Broadmeadows Disability Services
[2011] FWA 4063
•29 JUNE 2011
[2011] FWA 4063 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Broadmeadows Disability Services
(AG2010/24259)
COMMISSIONER GOOLEY | MELBOURNE, 29 JUNE 2011 |
January 2011 Single Enterprise Agreement Broadmeadows Disability Service.
[1] On 5 April 2011 an interim decision 1 was issued in relation to the application made by Broadmeadows Disability Services (BDS) for approval of the January 2011 Single Enterprise Agreement Broadmeadows Disability Service (the Agreement). In that decision I concluded that the Agreement did not meet the better off overall test (BOOT). I further concluded that despite the undertakings provided I was not satisfied, on the information provided, that the Agreement passed the BOOT.
[2] Further submissions were filed by BDS and a hearing was held on 25 May 2011. At the hearing the Australian Education Union (AEU) and Health Services Union (HSU) made submissions opposing the approval of the Agreement.
Submissions of BDS
[3] BDS relied upon the undertakings already given in this matter and addressed the issues raised in the interim decision. 2
[4] BDS submitted that the relevant transitional awards for the purpose of determining the applicable rates of pay, allowances and penalties payable under the Social, Community, Home Care and Disability Services Industry Award 2010 (the Modern Award) are the Attendant Care (Victoria) Award 1999 (AC Award) and the Disability Services Award (Victoria) 1999 (the DS Award). 3
[5] BDS provided a detailed description of the organisation and the role of the community support worker.
[6] In response to issues raised in the interim decision submissions were made by BDS on the following matters:
Redeployment
[7] Clause 20 of the Agreement permits BDS to redeploy employees provided they are provided with one month’s salary maintenance.
[8] BDS submitted that this provision is a positive for employees because it provides an alternative to termination. The employer provided an undertaking that “the Clause shall only apply if there is an identifiable operational or financial reason compelling its use, and then only after consultation as prescribed in Clause 56 of the agreement and of course access to the disputes procedure.” 4
Public Holidays
[9] Clause 40 of the Agreement did not provide for the any additional penalty for employees who performed work on public holidays.
[10] BDS submitted that clause 40.3 of the Agreement incorrectly states “all overtime worked”. BDS undertook to amend clause 40.3 so that it reads “all time worked.....”
Weekends
[11] BDS undertook that all time worked on a Sunday would be paid at double time. 5 The rate for Saturday would remain at time and a half. BDS submitted that only 518 hour’s work was performed on a Saturday in 2009-2010.
Long Service Leave (LSL)
[12] BDS undertook that no employee will have any lesser LSL entitlement than that which existed as at the date of the commencement of the Agreement and further undertook that the standard would be as follows:
An employee shall have the following entitlement to long service leave:
• From the date of certification each employee shall be entitled on the completion of ten years' continuous service - three months long service leave and thereafter an additional one and a half months long service leave on the completion of each additional five years' service.
• In addition, in the case of an employee who has completed more than ten years' service and whose employment is terminated otherwise than by the death of the employee, an amount of long service leave equal to one-forty-fifth of the period of that employee's service since the last accrual of entitlement to long service leave.
• Where an employee who has completed at least ten years' service dies while still in the employ of the employer, the employer shall pay to such employee's personal representative a sum equal to the pay of such employee for one-fortieth of the period of that employee's service in respect of which leave has not been allowed or payment made prior to the death of that employee.
• Where an employee ceases their employment with the employer after eight or more years but less than ten years of service with that employer they shall be paid out 80% of the pro rata accrual of long service leave with that employer.
• Where an employee with at least five years but less than eight years' service ceases employment with an employer due to serious ill health the employee shall be paid out 60% of their pro-rata accrual of long service leave with that employer. The employee shall provide certification from the treating medical practitioner indicating that their incapacity is such that continued employment is not possible and that ill health retirement is recommended.
• Where an employee with at least five years but less than eight years' service with an employer dies, 60% of their pro-rata accrual of long service leave will be paid to the estate of the employee.
Matters not dealt with in the Modern Award
[13] BDS submitted that regard should be had to the many agreements that had been approved by Fair Work Australia with similar provisions. BDS submitted that the obligations identified in paragraph [56] of the interim decision are not prohibited matters and are clearly relevant to the employment relationship and can be seen as positives, particularly as they reflect and codify the parties’ mutual benefits and existing employee and/or employer obligations. 6
[14] Further it was submitted that a number of the clauses include written mutual obligations with the protection of the likely intervention of Fair Work Australia or a Court in the event that the employer abuses such provisions. This is a benefit to employees.
Confidential Information
[15] Clause 13 of the Agreement prohibits the disclosure by employees of confidential information. The clause purports to impose obligations on employees after they have left their employment with BDS.
[16] Confidential information is defined as:
“Confidential information refers to any information (electronic, written or oral) which is not publicly available, including details on all transactions, records, customer details, financial information, remuneration details, security arrangements and any other information pertaining to the operations of the Employer.”
