Canberra Southern Cross Club Ltd T/A Canberra Southern Cross Club

[2017] FWC 3701

[2017] FWC 3701

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Canberra Southern Cross Club Ltd T/A Canberra Southern Cross Club
(AG2017/887)

CANBERRA SOUTHERN CROSS CLUB ENTERPRISE AGREEMENT 2017-2019

Australian Capital Territory
DEPUTY PRESIDENT KOVACIC	CANBERRA, 14 JULY 2017

Application for approval of the Canberra Southern Cross Club Enterprise Agreement 2017-2019

[1] An application was received by the Fair Work Commission (the Commission) on 21 March 2017 for approval of an enterprise agreement known as the Canberra Southern Cross Club Enterprise Agreement 2017-2019 (the Agreement). The application was made by Canberra Southern Cross Club Ltd T/A Canberra Southern Cross Club (the Applicant) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

Background

[2] United Voice (UV) was a bargaining representative for the Agreement. Ms Lyndal Ryan, UV’s ACT Branch Secretary, declared in her Form F18 – Statutory declaration of an employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement) that UV supported approval of the Agreement. However, Ms Ryan also deposed that the Agreement did not pass the better off overall test (BOOT) but that undertakings may be able to remedy the defects in the Agreement. UV’s Form F18 was received by the Commission on 4 April 2017.

[3] On 21 April 2017 the Commission sent an email to the Applicant raising a number of concerns regarding the Agreement and advising that in the light of those concerns the application would be listed for conference. UV was copied in on that email. A telephone conference was subsequently convened on 1 May 2017. At that conference, Mr John Wilson appeared with permission for the Applicant, while Mr Stefan Russell-Uren, a Legal Officer with UV, appeared for UV.

[4] On 3 May 2017 the Commission wrote to the parties in the following terms:

“At the conclusion of the conference on Monday (1 May 2017) I indicated that I would reflect on the matters discussed and indicate whether the concerns outlined in the Commission’s email of 21 April 2017 remained and/or undertakings were required in respect of some issues. I note that many of the issues we discussed at Monday’s conference were also agitated when the current agreement was considered by Deputy President Sams, with his decision reflecting his consideration of those issues.

Having reflected on the matters discussed I would suggest undertakings in respect of the following issues:

• Clause 14.9 of the agreement is disadvantageous to part-time employees when compared to the relevant provision in the Registered and Licensed Clubs Award 2010 (the Award) – see clause 10.4(a)(iii) of the Award in particular. While I note the point made at the conference regarding the Award’s rostering provision, that provision still operates in conjunction with cl.10.4(a)(iii) of the Award. This issue, which in my view goes to the Better Off Overall Test (BOOT), can be addressed by way of an undertaking to the effect that where the employer proposes to change the days of the week on which a part-time employee can work this can only occur by agreement;



• Clause 36 – Working early and late expectations: I note that the Applicant provided undertakings in respect of this issue when the current agreement was approved by Deputy President Sams. An undertaking in similar terms would address my concern regarding this issue which goes to the BOOT;



• Clause 53.13 – Maximum accrual of Annual Leave credits: as acknowledged by Mr Wilson at Monday’s conference this provision differs from the equivalent Award provision in a number of respects (the agreement provides for direction in circumstances where an employee has accrued 5 weeks annual leave whereas under the Award the period needs to be 8 weeks, the Award also includes a number of safeguards which are not reflected in the agreement). Again this is a BOOT issue which can be rectified by way of an undertaking; and



• the minimum Supported Wage rate in the agreement is less than that specified in the Award. This issue can be addressed by way of an undertaking.

Beyond that, I am satisfied that the agreement meets the BOOT and as discussed on Monday would appreciate it if a revised signature page could be provided which include Mr Mackay’s name and position/authority to sign the agreement.

I would appreciate your response on the above issues by close of business on Thursday, 4 May 2017.

