Business Risks International (Victoria) Pty Ltd
[2012] FWA 4916
•19 JUNE 2012
[2012] FWA 4916
The attached document replaces the document previously issued with the above code on 19 June 2012.
The document has been edited to correct typographical error in the head note by replacing the date “13 June 2012” with the date “19 June 2012”.
Kate Greig
Associate to Commissioner Lewin
Dated 25 June 2012
[2012] FWA 4916 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Business Risks International (Victoria) Pty Ltd
(AG2012/4114)
COMMISSIONER LEWIN | MELBOURNE, 19 JUNE 2012 |
Business Risks International (Victoria) Pty Limited Enterprise Agreement 2012-2016 - better off overall test - undertakings - financial detriment - substantial change to terms of agreement - approval refused
[1] This decision concerns an application for approval of an enterprise agreement. The application is made by Business Risks International (Victoria) Pty Ltd (“BRI”). The enterprise agreement is known as the Business Risks International (Victoria) Pty Limited Enterprise Agreement 2012-2016.
[2] The application was filed on 22 March 2012 accompanied by a Form F16, as required by the Fair Work Australia Rules and was signed by John Portoglou, State Manager Victoria. The application states that there was no union bargaining representative for the agreement. The application names nine persons as bargaining representatives for the Agreement.
[3] In the Form F17 - Employer’s Declaration in Support of Application for Approval of Enterprise Agreement filed by BRI the following question and answer is contained:
“2.4 Did the employer take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who will be covered by the Agreement as required by s.173?
[X] Yes
[ ]
If “Yes”, please attach a copy of the notice given to employees and explain the steps taken:
On 3 February 2012, all employees that are covered by the Agreement were sent an email or a letter by registered post (to those who did not have an email) attaching a letter informing staff of the current agreement expiring and the negotiations for a new agreement beginning and a copy of the ‘Notice of Representational Rights’ provided to all employees received a copy, receipts were retained by the company, including delivery receipts where applicable. (Attachment 1)”.
[4] A Form F18 - Declaration of Employee Organisation in relation to an Application for Approval of Enterprise Agreement was filed by Mr Beadin Alusoski on 20 March 2012. Mr Alusoski is named as a bargaining representative for the agreement in the Form F16.
[5] In the Form F18 Mr Alusoski describes himself as a “head bargaining employee officer” and does not identify an organisation for the purposes of the declaration. Clearly Mr Alusoski has completed the form 18 by mistake. Mr Alusoski states in the form that “the Union does not support the approval of the Agreement”. Mr Alusoski is not an officer of an employee organisation. This must be treated as an observation by Mr Alusoski which, as it turns out is accurate, as will become apparent below.
[6] In addition to the various forms filed by BRI two twin ring folders containing a large volume of documentation relating to the making of the agreement, among other things, accompanied the application. On inspecting the file I noticed that the material contained correspondence of 12 February 2012 from United Voice to BRI complaining that BRI had not complied with s.173 of the Act, which provides that an employer must provide to each employee who will be covered by the Agreement a notice of representational rights as prescribed by s.174 of the Act.
[7] After reading the terms of the Agreement I became concerned that BRI may not have complied with s.173 and that the Agreement may not pass the better off overall test. I consequently notified BRI of my concerns on 12 April 2012. In light of the issue of compliance by BRI with s.173 having been raised by United Voice, a copy of my notification to this effect was provided to the bargaining representatives named in the Form F17 and to United Voice. I allowed BRI until 19 April to respond to the notification of my concerns.
[8] A declaration made by Erin Keogh on behalf of United Voice a registered Organisation entitled to represent the industrial interests of the employees whose employment would be covered by the Agreement was filed on a Form F18 on 13 April 2012.
[9] The Form F18 filed on behalf of United Voice states that the Union was a bargaining agent for the proposed agreement because one or more members of the Union are employees who are covered by the proposed agreement. Further, United Voice states that it has not been in any negotiations for the proposed agreement and was not provided with a copy of the Form F17 - Employer’s Declaration. United Voice states in the Form F18 that for various reasons which are detailed in the form, the proposed agreement does not pass the better off overall test prescribed by s.193 of the Act.
[10] Attachment 1 to the Form F17 is attached to this decision as Annexure A. In light of Annexure A I am satisfied that BRI complied with the requirements of s.173 of the Act.
[11] As a consequence of my notification to BRI and United Voice BRI responded on 27 April 2012. In that response BRI proposed a number of undertakings in relation to the Agreement to address my concerns in relation to the application of better off overall test.
[12] The Tribunal has produced a series of written analysis of numerous concerns in relation to the better off overall test which identified and detailed deficiencies in the terms of the Agreement when considered against the relevant Modern Award according to that test. BRI was provided with the analysis conducted and provided with an opportunity to respond accordingly. Subsequent to BRI proposing undertakings further analysis which identified outstanding deficiencies of the terms of the Agreement together with the terms of the undertakings proposed was provided to BRI.