[17] BDS submitted that this clause defines mutual obligations and affords protections to employees by spelling out clearly their obligations and this is a positive. 7
External Employment
[18] Clause 19 provides for restrictions on when an employee can perform other work for themselves or other employers.
[19] BDS submitted that knowing that this obligation is codified and understandable works in favour of the employees as it restricts the general right of an employer to restrict external employment. BDS advised that this has been their policy for the past decade and no employee has ever been refused consent. 8
Promotion of the employer
[20] Clause 60 imposes an obligation on employees to promote the employer.
[21] BDS contended that this is a clear expectation of any employee and not a negative in any way. 9
Surveillance of employees
[22] Clause 61 provides for surveillance of employees.
[23] BDS submitted that this clause applies subject to the law and simply encapsulates mutual obligations reflected in that legislation and cannot be seen as negative or positive. Its inclusion is a benefit to employees because they are able to use the disputes resolution procedure to resolve any issue. 10
Social Media
[24] Clause 64 regulates the use of social media by employees.
[25] BDS submitted that, subject to their undertaking not to seek the imposition of penalties for breach of this provision, codifying an established employment problem in a manner that not only clarifies the mutual obligation but also reflects decisions of Fair Work Australia in unfair dismissal matters involving these types of issues cannot be a negative. 11
Other policies
[26] Schedule 1 of the Agreement sets out the motor vehicle usage policy and Schedule 2 sets out the electronic systems acceptable use policy.
[27] BDS submitted that these are pre-existing policies which were not previously subject to the protection of the Agreement provisions and it is the mutual desire of the parties to formalise their mutual obligations. It is a benefit to employees that these are included in the Agreement as it permits disputes about the policies to be settled by the dispute resolution procedure. 12
[28] BDS submitted, that having regard to the wage increases in the Agreement, salary packaging, the guarantee about the equal remuneration case, the ability to pay the employee above agreement rates, averaging of hours, a superior overnight camping payment, superior annual leave and the introduction of ‘a sabbatical model” and the undertakings already given, the Agreement will result in employees being better off overall. 13
The submissions of the AEU
[29] The AEU filed written submissions 14 in response to BDS’s submissions and provided further written submissions at the hearing.15
[30] The AEU accepted that for the employees for whom it was the bargaining representative the relevant transitional instrument is the DS Award.
[31] The AEU submitted that BDS had not established that each employee or prospective employee would be better off over all under the Agreement when compared with the Modern Award. The AEU submitted that BDS had made submissions that employees in general would be better off over all, 16 and this is not the relevant test.
Redeployment
[32] The AEU compared clause 20 of the Agreement with clause 9.2 of the DS Award. The Modern Award contains an identical provision to clause 9.2 at clause 12.2. 17
[33] The AEU submissions on this matter are not clear. The AEU appear to submit that under the DS Award an employee whose position is redundant who accepted a transfer to a lower paid position in addition to payment of the notice period at the higher rate of pay is entitled to severance pay. 18
[34] Neither clause 20.2 nor clause 12.2 deal with the issue of whether an employee is entitled to redundancy pay in these circumstances.
[35] The AEU also submitted that clause 57 of the Agreement provides that an employer is not required to pay severance pay if the employer obtains suitable alternative employment for an employee. The AEU submitted that there is no definition of suitable. 19
[36] The AEU submitted that clause 20.2 of the Agreement provides the employer with a right to redeploy employees in a wide range of circumstances including redundancy and the employer would not be required to pay the employee redundancy pay. 20
Weekend work
[37] The AEU submitted that the lesser provisions for the payment of overtime on Saturday in the Agreement would result in some employees being disadvantaged. 21
Long Service Leave
[38] The AEU submitted that the DS Award provides for recognition of service with other employers in certain circumstances in calculating an employee’s service. The Agreement does not provide for recognition of prior service with other employers. This will disadvantage experienced employees commencing with BDS. 22
The Undertakings provided by BDS
[39] The AEU submitted that the number of undertakings would make the Agreement unintelligible to the employees covered by the Agreement. 23
Undertaking 6 - Accident Make Up Pay
[40] The AEU submitted that the undertaking is unclear. 24
Undertaking 12 - Social and Networking Media
[41] The AEU submitted that despite the undertaking, the employer could take disciplinary proceedings against an employee where breaches of this clause are alleged to have occurred. Further, the AEU submitted that this provision would extend the employer’s authority beyond the workplace and could, for example, extend to fair comment that a union representative may wish to make in relation to employment conditions and policies at BDS.
Undertaking 14 Annual Leave Loading
[42] The AEU submitted that the undertaking provided by the employer did not remove the proposed 12 month qualification period. Employees who leave before 12 months, the AEU submitted, would be worse off. 25
Matters not dealt with in the Modern Award
[43] The AEU submitted that the obligations imposed by employers are notably one sided.
