Border Express Pty Ltd

[2013] FWC 7627

[2013] FWC 7627

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Border Express Pty Ltd
(AG2013/8756)

Road transport industry
COMMISSIONER ROBERTS	SYDNEY, 30 SEPTEMBER 2013

Application for approval of the Border Express Pty Ltd Transport Employees Melbourne Sites Enterprise Agreement 2013 - 2016.

[1] An application has been made for approval of an enterprise agreement known as the Border Express Pty Ltd Transport Employees Melbourne Sites Enterprise Agreement 2013 - 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Border Express Pty Ltd (Border Express). The Agreement is a single-enterprise agreement.

[2] On 6 September 2013 the Transport Workers’ Union of Australia (TWU), being a bargaining representative for the Agreement, filed a notice under s.183 of the Act supporting approval of the Agreement and wishing to be covered by the Agreement. On 10 September the TWU rescinded its support for the approval of the Agreement on the sole ground that the agreement provisions relating to part-time employees in clause 10.4.3 would result in the Agreement not passing the Better Off Overall Test (the BOOT) in relation to that class or group of employees. The TWU does not oppose approval on any other ground relating to the BOOT. The TWU does not allege any technical deficiencies in the Agreement-making process or the application for approval. The TWU takes the further position that if its objection to approval is rejected then it seeks to be covered by the Agreement when approved.

[3] The modern award which applies is the Road Transport and Distribution Award 2010 (the Award).

[4] The Agreement provisions in relation to part-time employees are relevantly found at clauses 10.4 and 16.1:

“10.4 A Part-time employee’s entitlements under this Agreement shall be a prorate proportion of these entitlements set out in this Agreement for full-time employees.

10.4.1. Employees may be employed on a permanent basis to work regular days and regular hours less than 38 hours per week.

10.4.2 Hours of work to be determined and altered by agreement with the employer and employee.

10.4.3 Part time employees may be offered additional work up to 38 hours per week at ordinary pay.

16.1 The ordinary hours of work shall not exceed 40 hours per week.

16.1.1 Part-time Employees may be employed on a permanent basis to work regular days and regular hours less than 38 hours per week.

16.1.2 Part time Employees may be offered additional work up to 38 hours per week at ordinary pay.”

[5] As at the date of the making of the Agreement, it does not cover any part-time employees.

[6] Clause 12.4 of the Award provides:

“12.4 Part-time employment

(a) A part-time employee is an employee who is engaged to work less than 38 ordinary hours per week.

(b) Before commencing part-time employment, the employee and employer must agree upon:

(i) the hours to be worked by the employee, the days upon which they will be worked and the commencing and finishing times for the work; and

(ii) the classification applying to the work to be performed.

(c) Except as otherwise provided in this award, a part-time employee is entitled to be paid for the hours agreed upon in accordance with clause 12.4(b)(i).

(d) The terms of the agreement may be varied by consent.

(e) The terms of the agreement or any variation to it must be in writing and retained by the employer. A copy of the agreement and any variation to it must be provided to the employee by the employer.

(f) A part-time employee must be paid per hour 1/38th of the weekly rate prescribed by clause 15-Classifications and minimum wage rates for the classification in which the employee is engaged. A part-time employee must receive a minimum payment of four hours for each day engaged.

(g) The terms of this award apply pro rata to part-time employees on the basis that ordinary weekly hours for full-time employees are 38.

(h) All time worked in excess of the agreed hours referred to in clause 12.4(b)(i) will be paid at the appropriate overtime rate.”

[7] The application came on for hearing before me via recorded telephone link on 13 September 2013. Border Express was represented by its National People & Culture Manager, Ms L Kearneyand Ms S Williams of the Australian Industry Group. The TWU was represented by Mr H Smith.

[8] The Company submits that clause 10.4 is not inconsistent with the Award provisions and that the Award and the Agreement should be read in conjunction with each other. The Company contends that it has the right to offer additional hours, and the employee can in turn reject the offer of those hours. The Company further submits that this is in essence about an agreement being reached between the employee and the employer about the variation of ordinary hours as per clause 12.4 of the Award which allows the terms to be varied by consent.

[9] The Company further states that this clause occurs in identical form in some eight current Border Express agreements for other states and territories which have been approved by the Commission. Those agreements include: Border Express Pty Ltd Transport Employees ACT Enterprise Agreement 2012-2016 (approved on 5 March 2012, clause 9.5); Border Express Pty Ltd Transport and Distribution Facility Employees South Australia Agreement 2011-2014 (approved on 10 November 2011, clause 9.4) and Border Express Pty Ltd Transport Employees Queenlsand Enterprise Agreement 2011-2014 (approved on 10 April 2012, clause 9.3). The same provision occurred in the predecessor agreement to the one under consideration in this decision.

[10] The TWU submits that clause 10.4.3 of the Agreement provides that a part time employee may work additional hours up to 38 hours per week at ordinary pay. The Award provides that part-time employees must have agreed hours of work with agreed starting and finishing times before commencing the employment, and that any time worked in excess of or outside the agreement hours would be paid at the appropriate overtime rates. TWU said part time employees would be disadvantaged under the Agreement.

