreement was lodged for approval.

[8] The Employer provided a response to the concerns raised and in doing so offered undertakings to the following effect:

•  the Agreement’s wage increases would be paid to Trainees employed under Agreement clause 51 on top of the wage rates applicable under the National Training Wage Schedule at any time during the life of the Agreement; and

•  the classification position for which rates of pay are listed in Schedule A for Environmental Services Level 1.1 would have no effect and that the rates of pay for Level 1.2 would be the minimum applicable to Environmental Services employees at Level 1.

[9] Further information was also provided by the Employer in relation to the explanation of the terms of the Agreement.

Consideration

[10] At the outset, it is relevant to note that the wage rates in the Agreement exceed those in the relevant Awards by a range from 30.75% to 6.24%. In relation to classifications of employees who would otherwise be covered by the Aged Care Award the range by which wage rates in the Agreement exceed those in the Award is 6.24% to 20.90% and for classifications of employees who would otherwise by covered by the Nurses Award, the range is 9.64% to 30.75%. Further, clause 6 of the Agreement provides as follows:

“6. This Agreement and the NES

The NES and this Agreement contain the minimum conditions of employment for employees covered by this Agreement. This Agreement will be read and interpreted in conjunction with the NES. Where there is inconsistency between this Agreement and the NES, and the NES provides the greater benefit, the NES provision will apply to the extent of the inconsistency.”

[11] In relation to the matters raised by the Commission, the Employer provided responses and/or offered undertakings as follows. With respect to annual leave, entitlements in the Aged Care Award are the same as the NES – four weeks of paid annual leave and five weeks for shift workers. The Agreement provides that all workers who would otherwise be employed under the Aged Care Award are entitled to five weeks of paid annual leave. Employees covered by the Nurses Award have a different entitlement to annual leave and are entitled to five weeks annual leave or six weeks for a shift worker. This is an additional period of 1 week for each category of employee when compared with the entitlement under the NES.

[12] The Employer conceded that there may be employees who would qualify under the Nurses Award for a sixth week of annual leave but who would not qualify under the definition of shift worker in the Agreement. The Employer submitted that the Agreement provided that nursing employees are paid between 9.6% and 30% above the comparative rates in the Award and that an additional week of paid leave has a wage equivalent of 1.92%. The employer also submitted that this compensates employees for the fact that they may not be entitled to the sixth week of annual leave. The Employer also pointed to other Agreements with the same shift worker definition which have been approved by the Commission. I accept the employer’s submission in relation to this matter and that any detriment to employees is offset by the higher wage rates in the Agreement. I am also of the view that this is not a term that conflicts with the NES on the basis that the NES provides a fifth week of annual leave for shift workers and the sixth week is an Award rather than an NES entitlement for employees covered by the Nurses Award.

[13] In relation to trainees, the Employer advised that it intended to apply wage increases under the Agreement to the Trainee Rates and provided an undertaking in this regard. In response to the issue with respect to part-time employees and overtime for Environmental employees classified at Level 1.1, the Employer advised that it had determined not to apply the rate for Level 1.1 with the result that the minimum rate for such employees would be the Level 1.2 rate. An undertaking in this regard was also offered.

[14] In relation to the matters raised by the ANMF, my reasons for rejecting the contention that they cause the Agreement to fail the BOOT are as follows. In relation to issue 1, the fact that an award does not provide for fixed term employment is not an impediment to an employer offering an employment contract on that basis to an employee. I do not accept, as submitted by the ANMF, that as a general proposition, fixed term employment is less beneficial to employees. The fact that an enterprise agreement allows for employment to be offered and accepted on a fixed term basis, with all of the conditions of the agreement applying to such employment, is not a detriment for BOOT purposes. I do not consider this matter relevant to whether the Agreement passes the BOOT.

