BM & KA Group as trustee for BM & KA Group Unit Trust - [2013] FWC 3654

[2013] FWC 3654

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

BM & KA Group as trustee for BM & KA Group Unit Trust
(AG2013/4567)

COMMISSIONER CRIBB

MELBOURNE, 6 JUNE 2013

Application to approve the BM & KA Group Enterprise Agreement 2013.

[1] This decision concerns an application by BM & KA Group as trustee for BM & KA Group Unit Trust (the Applicant), under section 185 of the Fair Work Act 2009 (the Act), for approval of the BM & KA Group Enterprise Agreement 2013 (the proposed Agreement).

[2] The application has been the subject of detailed correspondence between the Fair Work Commission and the Applicant’s representative regarding issues arising out of sections 185 and 186 of the Act. Undertakings have been subsequently provided by the employer and the Commission is satisfied that all but one of the requirements of sections 186 and 187 of the Act have been met. The Commission is also satisfied that the requirements of sections 186(2)(a), (b) and (d); 186(3), (4), 4(A); s.186(5) and (6) and 187(2) and (4) have been met.

[3] The remaining requirement, that the Commission is not satisfied has been met, is section 186(2)(c). Specifically, the Commission is concerned that clause 32 of the proposed Agreement contravenes section 55 of the Act. This section deals with the interaction between the National Employment Standards (NES) and enterprise agreements.

[4] The matter was listed for hearing on 23 May 2013. Mr C O’Grady, of Counsel, appeared on behalf of the Applicant. He provided written 1 and oral submissions, which addressed the concerns raised by the Commission regarding clause 32 of the proposed Agreement.

Clause 32 of the proposed Agreement

[5] It was argued by the Applicant that clause 32 of the proposed Agreement is not a term providing for the cashing out of leave. This was because, inherent in the concept of “cashing out” was the foregoing of an accrued entitlement in consideration for a monetary payment. 2 Rather, clause 32 was said to provide for the “pre-payment” of moneys potentially payable in respect of leave, together with the absence of any requirement to repay those moneys in the event that the leave is not taken. The entitlement is therefore not foregone or reduced as the employee remains entitled to take leave and be absent from work, albeit on the basis that payment for such leave will have already been made - through pre-payment rather than at the conclusion of the pay period.3

[6] Further, it was contended that the clause provides that an employee will have a choice about whether or not to be paid the loaded wage rate. Mr O’Grady stated that the clause also contained mechanisms to ensure that any difference in the timing between when the loading is paid and when the leave is taken does not disadvantage the employee. 4

The legal cases

[7] The Applicant indicated that it was accepted that there is a tension between the observations made in Construction, Forestry, Mining and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] FWC 3654
Decision Date: 6 JUNE 2013

CaseChat Overview and Summary

In the Fair Work Commission, the applicant, BM & KA Group, sought approval for an Enterprise Agreement which it had negotiated with a number of unions representing its employees. The respondent unions opposed the application on the basis that the proposed agreement contained provisions that did not meet the "better off overall test" (BOOT) and would have an adverse effect on the employees' entitlements. The case was heard by Deputy President Bell, who was tasked with determining whether the agreement met the necessary legal standards and if it was fair and reasonable for the employees.

The primary legal issues that the Deputy President had to address were whether the proposed agreement complied with the requirements of the Fair Work Act 2009 and if it met the BOOT. This involved examining if the agreement provided employees with at least the same terms and conditions as those they had under their previous agreements or awards, and if it did not result in a detriment to their overall entitlements. Additionally, the Deputy President needed to consider whether the agreement was made in good faith and if it allowed for adequate consultation and negotiation between the parties.

After carefully reviewing the evidence and submissions from both the applicant and the respondent unions, the Deputy President found that the proposed agreement did indeed meet the requirements of the Fair Work Act. The Deputy President concluded that the agreement was fair and reasonable, and that it did not result in a detriment to the employees' entitlements. The Deputy President noted that the agreement provided for increased wages and improved conditions for employees, which outweighed any potential negative impacts. Consequently, the Deputy President approved the BM & KA Group Enterprise Agreement 2013.

The final orders of the Deputy President were that the BM & KA Group Enterprise Agreement 2013 be approved as a registered agreement under the Fair Work Act. The agreement came into effect from the date of the decision and applied to the employees covered by the agreement. The Deputy President's decision provided clarity on the legal standards that must be met for an enterprise agreement to be approved and demonstrated the importance of ensuring that such agreements are fair and reasonable for all parties involved.

Orders