Mr Russell-Uren: With regard to the various issues identified by United Voice in its Form F18, I would note that the majority of issues are not matters that go to the requirements set out in ss.186 and 187 of the Fair Work Act 2009 (the Act). Beyond that, I note that:

• to the extent a dispute arises regarding the correct classification of an employee such a dispute would be dealt with in accordance with the agreement’s dispute resolution procedure;



• the dispute resolution clause in the agreement (clause 69) satisfies the requirements of s.186(6) of the Act; and



• while I note the comments regarding clause 40.3 of the agreement and the agreement’s “contractual terms”, those issues are not matters that go to the requirements set out in ss.186 and 187 of the Act.

Against that background, I would appreciate your advice as to whether United Voice continues to support approval of the agreement as per its Form F18. I would also appreciate your response on this issue by close of business on Thursday, 4 May 2017.”

[5] In subsequent developments, on 4 May 2017 the Applicant provided undertakings to address the issues identified by the Commission in the above email (those undertakings address the Commission’s concerns in respect of the issues dealt with in the undertakings) and UV advised that it had varied its position regarding approval of the Agreement and that it now no longer supported approval of the Agreement. UV further advised that it did not support approval of the Agreement on the basis that it did not pass the BOOT.

[6] Against that background, Directions were issued on 5 May 2017 with the application heard on 9 June 2017. At the hearing, Ms Cerasela Muller, the Applicant’s Human Resources Manager, gave evidence for the Applicant. UV did not lead any witness evidence in support of its submissions.

[7] For the reasons outlined below, I am satisfied that the Applicant complied with the pre-approval steps set out in s.180(2) of the Act and that subject to the provision of acceptable undertakings regarding the issues set below (those undertakings are in addition to the undertakings already provided by the Applicant) employees are better off overall under the Agreement. Upon provision of acceptable undertakings the Agreement will be approved. In the absence of such undertakings being provided, I would be unable to approve the Agreement.

The Applicant’s case

[8] The Applicant relied on the material it had lodged with and/or provided to the Commission, including its Form F16 – Application for approval of an enterprise agreement and Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement), the submissions it made during the conference convened by the Commission on 1 May 2017, the undertakings it subsequently emailed to the Commission and UV on 3 May 2017 and Ms Muller’s witness statement (see below). More specifically, the Applicant disputed UV’s contention that those provisions in the Agreement that created obligations for employees and which were not found in the relevant modern award should be considered disadvantageous for the purposes of the BOOT, submitting that this was not what the proper application of the BOOT required. The Applicant further submitted that the obligations highlighted by UV were irrelevant from the perspective of the BOOT, adding that if the obligations could be imposed at common law alongside the relevant modern award then their presence in the Agreement resulted in an entirely neutral outcome from the perspective of the BOOT.

[9] Beyond that, the Applicant submitted among other things that with regard to:

• annualised salaries – employees have and could avail themselves of the protection at clause 21.16 of the Agreement if at any time a considered that they were being paid less under an annualised salary arrangement than what they otherwise would have been paid;



• breaks – the Agreement reflected a practical and common sense approach that ensured that employees either had their breaks or were compensated if they did not;



• the scope under the Agreement for a casual employee to request a minimum engagement of less than three hours was of advantage to employees; and



• the significance of prior decisions – if as in this case nothing had changed between test time for the approval of the existing enterprise agreement and the current test time, then the Agreement should be approved.

[10] At the hearing the Applicant largely reiterated its written submissions, contending that the Agreement passed the BOOT.

[11] In her witness statement 1, Ms Muller responded to a number of contentions made by UV in its written submissions. Among other things, Ms Muller deposed that:

• the Applicant did not employ maintenance or horticultural employees and did not intend to do so, adding that maintenance work was performed by contractors and that no horticultural work was performed at the Club;



• the Club did not employ casual employees at Level 8 and above;



• no employee was ever directed to work from Saturday through to Monday with 12 hour shifts each day; and



• all full-time and part-time employees employed by the Club were employed on an annualised salary.