[44] The AEU further submitted that the Agreement does not provide for examination leave. The AEU submitted that the DS Award provides for examination leave.
Submissions at the hearing
[45] At the hearing, the AEU submitted that the rates of pay and classification structure in the Agreement left some employees worse off. Under the DS Award the classification structure provided for 14 levels/increments for an instructor. The DS Award provided that an instructor with no recognised qualification could be allocated to the salary subdivision range 1-10 commencing at subdivision one. The AEU submitted that the DS Award recognised experience with other employers. An instructor with one year’s relevant experience with another employer would commence on subdivision 2 and so on. The DS Award also provided that an employee with a certificate 4 in Community Service (Disability) would commence on level 3 and could progress to level 14.
[46] As a consequence the AEU submitted that the highest rate of pay for an unqualified instructor under the Agreement is $19.53 but under the DS Award an unqualified instructor can be paid up to level 10 which is currently $22.39. 26
Salary Packaging
[47] The AEU submitted that no regard should be had to the provision for salary packaging. In support of its submissions the AEU relied upon the decision of the Full Bench in the Equal Remuneration Case. 27
[48] Further the AEU submitted that this provision should be disregarded because it relies upon the employer policy which may be changed from time to time; it applies only in accordance with taxation rules as they apply from time to time; it only applies to eligible employees and that is not defined; and there is no provision which provides that superannuation and redundancy pay are paid at the pre-packaged gross salary rather than the amount post packaging. 28
Written guarantee as to the application of the Equal Remuneration Pay case
[49] The AEU submitted that no regard should be had to this as BDS misconceives the test and in any event the benefit of this guarantee is profoundly uncertain. 29
Hours of Work
[50] The AEU submitted that the hours of work are inferior to the DS Award. 30
Licences, certificates and other qualifications
[51] The AEU submitted that clause 11.1 of the Agreement which requires employees to hold relevant certificates interacts with clause 20 of the Agreement which provides that an employee can be transferred to a position against her or his will. This could result in an employee being transferred to a role for which she or he does not hold the appropriate certificates and if she or he didn’t obtain the certificate within four weeks her or his employment could be terminated. 31
Confidentiality
[52] The AEU submitted that there was no reciprocal obligation on BDS to preserve confidential information about employees. 32
Termination
[53] The AEU submitted that clause 14.4 of the Agreement which preserves the employer’s right to terminate the employee’s employment without notice is inferior to clause 10 of the DS Award.
Program Development and Training Days
[54] The AEU submitted that clause 30 of the Agreement does not prevent the program development days from being used for other purposes.
Annual leave loading
[55] The AEU submitted that the Modern Award does not provide for a qualifying period for annual leave loading.
Personal/carer’s leave
[56] The AEU submitted that the DS Award provides for superior sick leave provisions. The AEU also submitted that the provision in the Agreement in relation to the number of consecutive days of carer’s leave is uncertain.
Individual Flexibility Agreement
[57] The AEU submitted that the individual flexibility agreement (IFA) term in the Agreement is contrary to the Fair Work Act 2009 (FW Act) as it does not require the IFA to result in the employee being better off.
Submissions of the HSU
[58] The HSU supported the submissions of the AEU. 33 The HSU supported BDS’s submission that the relevant transitional award for the employees the HSU represented is the AC Award.34
[59] The HSU submitted that the minimum call for employees working in the disability sector is two hours under the Modern Award not one hour as submitted by BDS. 35 The HSU submitted that the equivalent classification under the Modern Award was social and community services employees and not home care sector employees.36
[60] The HSU submitted that the Agreement did not pass the BOOT. Further the HSU submitted that there are a significant number of undertakings proposed by the employer and this makes the Agreement difficult to understand. 37
The relevant transitional instruments
[61] In the interim decision I reached the conclusion that I was not satisfied on the information provided that the Agreement passed the BOOT and I provided BDS with an opportunity to address the matters raised in that decision, and if it considered necessary, to make further undertakings.
[62] As a consequence of the interim decision, BDS and the HSU now agree that the relevant transitional instrument for the purposes of the BOOT is the AC Award. There is no dispute that the relevant award for the purpose of the BOOT is the Modern Award.
[63] No party addressed the Tribunal on the relevant transitional instrument for employees employed in administration or employed as a bus driver. I presume the clerical employees were within the scope of the Clerical and Administrative Employees (Victoria) Award 1999. It is not clear what transitional instrument would have applied to a bus driver employed by BDS. However given the decision in this matter it is not necessary to determine these matters.
[64] The union parties have referred to the DS Award and AC Award and made submissions that there are terms of the Agreement which are inferior to the DS Award.
[65] However the relevant award for the purpose of the BOOT is the Modern Award. The only relevant terms of the DS Award and the AC Award are those which are relevant to the transitional provisions in the Modern Award. The National Employment Standards (NES) are also relevant to the approval process because section 186(2) (d) of the FW Act provides that Fair Work Australia must be satisfied that the terms of the Agreement do not contravene section 55 of the FW Act.