[11] Border Express argues that any additional hours can only be offered to employees rather than them being required to work. In this regard, Ms Williams said: “When you look at the clauses in the agreement compared to those in the Road Transport Distribution Award, they aren’t actually inconsistent, but instead we would submit that they should be read in conjunction with each other. Clause 10.4 of the agreement states that, “A part-time employee may be offered additional work up to 38 hours at ordinary pay.” This is again reiterated in clause 16.1.2 which states that, “A part-time employee may be offered additional work up to 38 hours at ordinary pay.” The use of the words “may be offered” is crucial as it distinguishes between an employee being required to work additional hours without receiving that overtime payment. We in fact don’t disagree with the TWU’s broad notion that if an employee is required to work overtime hours then they would be paid those overtime rates.” 1

Conclusion and Determination

[12] The Act requires that the BOOT must be considered on each occasion an agreement comes before the Commission for approval. It is not automatic that an agreement will be approved because its predecessor or similar existing agreements contain an identical provision which was held at the relevant time to not offend the BOOT. However, the existence of the same provision in both the predecessor agreement and several current Border Express agreements approved by other Members of the Commission, cannot be totally without influence.

[13] In Federal Express (Australia) Pty Ltd and Federal Express Corporation 2 Commissioner Cargill helpfully summarised the way in which the BOOT is to be applied:

“As the Armacell 3 and NTEIU4 Full Benches determined, it requires the identification of terms in the Agreement which are more beneficial for an employee when compared with those in the relevant award, the terms which are less beneficial and an overall assessment of whether the employee would be better off under the Agreement.” (citations added)

[14] The application by Border Express (Form F17) sets out a number of areas where employees under the Agreement will be better off when their wages and conditions of employment are compared with the Award. The application concedes that there are some areas where the provisions in the Agreement would be inferior to those in the Award. However the TWU only submits that the BOOT is not met in relation to possible additional hours performed by (putative) part-time employees. Section 193 of the Act requires that the interests of prospective employees are also subject to the BOOT.

[15] There is no contention that any other employee will not be better off overall under the Agreement. I agree with that view and will therefore confine myself to an examination of the part-time employee hours of work issue only.

[16] I now turn specifically to an examination of clause 10.4 of the Agreement and a comparison of those provisions with clause 12.4 of the Award.

[17] Initially, it is important to note the provisions of clause 2.2 of the Agreement:

“2.2 This Agreement shall be read in conjunction with the Road Transport and Distribution Award 2010 (‘the Award’) as varied from time to time. In the event of any inconsistency between the terms of this Agreement and the Award, this Agreement shall prevail to the extent of the inconsistency.”

[18] It is clear from a fair reading of clause 12.4 of the Award that it prescribes that part-time employees and their employers must agree, prior to commencement of employment, on the hours to be worked by the employee, the days upon which those hours will be worked and the commencing and finishing times of such work. However, that agreement may formally be varied by consent after employment has commenced. Where workers perform in excess of the agreed hours, such work will be paid at overtime rates.

[19] Clause 10.4 of the Agreement also provides that part-time employees may be employed on a permanent basis to work regular days and regular hours, less than 38 hours per week. Such hours are “to be determined and altered by agreement with the employer and employee.” Clause 10.4 then goes on to say that part-time employees “may be offered additional work up to 38 hours per week at ordinary pay.” Clause 16.1 of the Agreement repeats that provision.

[20] It is apparent to me that there is a clear inconsistency between the provisions of clause 12.4 of the Award and clauses 10.4 and 16.1 of the Agreement. As noted above, any inconsistency between the provisions of the Award and the Agreement is to be resolved by applying the Agreement.

[21] In bare summary, under the Award a written agreement must be reached between the employer and employees as to the number and span of hours to be worked with any hours worked outside the written agreement to be paid at overtime rates. The Agreement also provides for agreement to be reached between the employer and employees as to the hours to be worked and the span of those hours but then goes on to provide that additional hours worked outside those agreed, will be paid at single time rather than at overtime rates. In my view, this provides a clear disbenefit to part-time employees which would mean that such employees would not be better off overall under the Agreement.

[22] As noted above, I am satisfied that overall the proposed agreement meets the BOOT with the exception of the payment to be made to part-time employees for work performed outside the agreed number and span of hours. The Agreement’s failure to satisfy the BOOT in this regard is not necessary fatal to its approval. In this regard, I will accept a suitable undertaking from Border Express that makes it clear that any hours performed outside those already agreed between the employer and relevant employees will be paid at overtime rates as per the provisions of the Award. Border Express is to provide me with a suitable undertaking within seven days of the date of this decision. Should a suitable undertaking not be provided, I will not approve the Agreement.

COMMISSIONER

 1   Transcript PN148.

 2   [2013] FWC 6022.

 3   [2010] FWAFB 9985.

 4   [2011] FWAFB 5163.

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