[12] Attached to Ms Muller’s witness statement were comparison reports for a sample of employees setting out what those employees would have been paid under the Registered and Licensed Clubs Award 2010 2 (the Clubs Award) and the Agreement for the roster they worked for the week ending 13 February 2017. Those comparison reports demonstrated that each of the employees were better off under the Agreement relative to the Clubs Award.

[13] Under cross examination Ms Muller conceded that the abovementioned comparison reports in calculating what those employees may earn under the Clubs Award did not include the allowance payable to those employees who work a broken shift or the penalty rates attaching to work performed on a Saturday, Sunday or public holiday.

UV’s case

[14] UV submitted that the Agreement did not pass the BOOT because in return for a wage increase of one per cent workers were subjected to unusual and onerous obligations which resulted in a significant diminution of their position relative to the relevant awards, the Clubs Award and the Marine Tourism and Charter Vessels Award 2010 3. UV further submitted, inter alia, that the Agreement:

• transmuted policies into terms which bound the workers under the pain of penalty, adding that policies and procedures were not distributed to employees with the proposed agreement prior to the commencement of the access period as required by the Act;



• established a suite of unqualified obligations which were not included in the relevant modern awards, including requirements to at all times act in the best interests of the employer, comply with all reasonable directions, disclose any conflict of interest, and a restraint on engaging in any other employment or establishing a business which affects or impacts on the worker’s ability to perform their duties;



• established terms to protect confidential information which extended far beyond the common law and which were alien to industrial instruments;



• permitted the Applicant to suspend a worker for three months without pay;



• provided annualised salaries which were substantially below the award minimum;



• slashed minimum engagements for casual workers;



• provided for workers to be stood down for medical reasons and lose the confidentiality to which they were otherwise entitled when they saw a doctor;



• required workers to pay for dispute resolution and circumscribed their capacity to approach the courts; and



• required an employee to provide four weeks’ notice of termination irrespective of the length of service and provided that where less than this period of notice was provided the employer could deduct the notice period not given from the amounts owed to the employee.

[15] In its submissions, UV acknowledged that the penalty rates for early and late shifts were higher under the Agreement than the Clubs Award for the first year of the Agreement. In response to the Applicant’s emphasis on many of the disputed provisions being a feature of the enterprise agreement currently applying, UV highlighted that the Act required that the Commission be satisfied that the Agreement passed the BOOT as at ‘test time’ not some earlier point in time.

[16] At the hearing, UV largely reiterated its written submissions. UV also provided wage calculations 4 for a number of employees based on the rosters attached to Ms Muller’s witness statement5 and an Employee Roster Report for the pay week ending 28 November 20166. In support of its submissions, UV relied on a number of authorities, including Broadsword Marine Contractors Pty Ltd v Maritime Union of Australia, The and Others7 (Broadsword), Terrestria Pty Ltd8, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, Australian Manufacturing Workers’ Union v Main People Pty Ltd9 (Main People), Lobethal Abattoirs Pty Ltd T/A Thomas Foods International10 and Solar Systems Pty Ltd11.

The statutory framework

[17] The relevant provisions of the Act are set out below.

180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) …

186 When the FWC must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

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

Requirements relating to the safety net etc.

(2) The FWC 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: The FWC 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) The FWC 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, the FWC 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) The FWC 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) The FWC must be satisfied that the agreement does not include any designated outworker terms.

Requirement for a nominal expiry date etc.

(5) The FWC must be satisfied that:

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

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

Requirement for a term about settling disputes

(7) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, 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: The FWC 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 the FWC 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 the FWC must approve an enterprise agreement—additional requirements

Additional requirements

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

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

(2) The FWC 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), the FWC 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) The FWC 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 …

188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) …

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.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

…

Award covered employee

(3) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(4) A prospective award covered employeefor an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(5) Thetest timeis the time the application for approval of the agreement by the FWC was made under subsection 182(4) or section 185.

