Calvary Health Care Tasmania Limited T/A Calvary Health Care Tasmania

[2013] FWC 908

[2013] FWC 908

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Calvary Health Care Tasmania Limited T/A Calvary Health Care Tasmania
(AG2012/14411)

Health and welfare services
COMMISSIONER HAMPTON	ADELAIDE, 1 MARCH 2013

Enterprise Agreement - interaction with NES - whether undertaking is required to confirm the continued application of the NES - deductions from wages - whether individual authorisation required - whether permitted matter - whether consistent with the Act - whether raises relevant approval consideration - Agreement approved on the basis of certain undertakings.

Background

[1] This decision concerns an application for approval of an enterprise agreement known as the Calvary Health Care Tasmania Nursing Staff (St Luke's Campus and St Vincent's Campus) Enterprise Agreement 2012 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Calvary Health Care Tasmania Limited T/A Calvary Health Care Tasmania (the employer). The Agreement is a single-enterprise agreement.

[2] Following a hearing in this matter, the Agreement was approved by me on 7 February 2013 1 on the basis of certain undertakings set out in the approval decision. I indicated at that time that I would subsequently provide my reasons for doing so.

[3] The Australian Nursing Federation (ANF) and Health Services Union, Tasmania No. 1 Branch (HACSU) were both employee bargaining representatives and are covered by the approved Agreement. Both unions raised certain issues about the Agreement in terms of compliance with the approval requirements of the Act and sought certain undertakings from the employer in that context. They also opposed certain elements of the undertakings ultimately provided by the employer. Each union however sought approval of the Agreement.

[4] The decision deals only with the issues surrounding the disputed undertakings and my reasons for accepting some but not all of them. This involves consideration of two different elements of the Agreement provisions; namely, clause 27 dealing with parental leave and clause 25(a) and (b) and clause 42(d) dealing with potential deductions from pay in certain defined circumstances.

The statutory requirements

[5] Without overlooking the range of other statutory considerations applicable to the application more generally, those of specific relevance to the two issues arise from the general approval requirements for agreements, certain specific additional requirements, and those provisions dealing with undertakings.

[6] Section 186 of the Act imposes an obligation on FWA to approve an agreement if an application for approval of the agreement is made under s 185 and the requirements of s.86 and s.187 are satisfied. These sections provide:

“186 When FWA must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

(2) FWA must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and

(b) if the agreement is a multi-enterprise agreement:

(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d) the agreement passes the better off overall test.

Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.

Note 2: FWA may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).

Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).

Requirement that the group of employees covered by the agreement is fairly chosen

(3) FWA must be satisfied that the group of employees covered by the agreement was fairly chosen.

(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, FWA must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Requirement that there be no unlawful terms

(4) FWA must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).

Requirement that there be no designated outworker terms

(4A) FWA must be satisfied that the agreement does not include any designated outworker terms.

Requirement for a nominal expiry date etc.

(5) FWA must be satisfied that:

(a) the agreement specifies a date as its nominal expiry date; and

(b) the date will not be more than 4 years after the day on which FWA approves the agreement.

Requirement for a term about settling disputes

(6) FWA must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows FWA, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

Note 1: FWA or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).

Note 2: However, this does not prevent FWA from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).

187 When FWA must approve an enterprise agreement—additional requirements

Additional requirements

(1) This section sets out additional requirements that must be met before FWA approves an enterprise agreement under section 186.

Requirement that approval not be inconsistent with good faith bargaining etc.

(2) FWA must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.

Requirement relating to notice of variation of agreement

(3) If a bargaining representative is required to vary the agreement as referred to in subsection 184(2), FWA must be satisfied that the bargaining representative has complied with that subsection and subsection 184(3) (which deals with giving notice of the variation).

Requirements relating to particular kinds of employees

(4) FWA must be satisfied as referred to in any provisions of Subdivision E of this Division that apply in relation to the agreement.

Note: Subdivision E of this Division deals with approval requirements relating to particular kinds of employees.

Requirements relating to greenfields agreements

(5) If the agreement is a greenfields agreement, FWA must be satisfied that:

(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and

(b) it is in the public interest to approve the agreement.”

