Border Express Pty Ltd

[2016] FWCA 8554

[2016] FWCA 8554

FAIR WORK COMMISSION

DECISION

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

Border Express Pty Ltd
(AG2016/5461)

BORDER EXPRESS PTY LTD TRANSPORT EMPLOYEES AND TWU SYDNEY AND NEWCASTLE SITE AGREEMENT 2016-2020

Road transport industry
DEPUTY PRESIDENT BULL	SYDNEY, 9 DECEMBER 2016

Application for approval of the Border Express Pty Ltd Transport Employees Sydney and Newcastle Site Agreement 2012-2015

[1] An application has been made by Border Express Pty Ltd (the applicant) for the approval of an enterprise agreement known as the Border Express Pty Ltd Transport Employees Sydney and Newcastle Site Agreement 2012-2015 (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] The Agreement covers employees of the applicant who are employed at the employer’s Wetherill Park and Newcastle sites in the classifications outlined in clause 10 of the Agreement. As per the requirement under s.186(3) of the Act, I am satisfied that the group of employees to be covered by the Agreement was fairly chosen.

[3] The Transport Workers’ Union (TWU) was an employee organisation involved in the agreement making process as a bargaining representative. The TWU has filed a statutory declaration (F18) stating that it supports the approval of the Agreement.

Nominal expiry date

[4] The Agreement provides that it will operate for a nominal term of four years from the date the Agreement commences. The Commission wrote to the applicant noting that the Act specifies the nominal expiry date can be no more than 4 years from the date of approval.

[5] The applicant has provided an undertaking that the Agreement will remain in force for a period of four years from the date of approval by the Commission.

Shiftworkers

[6] The Commission wrote to the applicant nothing that the applicant’s F17 Statutory Declaration states that shiftworkers can be employed under the Agreement, however the Agreement does not define a shift worker in the terms in which shift workers are defined in the Award, ensuring that they will receive an additional week of annual leave in accordance with the National Employment Standards (NES).

[7] The applicant has noted that while it does not employ any workers who meet the definition of a shiftworker provided for in the Award, for the purpose of an additional week of annual leave provided for in the NES, the applicant has provided an undertaking that a shift worker will be defined in accordance with the Award as a seven day shiftworker who is regularly rostered to work on Sundays and public holidays.

Redundancy term detrimental when compared with NES

[8] The Commission wrote to the applicant noting that clause 26.6 of the Agreement appears to be detrimental when compared with the severance pay provisions in the NES, in that clause 26.6 appears to allow the employer to unilaterally determine when alternative employment is acceptable employment, enabling the employer to then determine when it may be exempt from paying an employee’s redundancy entitlement. Under s.120 of the Act however, an employer must make an application to the Commission to vary redundancy pay by reason of the employer obtaining other acceptable for the employee.

[9] The applicant has provided an undertaking removing clause 26.6 of the Agreement.

Objections of bargaining representatives

[10] A total of seven bargaining representatives filed a Form F18 – Statutory declaration of employee representative in relation to application for approval of an enterprise agreement. Three of the bargaining representatives stated that the employees they represented did not support the approval of the Agreement by the Commission, and provided brief reasons. The applicant was requested to provide a response to the objections raised by the bargaining representatives.

Duration of the Agreement

[11] One bargaining representative, a Mr Andrew Wilson stated that he did not agree with the “duration of the EBA.” No further detail was provided.

[12] As noted above, the nominal expiry date in the Agreement does not comply with the requirement under the Act; however this has been rectified by way of an undertaking by the Applicant.

Annual pay increases

[13] The Agreement provides that on each anniversary of the approval of the Agreement, the base hourly rates of pay for each classification will increase by 1%. Clause 11.1 of the Agreement provides that an increase of 2% may be made annually from the second anniversary onward, contingent upon the currently high absenteeism rate within the business being reduced.

[14] For the purpose of calculating average absenteeism rates, employees will be classified into a number of working groups, and the calculation of the average absenteeism rate is to take into account circumstances such as an employee’s prolonged illness.

