Aus Iron Industries Pty Ltd
[2013] FWC 3954
•19 JUNE 2013
[2013] FWC 3954 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Aus Iron Industries Pty Ltd
(AG2013/6947)
Manufacturing and associated industries | |
COMMISSIONER RYAN | MELBOURNE, 19 JUNE 2013 |
Application for approval of the Aus Iron Industries Pty Ltd and Employees Enterprise Agreement 2013 - 2016.
[1] An application for approval of the Aus Iron Industries Pty Ltd and Employees Enterprise Agreement 2013 - 2016 was filed with the Commission on 12 June 2013. The application was accompanied by a Form F17, Employer’s Declaration in Support of Application for Approval of Enterprise Agreement sworn by Mr Matthew Meinhardt, Operations Manager for Aus Iron Industries Pty Ltd. The Form F17 identifies that bargaining commenced with the Applicant issuing a Notice of Employee Representational Rights (a Notice) to employees on 15 March 2013 in the following form:
“15th March 2013
Schedule 2.1 Notice of employee representational rights
(regulation 2.05)
Fair Work Act 2009, subsection 174 (6)
Aus Iron Industries Pty Ltd gives notice that it is bargaining in relation to an enterprise agreement (Aus Iron Industries Pty Ltd and Employees Enterprise Agreement 2013-2016) which is proposed to cover employees that are engaged in any of the occupations, industries or callings specified in and covered by the Award.
What is an enterprise agreement?
An enterprise agreement is an agreement between an employer and its employees that will be covered by the agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the agreement must be supported by a majority of the employees who cast a vote to approve the agreement and it must be approved by an independent authority, Fair Work Australia.
If you are an employee who would be covered by the proposed agreement:
You have the right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Australia about bargaining for the agreement.
You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.
If you are an employee covered by an individual agreement:
If you are currently covered by an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or a preserved individual State agreement, you may appoint a bargaining representative for the enterprise agreement if:
• the nominal expiry date of your existing agreement has passed; or
• a conditional termination of your existing agreement has been made (this is an agreement made between you and your employer providing that if the enterprise agreement is approved, it will apply to you and your individual agreement will terminate).
Questions?
If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to or contact the Fair Work Australia Help Line on 1300 799 675.”
[2] Amendments to the Fair Work Act which commenced on 1 January 2013 require clarified what must be in a Notice. S.174(1A0 is as follows:
“Notice requirements
(1A) The notice must:
(a) contain the content prescribed by the regulations; and
(b) not contain any other content; and
(c) be in the form prescribed by the regulations.”
[3] Schedule 2.1 of the Fair Work Regulations sets out the terms of a Notice as follows:
“Schedule 2.1 Notice of employee representational rights
(regulation 2.05)
Fair Work Act 2009, subsection 174 (6)
[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].
What is an enterprise agreement?
An enterprise agreement is an agreement between an employer and its employees that will be covered by the agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the agreement must be supported by a majority of the employees who cast a vote to approve the agreement and it must be approved by an independent authority, Fair Work Commission.
If you are an employee who would be covered by the proposed agreement:
You have the right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Commission about bargaining for the agreement.
You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.
[If the agreement is not an agreement for which a low-paid authorisation applies — include:]
If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.
[If a low-paid authorisation applies to the agreement — include:]
Fair Work Commission has granted a low-paid bargaining authorisation in relation to this agreement. This means the union that applied for the authorisation will be your bargaining representative for the agreement unless you appoint another person as your representative, or you revoke the union’s status as your representative, or you are a member of another union that also applied for the authorisation.
[if the employee is covered by an individual agreement-based transitional instrument — include:]
If you are an employee covered by an individual agreement:
If you are currently covered by an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or a preserved individual State agreement, you may appoint a bargaining representative for the enterprise agreement if:
● the nominal expiry date of your existing agreement has passed; or
● a conditional termination of your existing agreement has been made (this is an agreement made between you and your employer providing that if the enterprise agreement is approved, it will apply to you and your individual agreement will terminate).
Questions?
If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to or contact the Fair Work Commission Infoline on [insert number].”
[4] The Notice issued to employees in relation to this Agreement does not accord with the requirements of Schedule 2.1 of the Regulations and thus does not comply with the requirements of s.174(1A). In particular the Notice does not contain the paragraph which identifies the role of a union as a default bargaining representative for employees who are members of a union.
[5] Non compliance with s.174(1A) by the employer means that there is no valid enterprise agreement before me.
[6] The application in this matter is therefore dismissed.
Observations
[7] The following observations may assist the employer and employees to make an enterprise agreement that will be approvable by the Commission. These observations do not form part of the decision in this matter.
[8] Clause 3 of the Agreement incorporates the Manufacturing and Associated Industries and Occupations Award 2010 (the Award) into the Agreement and provides that “Where there is any inconsistency between substantive provisions of this Agreement on the one hand and the Award on the other, this Agreement shall prevail to the extent of the inconsistency.”
