[2018] FWC 812

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Ausdrill Limited
(AG2017/3933)

Coal industry
DEPUTY PRESIDENT MASSON	MELBOURNE, 6 FEBRUARY 2018

Application for approval of the Ausdrill Limited Mining Enterprise Agreement 2017.

[1] An application has been made for approval of the Ausdrill Limited Mining Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Ausdrill Limited (the Applicant). The Agreement is a single enterprise agreement.

[2] A notice of employee representational rights was provided to employees on 10 May 2017¹ and the notice complied with the regulations.² Employees were provided with access to the proposed Agreement and information about the effect of the terms of the Agreement along with a notice of the time and place and method of voting was provided to employees on 4 August 2017. Voting occurred in the period 14 to 21 August 2017 and a majority of those who voted approved the Agreement.³

[3] The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test was the Black Coal Mining Industry Award 2010 (the BCMIA).⁴

[4] The statutory declaration noted that the provisions in the proposed Agreement were more beneficial than the BCMIA or were not conferred by the BCMIA. No less beneficial terms were identified.

[5] In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of issues in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and better off overall test assessment considerations. The Commission wrote to the Applicant on 29 November 2017 and identified the following issues requiring its response:

(1) The Form F16 lodged with the Commission failed to include the Applicant’s details;

(2) Additional information was sought from the Applicant regarding the means by which the Applicant advised employees of the location, date and method of the vote for the Agreement per question 2.5 in its Form F17 statutory declaration.

(3) Clause 15 of the Agreement which dealt with Superannuation referred to superannuation contributions being based on “approved” hours rather than “ordinary” hours.

(4) Clause 21.4 of the Agreement enabled the employer to direct an employee to take all of their accrued annual leave, whereas the BCMIA only allowed for such a direction in respect of excessive leave accruals.

(5) Clause 18 failed to define a shift worker for the purposes of the NES.

(6) The Agreement provides for flat rates of pay that are inclusive of overtime, shift and weekend penalties and other applicable allowances. Some instances were identified where it appeared certain classifications under particular roster and overtime patterns may not be better off overall.

[6] The Applicant provided undertakings and submissions on 30 November 2017 in order to address the matters raised by the Commission.

Applicant undertakings

Pre-approval requirements

[7] The Applicant provided a revised signatory page with the required addresses of the signatories. The Applicant also provided a statutory declaration to address the Commission’s queries raised in relation to the Applicant’s responses to questions 2.5 in the original form F17 statutory declaration.

Clause 15 Superannuation

[8] With respect to Clause 15 Superannuation, the Applicant proffered the following undertaking:

“For the purpose of clause [15] of the Agreement and for the avoidance of doubt, the word “approved” will be replaced with the word “ordinary”.

Clause 18 Definition of Shift Worker

[9] With respect to clause 18 of the Agreement the following undertaking was proffered;

“Under the Agreement, a shift worker is an employee who:

a. is assigned to perform work at an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and

b. is regularly rostered to work those shifts; and

c. regularly works on Sundays and public holidays. “

Clause 21.4 Annual Leave

[10] With respect to clause 21.4 of the Agreement, the Applicant undertook to delete the existing clause 21.4 and replace it with the following:

“The Company may direct an employee to take excessive annual leave in circumstances where:

(a) the direction takes effect with no less than 8 weeks’ notice to the Employee; and

(b) the direction does not result in the Employee’s remaining accrued entitlement to paid annual leave being less than 210 hours when any other approved annual leave arrangements are taken into account; and

Schedule 1

[11] With respect to particular wage rates under the Agreement, the following undertakings were provided:

“For the purposes of Schedule 1 to the Agreement, the hourly rate of pay for a Maintenance Fitter (trade qualified) will be between $45.00-$56.00 per hour.

For the purposes of Schedule 1 to the Agreement, the hourly rate for a Site Clerk will be between $34.00-$36.00.”

CFMEU Objections to Agreement

[12] In correspondence to the Commission on 30 November 2017, the Construction, Forestry, Mining and Energy Union (the CFMEU) advised that while it was not a bargaining representative it objected to approval of the Agreement and sought to be heard in relation to the application.

[13] The CFMEU’s request to be heard was dealt with and acceded to in a separate decision by the Commission. 5 It was determined that the Commission would be assisted in reaching a conclusion about the issues of genuine agreement and the Better Off Overall Test (BOOT) if submissions from the CFMEU were obtained pursuant to the Act.6

[14] A Mention/Directions Hearing was conducted on 7 December 2017 following which the parties were required to file submissions and materials on which they sought to rely. The Applicant and CFMEU agreed to the Commission dealing with the matter on the papers in circumstances where cross examination of witnesses was not required. The CFMEU declined to cross examine the Applicant’s witness in the proceedings. The matter was consequently dealt with on the papers.

CFMEU Case

[15] The CFMEU contended that there were numerous grounds on which the Agreement could not and should not be approved by the Commission. Those grounds can be summarised as follows:

1. That there is no valid agreement for approval before the Commission, such submission relying on the recent Federal Court decision in Construction, Forestry, Mining and Energy Union v One Key Resources Pty Ltd 7 (One Key).

2. That the Commission cannot be satisfied that employees genuinely agreed to the Agreement because it cannot be satisfied that the Applicant took all reasonable steps to explain the Agreement and the meaning and effects of the terms of the Agreement, also having regard to less beneficial provisions that were not identified by the Applicant in its Form F17 statutory declaration.

3. A significant number of less beneficial provisions relative to the BCMIA that would lead to the Agreement failing the BOOT. The provisions referred to included:

a. Flat wage rates in the Agreement which fail to compensate for foregone penalty rates under the BCMIA depending on the particular rosters and hours of work.

b. Legal responsibilities and breach of Agreement prosecution exposures of employees created by reason of clause 9 Duties and Responsibilities.

c. Clause 11 Termination of Employment does not allow for the exhaustion of personal leave in circumstances where an employee is terminated while on personal leave.

d. Clause 12 Abandonment of Employment enables the “deeming” of abandonment where no such provision exists under the BCMIA.

e. Clause 13 Redundancy does not provide for the more generous “sunset” provisions available under the BCMIA.

f. Clause 14 Wages provide for benefits that are less beneficial than a range of provisions in the BCMIA including; mixed functions, starting and finishing place and change of roster entitlements.

g. Clause 18.9 provides for a “reconciliation” of earnings under the Agreement versus the BCMIA but fails to ensure that an employee is better off overall when compared against the BCMIA in terms of earnings.

h. A range of additional benefits under the BCMIA which are not provided for in the Agreement including; paid breaks on completion of ordinary hours prior to commencing overtime, meal allowance when working non-rostered overtime, call back provisions, ten hour rest periods and time off in lieu (TOIL) provisions.

i. Clause 21 Annual Leave fails to provide for an additional (sixth) week of annual leave for shift workers nor does it provide for payment of leave loading or rostered earnings while on annual leave.

j. Clause 22 Public Holidays provides for less beneficial penalty payments compared to the BCMIA.

k. Clause 23 Personal Leave is less beneficial relative to the BCMIA in terms of the deduction of an employee’s personal leave accrual for part shifts taken off.

l. Clause 8.1(c) provides for the casual employment of production and engineering staff whereas the BCMIA does not provide for casual employment in those classifications.

m. Clause 20 Stand Down would operate in conjunction with the dispute settlement procedure of the Agreement to deprive employees of a right to take a stand down dispute to the Commission under part 3-5 of the Act.