[15] Each of the bargaining representatives who indicated that they did not support the approval of the Agreement raised as an objection the annual pay increases. Mr Eric Coelho for instance stated:

“The pay rises over the 4 years of the agreement are only 1% per year (less than CPI 1.3%) guaranteed. At the end of the 4 year agreement worker pay would have increased slower than the cost of living, making the worker worse off overall in time. Need clause: 1% or CPI, whichever is greater.”

[16] Mr Mike Potoru objected to the approval on the basis that the applicant has not allowed the CPI to be based into the agreement, and that the bonus pay increases are based on employee absenteeism as a collective.

[17] In its response to the concerns raised by the employee bargaining representatives, the applicant noted that there were indeed some areas where it was recognised during bargaining that an agreement would not be reached, and therefore could be determined through the voting process.

[18] In respect of the annual pay increases, the applicant noted that the Agreement base rates of pay are significantly higher (on average 23.9% higher) than the rates of pay under the Award, so that even with a 1% increase annually, rates would continue to be above Award base rates during the nominal term of the Agreement. Further, the applicant noted that the Agreement provides a number of more beneficial terms than the Award, including a greater annual leave loading (26.32% as opposed to 17.5% under the Award), an early morning shift allowance, a greater afternoon shift allowance and more generous meal and first aid allowances, such that employees would be better off overall under the Agreement.

[19] In respect of the 2% pay increase being based on collective reduction of absenteeism rates, the applicant states that the incentive is to be paid across four working groups, rather than across the business as a whole. The applicant submits that the KPI which has been set (6 days on average per work group) is achievable when calculated using the above method, and would address the currently high absenteeism rate which has ramifications for the business.

[20] On receipt of the applicant’s response, the bargaining representatives were, on 27 October 2016, emailed a copy of the applicant’s response and undertakings, and requested to provide a response by 3 November 2016. No response was received from any bargaining representative. On 21 November 2016 the Commission again wrote to the bargaining representatives, providing a further opportunity to file a response, and advising that if a response was not received by 23 November 2016, the application would be decided on the materials before the Commission. No response was received from any bargaining representative.

[21] Consideration has been given to the objections raised by the bargaining representatives and the response provided by the applicant. The objections do not raise issues relating to the statutory tests the Commission must apply prior to approving an agreement, rather than the outcome of the enterprise negotiations. Taking into account the significantly higher base rates of pay under the Agreement, the other more beneficial terms provided by the Agreement and the undertakings provided by the applicant, pursuant to s186(2)(d) of the Act, I am satisfied that employees will be better off overall under the Agreement than under the Award. I also note that s.206 provides protection to employees covered by an enterprise agreement in circumstances where the base rates of pay contained in an agreement fall below the base rates of pay under the corresponding Award.

[22] Section 206 ensures that the base rate of pay under an enterprise agreement must not be less than the base rate of pay under the relevant modern award:

“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.

[23] The effect of s.206(2) is that despite any clause in an enterprise agreement the base rate of pay in the agreement must not be less than the base rate of pay under the relevant modern award. 1

Conclusion

Undertakings

[24] The undertakings are taken to be a term of the Agreement and a copy is marked Annexure A. I am satisfied that the undertakings do not result in a substantial change to the Agreement, as per s.190(3)(b) of the Act. The undertakings should be brought to the attention of employees.

[25] The TWU has stated that it wishes to be covered by the Agreement, and in accordance with s.201(2) of the Act, I note that the Agreement covers this employee organisation.

[26] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[27] The Agreement is approved. In accordance with s.54(1), the Agreement will operate 7 days from approval. The nominal expiry date of the Agreement is 9 December 2020.

DEPUTY PRESIDENT

<Price code G, AE422415  PR588007>

Printed by authority of the Commonwealth Government Printer

1   Ferrymen Pty Ltd v The Maritime Union of Australia[2013] FWCFB 8025

Annexure A