[15] In relation to issue 2 the ANMF points to clause 10.1 of the Agreement which states inter alia that at the time of engagement the employer will inform employees whether they are engaged on a full-time, part-time or casual basis, and that they may be required to be available across all shifts. The ANMF asserts that this provision is detrimental to part-time employees who are required by the terms of the Nurses Award to have fixed hours and a fixed roster at the outset of their employment. In my view, clause 10.3 of the Agreement contains such provisions which are equivalent to those in the Nurses Award with respect to part-time employees including that the guaranteed minimum number of hours and the rostering arrangements for part-time employees are required to be agreed in writing. The only provision in the Agreement allowing for a change to such agreed hours for part-time employees is in clause 10.3(f) and that provision is formulated such that any change to those hours is initiated by the employee. The general term in clause 10.1 does not over-ride the specific terms in 10.3. I do not accept that the terms of clause 10.1 allow the employer to “dictate the roster” of a part-time employee when considered in light of clause 10.3. This issue does not cause the Agreement to fail the BOOT and is in fact, not an issue of concern.

[16] Issue 3 concerns the calculation of casual rates. In this regard, the ANMF points to a decision of a Full Bench of the Commission in ANMF v Domain Aged Care (Qld) Pty Ltd t/a Opal Aged Care 3which held that for casual employees under the Nurses Award, weekend penalties are calculated based on the ordinary rate, inclusive of casual loading. The ANMF contends that the Agreement in the present case does not pass the BOOT, because it does not provide for casual loadings to be treated in this manner.

[17] This argument is misconceived. The fact that an enterprise agreement provides for a different method of calculating a particular rate or monetary amount than an award, does not, of itself, result in a detriment for employees under the agreement. A method of calculation leads to an amount which an employee is entitled to be paid for working particular hours on particular days or at particular times. Provided that an amount calculated under an enterprise agreement exceeds the amount for working the same hours under an award (notwithstanding that the award provides for a different method of calculation) this will not be a matter that is a detriment for the purposes of assessing whether an agreement passes the BOOT.

[18] In the present case, the base rates in the Agreement for all classifications exceed those in the Nurses Award. The weekend rates for casual employees calculated in the manner provided for in the Agreement, exceed the rates for casual employees calculated in the manner provided for in the Award, and there is no detriment for the purposes of the BOOT.

[19] In relation to issue 4, I do not accept that it is detrimental to employees to be required to provide evidence of their previous experience to the employer within four weeks of commencing employment for the purposes of being entitled to a pay point which reflects the experience they claim to have. The fact that such a provision is not contained in the Nurses
Award is not of itself a detriment but rather a condition that the employer has placed on the payment of higher rates of pay to employees, which is offset by those higher rates.

[20] In relation to issue 5, the ANMF’s assertion that the Agreement provides for ordinary hours to be averaged over an unspecified period and therefore has no effective maximum limit on ordinary hours, is incorrect. Clause 20.1 of the Agreement provides that the ordinary hours for full time employees will be an average of 76 per fortnight. By definition, the averaging period is a fortnight. For the reasons set out above in relation to issue 3, issue 6 which concerns the method of calculating weekend penalty rates, does not result in detriment to employees.

[21] Issue 7 relates to the Agreement not containing a requirement that meal breaks must be taken between the fourth and sixth hours after beginning work, where reasonably practicable as per clause 27.1 of the Nurses Award. In relation to this issue, the Award does not provide an absolute right to a meal break at a specified time, but only where reasonably practicable. In my view, when the benefits in the Agreement are considered, particularly the wages rates which exceed those in the Nurses Award, this is not a matter that causes the Agreement to fail the BOOT. Issue 8 relates to annual leave, and for reasons set out above, I accept the submissions of the Employer and that this does not cause the Agreement to fail the BOOT.

[22] In relation to issue 9, I do not accept the fact that the Award is silent and therefore does not prohibit employees from requesting annual leave with less than four weeks’ notice, and the Agreement provides that unless otherwise agreed between the employer and the employee, four weeks’ notice will be given by employees requesting leave, is a detriment or relevant to whether the Agreement passes the BOOT. The Award does not provide that an employer must approve leave and by virtue of s.87 of the Act, leave is to be taken for a period agreed between the employer and the employee and that agreement must not be unreasonably refused by the employer. Clause 6 of the Agreement provides that where the Agreement is inconsistent with the NES the NES applies to the extent of the inconsistency. Further, the Agreement contains a dispute resolution provision. In my view these provisions adequately protect employees from unreasonable refusal on the part of the Employer to the taking of leave. Accordingly, this provision is not a detriment to employees for the purposes of assessing the BOOT.