[66] The AEU submitted that the classification structure of the DS Award was relevant for the purposes of the BOOT.
[67] Schedule A of the Modern Award is as follows:
“Prior to the first full pay period on or after 1 February 2012 the employer must pay no less than the minimum wage in the relevant transitional minimum wage instrument and/or transitional instrument for the classification concerned.”
[68] The classification structure in the DS Award is relevant in determining the transitional rates in the Modern Award.
Rates of Pay
[69] The AEU submitted that for social and community services sector employees the rates of pay in the Agreement are, for some employees, less than the rates in the Modern Award.
[70] The Modern Award defines the social and community services sector at clause 3.1 as follows:
“social and community services sector means the provision of social and community services including social work, recreation work, welfare work, youth work or community development work, including organisations which primarily engage in policy, advocacy or representation on behalf of organisations carrying out such work and the provision of disability services including the provision of personal care and domestic and lifestyle support to a person with a disability in a community and/or residential setting including respite centre and day services.”
[71] The Modern Award provides for a separate classification structure for social and community sector employees and home care employees.
Social and Community Sector Employees
[72] At the test time the Australian Fair Pay and Conditions Pay Scale derived from the DS Award was as follows:
Instructors Subdivision | Wages per week |
14 | 23.78 |
13 | 23.27 |
12 | 22.77 |
11 | 22.57 |
10 | 22.39 |
9 | 21.68 |
8 | 21.18 |
7 | 20.60 |
6 | 20.24 |
5 | 19.86 |
4 | 19.43 |
3 | 19.05 |
2 | 18.42 |
1 | 18.04 |
Program Director Grade 1 Centre (Qualified tertiary, FEECH or equivalent) | 26.35 |
Program Director Grade 1 Centre (81 and over) | 25.43 |
Program Director Grade 2 Centre (Qualified tertiary, FEECH or equivalent) | 25.86 |
Program Director Grade 2 Centre (41 to 80 adults) | 24.96 |
Program Director Grade 3 Centre (Qualified tertiary, FEECH or equivalent) | 25.34 |
Program Director Grade 3 Centre (up to 40 Adults) | 24.29 |
Ass Program Director Grade 1 Centre (Qualified tertiary, FEECH or equivalent) | 25.03 |
Ass Program Director Grade 1 Centre | 24.59 |
Ass Program Director Grade 2 Centre (Qualified tertiary, FEECH or equivalent) | 24.56 |
Assistant Program Director Grade 2 Centre | 24.13 |
[73] The DS Award sets out at clause 21.2 the salary subdivision for certain qualifications as follows:
Qualification Base | Salary subdivision |
No recognised qualification | 1-10 |
CIVICS* or equivalent | 3-14 |
Trade Qualifications | 1-12 |
Trade Qualifications plus CIVICS or equivalent | 11-14 |
Tertiary Qualifications | 7-13 |
Tertiary Qualifications plus CIVICS | 12-14 |
[74] The DS Award then sets out the starting level for specific qualifications.
[75] Clause 21.3 of the DS Award then sets out the starting level for employees having regard to their experience as follows:
“21.3 Experience
21.3.1 An Instructor with no recognised qualification shall be allocated to the salary subdivision range 1-10, commencing at subdivision 1. Upon the production of documentary evidence indicating attainment of knowledge and skill components relevant to the position and specific to the job specification or centre's program needs, an Instructor shall be awarded a higher commencement subdivision, eg:
• an Instructor with one year experience is to commence on subdivision 2;
• an Instructor with two years experience is to commence on subdivision 3, etc.
21.3.2 For the purposes of this award applicable experience is defined as experience relevant to the education and/or training of persons with an intellectual disability.
21.3.3 Progression for all classifications for which there is more than one wage point shall be by annual increment having regard to the acquisition and utilisation of skills and knowledge through experience in the employee’s workplace over such period.
21.3.4 For part-time Instructors an equivalent full instruction year shall comprise 1,505 hours. An increment shall be paid for every 1,505 hours completed.
21.3.5 For casual hours Instructors an equivalent full instruction year shall comprise 1,484 hours. An increment shall be paid for every 1,484 hours completed.
21.3.6 An Instructor, who completes a recognised base qualification subsequent to employment, shall be advanced to the first step on the subdivision range appropriate to that qualification. Provided that an Instructor shall advance two incremental levels on completion of ACRACS or ACRACS equivalent.
Under no circumstances shall the gaining of further qualifications result in a reduction of an employee's salary.
21.3.7 Instructors who have been away from instructing in this field of work for less than six years shall be deemed to return at the same classification level on which they left. For every further three year absence, or part thereof, the level of experience shall be deemed to be reduced by one year.”
