Border/ID Security Pty Ltd T/A Border Security Services

[2015] FWC 6461

[2015] FWC 6461

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Border/ID Security Pty Ltd T/A Border Security Services
(AG2015/1205)

COMMISSIONER GREGORY MELBOURNE, 17 SEPTEMBER 2015

Application for approval of the Border Security Services Australia Enterprise Agreement 2015.

[1] This decision deals with an application under s.185 of the Fair Work Act 2009 (Cth) by Border/ID Security Pty Ltd T/A Border Security Services (“Border Security Services”) for approval of the Border Security Services Australia Enterprise Agreement 2015.

[2] The F17 Employer’s Statutory Declaration indicates the proposed Agreement is intended to cover five existing employees who are each employed on a casual basis. In dealing with the question in the Declaration about those provisions in the Agreement that are more beneficial than those contained in the underlying Security Services Industry Award 2010 the Statutory Declaration indicates the proposed rates of pay are generally in excess of those contained in the Award. The Declaration also indicates the Agreement contains nothing that is less beneficial than the terms and conditions in the Award, and expresses the view that the Agreement meets the requirements of the “better off overall” test.

[3] After reviewing the application and the terms and conditions contained in the proposed Agreement the Commission forwarded a letter to the Applicant’s representative on 13 July indicating that further clarification was sought about certain aspects of the Agreement before further consideration could be given to the application. It was noted in this context that the application indicates the Agreement is only intended to apply to casual employees, and provides for a single rate of pay for each classification level for all-time worked, apart from work performed outside the span of 6 a.m. to 10 p.m. on Monday to Friday when it is proposed an additional amount of $1 per hour will apply. (However, this additional amount only applies when the majority of the shift is worked outside of the designated span of hours.)

It was also indicated in the Commission’s correspondence that the wage rates in the Agreement appear to be inclusive of the majority of allowances, and all penalties and loadings that would otherwise apply under the terms and conditions contained in the underlying Security Services Industry Award 2010.

[4] It was also noted that a comparison of the wage rates contained in the Agreement and the underlying Award indicate the rates in the Agreement are approximately 4% above the comparable Award rates. The additional $1 per hour that would apply for work performed outside the spread of hours nominated in the Agreement also increases this amount by approximately a further 4%. It was also noted that these rates are proposed in circumstances where the Award provides for ordinary time rates of time and a half on Saturday and double time on Sunday, and also provides for additional penalty rates of 21% for work performed after 6 p.m. in the evening, and 30% where this work is performed on a regular basis. An entitlement of double time and a half also applies for work performed on public holidays under the Award and casual employees can also be entitled to overtime payments under the Award conditions.

[5] The letter concluded by indicating the Commission sought further explanation in terms of how the proposed Agreement could meet the requirements of the better off overall test, given the matters referred to above. The application was subsequently then listed for hearing given the fact no response to this correspondence had been received from the Applicant.

However, on 5 August the Commission did receive a response to its correspondence from the General Manager of Border Security Services indicating the delay in responding had been due to her absence on annual leave.

[6] The response continued to indicate Border Security Services currently utilises the services of employees provided by a labour hire agency, and was now wanting to employ more employees directly so as to avoid the requirement to utilise the services of the labour hire business. The letter indicated the rates proposed in the Agreement are $1.00 more per hour than the rates currently being paid under the terms of the labour hire arrangement. It also indicated those rates compare favourably with other rates in Agreements previously approved by the Commission. Copies of two such Agreements were provided to the Commission in conjunction with the Applicant’s correspondence. It was also indicated:

“By having our guards work directly for us and not through a Labour hire company will allow us to have total control of our workforce and be more competitive an industry where many companies pay guards well under the award by engaging them as subcontractors on ABN's. Border Security are endeavouring to ensure that guards are paid appropriate rates as employees, offer job security and ensure we remain competitive in the marketplace.” 1

[7] The application was also dealt with in a hearing on 17 August. Ms Leanne Walsh, the General Manager of Border Security Services appeared by telephone on its behalf in those proceedings. She indicated in those submissions that the employees to be covered by the proposed Agreement typically work between 28 and 38 hours each week. She also indicated the work is typically performed on Monday to Friday and involves both day and evening work. She also said some weekend work is involved, and on average this would require the employees to work on one in three or one in four weekends. She also indicated it was her understanding that many other businesses in the industry were not complying with their industrial obligations, and the proposed Agreement was intended by Border Security Services to put in place agreed industrial arrangements with its employees and, at the same time, to enable the business to be in a competitive position in the industry.