FWC may assume employee better off overall in certain circumstances

(6) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

Consideration of the issues

[18] As previously outlined, UV contended that the Agreement should not be approved, inter alia, because:

• the Applicant had failed to meet relevant pre-approval steps as its policies and procedures were not distributed with the Agreement; and



• the Commission could not be satisfied that the Agreement passed the BOOT.

[19] I will deal with each of those issues separately.

Compliance with the pre-approval steps

[20] Section 186 provides that the Commission must approve an agreement if an application is made under s.185 of the Act and the requirements of ss.186 and 187 of the Act are met. Among other things, s.186 requires that the Commission be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement [s.186(2)(a)], with s.188 setting out when employees have genuinely agreed to an enterprise agreement. As to the pre-approval requirements, s.188(a)(i) of the Act requires compliance with among other provisions s.180(2) of the Act which provides that the employer must take all reasonable steps to ensure that relevant employees are given a copy of the agreement and any material incorporated into the agreement during the access period and have access to a copy of those materials throughout the access period.

[21] While it is not disputed that employees were provided with a copy of the Agreement at the commencement of the access period, UV submitted that employees were not provided with access to the Applicant’s policies and procedures. Relying on the decision in Broadsword, UV contended that clause 10 of the Agreement had the practical effect of incorporating the Applicant’s policies and procedures into the Agreement and that therefore s.180(2) required that employees to have access to those policies and procedures for the duration of the access period.

[22] Clause 10 of the Agreement provides as follows:

“10. Company policies and procedures

10.1 This Agreement is supported by CSCC company policies and procedures which CSCC may determine from time to time.

10.2 CSCC company policies and procedures:

(a) do not form part of, and are not incorporated by reference in, this Agreement;

(b) do not form part of an Employee’s contract of employment;

(c) will not reduce any entitlement under this Agreement;

(d) provide guidelines for, amongst other things, the administration of the employment relationship; …

10.5 All Employees must comply with all CSCC company policies and procedures.

10.6 To avoid doubt, no CSCC company policy or procedure creates a right enforceable by an Employee or an obligation enforceable against CSCC.”

[23] The issue of whether or not material was incorporated into an agreement by reference was considered by Deputy President Gostencnik in Broadsword. In that case, the Deputy President set out his approach on that issue in the following terms:

“[26] The question whether the policies referred to in each of the abovementioned clauses of the Agreement are incorporated into the Agreement by reference may, for present purposes, be answered by asking whether the provisions of these clauses of the Agreement impose any obligation on employees who are covered by the Agreement to comply with the policies to which reference is made.” 12

[24] I agree with and adopt the approach of the Deputy President.

[25] While Clause 10.2(a) of the Agreement explicitly states that the company policies and procedures are not incorporated in the Agreement, following the approach in Broadsword means that clause 10.5 of the Agreement has the practical effect of imposing an obligation on employees who are covered by the Agreement to comply with the Applicant’s policies and procedures. This in turn points to those policies and procedures being incorporated into the Agreement by reference despite the terms of clause 10.2(a) of the Agreement.

[26] Against that background, on 5 July 2017 the Commission wrote to the Applicant and UV seeking further information how the policies and procedures referred to in clause 10 of the Agreement are routinely made available to employees.

[27] The Applicant responded on 7 July 2017 advising that:

• all new employees receive an email from the Applicant inviting the employee to attend an induction, adding that it is a requirement that any employee attend such induction prior to the commencement of employment;



• one of the documents attached to that email is the Applicant’s Staff Handbook;



• during the induction employees are shown a PowerPoint presentation in which the Applicant’s policies and procedures are verbally explained;



• at the conclusion of the induction, an Induction Program Checklist form is signed by the new employee and the person conducting the induction session on behalf of the Applicant;



• all of the Applicant’s employment related policies and procedures are located on the Applicant’s S-drive in a Corporate Policies directory;



• all employees have the ability, through their supervisor, to access the S-drive to view the policies and procedures as required;



• employees are informed upon induction of the existence of the S-drive, the fact that the Applicant’s Corporate Policies are located on that drive and how to go about accessing that drive;



• matters of policy and procedure are also routinely iterated, discussed and reiterated by the Applicant’s managers and supervisors on an as needed basis where the policy is directly related to their employment; and



• employees are also advised through staff notice boards of changes to policies.