[7] Some of these tests are subject to further legislative explanation. The requirement that the agreement meet the better off overall test is detailed in s.196. The meaning of “unlawful term” and “discriminatory term” is provided in s.194 and s.195 of the Act as follows:

“194 Meaning of unlawful term

A term of an enterprise agreement is an unlawful term if it is:

(a) a discriminatory term; or

(b) an objectionable term; or

(c) if a particular employee would be protected from unfair dismissal under Part 3-2 after completing a period of employment of at least the minimum employment period—a term that confers an entitlement or remedy in relation to a termination of the employee’s employment that is unfair (however described) before the employee has completed that period; or

(d) a term that excludes the application to, or in relation to, a person of a provision of Part 3-2 (which deals with unfair dismissal), or modifies the application of such a provision in a way that is detrimental to, or in relation to, a person; or

(e) a term that is inconsistent with a provision of Part 3-3 (which deals with industrial action); or

(f) a term that provides for an entitlement:

(i) to enter premises for a purpose referred to in section 481 (which deals with investigation of suspected contraventions); or

(ii) to enter premises to hold discussions of a kind referred to in section 484;

other than in accordance with Part 3-4 (which deals with right of entry); or

(g) a term that provides for the exercise of a State or Territory OHS right other than in accordance with Part 3-4 (which deals with right of entry).

195 Meaning of discriminatory term

Discriminatory term

(1) A term of an enterprise agreement is a discriminatory term to the extent that it discriminates against an employee covered by the agreement because of, or for reasons including, the employee’s race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

Certain terms are not discriminatory terms

(2) A term of an enterprise agreement does not discriminate against an employee:

(a) if the reason for the discrimination is the inherent requirements of the particular position concerned; or

(b) merely because it discriminates, in relation to employment of the employee as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed:

(i) in good faith; and

(ii) to avoid injury to the religious susceptibilities of adherents of that religion or creed.

(3) A term of an enterprise agreement does not discriminate against an employee merely because it provides for wages for:

(a) all junior employees, or a class of junior employees; or

(b) all employees with a disability, or a class of employees with a disability; or

(c) all employees to whom training arrangements apply, or a class of employees to whom training arrangements apply.”

[8] An “objectionable term” is in turn defined in s.12 of the Act as follows:

“objectionable term means a term that:

(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or

(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;

either of the following:

(c) a contravention of Part 3-1 (which deals with general protections);

(d) the payment of a bargaining services fee.”

[9] The nature and characterisation of certain provisions of the Agreement is also relevant in this matter. Section 172(1) of the Act provides as follows:

“172 Making an enterprise agreement

Enterprise agreements may be made about permitted matters

(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:

(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;

(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d) how the agreement will operate.

Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.

Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement will be covered by the agreement if the organisation notifies FWA under section 183 that it wants to be covered.”

[10] The Act also deals with the impact of certain provisions of an enterprise agreement at s.253 as follows:

“253 Terms of an enterprise agreement that are of no effect

(1) A term of an enterprise agreement has no effect to the extent that:

(a) it is not a term about a permitted matter; or

(b) it is an unlawful term; or

(c) it is a designated outworker term.

Note 1: A term of an enterprise agreement has no effect to the extent that it contravenes section 55 (see section 56).

Note 2: A term of an enterprise agreement permitting or requiring deductions or payments to be made has no effect if it benefits the employer and is unreasonable in the circumstances (see section 326).

(2) However, if an enterprise agreement includes a term that has no effect because of subsection (1), or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement.”

[11] Sections 190 and 191 of the Act deal with undertakings and provide as follows:

“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.

191 Effect of undertakings

(1) If:

(a) FWA approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers a single employer;

the undertaking is taken to be a term of the agreement, as the agreement applies to the employer.

(2) If:

(a) FWA approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers 2 or more employers;

the undertaking is taken to be a term of the agreement, as the agreement applies to each employer that gave the undertaking.”

Clause 27 of the Agreement - Parental Leave

[12] I turn now to the first of the issues that had to be determined.

[13] Clause 27(a) of the Agreement provides as follows:

“(a) Employees are entitled to parental leave in accordance with the provisions of the Fair Work Act 2009, as amended.”

[14] The balance of clause 27 sets out some but not all of the relevant parts of the NES dealing with Parental Leave. Importantly for present purposes, the provision does not detail all of the NES concerning the entitlements and obligations surround “safe jobs”.