[13] The Tribunal can approve an enterprise agreement with undertakings. The relevant statutory provisions are set out below:
“190 FWA may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made under section 185; and
(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.
Undertakings
(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
FWA must seek views of bargaining representatives
(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.”
[14] After the sequence of analysis by the Tribunal of the terms of the Agreement for the purposes of the better off overall test, exchange of information and the receipt of a significant number of undertakings of substantial consequence upon the terms of the Agreement I wrote to BRI on 22 May 2012 in the terms set out below:
“Dear Mr Portoglou,
Since the filing of this application and my consideration of the relevant statutory provisions, two issues of concern have arisen.
The first is the requirement of s.173 of the Act that Business Risks International (BRI) must have taken all reasonable steps to provide the employees whose employment will be covered by the agreement with a Notice of Representational Rights.
The second is the requirement of s.186(2)(d) that the agreement passes the better off overall test as prescribed by s.193 of the Fair Work Act 2009 (the Act).
I note that BRI have made submissions and offered undertakings, pursuant to s.190, of the Act to deal with these concerns respectively.
Presuming, without deciding, that the requirements of s.173 have been met and the only reason for which the agreement would not be approved is the Tribunal’s concerns in relation to the Agreement passing the better off overall test, it is necessary to consider the approval of the agreement with the undertakings offered by BRI having regard to the statutory provisions governing the approval of enterprise agreements with undertakings.
There are three relevant statutory considerations. The first consideration arises under s.190(1)-(3).
The concerns arising under subsection (1) thereof have already been communicated and are the subject of the undertakings under consideration in this letter offered by BRI.
The second consideration is whether or not the relevant undertakings meet the Tribunal’s concerns in relation to the better off overall test. I have caused an analysis of the effect of the undertakings to be produced and subsequently summarised by the FWA Agreements unit. A copy of that analysis and summary are attached for your information.
I am not satisfied that the agreement together with the undertakings offered meets the requirements of s.183(2)(d).
The third consideration is the requirement that the approval of the agreement with the undertakings not cause a financial detriment to any employee covered by the agreement and the effect of the undertakings is not to make substantial changes to the agreement.
I am not satisfied that either of these requirements are met.
However, for present purposes it is appropriate to refer particularly to the requirements of s.190(3)(b). These provisions properly construed are a condition precedent for the power to arise for the Tribunal to approve an agreement with undertakings as provided for by s.190 of the Act.
If the effect of the proposed undertakings is likely to lead to substantial changes to the terms of the agreement the Tribunal is not clothed with the power to make a discretionary judgement of whether or not to approve the agreement.
In my judgement, the effects of the undertakings proposed by BRI are likely to cause such substantial changes.
Moreover, in my view, as shown by the analysis attached with this letter the agreement together with the undertakings does not meet the better off overall test for various reasons. This gives rise to concerns identified in the attachment which would require even further undertakings in order for the agreement to pass the better off overall test. Such undertakings would most likely effect further change of substance to the terms of the Agreement.
My conclusion is that the preliminary discretion to approve the agreement with the undertakings offered does not arise because of the effect of those undertakings causing substantial changes to the terms of the agreement.
I have written this letter to provide BRI with an opportunity to make final submissions in relation to the approval of the agreement which should be filed with the Tribunal by the close of business 30 May 2012.
Finally I direct that BRI serve a copy of this letter and the attachments hereto on all of the employee bargaining representatives for the agreement as listed in the Form F16.
A copy of this letter and the attachments will be forwarded to United Voice which organisation has sought to be heard in relation to the application and filed submissions...
Yours sincerely,
JCW Lewin
Commissioner”
[15] Regrettably the letter included a typographical error and the reference to s.183(2)(d) should have been s.186(2)(d). From what follows it will be observed that is of no substantial consequence and the issue of the deficiencies of the Agreement taken together with the proposed undertakings for the purposes of the better off overall, in the eyes of the Tribunal, was understood by BRI.
[16] On 5 June 2012 I received a response as follows:
“Dear Commissioner Lewin,
This correspondence is in response to your letter dated 22nd of May 2012, regarding the approval process of our recent proposed Enterprise Agreement. This letter seeks to outline our final submission to Fair Work Australia (FWA) with specific focus on addressing the concerns raised in your correspondence.
Indeed, BRI set out to explain (in further detail) the key advantages aligned in our proposed Enterprise Agreement, which will continue to meet our employee’s satisfaction and flexibility working within BRI. Please note that in accordance with your instructions BRI has served all correspondence received on the 22nd of May 2012 to all Employee Bargaining Representatives.
