Bona Management Group Pty. Ltd. T/A Macxsec

[2013] FWC 7692

[2013] FWC 7692

FAIR WORK COMMISSION

DECISION

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

Bona Management Group Pty. Ltd. T/A Macxsec
(AG2013/5860)

COMMISSIONER LEWIN MELBOURNE, 9 OCTOBER 2013

Application for approval of the Macxsec Enterprise Agreement 2013 - better off overall test - methodology - use of total hours worked by roster of all employees to be covered by Agreement rejected - each employee must be better off overall - undertakings considered - hours overtime and shift work remuneration considered - modelling of work permitted by hours provisions of Agreement - remuneration provided for by Agreement - Comparison to Award provisions - Agreement fails better off overall test.

Introduction

[1] This decision concerns an application for approval of the Macxsec Enterprise Agreement 2013 (the Agreement) pursuant to s.189 of the Fair Work Act 2009 (the Act).

[2] The application was the subject of a decision dated 29 May 2013, 1 by which approval of the Agreement was refused. That decision determined that the Agreement did not pass the better off overall test prescribed by s.193 of the Act.

[3] That decision was the subject of an Appeal. The Appeal was decided by the Full Bench on 15 August 2013 2. The decision was quashed by the Full Bench having regard to an erroneous notice of listing inadvertently sent to the Applicant. The reasons for the decision of the Full Bench are set out below.

[4] We accept that the content of the Notice of Listing, no doubt issued inadvertently, gave rise to a legitimate expectation on the part of the applicant employer that the Agreement would be approved on the basis of the information and undertakings it had earlier provided to the Commissioner, and that there was therefore no need for it to seek to be heard further in respect of its application. The employer was not put on notice that in fact the information and undertakings provided were considered insufficient to allow the Agreement to be approved. The employer was as a consequence denied procedural fairness.

[5] Not every denial of procedural fairness at first instance entitles an aggrieved appellant to a new hearing. An appellant in that situation has to demonstrate that it was denied the opportunity of a successful outcome. If a new hearing would only lead to the same result as the initial hearing, it will not be ordered. In Stead v State Government Insurance Commission 3 the High Court said at page 145 that the general principle of a right to a fair trial was subject to “an important qualification”:

“That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility.

For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submission on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial.”

[6] At the hearing of the appeal, the appellant did not attempt to demonstrate that the “better off overall test” analysis contained in the Commissioner’s decision was flawed such that the Agreement should have been approved. We ourselves cannot detect any flaw in the analysis.

[7] However, the appellant did submit that, firstly, it was denied the opportunity to provide further information and analysis to the Commissioner in response to the concerns patently held by the Commissioner concerning satisfaction of the “better off overall test”, and secondly that it was denied the opportunity to provide further undertakings which might have allowed the Agreement to be approved. We accept that the appellant was denied these opportunities, and therefore should be permitted a new hearing so that it may now be afforded these opportunities.

[4] The outcome of the Appeal was as follows:

[5] We make the following orders:

1. Permission to appeal is granted.

2. The appeal is upheld.

3. The decision of Commissioner Lewin of 29 May 2013 the subject of the appeal is quashed.

4. The employer’s application for approval of the Macxsec Enterprise Agreement 2013 is under s.607(3)(c) of the Fair Work Act remitted to Commissioner Lewin for re-hearing subject to the following directions:

(i) the Commissioner shall give the employer and the employees’ bargaining representative an opportunity to demonstrate that the analysis for the purpose of the statutory test in s.193 that was contained in the Commissioner’s decision of 29 May 2013 was incorrect and/or incomplete;

(ii) the Commissioner shall give the employer the opportunity to provide further undertakings in accordance with the requirements of s.190 which would allow the Agreement to be approved.

[5] On 29 August 2013, Directions were issued to the Applicant in the following terms.

[1] In accordance with the Decision issued by the Full Bench of the Commission in Melbourne on 15 August 2013, [2013] FWCFB 5768, I direct that:

a. The employer may provide the Commission any further proposed undertakings in accordance with the requirements of s190 of the Fair Work Act 2009 (the Act) which would allow the Agreement to be approved in this matter.

b. Any such undertaking shall be provided in writing by the close of business on Wednesday, 11 September 2013.

c. The employer and the employee’s bargaining representative shall provide written submissions to demonstrate that the analysis for the purpose of the statutory test in s.193 of the Act that was contained in the Commission’s decision of 29 May 2013 was incorrect and/or incomplete.

[2] These directions are to be complied with by 5:00pm, Wednesday, 11 September 2013.

