Business Security & Management Solutions Pty Ltd T/A BSMS Security

[2015] FWC 7127

[2015] FWC 7127

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Business Security & Management Solutions Pty Ltd T/A BSMS Security
(AG2015/2884)

COMMISSIONER GREGORY MELBOURNE, 21 OCTOBER 2015

Application for approval of the Business Security & Management Solutions Pty Ltd / Media Entertainment & Arts Alliance (Casual Employees) Enterprise Agreement 2015-2018.

[1] This decision deals with an application under s.185 of the Fair Work Act 2009 (Cth) by Business Security & Management Solutions Pty Ltd T/A BSMS Security for approval of the Business Security & Management Solutions Pty Ltd / Media Entertainment & Arts Alliance (Casual Employees) Enterprise Agreement 2015-2018.

[2] The application and the Employer’s Statutory Declaration indicate the proposed Agreement is intended to cover around 15 employees, all of whom are engaged on a casual basis and work in entertainment venue security and crowd control. The Declaration also indicates the Agreement does not contain any terms that are less beneficial than the equivalent terms and conditions contained in the reference instrument, which in this case is the Security Services Industry Award 2010. It also states that, “Clause 4 provides that all award provisions have been incorporated into the agreement.” 1 However, clause 4 in the Agreement also indicates that in the event of any inconsistency between the terms in the Award and those in the Agreement “…the express provisions of this Enterprise Agreement shall prevail to the extent of such inconsistency…”2

[3] The Agreement also indicates at clause 13.2 that “The majority of work for these engagements is after hours and casual in nature.” 3 Clause 12 of the Agreement, in turn, provides for a single rate of pay to apply to each of the five grades or classification levels contained in the Agreement. Those casual employee rates of pay are as follows –

• Grade 1 – $23.90



• Grade 2 – $25.12



• Grade 3 – $26.38



• Grade 4 – $27.70



• Grade 5 – $29.08.

[4] The Agreement continues to indicate these are “composite hourly rates of pay,” 4 and “are inclusive of all allowances, penalties and loadings, and are payable for all hours worked except where otherwise expressly provided.”5 The only other occasions when different hourly rates are provided for are for work on public holidays, when a rate of double time applies, and after an employee has worked in excess of 38 hours in any week, when sub clause 13.2 provides that the overtime penalty rates contained in the Award apply. These provide for time and a half for the first two hours of overtime worked, and double time thereafter.

[5] A form F18 Statutory Declaration was also received from the Media, Entertainment & Arts Alliance (“MEAA”) indicating it supports approval of the Agreement by the Commission.

[6] After reviewing the application, and the terms of the proposed Agreement, the Commission indicated that it sought further clarification about certain matters, particularly to do with the arrangements to apply for employees who are working primarily in the evenings or at weekends. In this context it noted that while the proposed Agreement contains hourly rates that are in excess of those in the Security Services Industry Award 2010 there appeared to be an issue about whether the employees were going to be “better off overall” under the terms of the proposed Agreement when compared with the terms and conditions contained in the Award, particularly if the majority of work performed by the employees in any week was rostered in the evenings or on Saturday/Sunday. This is because the Award provides for an evening penalty rate of 21.7% for all hours worked after 6 p.m., and for ordinary time rates of time and a half for work performed on Saturday and double time for work performed on Sunday.

[7] The MEAA provided a response to these issues indicating, in part, that the business is involved in providing crowd control services in the entertainment industry, and it is an industry sector that is largely “unregulated” and characterised by businesses that do not necessarily have proper regard for their employment obligations. The proposed Agreement was intended in response to be a step towards improving those standards and working to build appropriate employment obligations.

[8] The Commission indicated in response that it still had concerns about satisfaction with the requirements of the “better off overall” test, and after some further exchanges decided to list the matter for hearing to enable further submissions and evidence to be provided in support of the application. The Commission indicated in this context it was particularly interested in dealing with the issues raised in its previous correspondence.

[9] The hearing proceeded by way of telephone on 14 October 2015. Mr Karan Babuta appeared on behalf of BSMS Security and Ms Patricia McDonough appeared on behalf of the MEAA.

[10] BSMS Security indicated in its submissions that it believes the Agreement satisfies the requirements of the “better off overall” test. However, it also indicated it was prepared to provide two undertakings for the Commission to consider in response to the issues that it had raised about satisfaction with the requirements of the “better off overall” test. It, firstly, proposed that an undertaking could be provided which would require that it roster at least one third of the hours worked by an employee in any week in the hours between 6 a.m. and 6 p.m. on Monday to Friday. This period represents the ordinary time span of hours that apply under the terms and conditions contained in the Security Services Industry Award 2010.

