Bible College Of South Australia Inc T/A Bible College Sa
[2023] FWCFB 183
•5 OCTOBER 2023
| [2023] FWCFB 183 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 7, Item 30(4) - Application to extend default period for enterprise agreements made during the bridging period
Bible College Of South Australia Inc T/A Bible College Sa
(AG2023/1575)
BIBLE COLLEGE SA ENTERPRISE AGREEMENT 2009
| Clerical industry | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 5 OCTOBER 2023 |
Application to extend the default period for Bible College SA Enterprise Agreement 2009
Bible College of South Australia Inc (Applicant) has applied under item 30(4) of Schedule 7 to the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth) (Transitional Act) to extend the default period for the Bible College SA Enterprise Agreement 2009 (Agreement, or the zombie agreement). The Applicant originally sought an extension for a period of four years until 6 December 2027. The Applicant subsequently sought a reduced extension period to 30 June 2024.
The Agreementwas made during the ‘bridging period’ as defined[1] in the Transitional Act and approved under the Fair Work Act 2009 (Cth) (FW Act) on 22 February 2010.[2] Agreements of this kind are one of a number of different types of agreements that are commonly referred to as ‘zombie agreements.’
The Agreement applies to the Applicant and its employees engaged as teaching staff and general staff at the Applicant’s College in South Australia.[3]
The main aspects of the statutory framework for applications for the extension of zombie agreements were detailed in the Full Bench decision in Suncoast Scaffold Pty Ltd.[4] The Full Bench there dealt with an application to extend a ‘WR Act agreement’ under item 20A of Sch 3 to the Transitional Act. The terms of item 20A of Sch 3 are relevantly the same as item 30 of Sch 7. The Full Bench’s analysis of those provisions applies equally to item 30 of Sch 7. It is not necessary to repeat that analysis here.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act2022 (Cth) (SJBP Act) amended the Transitional Act to include item 30 in Sch 7. Item 30 provides for the sunsetting of remaining enterprise agreements made during the bridging period on 6 December 2023, unless extended by the Commission. Subitem 30(6) provides that where an application is made under subitem 30(4) for the period to be extended, the Commission must extend the default period for a period of no more than four years if either:
(a) subitem (7) or (8) applies and it is otherwise appropriate in the circumstances to do so; or
(b) it is reasonable in the circumstances to do so.
Subitem (7) applies where the application is made at or after the notification time for a proposed enterprise agreement that will cover the employees and bargaining for the proposed enterprise agreement is occurring. No reliance was placed on this subsection by the Applicant.
The present application was advanced on the basis that subitem (8) applies. That subitem applies if it is likely that at the time the application is made, the relevant employees covered by the Agreement would be better off overall if the Agreement continued to apply than if the relevant modern award referred to in subitem (9) applied to the employees. The relevant modern award in this case is the Educational Services (Post-Secondary Education) Award 2020 (Award).
Grounds for the Application
The Applicant contended that the employees of the Applicant would be better off overall if the zombie agreement continued to apply, than if the Award applied. The Applicant said that bargaining for a new agreement will take place in 2024 and would be completed before the date of the proposed extended default period. The Applicant pointed out that some key staff were on sabbatical leave and would return in the latter half of 2023 and the first half of 2024 and that bargaining would move forward after that.
Better Off Overall Analysis
The Fair Work Commission’s Agreements Analysis Team prepared a written assessment of the Agreement for the purpose of comparing the wages and entitlements with those contained in the Award. The assessment took account of a number of undertakings that were given to the Commission at the time the Agreement was approved. A copy of this analysis was provided to the Applicant who was given an opportunity to make further comments or submissions. The Applicant did not seek to engage directly with the analysis, but provided the Commission with updated material as to wages that are currently paid to employees covered by the Agreement and some background information as to the history of the rates and conditions that have applied in practice to those covered by the zombie agreement since it was made.
The Agreement provides for a pay schedule for 14 classifications setting out the rates of pay for each of those classifications and phasing in annual increases for them until 1 July 2014. The rates of pay provided for by the Agreement were the subject of an undertaking when the Agreement was approved in 2010. As a result of the undertaking, an amended schedule of rates was to apply in lieu of the schedule in the Agreement. There was a further undertaking to provide for annual increases to the rates in the Agreement (as amended by the first undertaking) based on National Wage determinations of, as it then was, Fair Work Australia.
According to the Commission’s analysis, when the various increases arising out of annual wage review processes are applied to the Agreement rates, the result is that employees in some classifications are entitled to receive rates of pay that are up to 18.76% above the corresponding Award rates while others receive rates that are up to 13.01% below award rates.
