Cams Security Services Pty Ltd

[2015] FWC 8098

[2015] FWC 8098

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Cams Security Services Pty Ltd
(AG2015/5755)

COMMISSIONER GREGORY MELBOURNE, 24 NOVEMBER 2015

Application for approval of the CAMS Security Services Pty Ltd Employee Collective Agreement 2015.

[1] This matter concerns an application by CAMS Security Services Pty Ltd for approval of the CAMS Security Services Pty Ltd Employee Collective Agreement 2015. The proposed Agreement is a single enterprise agreement.

[2] After reviewing the application and the terms and conditions contained in the proposed Agreement the Commission wrote to the Applicant seeking clarification about a number of matters. It was noted, firstly, that the Agreement had only been signed by a representative of the employer and had not been signed by an employee representative. A number of matters were also raised in regard to the processes involved in making the Agreement. It was also indicated that the Consultation and Dispute Resolution clauses did not appear to meet the requirements of the Act.

[3] The Commission also indicated it had concerns about satisfaction with the requirements of the better off overall test, despite the Employer’s Statutory Declaration indicating the proposed Agreement did not contain any terms that are less beneficial than the equivalent terms and conditions in the underlying Security Services Industry Award 2010. In this context the Employer’s Statutory Declaration indicated the overwhelming majority of employees to be covered by the proposed Agreement are employed on either a casual or part-time basis. The Agreement, in turn, provides for a single rate of pay for each classification for all time worked by both weekly and casual employees, apart from some additional entitlements to apply for work on public holidays. In addition, it does not contain a spread of hours in which ordinary time hours are to be worked and provides instead that ordinary hours can be worked at any time of the week.

[4] The Commission also indicated that the rates of pay in the proposed Agreement appear to be inclusive of the various allowances, penalties and loadings that would otherwise be provided under the terms and conditions contained in the underlying Security Services Industry Award 2010, including the penalty rates of time and a half and double time that apply on Saturday and Sunday for ordinary time work, as well as the additional penalty rates of 21.7% and 30% which apply under the Award for work performed after 6 p.m. in the evenings. These entitlements also apply under the Award to casual employees. It was also indicated that there did not appear to be any provision for overtime entitlements in the proposed Agreement.

[5] Against this background the Commission indicated in its correspondence to the Applicant that the proposed rates of pay in the Agreement, particularly for casual employees, do not appear to provide adequate compensation for the fact many of the Award entitlements are not replicated in the Agreement. By way of example it was noted that the proposed casual rate at the Level 1 classification was less than the Award rate, and the rate at Level 2 was less than 1% above the Award rate. It was also noted that the part-time provisions in the Agreement do not replicate the entitlements in the Award, which provide that a part-time employee is entitled to overtime payments whenever they work hours in excess of those originally agreed on commencement.

[6] A letter in response was subsequently received from the Applicant’s representative, Mr Frank Caminiti. It provided further detail about the processes leading up to the making of the Agreement, including an explanation about why only one third of the employees to be covered participated in the voting process. It also indicated that undertakings could be provided to deal with the issues concerning the Consultation and Dispute Resolution clauses in the proposed Agreement. It also attached a signature page that now contained a signature of one of the employees to be covered by the Agreement.

[7] In regard to the issues to do with the wage rates the response from Mr Caminiti also contained two further undertakings. The first concerned the rates of pay to be provided to full and part-time employees. It now proposed that instead of a single rate at each classification level there would be six separate rates, depending upon the days and times employees were rostered to work. Further revised rates were also proposed in a second undertaking concerning casual employees, although in this case it was only proposed that a single rate would continue to apply at each classification level.

[8] Following this response the Commission sent further correspondence to the Applicant indicating at the outset that it understood a very different wage structure was now being proposed in the undertakings, compared to that contained in the original Agreement. The Commission noted in this context that while it can accept undertakings s.190 of the Fair Work Act 2009 makes clear it may only do so if satisfied that the effect of accepting the undertaking is not likely to “result in substantial changes to the Agreement.”

[9] The Commission continued to indicate that its preliminary view, at this time, was that the detailed wage structure now being proposed for weekly employees, based on six different wage rates at each classification level, was a significant and substantial change from the original Agreement and, accordingly, it might not be appropriate to accept that undertaking. A change of such significance should instead be something that had been considered, voted on, and approved by the employees to be covered by the proposed Agreement. However, the Commission also continued to indicate that regardless of these considerations it still had concerns about satisfaction with the requirements of the better off overall test. It concluded by indicating that if the application continued to be pressed the matter would be set down for hearing to enable further evidence and submissions to be provided in support.