Notice of Representational Rights:
In our previous submission, BRI stated that we supplied supporting documentation and took every reasonable step to ensure that our employees were provided with the Schedule 2.1 Notice of Representational Rights during the notification period. We note that Michael Harris acknowledges in his response that the correspondence distributed on 3rd February 2012, appears to comply with Part 2-4, Division 3 of the Fair Work Act 2009 and the Fair Work Regulations.
United Voice:
BRI briefly refers to correspondence issued by Erin Keogh from United Voice stating that the Union was not part of the bargaining process, BRI disputes this claim. A letter from the Group CEO (Frank Bellomo) dated 20th February 2012, invited United Voice to meet with BRI in order to table any concerns. Unfortunately, United Voice elected not to engage BRI in any discussions; BRI issued this invitation in good faith to address any concerns that United Voice may have had on behalf of their members. BRI would like to state on record that we recognise the work and input from United Voice and are aware that their role is to protect the rights of security officers across Victoria. BRI recognises that this role is fundamentally important. We commend them on the work they have done and continue to do with the Security Industry. Furthermore, we encourage an open and transparent relationship with United Voice and have previously invited representatives to meet with us.
Additional Undertakings provided by BRI:
We believe that the additional undertakings that BRI have provided meet the requirements of the BOOT and provide our employees with increased pay rates. This is further aided by the removal of the clause in relation to unpaid training. Furthermore, we maintain that none of the added benefits we have included into our agreement have not been factored in the boot. This includes paid first aid training, discounted fees on all training courses offered through the BRI Registered training organization (BRITEC) and more. These additional benefits are an advantage to our employees as part of the overall agreement. Moreover, BRI sought to add these additional benefits into our agreement on the back of feedback received from employees, whom stated that more scope for professional development was required within the organization. Moving forward, BRI adopted this feedback and added these provisions to the proposed Enterprise Agreement with the approval of the Employee Bargaining Representatives.
The additional weeks Annual Leave is awarded at the completion of 12 months continuous service. These considerations appeared to have been overlooked, purely because the additional week of Annual Leave is not credited until the end of the 12 month period. Furthermore, we state that this has been put in place as part of the company’s retention strategy.
Our employees have (through many streams across the business) communicated how satisfied they are with the additional weeks Annual Leave, and in their experience, no other company in the Security Industry offers this additional benefit. BRI maintains that with the increases in hourly rates, the additional Annual Leave benefits & professional development opportunities, BRI meets the requirements of the BOOT.
Over the term of our Employee Collective Agreement, BRI has provided flexibility with our employees that is generally absent from other agreements within the Security Industry. This approach allows both our employees to work Voluntary Additional Hours at their own request, and allows BRI to remain competitive in the market place. It is this area of our agreement that we believe addresses many of the concerns raised by the Commissioner and also by United Voice when stating that the undertakings offered cause substantial changes to the agreement.
It is on the basis highlighted above, together with the distinct fact that an overwhelming majority of our workforce have voted in favour of this agreement that we ask the Commissioner to allow that the BRI’s Enterprise Agreement be passed.
Many Thanks in Advance,
Christopher Cornwall
Human Resources Coordinator-VIC
Business Risks International”
[17] Having regard to the provisions of ss.190(3) in order to approve the Agreement with the undertakings proposed by BRI I would first have to be satisfied that the undertakings would not be likely to lead to any employee suffering a financial detriment or result in substantial changes to the Agreement. I am unable to be so satisfied. In my view, both consequences would flow from approving the agreement with the undertakings proposed.
[18] In my judgement, the terms of the Agreement, taken together with the terms of the undertakings, do not pass the better off overall test for the reasons which are set out in the lengthy, detailed and complex analysis contained in the information provided to BRI. In my view, each employee whose employment would be covered by the agreement, taken together with the undertakings proposed, would therefore suffer financial detriment under the terms of the agreement compared to the terms and conditions of employment which would apply under the relevant modern award, the Security Services Industry Award 2010, if the Agreement was not approved.
[19] Furthermore, the effects of the changes to the terms of the Agreement arising from the undertakings proposed are substantial. Indeed, in my judgement, the substance of those effects is so great that it would be difficult to discern which of the terms of the Agreement and the terms of the undertakings, respectively, were the more substantial determinants of the conditions of employment of employees who would be covered by the terms of the agreement and the undertakings proposed, if they were to be accepted.
[20] I have therefore decided as follows:
● the terms of the Agreement taken together with the proposed undertakings do not pass the better off overall test
● consequently, employees whose employment would be covered by the terms of the Agreement and the undertakings would likely be detrimentally affected financially if the Agreement together with the undertakings were approved, and
● the effects of the proposed undertaking on the terms of the Agreement would cause substantial changes.
[21] For all of the above reasons I therefore decide that the application for approval of the Agreement should be dismissed. An order will follow accordingly.
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Annexure A
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