For the purposes of comparing base rates of pay between the Agreement and the Award, we have taken into account the operation s.206 of the FW Act which relevantly provides:
206 Base rate of pay under an enterprise agreement must not be less than the modern award rate or the national minimum wage order rate etc.
If an employee is covered by a modern award that is in operation
(1) If:
(a) an enterprise agreement applies to an employee; and
(b) a modern award that is in operation covers the employee;
the base rate of pay payable to the employee under the agreement (the agreement rate) must not be less than the base rate of pay that would be payable to the employee under the modern award (the award rate) if the modern award applied to the employee.
(2) If the agreement rate is less than the award rate, the agreement has effect in relation to the employee as if the agreement rate were equal to the award rate.
The zombie agreement includes a number of less beneficial entitlements compared to the Award. The Agreement makes no provision for the payment of overtime rates for work performed outside of ordinary working hours. The Award provides for the payment of penalty rates for overtime in the case of full-time and part-time employees of 150% of the minimum hourly rate for the first two hours and 200% thereafter, and in the case of casual employees an additional 25% casual loading.
The Agreement makes limited provision[5] for ‘time off in lieu’ for additional hours worked up to a maximum of one day[6] but there is no provision for the payment of unused time in lieu, either during employment or on termination. The Award allows for employees to be paid out for time in lieu at their request where the leave has accrued but has not been taken within 6 months of accrual, or on the termination of employment, with such payments being paid at overtime penalty rates.[7]
The Award makes provision for lectures, tutorials and contact hours of teaching to count as additional time worked to take account of preparation, assessment and consultation.[8] The Agreement makes no such provision.
The Agreement provides the reimbursement of fares and vehicle travel but otherwise makes no provision for the payment of allowances. The Award provides for several allowances including first aid, clothing, laundry, meal and living away from home allowances, which may be applicable to employees covered by the Agreement.
The Agreement does not provide for paid rest breaks. The Award provides for two paid rest breaks per day for each employee.[9]
There are some more favourable provisions in the Agreement, notably a narrower span of ordinary hours (8.30am to 5.30pm on weekdays compared to 7am to 7pm under the Award) and a minimum engagement period of 3 hours for all employees whereas for casual teaching/tutoring staff the minimum period is 2 hours under the Award. There is an additional week of annual leave provided for in the Agreement which is paid in lieu of annual leave loading.
Consideration
In Suncoast Scaffolding the Full Bench observed that the application of the better off overall test in Item 9 of Item 20A in Schedule 3 required a broad evaluative judgment based upon an overall comparison of the terms of the transitional instrument and the relevant award(s) in their application to the cohort of award covered employees. We apply the same approach here.
Given the above analysis, we are not satisfied that the award covered employees, viewed as a group, would be likely to be better off overall if the Agreement continued to apply to them rather than if the relevant modern award applied. The inferior employment conditions referred to above support this conclusion. We note that to the extent the Agreement provides more favourable rates of pay, this applies to a limited number of classifications only. The remaining classifications are disadvantaged by the inferior conditions without the offsetting benefit of the higher rates of pay. We are not satisfied that the rates of pay, in combination with the conditions of employment, would make it likely that the employees, viewed as a group, would be better off overall. Consequently, we conclude that subitem 8 of item 30 does not apply. It is therefore unnecessary to consider whether it is also otherwise appropriate in the circumstances to extend the default period.
Although the Applicant did not expressly contend that the default period should be extended because it was reasonable in the circumstances to do so within the meaning of subitem (6)(b), we have, for completeness, considered that issue. We are unable to discern any reason why it would be reasonable in the circumstances to extend the life of the Agreement. We note that the Applicant has, since at least 2018, been reviewing remuneration arrangements applying to staff at the College. There was no evidence to suggest that the continued operation of the Agreement was critical to the operation of the Applicant and there was an indication from the Applicant that they intend to move as quickly as possible to finalise a contemporary industrial agreement. There was no evidence from employees to whom the Agreement applied to support any extension to the life of the Agreement. In the absence of other relevant considerations supporting the conclusion that it would be reasonable to extend the Agreement, we consider that an extension here is not reasonable and that the default period should not be changed.
For the above reasons, the application is dismissed.
DEPUTY PRESIDENT
[1] Item 2, Part 1 of Schedule 1.
[2] [2010] FWAA 1369.
[3] Clause 1.3.
[4] [2023] FWCFB 105 at [3]-[18].
[5] Clause 8.1
[6] See undertaking 1 in approval decision 22 February 2010 op cit.
[7] Clause 20.5.
[8] Clauses 14.2 and 14.3.
[9] Clause 15.3
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