Consideration

[8] As indicated already the issues highlighted in previous correspondence from the Commission to the Applicant summarise the principal concerns the Commission has about satisfaction with the requirements of the “better off overall” test in the context of this application. The proposed Agreement is essentially structured around what can be described as loaded wage rates, which are intended to be provided in place of other entitlements that would otherwise apply under the terms and conditions contained in the underlying Security Services Industry Award 2010.

[9] In terms of the statutory requirements, s.193 deals with the better off overall test and relevantly provides:

“When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

…

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.” 2

[10] The test is also a global one and requires identification of terms in the proposed Agreement which are more beneficial to the relevant employees when compared to the modern Award, and those which are less beneficial. An overall assessment is then made, based on that comparison, about whether the relevant employees would be better off under the proposed Agreement.

[11] In considering the terms of the proposed Agreement against the background of these statutory requirements it is noted again that the wage rates in the Agreement, to be provided to the casual employees to be covered by it, are higher than those contained in the underlying Security Services Industry Award 2010. However, it is also noted they are only around 4% above the Award rates and are proposed to be paid at all times for all work performed during the spread of hours on Monday to Friday from 6 a.m. until 10 p.m. An additional amount of $1 per hour is also to be paid for work performed outside of that spread, which represents a further amount of approximately 4% when compared with the ordinary time rates in the Award. However, this additional entitlement only arises in circumstances where the majority of the shift is performed outside of that spread of hours, meaning employees will almost never gain access to this additional amount during working hours performed on Monday – Friday.

[12] By contrast the terms and conditions contained in the Security Services Industry Award 2010 provide for the following additional penalty rate entitlements, including for casual employees.

• For ordinary time work performed between 6 p.m. and 6 a.m. on Monday to Friday – an additional penalty rate entitlement of 21.7%. (This amount increases to 30% when night shift is worked on a permanent basis.)



• For ordinary time work performed at any time on Saturday – an additional penalty rate entitlement of 50%.



• For ordinary time work performed at any time on Sunday – an additional penalty rate entitlement of 100%.



• For ordinary time work performed at any time on a public holiday – an additional penalty rate entitlement of 150%.

[13] The submissions provided on behalf of the Applicant indicate the work performed on Monday to Friday by the casual employees to be covered by the proposed Agreement would typically involve work during day time and at night. It was also indicated those employees could be required to work at weekends, and this would occur on average on one in three or one in four weekends.

[14] Based on these submissions and the comparisons set out in this decision between the rates of pay proposed to be provided for in the Agreement and the wage rates and conditions contained in the Security Services Industry Award 2010 I am not satisfied that the requirements of the better off overall test can be satisfied. I am also not satisfied that the situation can be dealt with by means of an additional undertaking being provided as I am satisfied this would involve a significant change to the existing conditions contained in the Agreement.

[15] It is also noted that the Applicant makes reference to other Agreements containing similar provisions, which have been approved by the Commission. It is simply indicated in response that this matter has been determined based on the submissions and evidence provided to the Commission about the proposed Agreement involved in this matter, and the employees intended to be covered by it. Invariably the circumstances involved in any matter will be different in each case and it is not necessarily appropriate to simply base the provisions in an agreement on those contained in another agreement and to expect that this will be sufficient to satisfy the requirements the Commission must have regard to in considering any application before it.

[16] It is also noted that the Applicant submits the industry it is involved in is characterised by some businesses who do not have proper regard for their employment obligations and this makes it difficult to be competitive with those businesses. The Applicant submits in response to this situation that the proposed Agreement is intended to reflect an agreed position with its employees and to also enable it to be competitive in the industry. The Commission does not take issue with these submissions and acknowledges the attempts by the Applicant to “do the right thing,” both by its employees and the interests of the business. However, in considering this application the Commission is simply required to have regard to the whether it satisfies the relevant provisions of the Act. The application has been dealt with on that basis.

[17] As indicated, I have had regard to all the circumstances I consider relevant to the determination of this matter, and to the relevant statutory provisions. Based on the conclusions I have come, as set out above, I do not consider that the Agreement can be approved. The application is dismissed.

COMMISSIONER

Appearances:

Leanne Walsh appeared on behalf of the Applicant.

Hearing details:

2015.

Melbourne (by telephone):

17 August.

 1   Correspondence from Leanne Walsh to Commissioner Gregory sent by email on 5 August 2015 at page 2

 2   Fair Work Act 2009 (Cth) at s.193

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