[3] The matter will be heard on Thursday, 12 September 2013.

[6] Pursuant to the Directions the Applicant filed accordingly on 11 September 2013.

[7] An attendance hearing was conducted on 12 September 2013. Mr Robert Graham appeared on behalf of the Applicant.

[8] Subsequent to the hearing the Applicant filed the following undertakings signed on 18 September 2013 and filed with the Commission on 23 September 2013, for consideration as terms of the Agreement, for the purposes of the application of the better off overall test.

RE: Matter Number AG2013/5860

MACXSEC- ENTERPRISE BARGAINING AGREEMET 2013

Pursuant to Section 190 of the Fair Work Act 2009 (Cth) regarding the above application,

I respectfully seek your approval of the following Written Undertakings.

1. Despite the provisions of Clause 10, a Full-time & Part-time Level 1 Guard will be

paid $20.50 per hour for Weekdays and $23.50 for Weekends (except for Overtime),

2. Despite the provisions of Clause 10, a Full-time & Part-time Level 2 Guard will be

paid $21.05 per hour for Weekdays and $24.1 0 for Weekends (except for Overtime),

3. Despite the provisions of Clause 10, a Full-time & Part-time Level 3 Guard will be paid $21.60 per hour for Weekdays and $24.75 for Weekends (except for Overtime),

4. Despite the provisions of Clause 10, a Full-time & Part-time Level 4 Guard will be paid $22.15 per hour for Weekdays and $25.40 for Weekends (except for Overtime),

5. Despite the provisions of Clauses 12(a), (b). (d) & (e) no employee will be required to work more than 12 hours in succession without a minimum break of not less than 8 hours during a 38 hour week roster cycle,

6. Despite the provisions of Clause 12(b), a Part-time employee prior to their initial engagement will have confirmed in writing their rostered hours of work,

7. Despite the provisions of Clause 12(f), no employee will be engaged as a Casual,

8. Despite the provisions of Clause 12(h), the amount of Voluntary Additional Hours will be limited to an average of five (5) hours per week, averaged over two (2) pay periods. Time worked in excess of those hours shall be paid as Overtime.

Consideration - analysis in Decision of 29 May 2013

[9] What follows should be read in conjunction with the decision of 29 May 2013.

[10] I will refer to the new undertakings shown above further below. However, before doing so I have given consideration to what was put to me at the hearing on 12 September 2013. For reasons which follow, nothing was put to me at the hearing which, in my view, demonstrates that the analysis of the Agreement, and Undertakings which had been offered at that time of the decision of 29 March 2013, was incorrect and/or incomplete, so as could have given rise to a conclusion that the Agreement, taken together with those Undertakings, passed the better off overall test.

[11] At the hearing on 12 September 2013, Mr Graham tendered Exhibit RG1, which, in one of its particulars, showed a variance of 0.7% and 0.5% in the calculation of the night shift allowance, derived from the Security Industry Award 2010 (the Award), used by me in my decision of 29 May 2013. I had applied night shift loadings of 122% and 146% whereas the Applicant submitted that the correct percentages were 121.7% and 145.7% respectively. Without digressing into a discussion of appropriate rounding to a full percentage point, for modelling purposes, the effect of the difference relied upon in this respect is of no substantial consequence in relation to the relevant models contained in the decision of 29 May 2013. The models in the decision of 29 May 2013, to which these variances were directed in Exhibit RG1, identified comparative differences such that the remunerative provisions of the Agreement and the extant undertakings would have to improve by between 16.83% and 34.99% for an employee working under the terms of the Agreement together with those undertakings when compared to an employee working under the terms of the Award.

[12] Accepting the validity of the variances relied upon (which I do insofar as they reflect fractions of 0.3%) and the marginal impact on the relevant calculations in the decision of 29 May 2013, this would not affect the conclusion that, in the relevant circumstances referred to, the models contained in the 29 May 2013 decision showed significant disadvantages accruing to an employee working in accordance with the relevant terms of the Agreement, and the Undertakings extant at 29 May 2013, when compared with the terms of the Award.

[13] Additionally, Exhibit RG1 refers to other arithmetic calculations in modelling of disadvantages occurring under the Agreement in the decision of 29 May 2013. The relevant calculations and representations offered in Exhibit RG1 are conducted in a different order than the models in the decision of 29 May 2013. However, the difference of procedure is of no substance and does not affect the ultimate conclusions concerning the better off overall test, which were drawn from the models in the decision of 29 May 2013.