[10] Mr Frank Caminiti and Ms Beverley Caminiti appeared in those proceedings on behalf CAMS Security Services Pty Ltd. They made reference in their submissions to the competitive nature of the security industry, and the fact that the business had only been in operation for less than 12 months and was working to establish itself. They also indicated that some of the security service work the business had contracted to provide involved sub-contracting arrangements as other businesses with contracts to provide security services to a particular site or locations are, in turn, sub-contracting the supply of the required labour to other businesses. It was indicated that these arrangements can mean that the profit margins are often very small. They also made reference to the costs associated with the existing penalty rates for work at weekends, meaning that the owners of the business can be required to work at these times in order to cover these rosters.

[11] In terms of the normal roster patterns it was indicated that some employees typically work Monday – Friday during daytime hours, and a contract for the supply of security services to Latrobe University was referred to as an example in this context. However, at other times employees are rostered to work in the evenings and at weekends, and contracts to provide security services to sporting clubs were highlighted as an example in this case. It was also indicated that the employees are most commonly engaged at the Level 1 classification.

[12] The Commission also asked whether the new wage structures now being proposed in the undertakings contained in the earlier correspondence provided to the Commission had been discussed with the employees. The Applicants indicated in response that these proposals had been discussed with some employees, however, those discussions indicated they would prefer to have a single rate structure in the manner proposed in the original Agreement, rather than the wage structure now proposed in the undertakings. As a consequence it was indicated that the Applicants no longer supported the proposed undertakings and they were being withdrawn.

[13] Following the hearing I have again reviewed the application and the terms and conditions contained in the proposed Agreement, together with the additional submissions made by the Applicants in the proceedings. I readily acknowledge the competitive nature of the security industry and the existence of arrangements in some parts of the industry where the supply of labour is contracted down the supply chain by the principal contractor to other subcontractors who are then required to accept responsibility for the labour costs associated with those arrangements. I also acknowledge that there is often little long-term certainty in regard to the contracts entered into by a business from time to time.

[14] In addition, as some recent publicity has highlighted, there are also businesses in the industry that are not complying with their legal obligations in regard to the provision of appropriate pay and conditions. This only makes it more difficult for those businesses endeavouring to “do the right thing” to remain competitive.

[15] However, leaving aside these considerations I am required to have particular regard to the statutory requirements which govern the determination of this matter, particularly the requirements of the better off overall test. Without setting out those requirements in full detail s.186 of the Fair Work Act 2009 requires, in part, that the Commission must be satisfied that the proposed Agreement passes the better off overall test. Section 193 continues to state in part as follows:

“193 Passing the better off overall test

When a non-greenfields Agreement passes the better off overall test

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

[16] As indicated, the overwhelming majority of employees to be covered by the proposed Agreement are employed on a casual basis. Under the terms and conditions contained in the Security Services Industry Award 2010 a casual employee employed at the Security Officer Level 1 classification is entitled to an hourly rate of $24.27 for work performed during the day on Monday – Friday. The equivalent night span rate is $29.30, although a higher rate can also apply where permanent night work is involved. Additional penalty rates of time and a half and double time also apply for work performed on Saturday and Sunday.

[17] By way of comparison I am not satisfied that the casual rates of pay in the proposed Agreement, particularly at the Level 1 and Level 2 classifications, which are intended to apply for work performed at any time, are sufficient to cover the fact that none of the additional penalty rate entitlements that apply under the Award would apply under the proposed Agreement.

[18] In the case of the rates in the Agreement that are proposed for full and part-time employees it is noted that they are greater than the rates contained in the Award, however, I am also not satisfied they are high enough to satisfy the requirements of the better off overall test, particularly for those employees working in the evenings or at weekends. In this context it is noted that the rates at the Level 1 and Level 2 classifications in the Agreement are less than the rates that apply under the Award for work performed in the evenings.

[19] It is also noted that the proposed Agreement does not replicate the overtime entitlements that apply for part-time employees, who are required under the Award to have fixed working hours and an entitlement to overtime when work in excess of those hours is performed.

[20] I have also given further consideration to whether it might be appropriate to seek further undertakings to deal with the on-going concerns I have regarding the existing terms and conditions in the proposed Agreement. However, I have already made reference in this decision to the provisions contained in s.190 of the Act. Various options have also been canvassed already in an attempt to establish whether the Agreement can be approved. I am also of the view that any further attempt to now seek to vary the wage rates through the provision of an undertaking would require and result in substantial changes to the Agreement and therefore make it inappropriate for such further undertakings to be accepted.

[21] For all of the reasons indicated above I am not satisfied the proposed Agreement can be approved, given the existing statutory requirements. The application is accordingly dismissed.

COMMISSIONER

Appearances:

Mr and Mrs Caminiti appeared on behalf of the Applicant.

Hearing details:

2015.

Melbourne:

23 November.

 1 Fair Work Act 2009 (Cth) at s.193

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