4. Unlawful and non-permitted terms are contained within the Agreement, contrary to s186 (4) and s(55) of the Act. The specific provisions referred to were:

a. Clause 10.3 permits an employee to be dismissed without explanation or repercussions during their qualifying period which under the Agreement can be up to twelve months. This is contrary to s 383 of the Act which provides for a qualifying period for the purposes of access to the Commission’s unfair dismissal jurisdiction of six months continuous service.

b. Clause 12 Abandonment of Employment is in conflict with the National Employment Standard (NES) requirement for notice of termination to be given, this having been confirmed by a recent Full Bench decision in Bienias v Iplex Pipelines Australia Pty Ltd T/A Iplex Pipelines Australia 8 (Iplex).

c. Clause 21.4 which provides for the giving of twenty eight days’ notice by the employer to an employee to take any or all annual leave, which is inconsistent with s 93(3) of the Act which requires a direction to take annual leave to be reasonable.

Applicant Case

[16] The Applicant submitted that the Commission must approve the Agreement as it was validly made in accordance with the Act and satisfied the BOOT.

[17] In response to the CFMEU’s submission regarding the relevance of the One Key decision, the Applicant relied on evidence by Mr Alan Jeneway, 9 which was not contested by the CFMEU, and submitted that the Applicant’s circumstances could be distinguished from One Key in that:

1. The majority of employees covered by the Agreement had considerable experience with Ausdrill;

2. Coverage of the Agreement is confined to one industry across two states; and

3. The rates of pay in the Agreement are considerably higher relative to the BCMIA than was the case in One Key where the margin was 0.1%.

[18] The Applicant also relied on the evidence of Mr Jeneway as to the steps taken to communicate with employees regarding the Agreement prior to the ballot, such steps in the Applicant’s submission, satisfying the requirement that it took all reasonable steps to explain the terms of the Agreement to employees and that their genuine agreement was secured.

[19] As regards the BOOT issues raised by the CFMEU the Applicant submitted that:

1. The flat rates in the Agreement were sufficient to compensate employees for the forgone penalty rates under the BCMIA.

2. The roster scenarios presented by the CFMEU, on which they relied to demonstrate less beneficial earnings under the Agreement relative to the BCMIA, were not currently being used by the Applicant. In any event the “reconciliation” provision at clause 18.9 of the Agreement acted to address any shortfalls in circumstances where an employee received less remuneration under a particular roster than they would otherwise receive under the BCMIA.

3. With respect to clause 10 Qualifying Period, the clause acted to the equal benefit of employees and was otherwise not inconsistent with the NES regarding notice of termination.

4. With respect to the redundancy “sunset” provision, the Applicant submitted that none of the Ausdrill employees currently employed had the length of service that would entitle them to the additional BCMIA benefit, therefore the “sunset” provision would not otherwise apply.

5. Annual leave loading and public holiday penalty rates under the BCMIA were considered by the Applicant in the make-up of the final rates of pay under the Agreement.

6. With respect to the causal employment provision at 8.1(c) of the Agreement, the Applicant submitted that inclusion of such a provision was not a barrier to approval of the Agreement and that the adequacy of a 25% loading was a relevant matter for consideration under the BOOT assessment.

7. Clause 20 Stand Down would not operate so as to exclude s 526 of the Act and the Commission’s powers to arbitrate a stand down dispute are unaffected.

Statutory Provisions

[20] Section 180 of the Act details the steps that must be taken by the employer to ensure that, prior to a ballot for an agreement, employees are properly informed as to the agreement and are notified as to the ballot process. The Commission must be satisfied as to the employer having taken all reasonable steps prior to the conduct of a ballot. The relevant provisions are:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

Employees must be given copy of disclosure documents etc.

(4A) If an organisation gives the employer a document under section 179 by the end of the fourth day of the access period for the agreement, the employer must take all reasonable steps to ensure that the relevant employees:

(a) are given a copy of the document as soon as practicable after it was given to the employer; or

(b) are given access to a copy of the document as soon as practicable after it was given to the employer and have access to that copy throughout the remainder of the access period for the agreement.

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

(4B) If the employer is required to prepare a document under section 179A, the employer must take all reasonable steps to ensure that the relevant employees:

(a) are given a copy of the document by the end of the fourth day of the access period for the agreement; or

(b) are given access to a copy of the document by the end of that fourth day and have access to that copy throughout the remainder of the access period for the agreement.

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

(4C) The employer must not knowingly or recklessly make a false or misleading representation in the document that the relevant employees are given a copy of or access to under subsection (4B).

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

Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

[21] Section 186(1) of the Act establishes a “basic rule” that where an application for approval of an enterprise agreement is made under s.185 (which prescribes the time in which such an application must be made and its content), the Commission must approve the agreement if the requirements in ss.186 and 187 of the Act are met. Sections 186 and 187 set out a range of approval requirements. Section 186(2) of the Act sets out approval requirements in relation to the safety net, and relevantly provides as follows:

“186 When the FWC must approve an enterprise agreement—general requirements

…

(2) The FWC 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; an

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

(i) the agreement has been genuinely agreed to by each employer 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.

[22] Section 193 prescribes what is necessary to pass the better off overall test. It relevantly provides:

“193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section .if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

…

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

Is there a valid agreement?

[23] The CFMEU contended that the Applicant had failed to comply with pre-approval requirements, specifically that they had failed to comply with s 180(5) of the Act which requires the Applicant to take all reasonable steps to explain the terms of the Agreement to employees. Further, employees could not have genuinely agreed to the Agreement as required under s 186(2)(a) of the Act. The specific concerns raised by the CFMEU in relation to the process undertaken by the Applicant were as follows:

• That bargaining/information sessions conducted at the two sites (the Ensham and Blair Athol Mine sites) on 25 July 2017 were followed by the distribution of the final Agreement on 4 August 2017, such distribution being unsupported by meetings or processes to explain the terms of the Agreement.

• That there was no evidence that in the meetings of 25 July 2017 the Applicant actually explained or provided documentation that detailed the effects of the terms of the Agreement or the BCMIA terms that were varied or negated by the Agreement.

• That providing an opportunity for employees to contact the Applicant if they had any questions did not satisfy the requirement under s 180(5) of the Act.

• That there was no evidence as to whether the particular needs of employees were considered and addressed as part of the Applicant explaining the terms of the Agreement, as required under s 180(5)(b) of the Act.