[15] As it is directly relevant, I note that clause 8 of the Agreement also provides as follows:

“8. RELATIONSHIP TO NATIONAL EMPLOYMENT STANDARDS

Entitlements in accordance with the National Employment Standards ("NES") are provided for under the Fair Work Act 2009. Where this Agreement also has provisions regarding matters dealt with under the NES and the provisions in the NES set out in the Act are more favourable to an Employee in a particular respect than those provisions, then the NES will prevail in that respect and the provisions dealing with that matter in this Agreement will have no effect in respect of that Employee. The provisions in this Agreement otherwise apply.”

[16] The ANF and HACSU 2 contended that important elements of the parental leave requirements established by the NES in s.81 of the Act were missing, including in particular, those entitlements established in relation to the provision of a safe job and access to paid no safe job leave in certain circumstances.

[17] The employer contended that it was not necessary to give an undertaking as the provisions of the NES applied by force of law through s.55 of the Act and that clause 8 of the Agreement ensured that it did not contravene that requirement.

[18] The employer however offered the following undertaking in relation to this matter:

“2 As stated at Clause 27(a) employees are entitled to parental leave in accordance with the provisions of the Fair Work Act 2009 (“the FW Act). Clause 27(c)(iii)(13) of the Agreement deals with transfer to safe job for persons who are eligible for maternity leave. This subclause is underpinned by the NES, specifically s.81(3)(a) of the FW Act, and does not displace this section which states that “if there is an appropriate safe job available - the employer must transfer the employee to that job for the risk period, with no other change to the employee’s terms and conditions of employment”.

[19] I accepted the undertaking as proposed however I included a note in the approval decision as follows:

“[6] I note also that undertaking 2 above does not purport to comprehensively deal with all of the NES provisions applicable to parental leave. This includes the obligations for “paid no safe job leave during risk period” as may be applicable in certain circumstances pursuant to ss.81(3) and (6) of the Act. As with all of the provisions of the Agreement dealing with NES related conditions, parties will need to consider the full import of the NES in applying those provisions.”

[20] Section 186(2)(c) of the Act would prevent approval of an enterprise agreement whose terms were found to contravene s.55, which in effect provides for the continued operation of the NES as an absolute minimum. Any such deficiency could be redressed by an appropriate undertaking.

[21] In this case, there was no issue of compliance for the Agreement with s.186(2)(c), or contravention of s.55 of the Act, as clause 8 and clause 27(a) meant that the NES in effect applied as part of the express terms of the Agreement. Rather, any undertaking that could be required was for the purpose of clarification of the intent of the Agreement in that regard.

[22] The undertaking proposed by the employer, along with the note in the approval decision, which both accompany the approved agreement, were sufficient for the purposes of clarification. Further, the undertaking in that context did not create further uncertainty and met the requirements of s.190(3) of the Act. Although the employee bargaining representatives wanted further undertakings, I sought (and considered) their views in making my decision to accept the proposed undertaking as required by s.190(4) of the Act.

[23] I note also that other elements of the Agreement touched upon NES related provisions of the Act, and the desired duplication of the NES provisions, could equally arise in their case.

Clause 25(a) and (b) and clause 42(d) of the Agreement - potential deductions from pay

[24] Clause 25(a) and (b) of the Agreement provide as follows:

“25. OVERPAYMENTS

(a) In the event of an overpayment to an employee where the overpayment has been made in one lump sum the following shall apply.

• The employer will negotiate a repayment arrangement with the employee



• If agreement is reached such agreement will be documented and implemented.



• If no agreement is reached such overpayment will be repaid over a maximum period of six (6) pays and the employer shall deduct such monies from the employee's pay.

(b) In the event of an overpayment to an employee where the overpayment has been made over an extended period of time the following shall apply.

• The employer will negotiate a repayment arrangement with the employee



• If agreement is reached such agreement will be documented and implemented.



• If no agreement is reached such overpayment will be repaid over a maximum period of twelve months and the employer shall deduct such monies from the employee's pay.

[25] Clause 42(d) of the Agreement provides:

“(d) No employee shall, without the consent of the employer, resign without having given seven days' notice of intention so to do or forfeiting salary earned during the pay period current at the time of resignation; provided that in no circumstances shall the employee forfeit more than seven days' pay at the rates prescribed for his or her classification.”