[14] Most importantly, the different order of the relevant calculations contained in Exhibit RG1 does not affect the conclusion that in the circumstances identified an employee would have been disadvantaged by the terms of the Agreement, considered together with the extant Undertakings at 29 May 2013, when compared to the terms of the Award, for reasons explained below.

[15] To understand the analysis offered in Exhibit RG1 below it is necessary to explain first that the enclosed tables to the left are those referred to by the Commission in the decision of 29 May 2013 and those (unenclosed), on the right, are those presented by the applicant at the hearing on 12 September 2013, to demonstrate alleged errors.

[16] The relevant section of Exhibit RG1 is as follows:

“Model A - Permanent level 1 employee working a 38 hour week Wednesday to Sunday half day shift half night shift shows -20.61% which should be -17.08%

Award Total Weekly Rate	$930.36	Award Total Weekly Rate	$930.36
Agreement Total Weekly Rate	$771.40	Agreement Total Weekly Rate	$771.40
Percentage Difference	-20.61%	Percentage Difference	-17.08%

Model B - Casual level 1 employee working a 38 hour week Wednesday to Sunday half day shift half night shift which has no relevance to the organization, shows -16.83% which should be -14.40%

Award Total Weekly Rate	$1,085.48	Award Total Weekly Rate	$1,085.48
Agreement Total Weekly Rate	$929.10	Agreement Total Weekly Rate	$929.10
Percentage Difference	-16.83%	Percentage Difference	-14.40%

Model C - Permanent level 1 employee starting on a Monday working 10 X 12 hour shifts (120 hours total) including (4 X 12 hours) weekends and a half day shift half night shift shows -34.99% which should be -25.91%

Award Total Weekly Rate	$3,288.33	Award Total Weekly Rate	$3,288.33
Agreement Total Weekly Rate	$2,436.00	Agreement Total Weekly Rate	$2,436.00
Percentage Difference	-34.99%	Percentage Difference	-25.91%

Likewise if we compare the Model scenarios provided by the Commissioner in his Decision not previously seen by the applicant, it is apparent once again that the resultant figures in every case are incorrect, thus bringing into question the use of such Models.

Example1: Level 1 employee working every second weekend, Saturday and Sunday, over a two week period (76 hours) shows -1.20% which should be -1.18%

Award Total Weekly Rate	$1,561.31	Award Total Weekly Rate	$1,561.31
Agreement Total Weekly Rate	$1,542.80	Agreement Total Weekly Rate	$1,542.80
Percentage Difference	-1.20%	Percentage Difference	-1.18%

Example 2: The analysis can be undertaken for an employee working night shift on the same roster shows -16.39% which should read -14.08%

Award Total Weekly Rate	$1,795.63	Award Total Weekly Rate	$1,795.63
Agreement Total Weekly Rate	$1,542.80	Agreement Total Weekly Rate	$1,542.80
Percentage Difference	-16.39%	Percentage Difference	-14.08%

Example 3: A part time employee can be engaged to work 13 hours per day for 3 days per week on night shifts shows -9.55% which should read 8.72%

Award Total Weekly Rate	$867.35	Award Total Weekly Rate	$867.35
Agreement Total Weekly Rate	$791.70	Agreement Total Weekly Rate	$791.70
Percentage Difference	-9.55%	Percentage Difference	-8.72%

[17] The issue raised by this submission is what it is that is mathematically represented in the respective tables. The table on the left shows the percentage increase in the remuneration prescribed by the Agreement which would be required to equate with the relevant remuneration prescribed by the Award. The table on the right shows the percentage amount less than the Award which the remuneration prescribed by the Agreement represents. By either representation the outcome shows significant deficits at the time of the 29 May 2013 decision, between the remuneration prescribed by the Agreement (and where relevant any of the undertakings extant at that time) and the remuneration prescribed by the Award.

[18] The range of the deficits shown on the left hand table is between -1.20% to -34.99%. The figures on the right hand table represent a range of difference from -1.118% to -25.91%. Clearly this part of Exhibit RG1, demonstrates that by either model of representation, in the models referred to by the Applicant in exhibit RG1, employees would not have been better off over all if employed under the terms of the Agreement and the undertakings extant at 29 May 2013 than if employed in the applicable circumstances under the terms of the Award.

[19] In addition to the above, at the hearing of 12 September 2013, Mr Graham reiterated a submission that the better off overall test should be applied to what he referred to as the “total average rostered hours as previously supplied by the organisation in their correspondence dated 10 May 2013”.