• That the Agreement contains less beneficial provisions that were not identified by the Applicant in its Form F17 statutory declaration. The CFMEU contended that as the Applicant failed to identify the less beneficial provisions in the statutory declaration, it could be reasonably inferred that the Applicant had also failed to identify those less beneficial provisions when explaining the terms of the Agreement to employees.

[24] In response to the CFMEU’s submissions, the Applicant gave unchallenged evidence as to the process that it undertook in communicating the terms of the Agreement to employees. The evidence of Mr Jeneway 10 included that:

• He travelled to both sites on 25 July 2017 and met with the five employees that would be covered by the Agreement for approximately ninety minutes at each site.

• The meetings with employees involved a distribution of the proposed Agreement at the meeting and a “page turn” and explanation of each clause of the Agreement.

• Through the course of the first meeting at the Ensham mine a number of typographical errors were identified that were marked up by Mr Jeneway in a hand written form to be subsequently corrected in the final Agreement. A clarification raised in relation to the Community Service Leave provision was also made and marked up. These mark ups were highlighted in the subsequent meeting at the Blair Athol mine site which took the same format as the first meeting at the Ensham mine site.

• Following the site meetings Mr Jeneway corrected the draft Agreement, reflecting the corrections and clarifications made during the meetings on 25 July 2017, and forwarded the final Agreement to employees on 4 August 2017 along with the ballot details.

• The postal ballot for the Agreement was conducted between 14 August and 21 August 2017. All five of the employees voted to approve the Agreement.

[25] Mr Jeneway also gave evidence that the process of communicating with employees regarding the Agreement followed on from an earlier bargaining process that had resulted in a ballot and the lodging of an agreement with the Commission that was subsequently withdrawn. 11

[26] I am not persuaded that the circumstances in the present case are directly analogous to One Key given the limited scope of the Agreement and the length of service of employees with Ausdrill. However, while the Applicant took steps to meet with and communicate the terms of the Agreement to the five employees that would be covered by the Agreement, there is no evidence that the explanation of the terms of the Agreement included an explanation of any reductions in entitlements found under the BCMIA. Significantly, no less beneficial provisions were identified in the Applicant’s Form F17 statutory declaration.

[27] As will be evident through the subsequent analysis of the BOOT in this decision, there are a number of provisions in the Agreement that are less beneficial than the BCMIA. There are also provisions in the BCMIA that are not conferred by the Agreement. In satisfying the requirements under s 180 (5) of the Act as to the explanation by the Applicant of the meaning and effect of the terms of the Agreement to employees, it is incumbent on the Applicant to satisfy the Commission that it took all reasonable steps.

[28] No evidence was led by the Applicant that went to an explanation of less beneficial provisions under the Agreement. In the absence of such evidence and also in the absence of any reference to less beneficial provisions in the Form F17 statutory declaration, a reasonable inference that may be drawn is that no such explanation of less beneficial provisions occurred.

[29] In the circumstances, I am not satisfied that the Applicant took all reasonable steps to explain the terms and effects of those terms of the Agreement to the relevant employees, specifically the less beneficial provisions in the Agreement. Consequently, the Applicant has not satisfied the Commission with respect to its compliance with s 180(5) of the Act. Further and consequently, I am not satisfied that employees genuinely agreed to the Agreement as required under s 186(2)(b)(i) of the Act.

Does the Agreement satisfy the BOOT?

Rates of pay

[30] The CFMEU contended that the use of flat rates under the Agreement would result in employees receiving less than under the BCMIA depending on the roster and hours of work scenario. It was submitted that this was due to employees under the Agreement not receiving the benefit of various shift, weekend, overtime and public holiday penalty rates that would otherwise apply under the BCMIA.

[31] The Applicant responded to the CFMEU contentions by asserting that the minimum rates under the Agreement were in excess of the BCMIA. That is certainly the case with respect to base rates of pay. The minimum weekly rate for a Shotfirer under the Agreement would be $1330 (Mineworker – Entry Level) based on $38 per hour 12 versus an equivalent BCMIA minimum rate of $904.70 per week based on $25.84 per hour.13

[32] Simply comparing the base rates under the Agreement and the BCMIA is however insufficient to properly undertake the required BOOT assessment. The Applicant has not answered the specific criticisms levelled at the Agreement by the CFMEU in terms of rosters and hours of work impacts on earnings beyond submitting that the CFMEU used hypothetical roster scenarios that are not currently in use. The Applicant also referred to the “reconciliation” provision at clause 18.9 which would operate in circumstances where an employee moved onto a new roster or had concerns regarding their earnings under the Agreement relative to the Award. It was submitted by the Applicant that clause 18.9 would operate to ensure employees were not disadvantaged relative to the BCMIA.

[33] In order to test the contentions of the CFMEU, it was necessary for the Commission to analyse the roster scenario advanced by the CFMEU, specifically rosters consisting of seven days on, seven days off. Such a roster configuration is explicitly provided for at clause 18.8(d) of the Agreement. Further, the Agreement makes clear that rosters may require day and/or night shifts. Clause 18.5 relevantly provides as follows:

“18.5 Depending on the production or site requirements, employees may be required to work day and/or night shifts according to the shift roster/work cycle. Under this Agreement, employees may be required to work day shift, night shift or a combination of both. Start and finish times will be determined as part of the roster.”

[34] Because the Agreement does not detail what average hours per day or week are contemplated under rosters provided for at clause 18.8, it was necessary to analyse different average weekly hours and rotating day and night shifts over the roster cycle.

Scenario 1(a)

[35] Scenario 1(a) has the following assumptions:

Roster:	7 (10 hour) day-shifts on, 7 days off
Hours of work:	70 hrs per 2 week cycle averaging 35 hrs per week
Classification of Shot firer:	Agreement rate of $38 for all hours worked
BCMIA rate of $25.84 for ordinary hours
Public Holidays worked:	Nil
Overtime hours worked:	Nil
Earnings under Agreement:	= Cycle earnings x 26 cycles
● Cycle earnings	= [7 (day shifts) x 10 hrs x $38]
= $2,660
● Annual earnings	= $2,660 x 26 cycles = $69,169 p.a.
Earnings under BCMIA	= Cycle earnings x 26 cycles
● Cycle earnings	= equivalent ordinary hours (EOH) in the cycle x hourly rate
= [5 (day shifts Mon-Frid) x 10]¹⁴ + [(4 x 1.5) + (6 x 2)]¹⁵+ [10 x2]¹⁶
= 50 (Mon-Fri) +18 (Sat) +20 (Sun) EOH
= 88 EOH x $25.84
= $2273.92 per cycle
● Annual earnings	= $2,273.92 x 26 cycles = $59,121.92 p.a.