[26] The ANF and HACSU contended that these provisions were not permitted terms as they did not fall within the scope of s.172(1) of the Act. Further, these provisions were said to be contrary to s.324(1)(b) of the Act.

[27] The employer took a contrary view on both issues but proposed an undertaking, the effect of which was to add the following additional words within each of the provisions purporting to confirm the deductions from the employees pay:

“...as authorised by the employee in accordance with the Fair Work Act 2009. This shall not preclude the Employer from initiating legal action to recover the overpayment to the employee.”

[28] I declined to accept that undertaking and did not require an alternative commitment. In the approval decision I noted as follows:

“[7] I have not accepted an undertaking proposed by the employer in relation to clause 25(a) and (b) and clause 42(d) of the Agreement. These provisions may be of no effect and/or not be enforceable under the Act to the extent that they permit deductions from wages due to an employee without specific employee authorisation.”

[29] My reasons for adopting this course of action require me to canvass each ground of objection raised by the unions, however they are directly related.

[30] I have earlier set out the terms of s.172(1) and s.253 of the Act.

[31] The positions contended by the parties on both propositions are also linked to the operation of s.323 and s.324, and to some degree s.325 and s.326 of the Act, which provide as follows:

“323 Method and frequency of payment

(1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:

(a) in full (except as provided by section 324); and

(b) in money by one, or a combination, of the methods referred to in subsection (2); and

(c) at least monthly.

Note 1: This subsection is a civil remedy provision (see Part 4-1).

Note 2: Amounts referred to in this subsection include the following if they become payable during a relevant period:

(a) incentive-based payments and bonuses;

(b) loadings;

(c) monetary allowances;

(d) overtime or penalty rates;

(e) leave payments.

(2) The methods are as follows:

(a) cash;

(b) cheque, money order, postal order or similar order, payable to the employee;

(c) the use of an electronic funds transfer system to credit an account held by the employee;

(d) a method authorised under a modern award or an enterprise agreement.

(3) Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.

Note: This subsection is a civil remedy provision (see Part 4-1).

324 Permitted deductions

(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:

(a) the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or

(b) the deduction is authorised by the employee in accordance with an enterprise agreement; or

(c) the deduction is authorised by or under a modern award or an FWA order; or

(d) the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

Note 1: A deduction in accordance with a salary sacrifice or other arrangement, under which an employee chooses to:

(a) forgo an amount payable to the employee in relation to the performance of work; but

(b) receive some other form of benefit or remuneration;

will be permitted if it is made in accordance with this section and the other provisions of this Division.

Note 2: Certain terms of modern awards, enterprise agreements and contracts of employment relating to deductions have no effect (see section 326). A deduction made in accordance with such a term will not be authorised for the purposes of this section.

(2) An authorisation for the purposes of paragraph (1)(a):

(a) must specify the amount of the deduction; and

(b) may be withdrawn in writing by the employee at any time.

(3) Any variation in the amount of the deduction must be authorised in writing by the employee.

325 Unreasonable requirements to spend amount

(1) An employer must not directly or indirectly require an employee to spend any part of an amount payable to the employee in relation to the performance of work if the requirement is unreasonable in the circumstances.

Note: This subsection is a civil remedy provision (see Part 4-1).

(2) The regulations may prescribe circumstances in which a requirement referred to in subsection (1) is or is not reasonable.

326 Certain terms have no effect

Unreasonable payments and deductions for benefit of employer

(1) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:

(a) permits, or has the effect of permitting, an employer to deduct an amount from an amount that is payable to an employee in relation to the performance of work; or

(b) requires, or has the effect of requiring, an employee to make a payment to an employer or another person;

if either of the following apply:

(c) the deduction or payment is:

(i) directly or indirectly for the benefit of the employer, or a party related to the employer; and

(ii) unreasonable in the circumstances;

(d) if the employee is under 18—the deduction or payment is not agreed to in writing by a parent or guardian of the employee.

(2) The regulations may prescribe circumstances in which a deduction or payment referred to in subsection (1) is or is not reasonable.

Unreasonable requirements to spend an amount

(3) A term of a modern award, an enterprise agreement or a contract of employment has no effect to the extent that the term:

(a) permits, or has the effect of permitting, an employer to make a requirement that would contravene subsection 325(1); or

(b) directly or indirectly requires an employee to spend an amount, if the requirement would contravene subsection 325(1) if it had been made by an employer.”