[20] I reject this submission for the reasons expressed in my decision on 29 May 2013, which can be understood by reference to paragraphs 12 to 20 inclusive thereof and the reasons for the decision in the matter of National Protection Group T/A NPS Australia 4, cited in paragraph 16 thereof. Using an abstract total of hours worked by the employee’s covered by the Agreement to represent the hours of work which may be worked in individual circumstances, according to the terms of the Agreement and any relevant undertakings, is not appropriate when applying the better off overall test.

[21] Other than these matters there was nothing put to me which might lead me to conclude that the analysis of the terms of the Agreement, together with the Undertakings proposed at the time of the decision of 29 May 2013, or the approach taken to the application of the better off overall test was erroneous or incomplete, such that the Agreement, together with the extant undertakings, passed the test at that time.

[22] While the quantitative details of the above analyses are now effectively superseded by the new Undertakings of 18 September 2013, as set out previously, for the further purposes of this decision I will incorporate the Applicant’s preferred model of differential calculation when modelling the remunerative effects of the terms of the Award on work which may be performed under the terms of the Agreement when compared to the applicable remuneration payable under the terms of the Agreement and provide additional information for clarity of representation in modelling to follow.

The new Undertakings

[23] I therefore now turn to consider the terms of the Agreement together with the Undertakings offered on 18 September 2013, as required by the decision of the Full Bench at paragraph 4 (ii) thereof above.

[24] The decision of 29 May 2013 refusing approval of the Agreement set out many of the critical terms of the Agreement and can be usefully read in conjunction with what follows, in particular the hours and overtime provisions of the Agreement as referred to in paragraph 9 of that decision.

[25] In my judgement, the Agreement taken together with the new Undertakings of 18 September does not pass the better off overall test, for the following reasons.

[26] While the new Undertakings set out above address comparative disadvantages as between the terms of the Agreement and the Award, significant deficits remain. These deficits largely arise from the terms of the Agreement which regulate the hours of work and the hourly rates of pay and overtime when compared with relevant provisions of the Award.

[27] In my consideration of the terms of the Agreement and the terms of the Award, in the decision of 29 May, I referred to the Applicant’s submission at that time that, for the purposes of the better off overall test, an employee might be considered to only ever work one weekend in two. At paragraph 20 that decision I observed that there was “nothing in the Agreement or the Undertakings which would ensure such arrangements were always a part of an employee’s roster and would only apply where an employee was required to perform work for more than seven days. 5” I then demonstrated that despite the deficiencies in the terms of the Agreement and the Undertakings at that time, even if one were to model work under the Agreement accordingly, employees would still have been disadvantaged.

[28] It is important to note that the Undertakings now under consideration do not address this deficiency. There is no provision of the Agreement which provides that an employee must be rostered on only one weekend in two. Consequently, there is nothing except this previous hypothesis to ground analysis of the terms of the Agreement on the basis that employees will always be rostered on only one weekend in two. Accordingly, rosters under the Agreement can provide for employees to work for example two weekends in a fortnight.

[29] Of some consequence for consideration of the terms of the Agreement for the purposes of the better off overall test analysis are the provisions of the Agreement in relation to work performed at night. The “Hours of Work” provisions of the Agreement allow that the hours of work may be performed at any time of day on any day. The Agreement applies in the security industry. Night work and weekend work are notorious features of the industry. The Undertakings make no reference to any modification of this aspect of the terms of the Agreement. On my consideration, the terms of the Agreement together with the Undertakings of 18 September 2013 would result in a fulltime employee working night shift being worse of under the terms of the Agreement than under the terms of the Award.

[30] No undertakings have been offered in relation to the rostering of hours of work or specified rosters which employees would work were offered on 18 September 2013, as was the case when the decision of 29 May 2013 was issued.

[31] A number of models demonstrating the deficits remaining under the terms of the Agreement, including consideration of the effects of the new undertakings of 18 September 2013, are appended to this decision. Those models clearly illustrate significant deficits arrising from what hours of work are permitted by the Agreement and the remuneration therefore provided by the terms of the Agreement and the undertakings of 18 September 2013,when compared to the terms of the Award.

[32] For all of these reasons I cannot be satisfied that the Agreement passes the better off overall test. The Agreement therefore cannot be approved.

[33] An Order dismissing the Agreement will be issued.

Appearances:

Mr R Graham for the Applicant

Hearing details:

Before Commissioner Lewin

2013

Melbourne:

12 September 2013.

 1   [2013] FWC 3372.

 2   [2013] FWCFB 5768.

 3 (1986) 161 CLR 141

 4   [2010] FWA 9351.

 5   [2013] FWC 3372 at para 20.

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