Scenario 1(b)

[36] Under Scenario 1(b), the roster would require employees to work a number of public holidays each year. Save for the public holiday variable, the roster assumptions under Scenario 1(a) would continue to apply. The assumption for the purpose of Scenario 1(b) is that an employee would be required to work five public holidays during a twelve month period. The following earnings comparison under the Agreement and BCMIA are derived:

Earnings under Agreement	= earnings from Scenario 1(a) + (5 x 7hrs 17 x $38)
= $69,169 + $1330
= $70,499 p.a
Earnings under BCMIA	= earnings from Scenario 1(a) + (5 P/Hs x 10hrs x 2 18 x $25.84)
= $59,121.92 + $2,584
= $61,705.92 p.a

Scenario 1(c)

[37] A further plausible scenario is one that would require an employee to work overtime from time to time, which for the purpose of Scenario 1(c) is assumed to be one twelve hour overtime shift per four week period. All other conditions are as per Scenario 1(b) including the requirement to work five public holidays per annum are maintained.

[38] The following earnings comparison under the Agreement and BCMIA are derived:

Earnings under Agreement	= Earnings under Scenario 1(b) + [10 hrs x $38 x 13]
= $70,499 + $4,940
= $75,439 p.a
Earnings under BCMIA	= Earnings under Scenario 1(b) + (10 hrs x 2 19 x $25.84 x 13)
= $61,705.92 + $6,718.40
= $68,424.32 p.a.

[39] Scenario 2(a) has the following assumptions:

Roster:	7 (12 hour) day-shifts on, 7 days off
Hours of work:	84 hours per 2 week cycle averaging 42 hrs per week based off 35 ordinary hours per week
Classification of Shot firer:	Agreement rate of $38 for all hours worked
BCMIA rate of $25.84 for ordinary hours
Public Holidays worked:	Nil
Overtime hours worked:	Nil

[40] Applying the above assumptions the following comparison of Agreement and BCMIA earnings on an annualised basis is derived:

Earnings under Agreement	= Cycle earnings x 26 cycles
● Cycle earnings	= [7 (day shifts) x 12 hrs x $38]
= $3192
● Annual earnings	= $3192 x 26 cycles
= $82,992 p.a.
Earnings under BCMIA	= Cycle EOH x $25.84 x 26 cycles
● Cycle Earnings	• [(5 days (Mon-Fri) x 10 hrs) + (5 days (Mon-Fri) x 2hrs x 2 20)] + [(4 hrs x 1.5) + (8hrs x 2)] + [12hrs x 2]
= 70 (Mon-Fri) + 22 (Sat) + 24 (Sun)
= 116 EOH x $25.84
= $2,997.44 per cycle
● Annual Earnings	= $2997.44 x 26 cycles
= $77,933.44 p.a.

Scenario 2(b)

[41] A further scenario involving a continuous roster is that the roster would require employees to work a number of public holidays each year. Save for the public holiday condition, the roster assumptions under scenario 2(a) would continue to apply. The assumption for the purpose of Scenario 2(b) is that an employee would be required to work five public holidays while on day shift during a twelve month period.

[42] The following earnings comparison under the Agreement and BCMIA are derived:

Earnings under Agreement	= earnings from Scenario 2(a) + [5 P/Hs x 7hrs x $38]
= $82,992 + $1330
= $84,322 p.a.
Earnings under BCMIA	= earnings from Scenario 2(a) + [5 P/Hs x 12hrs x 2 x $25.84]
= $77,933.44 + $3,100.80
= $81,034.24 p.a.

Scenario 2(c)

[43] A further plausible scenario is one that would require an employee to work overtime from time to time which for the purpose of Scenario 2(c) is assumed to be one twelve hour overtime shift per four week period. All other conditions are as per Scenario 2(b) including the requirement to work five public holidays per annum. The following earnings comparison under the Agreement and BCMIA are derived:

Earnings under Agreement	= Earnings under Scenario 2(b) + [12 hrs x $38 x 13]
= $84,322+ $5,928
= $90,250 p.a.
Earnings under BCMIA	= Earnings under Scenario 2(b) + [12hrs x 2 x $25.84 x 13 cycles]
= $81,034.24 + $8062.08
= $89,096.32 p.a.

Scenario 3(a)

[44] Scenario 3(a) has the following assumptions:

Roster:	Rotating (12 hour) 7 day-shifts on, 7 days off, 7 night- shifts on, 7 days off
Hours of Work:	168 hours per 4 week cycle averaging 42 hrs per week based off 35 ordinary hours per week
Classification of Shot firer:	Agreement rate of $38 for all hours worked
BCMIA rate of $25.84 for ordinary hours
Public Holidays worked:	Nil
Overtime worked:	Nil

[45] Applying the above assumptions, the following comparison of Agreement and BCMIA earnings on an annualised basis is derived:

Earnings under Agreement	= Cycle earnings x 13 cycles
● Cycle earnings	• [7 (day shifts) x 12 hrs x $38] + [7 (night shifts) x 12 hours x $38]
= $3192 (day shift) + $3192 (night shift)
= $6,384
● Earnings under Agreement	= $6,384 x 13 cycles
= $82,992 p.a.
Earnings under BCMIA	= (Day Shift + Night Shift Cycle EOH) x $25.84 x 13 cycles
● Day shift cycle earnings	• [(5 days (Mon-Fri) x 10 hrs) + (5 days (Mon-Fri) x 2hrs x 2)] + [(4 hrs x 1.5) + (8hrs x 2)] + [12hrs x 2]
• 70 (Mon-Fri) + 22 (Sat) + 24 (Sun)
• 116 EOH x $25.84
• $2,997.44
● Night shift cycle earnings	• [5 days (Mon-Fri) x 10 hrs x 115% + 5 x 2 x215%] + [(4 hrs x 165%) + (8 hrs x 215%)] + [12 hrs x 215%] 21
• 79hrs (Mon-Fri) + 23.8 hrs (Sat) + 25.8 hrs (Sun)
• 128.6 EOH x $25.84
• $3,323.02
Earnings under BCMIA	• ($2,997.44 + $3,323.02) x 13 cycles
• $82,165.98 p.a.

Scenario 3(b)

[46] A further scenario involving a continuous roster is that the roster would require employees to work a number of public holidays each year. Save for the public holiday condition, the roster assumptions under scenario 3(a) would continue to apply. The assumption for the purpose of Scenario 3(b) is that an employee would be required to work five public holidays while on day shift during a twelve month period.

[47] The following earnings comparison under the Agreement and BCMIA are derived:

Earnings under Agreement	= earnings from Scenario 3(a) + [5 P/Hs x 7hrs x $38]
= $82,992 + $1330
= $84,322 p.a.
Earnings under BCMIA	= earnings from Scenario 3(a) + [5 P/Hs x 12hrs x 2 x $25.84]
= $82,165.98 + $3,100.80
= $85,266.78 p.a.

Scenario 3(c)

[48] A further plausible scenario is one that would require an employee to work overtime from time to time which for the purpose of Scenario 3(c) is assumed to be one twelve hour overtime shift per four week period. All other conditions are as per Scenario 3(b) including the requirement to work five public holidays per annum. The following earnings comparison under the Agreement and BCMIA are derived:

Earnings under Agreement	= Earnings under Scenario 3(b) + [12 hrs x $38 x 13]
= $84,322+ $5,928
= $90,250 p.a.
Earnings under BCMIA	= Earnings under Scenario 3(b) + [12hrs x 2 x $25.84 x 13 cycles]
= $85,266.78 + $8062.08
= $93,328.78 p.a.