[9] Clause 19 contains the following provision:
“Ordinary Hours
(a) The ordinary hours of work shall be worked over 38 hrs per week Monday to Friday. The main imperative will be that the times to be worked shall be determined between the parties, taking into account customer requirements, the personal needs of employees and other issues that may be identified from time to time.”
[10] This provision is directly inconsistent with the provisions of the Award relating to ordinary hours of work and therefore this provision of the Agreement prevails over the terms of the incorporated Award.
[11] Whilst an employee will only be required to work 38 ordinary hours each week the effect of the provision would be that the those ordinary hours could be worked at any time between midnight Sunday through to midnight Friday. It is not clear that an employee would be better off overall if employed under the terms of this Agreement given this flexible approach to ordinary hours and the lack of some of the protections built into the Award.
[12] Clause 19 also contains the following provision in relation to overtime:
“Overtime is not a guaranteed right, persons falling under following may not be offered overtime.
• A person is away two or more days during Mon-Fri
• A person that does not work more than 4 hour's overtime during Monday to
Friday.
• A person that is absent on a Friday.”
[13] There is no equivalent restriction on the offering of overtime in the Award. It would appear that an employee who accessed their entitlements under the National Employment Standards to annual leave, personal/carers leave, compassionate leave or community service leave could then be denied an offer of overtime for having done so. It would appear that this provision in clause 19 may be an objectionable term as defined in s.12 of the Act.
[14] Clause 19 also contains the following provisions:
“Job Security
(d) To minimise the likelihood of retrenchments due to low product demand, and therefore provide for greater job security, working hours will be organised according to product demand with employees having input into how changes in manpower will take place with options for retraining and reassigmnent being exhausted before redundancies are considered.
(e) Subject to the incorporated provisions of the Award the Parties (via the Consultative Conm1ittee) may agree to an alternative arrangement in regard to Hours in general i.e. Spread of Hours, Hours worked over certain cycles, RDO's etc providing the business is not financially disadvantaged.”
[15] Whilst sub clause 19(e) refers to changes of hours of work by agreement it is not clear whether sub clause 19(e) qualifies sub clause 19(d) which appears to permit the organising of work hours without agreement. It is possible to read sub clause 19(d) as providing for a reduction in hours of work without agreement of employees. This clause raises potential BOOT issues which should be clarified.
[16] Clause 19 also contains the following provisions:
“Diligence to work
(f) All employees are to present themselves ready to commence work on time and will not depart from their allocated work prior to the official finishing time.
(g) Employees are to remain at their allocated work areas during working times and advise their supervisor if they are required to depart from that location.”
[17] There are no equivalent provisions in the Award. Both sub clauses 19(f) and (g) appear to require an employee to attend work before they are ready to commence work so that they commence work from their allotted start time and that they remain performing work until their allotted finishing time after which the employee may leave the work station and ready themselves to leave the workplace. The effect of these provisions is to deny the employee payment for the period that the employer requires them to be at the workplace. These provisions appear to operate to limit the period of payment to the time the employee is actually performing work. Necessary preparation time and necessary time spent packing up or cleaning up or putting things away at the end of work would be unpaid time. These two provisions raise real BOOT issues which the parties should consider before making any future application for approval of an enterprise agreement.
[18] Clause 19 also contains provisions relating to personal/carers leave and in particular contains a notice requirement in the following form:
“(e) The Employee is required to notify the Company prior to their scheduled starting time on any day that they are unable to attend for work. This needs to be direct contact with a Supervisor or Manager, Office or leaving a message on the Aus Iron Industries
Message Service. Office and Message Service contactable on (03) 9799 9922.
In the advent that the office is not contacted on the day of absence, payment of sick /
personal leave will be at the discretion of management.”
[19] Whilst s.107(5) of the Act permits enterprise agreements to include terms relating to the kind of evidence that an employee must provide to an employer there is no provision within s.107 which permits an enterprise agreement to contain a term which provides for notice requirements which are more onerous on an employee than the notice requirements of s.107(2) of the Act.
[20] Where an enterprise agreement seeks to replace the operation of s.107(2) of the Act with a more onerous notice requirement such a term of an enterprise agreement would appear to contravene s.55 of the Act and an enterprise agreement with such a term could not be approved by the Commission given the operation of s.186(2)(c) of the Act.
[21] Clause 25 of the Agreement is as follows:
“25.0 MEAL BREAKS
(a) An unpaid meal break of not less than30 minutes will be provided;
(b) The employees recognize the employer's need to have regard to operational factors in determining the timing of meal breaks.”
[22] Clause 25 of the Agreement is directly inconsistent with clause 38 of the Award. There is nothing in clause 25 of the Agreement which reflects the default position in clause 38 of the Award that an employee must not be required to work more than 5 hours without a meal break.
[23] Clause 29 of the Agreement refers to the entitlement to Compassionate Leave but does in language which does not reflect the NES entitlement to 2 days per occasion. It is possible that clause 29 could operate to misrepresent to employees their entitlements to compassionate leave under the NES.
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