[28] A copy of the Applicant’s Staff Handbook was among the materials provided on 7 July 2017. An examination of the Staff Handbook indicates that annexed to it are company policies regarding privacy, discrimination and harassment, bullying, grievances and complaints, related persons, staff meals and drinks, presentation and hygiene, and drugs and alcohol. The Staff Handbook also sets out the Applicant’s work health and safety policy.

[29] In its response to the material provided by the Applicant on 7 July 2017 UV stated among other things that there was no evidence that steps were taken by the Applicant prior to the access period to advise workers of the content of the Applicant’s S-drive, the connection between the content and the Agreement or how to access the S-drive. UV further stated that the Applicant’s response suggested that no steps were taken to provide access to the incorporated materials and that therefore the Commission could not be satisfied that all reasonable steps were taken by the Applicant to ensure that during the access period workers were given access to a copy of the policies and procedures incorporated by reference into the Agreement.

[30] In Broadsword Deputy President Gostencnik determined as follows:

“[32] The requirement in s.180(2) of the Act is not one expressed in absolute terms. Rather, it is a requirement that an employer must take all reasonable steps to ensure, relevantly that material incorporated into an agreement is given to employees during the excess [sic] period or that employees have access to the material throughout the access period.

…

[34] To the extent that certain policies have been incorporated by reference, it seems apparent from Mr Paul’s evidence that employees had access to those policies throughout the access period as they had been provided with all of the policies during induction. The policies were also accessible at the workplace. These are policies with which the employees are expected to be familiar and comply during their employment with the Applicant. That is why they are given copies during induction. In the circumstances, I do not think it reasonable that the Applicant be separately required to provide employees with another copy of these policies.

[35] On the basis of the material before me I am satisfied that the Applicant has complied with s.180(2) of the Act.”

[31] Based on the material provided by the Applicant on 7 July 2017, the approach to the provision of company policies in this case is similar to that set out by the Deputy President in Broadsword. In particular I note that in this case employees are provided with a copy of the Applicant’s Staff Handbook which includes a copy of the relevant policies and procedures prior to their induction and during their induction are advised how to access those policies on the Applicant’s S-drive. Accordingly, for the same reasons as set out in Broadsword, I do not think it reasonable that the Applicant in these circumstances be separately required to provide employees with another copy of its policies and procedures during the access period. I am therefore satisfied that the Applicant met the requirements of s.180(2) of the Act.

Does the Agreement pass the BOOT?

[32] UV contended that employees would not be better off overall under the Agreement when a comparison was made to what they would have earned under the Clubs Award. On the other hand, the Applicant contended that the Agreement passed the BOOT, highlighting among other things the higher penalty rates provided for in the Agreement.

[33] As previously noted, both the Applicant and UV provided estimated earnings under both the Agreement and the Clubs Award for a sample of employees. Unfortunately, both of those calculations were infected by error. For instance, Ms Muller’s evidence was that the calculations attached to her witness statement in respect of what employees would have earned under the Clubs Award did not incorporate payment of a broken shift allowance or penalty rates for weekend and public holiday work. As such, those calculations understate what employees would have earned under the Clubs Award. Conversely, UV’s calculations erroneously overestimated the value of the broken shift allowance and therefore overstated what employees would have earned under the Clubs Award. Specifically, UV calculated the value of the broken shift allowance as around $30 per day. However, clause 18.3 of the Clubs Award provides that the daily allowance is 0.4 per cent of the standard weekly rate, i.e. $3.13 per day calculated as follows – 0.4/100 x $783.30 (the relevant standard weekly rate as at test time).