[49] A summary of the annualised earnings under the various scenarios is provided below:

Roster	Base Annual Earnings	+ 5 Public Holidays	+ 12 Overtime shifts
7 day-shifts on 7 days off (10 hour shifts)
Agreement	$69,169	$70,499	$75,439
BCMIA	$59,121	$61,705	$68,424
Agreement/BCMIA	16.9%	14.2%	10%
7 day-shifts on, 7 days off (12 Hour shifts)
Agreement	$82,992	$84,322	$90,250
BCMIA	$77,933	$81,034	$89,096
Agreement/ BCMIA	6.5%	4%	1.2%
7 day-shifts, on 7 days off, 7 night-shifts on, 7 days off
Agreement	$82,992	$84,322	$90,250
BCMIA	$82,165	$$85,266	$$93,328
Agreement/ BCMIA	1%	(1.2%)	(3.3%)

[50] What is evident from the analysis is that while a shotfirer employed on the base rosters under each scenario may earn more than would be the case under the BCMIA, the margin over the BCMIA is eroded and ultimately lost through introducing a rotating twelve hour day and night shift roster with a requirement to work 5 public holidays and a not unreasonable amount of regular overtime.

Clause 18.9 Earnings Reconciliation

[51] The Applicant’s answer to an outcome in which earnings under the Agreement were to fall below the BCMIA is to point to clause 18.9 of the Agreement which relevantly provides as follows:

“18.9 For the purpose of clause 18.8 (f) above:

(a) Where an employee is paid a flat hourly rate in accordance with Clause 14.1 and Schedule 1 to this Agreement, the Company will undertake a reconciliation for each new roster cycle to which an Employee is appointed.

(b) The purpose of the reconciliation is to assess whether or not the Employee would receive less pay in that roster cycle than they would have received under the Award or under the Agreement had they not been paid a flat hourly rate.

(c) If the reconciliation shows that the Employee would be paid less under the flat hourly rate over the roster cycle, the Company will pay to the Employee the higher amount that otherwise would have been paid under the Award or under the Agreement.

(d) Additionally, an Employee who is paid a flat hourly rate in accordance with Clause 14.1 and Schedule 1 to this Agreement may request the Company to perform such a reconciliation, up to 1 reconciliation per quarter.

(e) If such a request is made, the Company will provide to the requesting Employee detail of the reconciliation in relation to the 12 week period immediately prior to the time the Employee requested the reconciliation.

(f) If the reconciliation shows that the Employee received less pay while being paid the flat hourly rate over the relevant period, the Company will pay to the Employee the higher amount that otherwise would have been paid under the Award or under the Agreement.

[52] The clause provides for a reconciliation in two different circumstances. Firstly, in the circumstances of an employee being placed on a new roster; and secondly in circumstances where an employee specifically requests an earnings reconciliation. Having regard to the Full Bench decision in Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery 22 (Beechworth) there are some difficulties with the provision as drafted. The difficulties include that under clause 18.9(d), the onus falls to the employee to request the reconciliation. Additionally, the one reconciliation per quarter limit on the frequency with which a reconciliation may be requested is in my view unreasonable.

[53] More importantly however, even if a reconciliation were carried out faithfully, it would not ensure that an employee was better off overall. That is because the adjustment that is required in circumstances of a shortfall relative to the BCMIA being identified is to pay an employee in accordance with the BCMIA.

[54] Having regard to the earnings comparison analysis, it is likely that under scenarios that that are neither unrealistic nor fanciful, employees engaged under the Agreement may receive less than they would receive under the BCMIA. The reconciliation clause which is intended to address such a potentiality does not assure that employees would receive more beneficial remuneration under the Agreement than the Award. The fact that the “reconciliation” clause does not assure that an employee’s earnings are more beneficial than the Award is a relevant consideration in the conduct of the BOOT assessment.

Clause 9 Duties and Responsibilities.

[55] I share the reservations expressed by Deputy President Sams in Surf City Coaches Pty Ltd t/as Bus IT Queensland 23(Surf City) regarding whether a provision in an agreement referring to company policies is a relevant matter for the purpose of the BOOT assessment. In any event, I am not satisfied that the prospect of an employee being pursued for a breach of such a policy is other than remote. Therefore I regard it as a neutral consideration in the conduct of the BOOT assessment.

Clause 11 Termination of Employment

[56] Clause 13.5(b)(ii) of the BCMIA relevantly provides that:

“(ii) When an employer terminates the employment of an employee during a period of absence on paid personal leave, the employee must be paid until the employee has no further accumulation of personal leave or until the employee is fit for duty, whichever occurs first.”

[57] The Agreement does not afford employees the BCMIA benefit or a similar benefit. Therefore the absence of such provision, will in weighing the Agreement, be regarded as less beneficial for the purposes of the BOOT assessment.

Clause 13 Redundancy

[58] Clause 14.4(c) of the BCMIA provides for a “sunset” benefit for employees with more than fifteen years completed employment as at 20 March 2017. The BCMIA clause relevantly provides as follows:

“(c) Despite clause 14.4(a), an employee who as at 20 March 2017 (the operative date) had more than 15 completed years of employment and after the operative date is made redundant will be entitled to retrenchment pay equal to two ordinary weeks’ pay for each completed year of employment as at the operative date. This payment is additional to the payment prescribed in clause 14.3.”

[59] The Applicant submitted that there were no employees that would be covered by the Agreement with fifteen years employment with the Applicant and as such there could no be detriment. In other key respects, the redundancy entitlement under the Agreement reflects the BCMIA entitlement.

[60] Having regard to the Applicant’s submissions regarding the length of service of employees of the Applicant that would be covered by the Agreement, I am satisfied that the “sunset” provision of the BCMIA would have no application. Consequently, the absence of such a benefit under the Agreement creates no detriment. I am therefore satisfied that the redundancy provision under the Agreement is a neutral consideration for the purposes of the BOOT assessment.

Clause 14 Wages

[61] The CFMEU have contended that a range of entitlements under Clause 16 Minimum Wages and Allowances of the BCMIA are not provided for in the Agreement. Clause 16 of the BCMIA provides:

“16.1 The wages and allowances which an employee is to be paid are specified in the following schedules:

(a) Schedule A—Production and Engineering Employees

(b) Schedule B—Staff Employees

16.2 An employee who performs mixed functions on any shift must be paid for the whole shift at the rate prescribed for the highest of such functions.

16.3 An employee absent from work is not entitled to payment for the period of absence unless paid absence is agreed by the employer, or permitted by this award or the law.

16.4 Unless otherwise agreed between the employer and the majority of employees, wages will be paid weekly.

16.5 Wages will be paid by cheque or electronic funds transfer.

16.6 In the absence of agreement to the contrary, not more than one week’s pay will be kept in hand by the employer.

16.7 Upon termination of employment, wages due to an employee will be paid on the day of such termination or forwarded by post, within 72 hours, to the last address notified in writing by the employee.