[76] The following table sets out the comparison between the Modern Award rates of pay as derived from the transitional provisions and the Agreement:
Agreement Classification | Agreement Rate | Award classification | Award rate |
CSW Band 1A (unqualified 0-12 months) | $18.36 | SCS Level 1 | $18.04 |
CSW Band 1B (unqualified >12 months) | $19.53 | SCS Level 1 | $18.42-$22.39 |
CSW Band 2A (qualified less than 2 years) | $20.62 | SCS Level 2 | $19.05- $19.43 |
CSW Band 2B (qualified 2>, <5) | $23.35 | SCS Level 3 | $$19.86-$20.60 |
CSW Band 2C (qualified >5 years | $24.24 | SCS Level 3 | $21.18-$23.78 |
Team Leader | $25.44 | SCS Level 4 | $23.27-$23.78 |
Program Leader | $25.90 | SCS Level 4 | $25.03 |
Program Manager | $28.84 | SCS Level 5 | $26.35 |
[77] BDS provided no detailed response to the submissions of the AEU that some employees would be paid less under the Agreement compared to the Modern Award.
[78] Mr Simon McDouell of BDS however submitted the following:
“PN547
MR McDOUELL: Commissioner, I'd just like to point out just for further clarification in regards to the comments made by Mr Bunn. It is clear that the structure under the existing award is band 1, band 2 and band 3. If you actually refer to the agreement that we have in place based on that, it is quite clear that band 1 is identified as entry level positions, hence the term that we have used in our agreement, "unqualified with zero to 12 months' experience". Band 2, being subdivisions 4 through to 11, actually have a CIVICS or an ACRACS or equivalent minimum qualification, which has been typical across our sector, set it as certificate IV.
PN548
The claim that in actual fact someone without qualifications can rise to the subdivision of 11 is actually incorrect. The highest that person can achieve is a level 3, not 11.
PN549
THE COMMISSIONER: So you say band 1 goes, what, 1.1 - - -
PN550
MR McDOUELL: 1.1, 2 and 3. Then we have band 2, 4 through to 11. The other point I would like to make is that it has always been the case band 3 or the team leader positions have been by appointment according to organisational capacity. I'd also like to point out that we are of the belief that there needs to be consideration given to the fact that we have collapsed a range of those subdivisions. Hence if we looked at someone who had just completed a certificate IV, which would allow them to now move into a band 2 scenario under our agreement, they would in actual fact be paid 12 months in advance of what the award proposes for those individuals. So the claim that our structure is to the detriment of employees, we believe to be absolutely incorrect.”
[79] However when Mr McDouell referred to bands he was referring to the classification structure in the predecessor agreement and not the rates of pay applicable under the Modern Award. There is no banding provision in the DS Award and that is the relevant transitional instrument for the purpose of determining the rates payable under the Modern Award.
[80] The table at paragraph 76 establishes that an unqualified instructor with more than four years experience would be paid less under the Agreement than they would be paid under the Modern Award.
Home Care Sector Employees
[81] There is no issue that the rates of pay in the Agreement for home care sector employees for whom the rates of pay in the transitional minimum wage instrument are derived from the AC Award are higher under the Agreement than under the Modern Award having regard to the transitional provisions of the Modern Award.
[82] It is not entirely clear whether any of the employees engaged by BDS are home care employees as it is not clear from the Agreement if there are any employees who are employed in the home care sector which is defined in the Modern Award as follows:
“Home care sector means the provision of personal care, domestic assistance or home maintenance to an aged person or a person with a disability in a private residence.”
[83] Clearly the provision of home care in a disabled client’s home is covered by the home care sector classifications.
Minimum call
[84] Clients of BDS receive individual support packages which can be group based or provided on an individual basis. Personal services are provided in a community setting and in private residences. If the services are provided in private residence under the Modern Award the minimum call is one hour and if provided in a community and/or residential setting the minimum call is two hours.
[85] The minimum call for home care workers under the Agreement is one hour. BDS has provided an undertaking that the minimum call for all other workers will be three hours.
[86] The undertaking makes it clear that only home care workers will have a minimum call of one hour. However as home care workers are not defined in the Agreement it is difficult to determine the effect of this undertaking. Had this been the only concern about the Agreement I would have provided BDS with a further opportunity to give an undertaking about the definition of home care workers.
Redeployment
[87] I do not accept that redeployment to a lower paid position without the employees consent even in the circumstances proposed in BDS’s undertaking is a benefit for employees. This provision can be used when an employee’s position is redundant and the employer would be entitled to redundancy pay. While there will be circumstances when an employee will elect to take a lower paid position rather than have their employment terminated this can occur by agreement in the case of redundancy and other circumstances. The provision in the Agreement provides the employer with the unilateral right to transfer the employee and this is not a benefit for employees.
Weekend work
[88] BDS have undertaken that all time worked on a Sunday will be paid at double time. This is consistent with the Modern Award provisions.
[89] It is not clear how BDS’s undertaking will apply.