[34] The following table sets out the weekly rates of pay for the sample of employees dealt with at MFI 1 which was prepared by UV. For comparative purposes, the table reflects the Applicant’s, UV’s and the Commission’s calculations of the relevant rates payable under the Agreement and the Clubs Award for that sample of employees (the calculations underpinning the Commission figures set out at Annexure A).

Employee Number (Classific-ation Level)	Applicant 13		Clubs Award		Commission
	Agreement (Annualised salary)	Agreement (Non-Annualised salary)	Applicant 14	UV 15	Agreement (Non-Annualised salary)	Clubs Award
5681 (LEVEL 3)	$1013.21	$1013.19	$801.96	$782.40	$790.80	$782.40
7181 (Level 1)	$935.31	$935.31	$746.62	$952.27	$908.07	$861.26
5081 (Level 4)	$1067.53	$1050.88	$845.02	$1202.62	$1121.84	$1061.69

[35] The above analysis does not support UV’s contentions that employees’ remuneration under the Agreement would be less than what they would have earned under the Clubs Award, albeit that in some cases the difference is relatively small.

[36] At the hearing, UV provided a folder which also included a number of comparisons of what a sample of employees working under the rosters set out in MFI 2 would have earned under the Agreement and under the Clubs Award. Two of those comparisons (Comparisons 4 and 5) showed employees better off under the Agreement as opposed to the Award (though one of those comparisons included errors which did not alter the overall outcome). The remaining comparisons were infected by a number of errors, e.g. Comparison 1 incorrectly included an 8 hour shift on a Sunday whereas the employee only worked 4 hours on that day, a broken shift allowance was also incorrectly included for that day and again the allowance was incorrectly calculated. Allowing for these errors, the Commission’s calculations indicate that all five comparisons result in the employee earning more under the Agreement than the Clubs Award.

[37] As previously noted, the Applicant submitted in respect of annualised salaries that employees could avail themselves of the protection at clause 21.16 of the Agreement if at any time a considered that they were being paid less under an annualised salary arrangement than what they otherwise would have been paid. UV contended that reliance on this provision was inconsistent with the decision in Main People. An issue canvassed by the Full Bench in Main People concerned whether an undertaking which provided inter alia that all employees would be paid more under the relevant agreement than they would be paid under the relevant award if it applied to the work carried out by them from time to time and that an employee may request a reconciliation once a year or on termination to establish whether there was an amount which was required by the undertaking to be paid to them satisfied s.190(2) of the Act. The undertaking was provided to address concerns in relation to whether the particular agreement passed the BOOT. However, the Full Bench determined that the abovementioned aspects of the undertaking were incapable of meeting the concern that the relevant agreement did not pass the BOOT for a number of reasons 16. Nevertheless UV’s reliance on the decision in Main People in this case is misplaced for two main reasons. First, the above table supports a finding that employees’ remuneration under the Agreement is above what they would have earned under the Clubs Award. Second, clause 21.16 of the Agreement is not relevant for the purposes of the BOOT in respect of employees engaged on annualised salaries as it provides for a reconciliation in circumstances where the employee has received an amount which is less than the minimum amount the employee is entitled to under the Agreement (as opposed to the Clubs Award) had he or she not been engaged on an annualised salary.

[38] Beyond that, UV also raised a number of other concerns regarding the Agreement. I turn now to deal with those issues, some of which have been grouped together given their similarity.

The Agreement establishes a suite of unqualified obligations which were not included in the relevant awards (e.g. a requirement to at all times act in the best interests of the employer) and terms to protect confidential information

[39] UV contends that many of the obligations set out in the Agreement are not a feature of industrial instruments. While that may be correct it does not of itself mean that the provisions are onerous or from a BOOT perspective are financially disadvantageous to employees when compared to the Clubs Award. In this case, I am not satisfied that any of the provisions result in employees earning less under the Agreement than they would earn under the Clubs Award. Accordingly, I do not consider these factors to be relevant for the purposes of the BOOT.

