Austeire Plant Hire Pty Ltd

[2017] FWCA 5699

[2017] FWCA 5699

FAIR WORK COMMISSION

DECISION

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

Austeire Plant Hire Pty Ltd
(AG2017/3462)

AUSTEIRE PLANT HIRE PTY LIMITED EMPLOYEE COLLECTIVE AGREEMENT 2017-2021

Building, metal and civil construction industries
DEPUTY PRESIDENT COLMAN	MELBOURNE, 21 NOVEMBER 2017

Application for approval of the Austeire Plant Hire Pty Limited Employee Collective Agreement 2017-2021.

[1] This decision relates to an application by Austeire Plant Hire Pty Ltd for approval of an enterprise agreement known as the Austeire Plant Hire Pty Limited Employee Collective Agreement 2017-2021 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The agreement is a single enterprise agreement.

[2] On 16 August 2017, the Fair Work Commission (Commission) received an email communication from the Construction, Forestry, Mining and Energy Union (CFMEU) advising that it sought to be heard on the application for approval of the Agreement, and requesting copies of the F16 application and the F17 employer declaration. The Commission provided the union with the documentation requested on 23 August 2017.

[3] On 24 August 2017, the CFMEU provided to the Commission and the company a written submission addressing the grounds on which it opposed the approval of the Agreement. These grounds related to concerns about terms concerning the National Employment Standards (NES) that might contravene s.55 of the Act; whether the Agreement was explained to employees by the employer and genuinely approved by employees; and whether the Agreement passed the better off overall test (BOOT) against the Building and Construction General On-Site Award 2000 (Award).

[4] On 28 August 2017, the company sent an email message to the Commission stating that the union was not a bargaining representative for the Agreement, and that the Commission should not entertain the union’s submission.

[5] The Commission has a broad power to inform itself in relation to any matter in such manner as it considers appropriate, including by inviting oral or written submissions from a person or organisation (s.590). 1 Although the CFMEU was not a bargaining representative for the Agreement, and has not established any right to be heard in the matter, I have taken the union’s written submissions into account.

[6] In correspondence with the company, the Commission raised a number of questions about the operation of particular provisions in the Agreement, in response to which the company provided undertakings. The undertakings are attached to this decision (Annexure A).

[7] Some of the matters raised in the CFMEU submission are among the issues that the Commission identified as potential concerns relating to the Agreement. Other issues raised in the CFMEU submission are in my view not of concern and do not pose an impediment to the approval of the Agreement. I set out below my assessment of the matters raised in the CFMEU submission. I do not address other issues raised by the Commission with the company that have been resolved to the Commission’s satisfaction.

NES issues

[8] The union raised several contentions that the Agreement excluded elements of the National Employment Standard (NES), contrary to s.55 of the Act. It submitted that the Agreement fragments and only partially replicates various standards. The personal leave clause was said to be incomplete and misleading by stating that an employee ‘is entitled to 10 days personal / carers’ leave in a 12 month period.’ Of course, an employee might have accrued more than this amount over the course of employment and could under the NES take more than 10 days in a given year. However, the statement in the Agreement does not exclude the NES, and can be read compatibly with it – the clause does not say an employee can take only 10 days.

[9] The union also contended that the annual leave provision in clause 16 of the Agreement impermissibly truncated the relevant NES provisions; and that there is no reference in the Agreement to parental or community service leave at all. However, there is no requirement that an agreement set out the NES in full or even at all. Indeed there might generally be some attraction to having NES-related provisions simply sit outside enterprise agreements, so as to avoid any question of concerns regarding s.55 and s.186(2)(c) altogether.

[10] The union submitted that clause 7.2 of the Agreement, which states that a reasonable amount of overtime will be worked, is incompatible with the NES provisions relating to reasonable additional hours of work and the considerations listed in s.62(3). I do not agree; the considerations in the section are expressly referable to reasonableness. In a particular case, the amount of reasonable overtime worked under the Agreement might be nil.

[11] The union submitted that the public holiday clause in the Agreement was less beneficial than the NES in several respects. I agree. However, the Commission’s correspondence with the employer has addressed concerns regarding public holidays, and an undertaking now provides that clause 17 will be applied in a manner consistent with the NES; in particular ‘an employee’ (not limited to a full-time employee) is entitled to the benefits of the public holidays in the NES.

[12] Similarly, issues raised by the CFMEU in relation to compassionate leave have otherwise been addressed by the Commission in its correspondence with the company. Undertakings confirm the entitlement of casual employees to unpaid compassionate leave, and that compassionate leave is available on each permissible occasion.

Terms less beneficial than the Award / BOOT

[13] The union contends that several provisions in the Agreement are less favourable than the relevant Award benefits, and that the Agreement did not pass the BOOT. It is well established that the test requires the identification of terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement. 2

[14] Clause 3.2 states that ‘all rates of pay, allowances and conditions applicable to employees … shall be in lieu of the provisions of the applicable nominated award’. However, clause 3.3 then states that where the Agreement ‘is silent or does not provide for terms and conditions of employment, the terms and conditions of the Award will apply’. Clause 3.2 does not use the language of incorporation. However, it will also be noted that undertaking 5 confirms that the intention of clause 3.3 is indeed to incorporate the Award.