[90] Currently clause 26.3 of the Agreement provides as follows:
“Base rate/ordinary hours worked (unless worked in accordance with clause 26.1) on a Saturday or Sunday will be paid at time and a half.”
[91] Presumably this clause now reads:
“Base rate/ordinary hours worked (unless worked in accordance with clause 26.1) on a Saturday will be paid at time and a half and on a Sunday will be paid at double time.”
[92] It is not clear how this provision will interact with clause 26 which provides (with the undertaking) as follows:
“26.1 The ordinary (base rate) hours of work are 38 ordinary hours per week. Such hours may be averaged over any period up to 4 weeks when agreed/negotiated in accordance with Clause 55 of this agreement, with any individual or group of Employees.
Clause 26.1 permits an Employer and an individual Employee or group of Employees to average out in any manner agreed in writing between them, up to a total of 152 ordinary (base) hours over an agreed period of up to 4 weeks. If agreed, an Employee/Employer can agree to make up any shortfall of ordinary hours in any agreed period in the next period, and/or credit (or pay out at ordinary/base rates) any excess hours in any agreed period, to the next period. Any disagreement over the application of any such written agreement shall be dealt with in accordance with the Disputes Clause 58 herein.
26.2 The terms of any such arrangement under Clause 0 must be in writing and will be retained on the Employee’s file. Any provisions in this agreement that would preclude ordinary hours being worked in the manner agreed in writing (Clause 26.1) shall not apply.”
[93] Clause 24.1 of the Modern Award provides ordinary hours of work to be worked on Monday to Sunday averaged over at most four weeks. However clause 25 of the Modern Award provides that ordinary hours of work on Saturday are paid at time and a half and ordinary hours on a Sunday are at paid double time.
[94] In submissions BDS said that any agreement under clause 26 will be made pursuant to clause 55. 38 While it is not clear that the wording provided by BDS will achieve this intention had I determined to approve the agreement I would have provided BDS with the opportunity to amend the undertaking to give effect to their intention.
Long Service Leave
[95] No detailed submissions were made on the effect of Division 9 of Part 2-2 and sections 26 and 27 of the FW Act or section 84 of the Long Service Leave Act 1992 (Vic) on the long service leave entitlements of BDS employees.
[96] BDS has provided an undertaking about long service leave. It provides no employee will have any lesser LSL entitlement than that which existed as at the date of commencement of the agreement. For the undertaking to have any effect in relation to preserving any better entitlement it should have provided that “no employee shall have any lesser LSL entitlement than that which existed immediately prior to the date of commencement of the agreement.”
[97] However it appears, whatever the entitlements to long service leave the employees would have had prior to the making of this Agreement BDS intends that they be preserved. While it is not clear that this is the effect of the undertaking had I determined to approve the Agreement I would have provided BDS with the opportunity to amend the undertaking to give effect to their intention.
Matters not included in the Modern Award
[98] The primary submission of BDS is that provided terms are about permitted matters, and not unlawful matters, that parties are free to agree on the terms to be included in their agreement. Further BDS submitted that agreements in the same terms had been approved by other members of the Tribunal. BDS acknowledged that the decision to approve an agreement rests with the Tribunal member.
[99] I accept the principle submission of BDS. It is not for this Tribunal to determine the terms of agreements. However it is the role of the Tribunal to apply the better off over all test to the Agreement.
[100] In applying that test, regard must be had to the terms of the Modern Award and NES compared with the terms of the Agreement. Additional terms including terms which are more beneficial and terms which are less beneficial are relevant to the better off overall test. 39
Confidential information
[101] I do not accept the submission of BDS that this clause merely codifies an employee’s common law obligations. For example, there is no obligation at common law that an employer keeps confidential their remuneration. Further not all information of an employer not in the public arena is confidential information at common law.
External employment
[102] There is no common law obligation on employees to obtain the permission of their employer to obtain alternative employment. Clearly employees are obliged to refrain from other employment which is in conflict with their employment with their employer. However they do not need the consent of their employer to obtain alternative employment.
The obligation to promote the employer
[103] I accept the submissions of BDS in relation to this provision.
Electronic Surveillance and Monitoring
[104] I accept the submission of BDS in relation to this provision.
Social Media
[105] While clause 64.1 of the Agreement is a reasonable imposition on employees the rest of the clause goes much further than regulating the use of social media during working hours. It prohibits an employee from putting any comments about the employer’s business on any social media site at any time. Further the clause extends to “conversations that take place about their employment and during their employment that are provided to a third party that results in the publication on Social Networking Media.”
[106] The restriction on the use of social media applies to both positive and negative information. The submission of BDS that this provision reflects a mutual obligation is not correct. There is no obligation on the employer and the only obligations are on employees. These are obligations not imposed at common law on employees, nor are they obligations imposed on employees by the Modern Award.