[11] The second undertaking was proposed in response to an issue raised by the Commission in the proceedings. The Commission noted that since the application was lodged the Minimum Wage Review decision had been handed down and had consequently increased the minimum rates in the Security Services Industry Award 2010 by 2.5% with effect from 1 July 2015. BSMS Security indicated in response it was prepared to provide an undertaking that the casual wage rates at each grade in the Agreement would be increased by the 2.5% percentage increase granted by the Minimum Wage Review decision. While it did not provide specific details about what those new figures would be the Commission’s subsequent calculations based on the rates originally contained in clause 12 of the Agreement indicate the new rates would be as follows –

● Grade 1 – $24.50

● Grade 2 – $25.74

● Grade 3 – $27.04

● Grade 4 – $28.40

● Grade 5 – $29.80.

[12] The Commission has, in response, carried out various calculations to assess how the proposed undertaking might operate in terms of the requirements of the “better off overall” test. This has been done using the wage rates that are now proposed to apply if the original rates contained in the Agreement were increased by the percentage amount awarded by the 2015 Minimum Wage Review decision, and a minimum of one-third of the hours for any employee in a week were rostered during the Monday – Friday, 6 a.m. to 6 p.m. period.

[13] The first example is based on a total of 30 hours being worked in a week by a casual employee, with one third or 10 of those hours being rostered between 6 a.m. to 6 p.m., Monday to Friday, and the remaining 20 hours being rostered after 6 p.m. in the evening. (Under the Security Services Industry Award 2010 the work performed in the evenings is entitled to the 25% casual loading and an additional evening shift penalty rate entitlement of 21.7%, being a total dollar amount of $28.48.)

[14] Under the terms of the proposed Agreement, based on these figures, the employee would be paid for all hours worked at the single rate of $24.50, which for 30 hours would amount to $735.00.

[15] Under the terms of the Security Services Industry Award 2010 the employee would be entitled to 10 hours based on the ordinary time casual rate of $24.27, being a total amount of $242.70. They would then be entitled to the remaining 20 hours at the rate applying to a casual employee for work performed after 6 p.m., being $28.48. This would amount to a figure of $569.60. Added to the figure of $242.70 this would amount to a total of $812.30, or around $77 more than what an employee would be entitled to under the terms of the proposed Agreement.

[16] The same calculations using the respective rates for an employee at the grade or level 2 classification results in the following outcome.

[17] Under the terms of the proposed Agreement the employees would be paid for all hours worked at the single rate of $25.74, which for 30 hours would amount to $772.20.

[18] Under the terms of the Security Services Industry Award 2010 the employee would be entitled to 10 hours based on the ordinary time casual rate of $24.97, being a total amount of $249.70. They would then be entitled to the remaining 20 hours at the rate applying to a casual employee for work performed after 6 p.m., being $29.30. This would amount to a figure of $586. Added to the figure of $249.70 this would amount to a total of $835.70, or around $60 more than what an employee would be entitled to under the terms of the proposed Agreement.

[19] Further calculations comparing what would be earned by an employee working one third of his/her hours during ordinary time, with the balance rostered at the weekends, simply highlights a wider gap between the entitlements under the Agreement and those under the Award, given that the Award provides for penalty rates of time and a half for ordinary time work performed on Saturday and double time for ordinary time work performed on Sunday.

[20] In considering an application for approval of an enterprise agreement s.186(2) of the Act requires that, inter alia, “the agreement passes the better off overall test.” Section 193 continues to state:

“(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.” 6

[21] The calculations referred to above, even with the additional undertakings proposed by BSMS Security, indicate that it is not possible to conclude that the employees would be better off overall if the Agreement applied to them, rather than if the modern award applied. It follows, in conclusion that I am not satisfied that the Agreement can be approved, even with the provision of the additional proposed undertakings, because it does not meet the requirements of the “better off overall” test. In the light of this conclusion the Commission has contemplated whether further undertakings could be sought from the Applicant, however, this proposes an outcome that moves even further from what was in contemplation by the parties when the Agreement was made, and would appear to result in something substantially different from what was agreed.

[22] I have also had regard to the submissions made by the MEAA about the industry largely being “unregulated,” and this Agreement being a step in the right direction towards establishing an enhanced understanding of the employment arrangements that should apply. I have no reason to doubt those submissions and they reflect, in large part, my own experience of the industry. However, in considering the application I am required to have regard to the appropriate statutory requirements, including the “better off overall” test, and the decision to refuse to approve the Agreement is not intended in any way to be construed as implying criticism of the Applicant.

[23] However, for the reasons indicated I am not satisfied that the terms and conditions contained in the proposed Agreement meet the requirements of the “better off overall test,” in particular. The application is not approved.

COMMISSIONER

Appearances:

Mr Karan Babuta appeared on behalf of Business Security Management Solutions Pty Ltd.

Ms Patricia McDonough appeared on behalf of the Media, Entertainment and Arts Alliance

Hearing details:

2015.

Melbourne:

14 October.

 1 F17 dated 31 May 2015 at question 3.4

 2   Proposed Business Security & Management Solutions Pty Ltd / Media Entertainment & Arts Alliance (Casual Employees) Enterprise Agreement 2015-2018 at cl.4

 3   Ibid at cl.13.2

 4   Ibid at cl.12.1

 5   Ibid

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

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