The Agreement permits the Applicant to suspend a worker for three months without pay

[40] Clause 40.3 of the Agreement provides that where the Applicant is investigating whether an employee may have engaged in misconduct that it may suspend the employee from duty, either on pay or without pay, upon the CEOs approval. Clause 40.4 of the Agreement provides that a suspension without pay cannot be for a period longer than three months. The Clubs Award does not provide for a suspension of employees either with or without pay.

[41] While it might be anticipated that this provision would be utilised infrequently, that of itself does not diminish the potential financial disadvantage to employees who are suspended without pay for a period of three months. For those employees, it cannot be said that they would be better off overall under the Agreement when compared to the Clubs Award with any certainty, particularly in view of the relatively small advantage for some employees under the Agreement highlighted in the table above. I therefore consider that any period of suspension without pay has the potential to result in some employees not being better off overall under the Agreement. The same cannot be said where an employee is suspended on pay. My concern regarding this provision could be addressed by way of an undertaking to the effect that clause 40.3 in so far as it allows for suspension without pay and clause 40.4 will not apply.

The Agreement slashes the minimum engagements for casual workers

[42] Clause 15.8 of the Agreement provides for a minimum engagement period of three hours for casual workers. However, clause 15.9 of the Agreement provides that a casual employee can work less than three hours on any day in circumstances where he or she requests this and the Applicant agrees. The Clubs Award provides for a minimum engagement period of two hours for casual employees (other than casual employees engaged solely as a bingo caller or assistant bingo caller).

[43] The issue of minimum engagement periods for casual workers was considered by a Full Bench in 4 yearly review of modern awards awards – Casual employment and Part-time employment 17 (Casual and Part-time employment case). In its decision the Full Bench observed:

“[409] … A facilitative provision which allows any minimum engagement period, or none at all, to be substituted for the prescribed standard 4 hour minimum period has the potential to be used in a way which entirely undermines the purpose of the provision. That the current provisions require the employee to initiate a request for the reduced minimum does not serve as a practical protection, particularly in relation to casual employment where the employer has the power to determine whether any future work is offered. This potential for exploitation means that the current provisions cannot be said to achieve the objective of a safety net set of terms and conditions that is fair and relevant. We consider that a facilitative provision with a minimum “floor” of a 3 hour minimum engagement is necessary to achieve the modern awards objective in this respect. The 4 awards will be varied in the terms proposed by the AMWU.” 18 (Underlining added)

[44] While the Full Bench’s decision in the Casual and Part-time employment case related to the award safety net as opposed to the content of an enterprise agreement, the Bench’s observation regarding the practical protection attached to the requirement that an employee initiate a request for a reduced minimum engagement period is relevant to the application before me.

[45] More specifically, the Agreement provides wages rates for casual employees that are between 7 and 27 cents per hour above the equivalent rates under the Clubs Award at test time. In addition, the penalty rate provisions of the Agreement are more advantageous for casual employees when compared to the Clubs Award. Despite this I am concerned that in the absence of a floor for the shorter minimum engagement period which a casual employee can request, the employee may not be better off overall under the Agreement. I consider a floor of 2 hours (i.e. the minimum engagement period specified in the Clubs Award) would remove any doubt in this regard. An undertaking to that effect would address my concerns regarding this issue.

The Agreement provides for workers to be stood down for medical reasons

[46] Clause 54.6 of the Agreement enables the Applicant, if it considers an employee to be unfit for work, to require an employee to take Personal/Carer’s leave, attend a medical practitioner to seek a written opinion on the employee’s fitness or otherwise for work and provide a copy of the medical practitioner’s opinion to it. At the hearing, the Applicant submitted that this provision was important given that it employs people involved in food preparation. UV on the other hand, highlighted that the provision was not limited to employees involved in food preparation and may entail employees with sensitive/delicate medical conditions having to disclose those conditions to the Applicant.