[32] The ANF and HACSU contended that the Agreement provisions were not permitted matters as the clauses allowed for the deductions without relevant employee authorisation and this was required by s.172(1)(c) of the Act.

[33] The unions further contended that the two agreement provisions were inconsistent with s.324 of the Act on the basis that the deduction contemplated by s.324(1)(b) still required authorisation by the employee concerned in accordance with the enterprise agreement.

[34] The unions accepted that the question as to whether a clause was a permitted matter, or contravened s.324 of the Act, would not necessarily prevent approval of the Agreement. However, it was said to be desirable that the operation of the Act be clarified and the parties informed by way of an appropriate undertaking. The unions also raised concerns about the reference in the proposed undertaking to the capacity for the employer to take legal action to recover the money.

[35] The ANF ultimately suggested that it would prefer no undertaking on this issue to that proposed by the employer. 3

[36] The employer contended that the undertakings in relation to clauses 25 and/or clause 42(d) were not necessary for the approval of the enterprise agreement under s.186(1) of the Act. Alternatively, the proposed undertaking in relation to the deduction of monies was said to be consistent with s.324(1)(b) of the Act for approval purposes and was therefore a permitted matter.

[37] The employer further argued that it was in any event irrelevant if an enterprise agreement contained non permitted matters. Section 253(2) of the Act was said to mean that the inclusion of a non-permitted term did not prevent the agreement from being an enterprise agreement but rather if it was subsequently determined that this was the case, this provision would operate such that those clauses would have no effect. Accordingly, it was submitted that the determination of this issue was not necessary during the approval process.

[38] It was further contended by the employer that s.172(1)(c) of the Act does not require the enterprise agreement to set out how the authorisation by the employee is to be sought by the employer. All that is required is that the deduction is authorised by the employee in order for it to be a permitted matter for inclusion in the enterprise agreement and a permitted deduction.

[39] In terms of s.324(1)(b) of the Act, the employer contended that this meant that the deductions could be authorised in accordance with an enterprise agreement and that the employees had authorised the deductions by agreeing to the approval of the enterprise agreement containing the relevant provisions. Further, it submitted that the fact that individual authorisations could be made pursuant to s.324(1)(a) meant that individual authorisations when subject to an enterprise agreement were not intended or required by the Act.

[40] These issues have been considered by Commissioner Gooley in Radploy Pty Ltd T/A Lake Imaging, 4 where she considered a clause that purported to allow for deductions from wages (without individual employee authorisation) and found as follows:

“[47] I do not accept the submissions of Radploy that clause 22 of the Agreement is consistent with section 324 of the FW Act. Section 324 treats deductions from award entitlements differently to deductions from agreement entitlements. Deductions may be made from an amount payable under section 323 if it is authorised by or under a modern award. However a deduction from an amount payable under section 323 may only be made if it is authorised by the employee in accordance with the enterprise agreement. So in addition to the enterprise agreement permitting the deduction, the individual employee must authorise the deduction and this authorisation does not arise simply from the approval of the Agreement.

[48] I therefore consider that clause 22, to the extent that it permits the deduction of monies without the individual employee’s authorisation, is unenforceable.”

[41] The Commissioner also observed that:

“[50] Fair Work Australia is not required, as part of the approval process, to determine if terms of an agreement offend sections 324 or 326 of the FW Act. It is not necessary for the approval process for Fair Work Australia to determine if clause 22 is or is not enforceable. Even if it is not, Fair Work Australia is not entitled on that basis to decline to approve the agreement.

[42] The approach on these elements was adopted by Asbury C in Jellifish! Pty Ltd. 5

[43] I would respectfully agree with the above approach and add the following in terms of the additional matters raised by the parties before me.

[44] There is an apparent difference in the language between s.324(1)(c) dealing with modern awards and s.324(1)(b) dealing with enterprise agreements. The inclusion in the second of these provisions to the phrase “is authorised by the employee”, which does not appear in relation to the modern award provision, appears to be significant.