[15] The union pointed to a number of matters in respect of which the Agreement was said to be less beneficial than the Award. One was in relation to the requirement to work reasonable overtime under clause 7.2 of the Agreement. Clause 31 of the Award provides a mechanism similar to the NES. However, for the reasons mentioned above in relation to the NES, I do not consider clause 7.2 to be less favourable than the Award counterpart. The union also contended that various overtime provisions in the Award were not reflected in the Agreement, such that the Agreement was less beneficial than the Award in these respects. The items in question were three hours minimum payment for recall to work; transport in certain circumstances; rules concerning breaks; and four hours minimum work on public holidays. However, as the Agreement does not contain such provisions, the effect of clause 3.2 is that the relevant Award provisions apply: although the Agreement contains a ‘condition’ in relation to overtime generally, it is ‘silent on or does not provide for’ terms in relation to these specific overtime issues. The incorporated Award provisions therefore apply.

[16] In relation to overtime for casuals, in respect of which there is a specific provision in the Agreement that displaces the Award casual provision, I was concerned that there was a potential that a casual working significant amounts of overtime under the Agreement might in some cases drop below the Award. An undertaking has been provided that, should this ever occur, the Company undertakes to apply the Award casual overtime provision (clause 14.6) to the work performed. I am satisfied that this will ensure that casual employees remain better off overall than under the Award. Note that the Agreement rate of pay would still apply.

[17] The union also contended that the redundancy benefits in the Award apply more broadly than the provision in clause 19 of the Agreement. Clause 17.2 defines a redundancy as a situation where an employee ‘ceases to be employed … other than for reasons of misconduct or refusal of duty.’ The benefits in the Award are not confined to employer initiated retrenchments. 3However, the Agreement does not contain a definition of redundancy. As it is silent on this question, the award definition will therefore apply by virtue of clause 3 of the Agreement.

[18] The union further submitted that the absence of a casual conversion provision in the Agreement constituted a detriment vis-à-vis clause 14.8 of the Award. Clause 11.1 of the Agreement states that there shall be no limitation on the period during which an employee may be employed as a casual, whereas clause 14.8 of the Award affords certain casual employees a right to elect to convert to permanent employment after six months. On one reading, the Agreement does not derogate from the Award, as there is no limitation per se on how long a person may be engaged as a casual if they are happy to continue as such. However, on balance I consider that the casual conversion provision in the Award is a limitation – casual employment cannot continue in the face of an employee preference to the contrary. The statement in clause 11.1 of the Agreement that there will be no limitations on the period of casual employment should be read as ousting clause 14.8 of the Award.

[19] Any detriment entailed in this derogation relates to the removal of choice, and, potentially, job security. However, casual employment also offers certain flexibility, which some employees appreciate. Further, a casual employed under the Agreement receives the 25% casual loading, on Agreement rates of pay that exceed the Award minima. I do not consider that the absence of casual conversion in the Agreement means that employees are not better off overall under the Agreement.

[20] Clause 10.2 of the Agreement states that wages and allowances in the Agreement ‘shall be in substitution for any wage and allowance entitlement’ under any award. This clause effectively ousts any ‘allowance’ in the Award that is not expressly provided for in the Agreement. There are numerous specialist and contingent allowances in the Award, identified in the attachment to the CFMEU submission, which are not provided under the Agreement. There was no evidence that any of these allowances would necessarily be applicable to the circumstances of the company’s business, or that such application would adversely affect the BOOT. But the possibility of the application of these allowances, with BOOT relevant for some employees, seemed to me realistic. The Company provided an undertaking that if a labourer performs work that would attract allowances under clauses 21 or 22 of the Award, the allowances would be paid.

[21] Having considered all of the provisions of the two instruments, and the circumstances of the present application, I am satisfied that each award covered employee and prospective award covered employee would be better off overall under the Agreement than under the Award.

Other issues

[22] The union raised concerns as to whether the Agreement was explained to employees by the employer, and whether it was genuinely approved by employees. It contended that the Form F17 submitted by the employer in support of the application contained misleading and incorrect information. The union contends that, in answer to Question 3.5 in the F17, the employer should have indicated that the Agreement did contain some terms that were less beneficial than the Award. I agree. The answer to question 3.5 should have been ‘yes’. However, an incorrect answer provided in the Form F17 (whilst potentially a serious matter) will not necessarily impugn the genuineness of employees’ approval of the agreement, or the employer’s explanation of the agreement to employees. All of the circumstances and evidence need to be considered. I do not accept the contention that the Agreement ‘substantially diminishes’ Award entitlements, or that this case is comparable with Falcon Mining; in that matter there was other evidence to suggest that the pre-approval requirements were not complied with. 4 That is not the case here. The company’s supporting statutory declaration attests that the company contacted each employee individually to discuss and explain the Agreement and answer questions.

[23] The union also submitted that the Agreement was vague and inconsistent as to its interaction with the NES and the Award. However, in light of the undertakings that have been provided, I am satisfied that the Agreement does not exclude the NES and clearly incorporates the Award.

Conclusion

[24] I have considered the application, the statutory declaration of the employer, the submissions of the CFMEU, and the undertakings provided by the employer.

[25] I am satisfied that the Agreement passes the better off overall test.

[26] I am satisfied that the undertakings provided by the company will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[27] Subject to the undertakings referred to above, and on the basis of the material contained in the application and accompanying statutory declaration, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[28] The Agreement was approved on 21 November 2017 and, in accordance with s.54, will operate from 28 November 2017. The nominal expiry date of the Agreement is 21 November 2021.

DEPUTY PRESIDENT

Annexure A

 1   CFMEU v Collinsville Coal Operations Pty Ltd[2014] FWCFB 7940 at [75]

 2   See AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833; Armacell Australia Pty Ltd [2010] FWAFB 9985

 3   CFMEU v Levent[2017] FWCFB 3911 at [7]

 4   Falcon Mining Pty Ltd [2016] FWC 5315. See also CFMEU v KAEFER Integrated Services Pty Ltd, at [45]

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