[107] Employees have an obligation at common law not to divulge confidential information and this includes on social media sites. Further employees who engage in conduct which damages the reputation of their employer’s business may have their employment terminated without notice for serious and wilful misconduct and this is made clear in clause 6 of the Agreement.
[108] Similarly cyber bullying of other employees or clients would also be within the definition of gross misconduct as defined in the Agreement.
[109] The obligations imposed on employees in clause 64 go beyond this and impose limitations on employees’ freedom to talk about their work on social media.
[110] While BDS have undertaken not to seek the imposition of penalties for a breach of this clause, this does not change the nature of the obligations imposed on employees and does not prevent an employee being subjected to disciplinary proceedings arising from a breach of the provision.
Other policies
[111] I accept the submissions of BDS that there is an advantage to employees to have these policies fixed and unalterable except by a variation to the Agreement approved by Fair Work Australia. I also accept the submission of BDS that it is an advantage to employees that disputes over the policies can be resolved by the dispute resolution procedure in the Agreement.
Matters raised by the AEU and HSU
Accident Make Up Pay
[112] BDS have provided an undertaking that they will pay accident make up pay. The AEU say this undertaking is unclear. While it would have been preferable for the undertaking to have provided that accident make up pay will be as provided for in the Modern Award, had this been my only concern about the Agreement I would have provided BDS with a further opportunity to clarify further its undertaking.
Annual Leave Loading
[113] I accept the submissions of the AEU that clause 39 of the Agreement which provides that annual leave loading is not payable in any pro rata year upon cessation of employment for any reason provides a lesser entitlement than provided by clause 30.3 of the Modern Award.
Salary Packaging
[114] I accept the AEU submissions that salary packaging should be disregarded in relation to the better off overall test.
Equal Remuneration
[115] I accept the genuineness of the undertaking provided by BDS in relation to the equal remuneration case however it is not clear how BDS intends to flow on any increase if such an increase is granted. Further I accept the submissions of the AEU that given the uncertainty of that matter and that the outcome is not known at the test time, I cannot have regard to it in assessing whether the Agreement passes the better off overall test.
Licences, certificates and other qualifications
[116] I consider that clause 11 of the Agreement is neutral in assessing the Agreement.
Termination
[117] The AEU submitted that clause 14.4 of the Agreement is inferior to the provision in the DS Award. However the clause of the DS Award relied upon by the AEU has no application in the assessment of the Agreement. However clause 14.4 of the Agreement is inferior to the Modern Award as it does not provide the employee with a day off with pay to look for alternative employment.
Professional development and training days
[118] There is no provision for such days in the Modern Award. However as mandatory training and program development and service review would need to occur during working hours, this provision is neutral in assessing the Agreement.
Personal/carer’s leave
[119] The AEU have submitted that the provisions are inferior to the DS Award. However this is not relevant as the comparison is with the NES.
[120] The number of days of personal/carer’s leave provided in the Agreement is more generous than that provided in the NES.
Individual Flexibility Agreement
[121] I accept the submissions of the AEU that this clause does not comply with the FW Act and this is acknowledged by BDS and hence that model flexibility clause would apply.
The number of undertakings
[122] Both the AEU and HSU submitted that even it were determined that with the undertakings the Agreement would pass the better off overall test, the Agreement should not be approved because the undertakings would result in substantial changes to the Agreement.
[123] In addition to the 15 undertakings provided prior to the hearing, in its submissions BDS have offered an additional 4 undertakings.
[124] BDS submitted that the undertakings, whilst substantial in number, “are more administrative and/or seek to change and clarify rather than to substantially alter the intent and purpose of the agreement.”
[125] In addition BDS submitted that the Agreement contained more beneficial terms than the Modern Award.
Conclusion
[126] In reaching my decision in this matter I have not been assisted by the failure of the parties to correctly identify the relevant transitional instruments when the matter was first before the Tribunal. I have further not been assisted by the submissions of both parties which refer back either to the predecessor awards or the predecessor agreement. The parties did not compare the Agreement with the Modern Award, preferring to compare it to the predecessor awards or agreement. The reference instruments in this case, the DS Award and the AC Award, only have relevance to the extent that they determine the starting rates for the transitional provisions of the Modern Award.
[127] The failure of the employer to identify the relevant transitional instrument and to have regard to the transitional provisions of the Modern Award raises serious questions about the explanation provided to the employees about the effect of the terms of the Agreement.
[128] The process to be followed when determining if an agreement passes the better off overall test requires a two step process. The first step involves an assessment of whether the Agreement as made by the employer and the employees at the test time provides that each award covered employee and each prospective award covered employee would be better off if the agreement applied to the employee than if the relevant modern award applied to the employee. 40
[129] In assessing whether each award or prospective award covered employee will be better off regard can be had to a class of employees to which a particular employee belongs and if the particular class would be better off Fair Work Australia is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off. 41
[130] If Fair Work Australia is not satisfied that the Agreement passes the better off overall test then Fair Work Australia may accept written undertakings if Fair Work Australia is satisfied that the effect of accepting the undertaking is not likely to either cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement. 42
[131] I have had regard to the submissions of the parties. I have had regard to the more beneficial provisions and the less beneficial provisions in the Agreement.