[23] In relation to issue 10, clause 6 of the Agreement applies to the extent that such a provision could result in a part-time employee not being paid in accordance with the NES for hours not worked on a public holiday. In relation to issue 11, the requirements in the Agreement for the provision of a medical certificate or statutory declaration to support a claim for personal leave, apply only in circumstances where employees seek to access such leave on public holidays where they are required to work or on the day immediately before or after absences on annual leave. I do not accept that such requirements are unreasonable and they do not result in a detriment for the purposes of the BOOT. Further, to the extent that such a requirement may, in particular circumstances, result in an employee not being able to access an entitlement to personal leave as provided in the NES, clause 6 of the Agreement would operate.

[24] Issue 12 is said by the ANMF to arise from clause 46 of the Agreement which deals with in-service training. That clause provides that where possible, employees will attend training identified as mandatory by the Employer, within their rostered shifts. The clause also provides that where an employee repeatedly, and without reasonable cause, absents themselves form such training, the employer may take appropriate disciplinary action. The ANMF asserts that this clause could be used to compel part-time employees to attend “mandatory training” outside their rostered shifts in breach of other provisions of the Agreement in relation to part-time work and make part-time employees subject to disciplinary action for non-attendance.

[25] I do not accept that clause 46 could be applied in such a manner to part-time employees. If training is mandatory then attendance at such training is work. The clause, on its face, does not allow an employee to be directed to attend training outside ordinary hours and if it was applied in such a manner, could be the subject of a dispute under the dispute settlement procedure. The clause is not a detriment for the purposes of the BOOT simply because there is a possibility that it will be misapplied.

[26] Issue 13 relates to clause 48 of the Agreement which is in the following terms:

“48. Police checks payment by the employer

The employer will meet the cost of 3 yearly renewals of police checks for employees with more than 6 months continuous service. However, employees are responsible for making renewal applications in a timely manner.”

[27] With respect to this clause, the ANMF contends that it contains an implied term that an employee with less than 6 months service is liable for the cost of a Police Check, whereas no employee to whom the Nurses Award applies is liable for the cost of Policy checks. The Award is silent in relation to this issue. The Agreement does not provide that the employer can deduct from an employee’s wages in relation to the cost of a Police check and the provisions of the Act in Part 2-9 of Chapter 2 in relation to permitted deductions from wages and unreasonable requirements to spend or pay an amount, provide protection for employees in this regard. I do not accept that there is such an implication and if there is, the legislative provisions apply.

[28] In relation to issue 14, the Agreement does not specifically provide that all meetings referred to in clause 49 are to be attended in paid time. However, the clause does provide that the duration of meetings will be no longer than one hour and the numbers of meetings which must be attended are higher for registered nurses (50% of meetings) than for care staff and hotel services staff (one meeting per quarter). To the extent that meetings may be held in outside of an employee’s rostered hours, I am satisfied that the amounts by which the Agreement rates exceed those in the relevant Awards, compensate employees for such attendance so that no detriment arises. In this regard I note that Registered Nurses who are required to attend more meetings than other staff, are paid rates under the Agreement which exceed those in the Nurses Award, by greater margins than the margins by which rates for other classifications exceed Award rates.

[29] Issue 15 raised by the ANMF in relation to rates for trainees, is the same issue that was raised in my correspondence to the employer and has been addressed by the undertaking offered.

Conclusion

[30] The undertakings offered by the Employer address the concerns raised in my correspondence in relation to the rates for trainees and part time employees engaged in classification Environmental Level 1.1. I accept that the explanation provided the employer in relation to the annual leave entitlement for shift workers addresses my concern in this regard. For the reasons set out above, I do not accept that the issues raised by the ANMF cause the Agreement to fail the BOOT.

[31] I note that the correspondence from the employer setting out its proposed undertakings was sent to the ANMF. The ANMF and the AWU as bargaining representatives for the Agreement are invited to provide their views in relation to the undertakings by 4.00 pm on Friday 31 July 2020. Absent any views to the contrary from the ANMF or the AWU, I intend to accept the undertakings and approve the Agreement.

DEPUTY PRESIDENT

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 1   [2019] FWCA 8733.

 2   [2020] FWCFB 2045.

 3   C2018/7345.