Belmont 16ft Sailing Club Limited T/A Belmont 16ft Sailing Club Limited

[2024] FWCA 2572

[2024] FWCA 2572

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Belmont 16ft Sailing Club Limited T/A Belmont 16ft Sailing Club Limited

(AG2024/1897)

BELMONT 16 FOOT SAILING CLUB ADMINISTRATION AND MANAGEMENT ENTERPRISE AGREEMENT 2024

Licensed and registered clubs
DEPUTY PRESIDENT SLEVIN	SYDNEY, 10 JULY 2024

Application for approval of the Belmont 16 Foot Sailing Club Administration and Management Enterprise Agreement 2024

1. An application has been made by Belmont 16ft Sailing Club Limited pursuant to s. 185 of the Fair Work Act 2009 (the Act) for approval of an enterprise agreement known as the Belmont 16 Foot Sailing Club Administration and Management Enterprise Agreement 2024 (the Agreement). The Agreement is a single enterprise agreement. The Commission must approve the Agreement if satisfied that the requirements in ss. 186 and 187 are met.

1. Some concerns were raised with the applicant about the requirements in s. 186. There was a concern that the requirement in s 186(2)(c) that the Agreement not exclude terms of the National Employment Standards (NES) may not be met. In particular, clause 36.2 setting out the circumstances where an employer has the right to withhold an amount from an employee’s termination pay on termination, clause 13.8 and 13.9 relating to the circumstances where an employee is deemed to have abandoned their employment and clause 12 relating to notice requirements for absent employees or those who cannot attend a rostered shift may be read so as to operate in a manner inconsistent with the NES. In response to the first two matters raised the applicant has provided undertakings. Given the undertakings provided and noting clause 6.2 of the Agreement, I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES and the requirement in s 186(2)(c) is met.

1. Section 186(2)(d) requires the Commission to be satisfied the Agreement passes the better off overall test (BOOT). The test is found in s.193 of the Act and it is to be applied in accordance with s.193A. Under s.193 the Commission must be satisfied, as at the time the application for approval was made, that each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than the relevant modern award. Here the relevant award is the Registered and Licensed Clubs Award 2020 which is excluded at Clause 6.1 (the Award). In applying the test, the Commission is required by s 193A to make a global assessment of whether each employee would be better off having regard to the terms of the agreement which would be more beneficial than the Award and the terms which would be less beneficial. In making that assessment, the Commission may have regard to the patterns or kinds of work, or types of employment, that are reasonably foreseeable at the time of the application. A number of BOOT concerns were raised about the application.

1. Firstly, clarity was sought as to the means of determining the aggregated annualised salaries. It appears unclear how employees may be considered better off overall if they are to be paid equal to the Award, and where there are no safeguards for reconciliation as described in the decisions of the Full Bench in Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery[2017] FWCFB 1664] (‘Beechworth’) and Commonwealth Bank of Australia [2021] FWCFB 3635. The applicant contends that the employees covered by the proposed Agreement are covered by rates well in excess of the Award rates to compensate for these entitlements. The Applicant further submits that under the Award IFA provisions any classification level can be offered a similar salary style arrangement which offers an inflated rate of pay to compensate for penalties, overtime and other similar entitlements and noted that the Award IFA provisions do not require reconciliation.

1. A second matter was raised with the applicant in respect of whether any deficiencies in the rates of pay for casual employees may result in financial and non-financial detriment. I raised these concerns in light of the decision Loaded Rates Agreements [2018] FWCFB 3610 which at [121] provides that:

“… In an enterprise agreement which provides or permits casual employment of this nature, it is difficult to envisage how it would be possible to provide for a loaded rate for casual employees that was capable of passing the BOOT. This is because it would always be possible for the casual employee, in a given pay period, to be engaged to work on a day or at a time which would attract the payment of penalty rates under the relevant award and not to be engaged on any other hours or at any other times.”

1. The applicant explained that 25% casual loading does apply to the minimum rates outlined in the proposed Agreement in accordance with Schedule A, Note B. The applicant noted that it only engages one casual employee at Level A and Administration and Coordinator Level who works set hours on weekdays and does not work any overtime and has never worked on weekends or public holidays. The applicant is of the view that the entitlements for casual employees who may be engaged at any level do not fall short of the requirements in the Loaded Rates decision, however for the avoidance of doubt it has provided an undertaking that only employees engaged at a Level A can be employed as a casual.

1. I raised further matters with the applicant in respect of overtime and penalties which in my view required a response before I could be satisfied that the BOOT is met. Clause 23 provides that the payment of overtime is not payable to employees under the Agreement. It appears clause 20.4 which states that any additional hours will be paid at ordinary rates is inconsistent with clause 10.3 of the Award. In response the applicant explained that employees work limited overtime, with overtime for part-timers undertaken on an alternate, optional basis and not exceeding the maximum hours prescribed in clauses 20.1, 20.2 and 20.3. I also raised a concern that the rates of pay do not appear to be high enough to compensate the shift penalties (provided for at clause 24.4 of the Award) and weekend penalties (provided for at clause 24.1 of the Award) which have been omitted from the Agreement. Rates of pay also do not appear to be high enough to compensate for the difference in entitlements owed to an employee who works on a Public Holiday, compared to clause 24.1 of the Award. I sought clarity in respect of whether employees can be considered better off when working split shifts. In response the applicant provided further modelling and indicated that split / broken shifts are unlikely to be worked by employees covered by the Agreement. Based on the types of employment and patterns of work of the employees and further analysis provided, the applicant submits that employees are better off than the Award.

1. Additionally, I raised a concern that the Agreement appears to be silent on the majority of time off in lieu of overtime (TOIL) safeguards contained in clause 22.8 of the Award. Notably, whether the day off will equate to time off equivalent to the overtime payment that would have been made and that there is no requirement for TOIL to be paid out at the overtime rate on request or on termination. In response the applicant explained that the intent is for clause 23.3 to operate in a manner so as to provide for an additional benefit. The applicant has provided an undertaking that any untaken time off in lieu will be paid out on termination of employment.

1. Given the explanations provided by the applicant, the undertakings provided, and having regard to s.193A(6), and in particular the types of employment and patterns of work of the employees covered by the Agreement, I am satisfied that the BOOT is met. A copy of the undertakings in relation to the matters raised is attached in Annexure A. The terms of the undertakings were provided to all bargaining representatives. No objection was raised. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and will not result in substantial changes to the Agreement. Pursuant to s.201(3), the undertakings are taken to be terms of the Agreement. I note that should the work patterns, kinds of work or types of employment under the Agreement change, an application under s.227A is available for a reconsideration of the BOOT

1. The Agreement does not cover all of the employees of the employer, however, taking into account the factors in sections 186(3) and (3A) I am satisfied that the group of employees was fairly chosen.

1. Having regard to the undertakings and the material contained in the application and filed in relation to it, including submissions of the applicant as to intended operation of the Agreement, I am satisfied that each of the requirements of ss.186 and 187 are met.

1. The Agreement was approved on 10 July 2024, and, in accordance with s.54, will operate from 17 July 2024. At clause 4.1 the nominal expiry date is 10 July 2028. They have said it will remain in force for 4 years and the maximum is 4 years from the date of approval.

DEPUTY PRESIDENT

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Annexure A