[45] For my part, I would not accept that the authorisation by the employee occurs as a result of the approval of an enterprise agreement by the group of employees concerned. The Act only requires that a valid majority of those employees who vote must approve the agreement. 6 Secondly, an employee who subsequently joins the group of employees becomes subject to the agreement.7 Although this is the obvious scheme of the Act in terms of approval of the agreement, it would be difficult to contend that an employee who voted against the agreement, or who later joined the group, had in fact relevantly authorised the deduction. In my view, something more would be required.

[46] I also note that there is a qualitative difference between an enterprise agreement, which is made by the parties and approved by the Commission, and a modern award or other order of the Commission that it has determined. This also explains why there may be a difference between the various provisions of s.324 of the Act.

[47] It should also be appreciated that s.324(1)(b) of the Act would potentially permit broader deductions than s.324(1)(a). Further, the nature of deductions and the process by which employee authorisation is provided are matters that could be dealt with in an enterprise agreement. On that basis, there is work for s.324(1)(b) to do, and there is meaning for that provision, even if applied on the basis that an individual employee authorisation is required under an enterprise agreement.

[48] Accordingly, it is my view that s.324(1)(b) apparently contemplates a form of specific individual employee authorisation for deductions even when the parties are subject to an enterprise agreement.

[49] However, it was not necessary to form a concluded view on this issue as it is not raised by an express approval requirement. Even if I formed a concluded view, it would not have been appropriate to require an undertaking as a pre-condition for approval, given that the Agreement would in my view still meet the other approval requirements relevant to s.186 and s.187, including the better off overall test of s.193 of the Act. 8 That is, unlike the matters raised by s.186 and s.187, the matter of compliance with the relevant deduction provisions of the Act does not arise as part of the express approval requirements.

[50] In terms of whether the clauses of the Agreement are permitted matters and whether the Commission can require such to be addressed by way of undertakings, the above conclusions are equally applicable. Further, in light of the operation of s.253 of the Act, it is also not necessary to determine the issue bearing in mind that whether a clause in an industrial instrument is considered to be a permitted matter is often the subject of fine judgement by the Court requiring consideration of the specific context in which it operates. 9

[51] I would accept that where a matter was clearly unlikely to be a permitted matter and the issue affected whether the agreement met the approval requirements of the Act, an undertaking to clarify its operation should be considered.

[52] In this case, the note in the approval decision regarding the operation of the respective clauses (set out earlier) accompanies the approved agreement. This in my view was sufficient to alert the direct parties to the issues, which is all that an undertaking might achieve here. I was not required to accept an undertaking to permit approval and the undertaking proposed by the employer had no support from the employee bargaining representatives and could not in any event conclusively resolve the issue.

[53] To the extent that the proposed undertaking sought to actually modify the legal application of the Agreement to confirm the authorisation of the employees for any deductions, I also had a concern that it could cause financial detriment to an employee covered by the Agreement. This would be contrary to s.190(3) of the Act.

[54] It was for these reasons that I declined to accept the proposed undertaking but did not require an alternative.

[55] I also note that if I am wrong about the operation of the Act in terms of deductions from wages under an enterprise agreement, no undertaking was required. In any event, the operation of the Act in this particular context is ultimately a matter for the Court.

Conclusions

[56] Having accepted the relevant undertakings, I was satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval had been met.

[57] The Agreement was approved and, in accordance with s.54 of the Act, operated from 14 February 2013. The nominal expiry date of the Agreement is 2 July 2014.

COMMISSIONER

Appearances:

S Cook of SIAG Pty Ltd on behalf of Calvary Health Care Tasmania Limited.

A Stanislaus-Large and J Thomas of the Australian Nursing Federation - Tasmanian Branch.

J Eddington of the Health Services Union, Tasmania No.1 Branch.

Hearing details:

2013:

January 15 (conference).

February 6.

 1   [2013] FWCA 865.

 2   The HACSU provided comprehensive written submissions.

 3   Transcript PN54.

 4   [2011] FWA 39.

 5   [2012] FWA 9640.

 6   Section 182(1) of the Act.

 7   Sections 52 and 53 of the Act.

 8   I have assessed the BOOT having regard to the overall operation of the Agreement and the relevant award, whilst noting the effect of those undertakings that I have accepted.

 9   See for example: Australian Maritime Officers Union v Sydney Ferries Corporation [2009] FCA 145 at 200-201.

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