[132] I am not satisfied that the Agreement as made by BDS and its employees provides that each employee or prospective employee would be better off if the Agreement applied to the employees than if the Modern Award applied. My interim decision sets out my initial conclusions about the Agreement. I have had regard to the additional submissions made in response to that decision. I accept the submissions of the AEU that the rates in the Agreement, at CSW Band 1B, fall below the rates in the Modern Award having regard to the transitional provisions.
[133] While section 206 of the FW Act would ensure that employees received the minimum rate applicable under the Modern Award I am not satisfied that an employee on the Modern Award rate of pay would be better off under the Agreement compared with the Modern Award.
[134] In addition the Agreement clauses which deal with hours of work, part time employees, penalty rates, weekend work are all less beneficial than those provided in the Modern Award. I accept that the quantum of annual leave and personal leave, unsatisfactory work performance, general misconduct, non contact time, program development and training days, camps holidays and rest period after overtime are more beneficial provisions. These beneficial provisions will of course impact on employees differently. For example casual employees do not benefit from the increase in the quantum of annual leave and personal leave.
[135] While BDS submitted that the percentage increases are significant it is clear that those increases are relative to the previous agreement and not the Modern Award. It is not possible at the test time to determine the benefit of the future increase provided for in the Agreement as their comparative value will be affected by increases that will apply to the Modern Award arising from the minimum wage adjustments.
[136] While I have addressed the individual clauses in the Agreement and the submissions made to the Tribunal, the FW Act requires Fair Work Australia to assess the Agreement as a whole to determine if employees or prospective employees are better off overall. This requires an assessment of both the more beneficial provisions and the less beneficial provisions. The submissions have focused on the less beneficial terms of the Agreement. However an agreement can have less beneficial terms provided that they are counterbalanced by more beneficial terms such that the employees or prospective employees are better off overall.
[137] In my interim decision I concluded that the Agreement did not pass the BOOT. Even if I had no regard to the additional obligations imposed by the Agreement which are not part of the Modern Award, I am not persuaded by the subsequent submissions of BDS to alter this conclusion.
[138] Section 190 of the FW Act provides for the giving of undertakings.
[139] BDS has provided a significant number of undertakings, some of which are minor in nature and some of which are significant. I have sought the views of the bargaining representatives who, despite the undertakings, do not support the approval of the Agreement.
[140] The undertakings provided do not address the findings that for some employees the rates of pay are be less than the Modern Award. Some of the undertakings are unclear. However as indicated earlier had I reached a different conclusion I would have provided BDS with a further opportunity to clarify the undertakings so that they gave effect to BDS’s intentions.
[141] BDS’s undertakings have endeavoured to address aspects of the Agreement which were less beneficial than the Modern Award. I do not accept that the undertakings proposed by BDS are not substantial.
[142] I am not satisfied when having regard to the more beneficial provisions and the less beneficial provisions in the Agreement having regard to the undertakings, that the Agreement passes the BOOT.
[143] In any event, even had I been satisfied that the Agreement with the undertakings would have resulted in employees and prospective employees being better off overall, I consider that the undertakings will result in substantial changes to the Agreement and therefore the application for approval of the Agreement is dismissed.
COMMISSIONER
Appearances:
C Dorber for Broadmeadows Disability Services
L Svendsen for Health and Community Services Union
D Bunn for Australian Education Union
Hearing details:
2011.
Melbourne:
May 25.
1 [2011] FWA 2069
2 Exhibit R1
3 Ibid at [11]
4 Ibid at [27]
5 Ibid at [33]
6 Ibid at [44]
7 Ibid at [55]
8 Ibid at [56]
9 Ibid at [57]
10 Ibid at [58]
11 Ibid at [59]
12 Ibid at [61]
13 Ibid at [65]
14 Exhibit AEU 1
15 Exhibit AEU 3
16 Exhibit AEU 1 page 2
17 Ibid at A[1]
18 Ibid
19 Ibid
20 Ibid
21 Ibid at A [2]
22 Ibid at A[3]
23 Ibid at B
24 Ibid
25 Ibid
26 Transcript PN 507-510
27 [2011] FWAFB 2700 at [244]
28 Exhibit AEU 3 at page 5
29 Ibid page 6
30 Ibid
31 Ibid page 8
32 Ibid
33 Exhibit HSU1at [1]
34 Ibid at [3]
35 Ibid at [7]
36 Ibid at [7]
37 Ibid at page 3
38 Transcript PN 89-96
39 Armacell Australia Pty Ltd [2010] FWAFB 9985 at [17]
40 Section 193
41 Section 193(7)
42 Section 190
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