16.8 Subject to all relevant laws, an employer and an individual employee may agree to a salary sacrifice arrangement. The obligations of the employer in respect of payment of remuneration will be satisfied by the employer complying with such an arrangement provided that the salary sacrificed amount and the residual wages combined are not less than the classification rate otherwise payable.”

[62] The Agreement has no comparable mixed function provision to that found at clause 16.2 of the BCMIA. I am therefore satisfied that the Agreement is less beneficial for the purposes of the BOOT assessment.

[63] Clause 14.3 of the Agreement provides for a fortnightly pay cycle, as opposed to the weekly cycle (other than by agreement) provided for at clause 16.4 of the BCMIA. I do not regard the Agreement provision as less beneficial as employees have voted in support of the Agreement inclusive of the fortnightly pay cycle provision. It is therefore a neutral consideration for the purposes of the BOOT assessment.

[64] The Agreement does not include provisions in the same or similar terms to clauses 16.6 and 16.7 of the BCMIA, therefore the Agreement is less beneficial for the purposes of the BOOT assessment.

Clause 18 Hours of Work and Clause 19 Meal Breaks

[65] The CFMEU have contended that there are a number of provisions under the BCMIA that are not included in the Agreement including:

• Start and finishing place of work to be agreed 24;

• Notice of roster changes 25;

• Rostered day off provisions 26; and

• Entitlement to thirty minute paid meal break after five hours worked and penalties for working beyond five hours without meal break. 27

[66] I accept that the Agreement does not include comparable benefits to those Award entitlements identified by the CFMEU. I am therefore satisfied that the absence of such provisions renders the Agreement less beneficial for the purposes of the BOOT assessment.

Clause 21 Annual Leave

[67] Clause 25.2 of the BCMIA provides for an entitlement to six weeks annual leave and is expressed in the following terms:

“25.2 Entitlement to annual leave

(a) An employee is entitled to annual leave, in addition to the amount provided for in the NES, such that the employee’s total entitlement to annual leave pursuant to the NES and this award for each year of employment is a cumulative total of 175 ordinary hours (five weeks).

(b) An employee who:

(i) is a seven day roster employee; or

(ii) works a roster which requires ordinary shifts on public holidays and not less than 272 ordinary hours per year on Sundays,

is entitled annually to an additional 35 ordinary hours (one week) of annual leave.”

[68] The Agreement provides for an entitlement to six weeks leave at clause 21.2(b). That clause has been supplemented by an undertaking that clarifies the definition of a shift worker for the purpose of the NES and an entitlement to an additional week’s annual leave. 28

[69] While the entitlement to six weeks leave under the Agreement is expressed in a less prescriptive manner than the BCMIA, I don’t regard that difference as significant. Each of the rosters detailed at clause 18.8 of the Agreement with the exception of clause 18.8(a) appear to require employees to work on the basis of a seven day roster. On that basis, employees working such rosters would be entitled to the additional week’s annual leave in accordance with clause 21.2(b) of the Agreement and the proffered undertaking. I am consequently satisfied that the Agreement provides for a similar entitlement as the BCMIA. It is therefore a neutral consideration for the purposes of the BOOT assessment.

[70] The CFMEU further contended that the Agreement is less beneficial than the BCMIA in terms of what employees are to be paid while on annual leave. The BCMIA relevantly provides the following:

“25.7 Deduction of annual leave

For each period of annual leave taken the ordinary hours of rostered shifts that would have been worked by an employee will be deducted from the employee’s accrued annual leave entitlement.

25.9 Payment for annual leave

An employee taking annual leave must be paid either:

(a) the employee’s ordinary rate of pay plus a loading of 20% of that rate; or

(b) the employee’s rostered earnings for the period of annual leave, which includes all rostered overtime and rostered public holidays (paid at double time), but does not include shift allowances, other than for seven day roster employees;

whichever is the greater.”

[71] The Agreement does not include comparable provisions that reflect the BCMIA entitlement in terms of what an employee is to be paid while on annual leave nor is the ordinary hours leave balance deduction provision, reflected at clause 25.7 of the BCMIA, made explicit in the Agreement.

[72] The Applicant contended that the flat rates in the Agreement were calculated to have regard to the entitlement expressed at clause 25.9 of the BCMIA. I accept that the payment of flat rates in the context of ordinary rostered earnings (excluding public holidays and overtime shifts) yields earnings higher than under the BCMIA. However, as I have also found, the margin of the flat rates earnings under the Agreement over the BCMIA is eroded progressively through the application of penalty rates for overtime, shift, weekend and public holidays on the base BCMIA rates in a rotating 12 hour continuous day and night shift roster.

[73] Notwithstanding the relative rostered earnings under the Agreement versus the BCMIA, a seven day shift roster employee under the BCMIA is entitled to be paid for rostered overtime and public holidays falling within the roster while on annual leave. For example, with Scenario 3 from paragraph [43], an average 42 hour week results. On that particular roster an employee under the BCMIA would receive payment while on annual leave in accordance with the roster including public holiday penalty payments and the average 7 hours overtime per week built in to that roster.

[74] By comparison, the Agreement does not provide for payment of rostered overtime (i.e. hours beyond average 35 hours per week) for employees on annual leave. Nor does the Agreement provide for payment for any rostered public holidays that fall within the period of annual leave. Consequently, in the example of Scenario 3, an employee under the Agreement would, when taking annual leave, not be entitled to their normal rostered earnings, whereas the BCMIA provides for such an entitlement.

[75] Having regard to the above I am not satisfied that the Applicant’s calculation of flat rates fully comprehends the annual leave entitlements under the BCMIA under all roster scenarios. Consequently I regard the annual leave provisions of the Agreement as less beneficial for the purposes of the BOOT assessment.

Clause 22 Public Holidays

[76] Clause 27.4 of the BCMIA provides as follows:

“27.4 Employee required to work on a recognised public holiday

(a) An employee who is required to work on a holiday is to be paid at the rate of double time for work performed during ordinary hours, in addition to the payment prescribed.

(b) Work performed in excess of ordinary hours on a holiday is to be paid at the rate of treble time.”

[77] By comparison the Agreement provides as follows:

“22.2 Employees rostered to work on a Public Holiday will be paid their flat hourly rate for hours worked plus seven hours at their flat hourly rate.”

[78] I am satisfied that the public holiday penalty payment provided for under the Agreement is less beneficial than the BCMIA. This is a relevant consideration in conducting the BOOT assessment although such a comparison cannot be done simplistically. This is due to the “flat” rates versus base rates and penalties comparison that must be undertaken having regard to particular rosters and hours of work scenarios.

Clause 23 Personal Leave

[79] The CFMEU contend that the Agreement is less beneficial as it requires a deduction from an employee’s personal leave accrual of seven hours for each shift unable to be worked due to personal leave. By comparison, the BCMIA provides for no deduction from an employee’s personal leave accrual in circumstances where less than half a full shift is lost due to personal leave. 29 I am satisfied that the Agreement is silent on leave deductions for part shifts missed therefore is less beneficial for the purposes of the BOOT assessment.