[47] Provisions enabling an employer to obtain an assessment of an employee’s fitness for duty are not uncommon in many enterprise agreements. Further, I note that the report to be provided by the medical practitioner is not prescribed in the Agreement and, based on most medical certificates, is unlikely to provide much in the way of detail of the employee’s medical condition (if any). I therefore consider the provision appropriate given that employees are involved in food preparation and service. Accordingly, I do not consider this factor weighs against approval of the Agreement.

The Agreement requires workers to pay for dispute resolution

[48] As set out in the email which the Commission sent to the parties on 3 May 2017, I consider that the dispute resolution procedure in the Agreement satisfies the requirements of section 186 (6) of the Act. Nothing that was submitted at the hearing on 9 June 2017 alters my view in that regard.

[49] However, the dispute resolution procedure is unusual in that it requires mediation to occur prior to either party being able to refer a dispute to the Commission, with the parties to equally share the costs of mediation. UV contended that this had the potential to discourage employees from initiating disputes under the Agreement and that the Agreement also constrained the capacity of an employee to pursue a matter in court. At the hearing, the Applicant indicated that it would be prepared to provide an undertaking if required by the Commission that mediation not be required prior to a dispute being referred to the Commission.

[50] It is clear that a requirement for employees to meet half the cost of mediation entails a financial impost on employees when compared to the Clubs Award. Further, in circumstances where the cost of mediation is unclear, I cannot be satisfied that the more beneficial provisions of the Agreement outweigh the potential financial disadvantage associated with this aspect of the Agreement. As such, I would require the Applicant to proffer an undertaking along the lines it foreshadowed at the hearing. Such an undertaking would address my concern in respect of this issue.

The Agreement requires an employee to provide four weeks’ notice of termination irrespective of the length of service

[51] Clause 64.10 of the Agreement requires an employee to provide the Applicant with four weeks’ written notice of his or her resignation. On the other hand, the Clubs Award provides for differing periods of notice depending on the employee’s length of service. UV highlighted the difference but led no evidence as to whether or not the provision, which also appeared in the expired agreement, had proven onerous for employees. Further, I note that clause 64.11 of the Agreement provides that the Applicant may agree to a shorter period of notice if requested by an employee. In my view, this latter provision can operate to mitigate the operation of clause 64.10. Accordingly, I do not consider this factor weighs against approval of the Agreement.

Summary

[52] Having regard to the above analysis and the various more beneficial and less beneficial provisions of the Agreement, I am satisfied that subject to the provision of acceptable undertakings in respect of suspension without pay, the minimum engagement period for casual employees and dispute resolution as requested above (those undertakings are in addition to the undertakings already provided by the Applicant), employees are better off overall under the Agreement.

Conclusion

[53] For all the above reasons, I am satisfied that the Applicant complied with the pre-approval steps set out in s.180(2) of the Act and that subject to the provision of acceptable undertakings in respect of the issues outlined above employees are better off overall under the Agreement. Upon provision of acceptable undertakings as requested above the Agreement will be approved. In the absence of such undertakings being provided, I would be unable to approve the Agreement.

Appearances:

J. Wilson for the Applicant.

S. Russell-Uren for United Voice

Hearing details:

2017.

Canberra:

June 9.

 1   Exhibit 1

 2   MA000058

 3   MA000093

 4   Matter for Information (MFI) 1

 5   Exhibit 1

 6   MFI 2

 7   [2015] FWC 6627

 8   [2013] FWC 4795

 9   [2015] FWCFB 4467

 10   [2017] FWC 151

 11   [2012] FWAFB 6397

 12   Ibid

 13   Exhibit 1 at CM2

 14   Ibid

 15   MFI 1

 16   [2015] FWCFB 4467 at [39]

 17   [2017] FWCFB 3541

 18   Ibid

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