[80] I also note that that the Award compels the pay out of accrued personal leave on termination of employment, where the employee has 70 hours or more of accrued personal leave, in circumstances of retrenchment, retirement at or after 60 years of age, ill health or death . 30 The Agreement does not compel the pay out of accrued personal leave in those same circumstances but rather allows the pay out as is evident by use of the word “may”.31 Consequently the terms of the Agreement are less beneficial than the Award for the purposes of the BOOT assessment.

Clause 8.1(c) Casual Employment

[81] I am satisfied the BCMIA does not provide for casual employees under Schedule A to the BCMIA. That does not however prevent that form of employment under the Agreement as proposed by the Applicant. The payment of a 25% causal loading under the Agreement is intended to compensate for the reduced employment security and entitlements that accompany casual employment. I note that the BCMIA does however provide for casual employees under Schedule B of the BCMIA and prescribes a 25% loading.

[82] In all the circumstances, I do not regard the proposed casual employment provision as less beneficial, notwithstanding the BCMIA is silent on Schedule A classifications being engaged on a casual basis. The 25% loading provided for in the Agreement is consistent with the BCMIA (in respect of Schedule B classifications) and general industry standards. I accept that a less secure form of employment may be regarded as less beneficial, however the payment of the casual loading provides appropriate compensation. Consequently, I regard the provision as a neutral consideration for the purposes of the BOOT assessment.

Clause 20 Stand Down

[83] Section 524 of the Act permits an employer to stand down an employee during any period in which the employee cannot usefully be employed in certain circumstances. Section 524(1) provides:

“(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

[84] An employer is not permitted to stand down an employee under s.524(1) if:

• an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

• the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance. 32

[85] In the circumstances of a planned stand down, the Applicant would need to rely on the terms of the Agreement 33 pursuant to s 524(2) of the Act rather than rely on s 524(1) of the Act.

[86] The jurisdiction of the Commission in dealing with a stand down dispute is confined to disputes arising under s 524(1) of the Act. 34 The jurisdiction of the Commission to deal with a stand down dispute pursuant to the terms of an enterprise agreement would be confined to the relevant dispute settlement terms of the agreement.

[87] The Agreement contains a dispute settlement procedure at clause 6 that limits the Commission’s jurisdiction to that of conciliation. Consequently, the Commission’s jurisdiction to deal with a stand down dispute under the Agreement would be limited to conciliation. This can be contrasted with the BCMIA where no stand down provision is found. Absent an agreement or contract of employment term dealing with stand down, the Commission’s jurisdiction to deal with a stand down dispute would be as per the Act, which includes both conciliation and arbitration. 35

[88] I am consequently satisfied that the Clause 20 Stand Down and Clause 6 Dispute Resolution Procedure in the Agreement would operate so as to limit the Commission’s jurisdiction in dealing with a dispute over a stand down to that of conciliation . That limitation of jurisdiction is less beneficial than the terms of the BCMIA where no such limitation operates. I do observe however that the incidence of stand down disputes being referred to the Commission in respect of s 524 (1) of the Act is small in number. As such I would attach limited weight to this item for the purposes of the BOOT assessment even though it may be less beneficial.

Unlawful and Non-Permitted Terms Consideration

Clause 10 Qualifying Period

[89] The CFMEU contend that clause 10.3 of the Agreement is unlawful as it seeks to exclude or modify the application of the unfair dismissal provisions, contrary to the provisions of the Act. 36 Clause 10.3 of the Agreement allows for an initial engagement period of six months to be extended to twelve months in certain circumstances. The CFMEU contend that by reason of the wording of clause 10.1, such extension of the qualifying period purports to extend the “minimum employment period”37 beyond six months.

[90] Clause 10 of the Agreement provides the following:

“10 Qualifying Period

10.1 On the initial engagement of an employee, a six month qualifying period will apply. During the qualifying period the Employee or the Company have the right to terminate the employment with one week’s notice for any reason without explanation and without any repercussions. The purpose of the qualifying period is to enable both parties to ascertain their suitability and capability to work together.

10.2 The Company and an Employee may agree on a lesser period of notice to terminate the employment at the employee’s initiative.

10.3 Should an employee be absent during the qualifying period and be unable to work the ordinary hours required due to illness, injury of for any other reason, the Company reserves the right to extend the qualifying period up to 12 months from initial engagement.

10.4 This clause does not apply to casual Employees.”

[91] The Act relevantly provides that an employee is protected from unfair dismissal if “the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period.” 38 An employee’s period of employment is defined as the “period of continuous service the employee has completed with the employer at that time as an employee.”39

[92] Continuous service is relevantly defined in the Act as follows:

“22 Meanings of service and continuous service

General meaning

(1) A period of service by a national system employee with his or her national system employer is a period during which the employee is employed by the employer, but does not include any period (an excluded period) that does not count as service because of subsection (2).

(2) The following periods do not count as service:

(a) any period of unauthorised absence;

(b) any period of unpaid leave or unpaid authorised absence, other than:

(i) a period of absence under Division 8 of Part 2-2 (which deals with community service leave); or

(ii) a period of stand down underPart 3-5, under an enterprise agreement that applies to the employee, or under the employee’s contract of employment; or

(iii) a period of leave or absence of a kind prescribed by the regulations;

[93] It is clear that under the Act the minimum employment period of six months is calculated having regard to the period of continuous service. The calculation of the continuous service period does not include certain absences, including unauthorised absences and any unpaid leave or unpaid authorised absences, subject to particular exclusions. Consequently, an employee with greater than six months employment may still be excluded from the unfair dismissal jurisdiction of the Commission in circumstances where their period of continuous service is impacted by absences referenced in s 22 of the Act.

[94] Clause 10 of the Agreement purports to extend the “qualifying period” by reference to particular absences. However it does not do so in a manner that is consistent with the Act. Specifically, it extends the “qualifying period” by reference to “illness, injury or for any other reason”. The Act does not permit the calculation of the period of “continuous service” by reference to all absences but rather by a narrower definition.

[95] I am not satisfied that the terms of clause 10 are consistent with the calculation of the “minimum employment period” and the supporting definitions of “continuous service” under the Act. Clause 10 purports to modify the terms of the unfair dismissal provisions in a manner that is detrimental to employees, is contrary to s 194 (d) of the Act and which consequently renders the term of the Agreement unlawful.

Clause 12 Abandonment of Employment

[96] A Full Bench in Iplex, in dealing with an appeal of an unfair dismissal decision, dealt with the permissibility of an abandonment of employment clause in the Manufacturing and Associated Industries Occupations Award 2010.

[97] The Iplex decision established that abandonment of employment provisions in the form such as that found at clause 12 of the Agreement are not permissible as they operate so as to automatically terminate the employment of an employee deemed to have abandoned their employment, such operation being in conflict with the notice of termination provisions of the Act. The Full Bench also found that such a provision would be detrimental to an employee when compared to the NES, this being contrary to s 55 of the Act.

[98] Relying on the reasoning of the Full Bench in Iplex, I am satisfied that clause 12 in its present form in the Agreement is not a permitted term as it contravenes s 55 of the Act.

Clause 21 Annual Leave

[99] The Applicant has proffered an undertaking which, if accepted, would extend the period of notice from four to eight weeks when directing employees to take leave due to an excessive leave balance. That period of notice is consistent with the minimum notice period under the BCMIA. I am satisfied that the undertaking, if accepted, would not be inconsistent with s 93(3) of the Act, which enables such a provision to be included in an agreement subject to the requirement to take leave being reasonable. I consider the eight weeks’ notice requirement to be reasonable in the circumstances.

Summary

[100] It will be seen from the statutory provisions provided above that an enterprise agreement will be found to have passed the better off overall test if the Commission is satisfied, that at the test time, each Award covered employee and each prospective Award covered employee employed under the Agreement would be better off overall if the Agreement applied to the employee rather than if the Award applied to the employee.

[101] The application of the better off overall test is not applied as a line by line test. Rather, it is a global consideration of the provisions in the Agreement compared to the Award taking into account those provisions that are less beneficial and weighing them against those provisions that are more beneficial.

[102] In conducting its assessment of the Agreement, it is open to the Commission to accept undertakings given pursuant to s 190 of the Act if the Commission is satisfied that the undertaking or undertakings provided are not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.

[103] While the “flat” rates of pay in the Agreement are significantly higher than the base rates of pay in the BCMIA, I am not satisfied that the flat rates are sufficient to compensate for the foregone BCMIA penalty rate provisions under all credible roster and hours of work scenarios. A mechanism that seeks to address such a potential earnings deficiency is found at clause 18.9 which provides for an earnings reconciliation. The reconciliation clause fails however to guarantee that employees through any reconciliation adjustment would in fact be better off overall.

[104] In addition to the concerns regarding the potential earnings deficiencies and the reconciliation provisions of the Agreement, there are a number of other less beneficial provisions that have been identified. They are:

• Clause 11 Termination of Employment does not afford employees the same benefit in respect of personal leave accrual exhaustion on termination as does the BCMIA.

• Clause 14 Wages does not afford employees a range of entitlements contained within the BCMIA including; mixed functions, employer not to hold more than a week’s pay in hand and payment on termination to be made on the date of termination or within 72 hours.

• Clause 18 Hours of Work and Clause 19 Meal Breaks do not include a range of provisions found within the BCMIA dealing with; starting and finishing place of work, rostered days off and paid meal breaks.

• Clause 21 Annual Leave does not provide for the payment of annual leave on the basis of rostered earnings inclusive of Public Holidays or normal rostered overtime as would be required under the BCMIA.

• Clause 22 Public Holidays provides for penalty payments that are less beneficial than BCMIA provisions.

• Clause 23 Personal Leave is less beneficial than the BCMIA as it is silent on accrued personal leave deduction in circumstances of a part shift lost and does not compel the pay out of accrued personal leave on termination.

• Clause 20 Stand Down is less beneficial by reason of the interaction of that clause with the Agreement dispute resolution procedure which has the consequence of displacing the Commission’s jurisdiction under the Act to arbitrate a stand down dispute pursuant to s 524(1) of the Act.

[105] The Agreement does not assure that remuneration under the Agreement is more beneficial than the Award. Further, there are no other significant beneficial terms that more than offset the less beneficial terms. Consequently I am not satisfied that the Agreement meets the required BOOT, notwithstanding the undertakings proffered by the Applicant. The satisfaction of the BOOT is a necessary pre-requisite to approval of the Agreement. 40

[106] I am also satisfied that Clause 10 Qualifying Period is an unlawful term as it seeks to modify the terms of the unfair dismissal provisions, contrary to s 194(d) of the Act. Further, Clause 12 Abandonment of Employment is non- permitted matter pursuant to s 55 of the Act, as it is detrimental to employees relative to the NES.

[107] Finally, as I have also found, I am not satisfied that the Applicant took all reasonable steps to explain the terms and the effects of the terms of the Agreement to employees as required under s 190(5) of the Act, having particular regard to the number of less beneficial provisions in the Agreement. Consequently, I cannot be satisfied that employees genuinely agreed to the Agreement as required under s 186(b)(i) of the Act.

Conclusion

[108] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of the s 186(2) requirements under the Act. For the reasons detailed above I am not satisfied in respect of those requirements. Consequently, the application for approval of the Agreement is dismissed. An order reflecting this decision will be separately issued.

DEPUTY PRESIDENT

1 Section 173 of the Act.

2 Section 174 of the Act.

3 Section 180 of the Act.

4 MA000001.

5 [2018] FWC 444.

6 Section 590, of the Act.

7 [2017] FCA 1266.

8 [2017] FWCFB 38.

9 Statement of Mr Alan Jeneway.

10 Ibid at paragraph [9]-[19].

11 Ibid at paragraph [13].

12 Ausdrill Limited Enterprise Agreement 2017, Schedule 1

13 Black Coal Mining Industry Award 2010, Schedule B Group D.

14 Black Coal Mining Industry Award 2010, Clause 21.2.

15 Black Coal Mining Industry Award 2010, Clause 21.2.

16 Black Coal Mining Industry Award 2010, Clause 21.2.

17 Ausdrill Limited Enterprise Agreement 2017, Clause 22.2.

18 Black Coal Mining Industry Award 2010, Clause 27.4.

19 Black Coal Mining Industry Award 2010, Clause 17.2(b).

20 Black Coal Mining Industry Award 2010, Clause 17.2(b).

21 Black Coal Mining Industry Award 2010, Clause 22.2.

22 [2017]FWCFB 1664.

23 [2014] FWC 3028.

24 Black Coal Mining Industry Award 2010, clause 23.4.

25 Ibid at clause 23.5.

26 Ibid at clause 23.6.

27 Black Coal Mining Industry Award 2010, clause 24.

28 See Paragraph [9].

29 Black Coal Mining Industry Award 2010, Clause 26.4.

30 Black Coal Mining Industry Award 2010, Clause 13.5.

31 Ausdrill Limited Enterprise Agreement 2017, Clause 23.5.

32 Section 524(2) of the Act.

33 Ausdrill Limited Enterprise Agreement 2017, Clause 20.

34 Section 526 (3) of the Act.

35 Section 526(2) of the Act.

36 Section 194(d) of the Act.

37 Section 383 of the Act.

38 Section 382(a) of the Act.

39 Section 384 (1) of the Act.

40 Section 186(2)(d) of the Act.

Printed by authority of the Commonwealth Government Printer

Ausdrill Limited

[2018] FWC 812

6 FEBRUARY 2018

DECISION

Applicant undertakings

CFMEU Objections to Agreement

CFMEU Case

Applicant Case

Statutory Provisions

Is there a valid agreement?

Does the Agreement satisfy the BOOT?

Unlawful and Non-Permitted Terms Consideration

Summary