Canley Heights RSL & Sporting Club Ltd
[2022] FWC 2840
•24 OCTOBER 2022
| [2022] FWC 2840 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Canley Heights RSL & Sporting Club Ltd
(AG2022/3522)
CHRSL&SC Enterprise Agreement 2022
| Licensed and registered clubs | |
| COMMISSIONER MATHESON | SYDNEY, 24 OCTOBER 2022 |
Application for approval of the CHRSL&SC Enterprise Agreement 2022.
An application has been made for approval of an enterprise agreement known as the CHRSL&SC Enterprise Agreement 2022 (Agreement). The application was made by Canley Heights RSL & Sporting Club Ltd (Applicant) pursuant to s.185 of the Fair Work Act 2009 (Cth) (Act). The Agreement is a single enterprise agreement.
The Commission identified a number of issues in relation to the application. Further, the United Workers’ Union, a bargaining representative for the Agreement, filed a ‘Form F18 – Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement)’ (Form F18) raising concerns with the application. These are dealt with below.
The matter was the subject of a hearing on 28 September 2022 so that the parties could be heard in relation to the concerns raised by the Commission and United Workers’ Union, as well as the Applicant’s response to those concerns. Prior to the hearing, the parties filed submissions. The United Workers’ Union submissions indicated that it opposed the approval of the Agreement on the basis that:
· the Agreement does not pass the better off overall test (BOOT) and the undertakings proposed by the Applicant are insufficient to rectify the BOOT concerns; and
· the errors identified by the Commission in relation to the rates of pay in the Agreement lodged cannot be considered a ‘minor technical or procedural error’ per s.188 of the Act and therefore affect genuine agreement.[1]
The Applicant filed additional submissions and modelling following the hearing.
Notification of vote – s.180(3)
Section 180(3) of the Act provides:
“(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a)the time and place at which the vote will occur;
(b)the voting method that will be used.”
Section 180(4) of the Act provides that the access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in s.181(1) of the Act.
A ‘Form F17 – Employer’s declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement)’ was filed by the Applicant in support of the application (Form F17). It is declared in the Form F17 that, on 28 July 2022, an email was sent to employees, advising that the vote was to be held on 5 August 2022 and that, on 2 August 2022, a further email was sent to employees, advising that the vote would be moved to 9 August 2022, with the vote ultimately held on that date. Copies of these emails have been filed with the application. The Commission raised the concern that employees were not notified of the time, place and method of vote 7 clear days prior to the commencement of voting, as required by s.180(3) of the Act.
The Applicant submitted that changing the date of the vote did not impact genuine agreement and that providing 6 days’ notice of the voting process, rather than 7 clear days, was a minor error and that employees covered by the Agreement were not likely to have been disadvantaged by the error.[2] The Applicant relied on Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others,[3] in which the Full Bench of the Commission said:
“[79] Whether a failure to comply with s.180(3) constitutes a ‘minor error’ depends on the extent of the non-compliance and the circumstances. Generally speaking, the lower the level of non-compliance the more likely it is to be characterised as a ‘minor error’. So, informing the employees of the matters in s.180(3)(a) and (b) ‘just after the start of the access period’, say 6 days before the start of the voting process, is likely to be a ‘minor error’ in most cases; but in some circumstances it may not be. For example, if it is the first agreement at the enterprise, the bargaining representatives are inexperienced and the employees are predominantly from a non-English speaking background, then it may not be a ‘minor error’.
[80] It may also be the case that what appears to be a more significant instance of non-compliance may still be categorised as a ‘minor error’, depending on the particular circumstances. For example, only informing the employees of the ss.180(3)(a) and (b) matters 4 days before the voting process starts may be a ‘minor error’ where all of the relevant employees actually voted.”
At the time of the vote, there were 65 employees covered by the Agreement and 49 of these cast a valid vote, which is a relatively high voting turnout.
In the circumstances of this application, and having regard to the submissions of the Applicant, I am satisfied that providing 6 days’ notice of the voting process is a minor procedural error and employees were not likely to have been disadvantaged by it.
Casual employees and voting
Of the 65 employees covered by the agreement at the time of the vote, 33 are casual employees. In light of the Full Bench decision in Appeal by Kmart Australia t/a Kmart and others,[4] the Commission sought further information from the Applicant addressing whether casual employees were employed at the time and entitled to vote. The Applicant submitted that it only uses regular and systematic casual employees who generally work weekly and all were entitled to vote.[5] I am satisfied that those casual employees who voted in relation to the Agreement were entitled to do so.
Definition of shiftworker for the purposes of the National Employment Standards
Section 196 of the Act requires that the Commission be satisfied that the Agreement defines or describes an employee as a shiftworker for the purposes of the National Employment Standards (NES) where:
(a)an employee is covered by the Agreement; and
(b)a modern award that is in operation and covers the employees defines or describes the employee as a shiftworker for the purposes of the NES.
Clause 25.1(b) of the Registered and Licensed Clubs Award 2020 (Award) provides a definition of shiftworker for the purposes of the NES. While clause 5(l) of the Agreement provides a definition of “shiftworker”, it does not provide that is for the purposes of the NES.
The Applicant provided an undertaking to address this concern.
National Employment Standards
Clause 43.3 of the Agreement provides:
“No Employee shall be dismissed without notice for sickness or accident or any other reasonable cause of absence from duty provided that the Employee informs CHRSL&SC of the Employee’s inability to commence work, within 24 hours of his or her usual starting time.”
This may be inconsistent with the notice requirements for personal leave as set out in s.107(2) of the Act and termination of employment as set out in ss.117-123 of the Act. Despite this, clause 4.2 of the Agreement provides:
“The NES and this Agreement contain the minimum conditions of employment for Employees covered by this Agreement. Where there is any inconsistency between this Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.”
As such, I am satisfied that the provisions of the NES apply as a minimum standard to the Agreement.
Better off overall test
Concerns
Rates of pay
The Commission’s analysis indicated that the rates of pay in the Agreement filed with the application are between 0.38% and 1.92% below the rates of pay in the Award. Further, Schedule D and Schedule F of the Agreement provide rates of pay for junior employees and apprentices and, while the percentages align with the Award, because the Agreement rates of pay for adults fall below the Award, the rates of pay for apprentices and junior employees are also below the Award. The rates of pay in the Agreement filed with the Commission appear to be unchanged from the rates of pay contained in the enterprise agreement currently in operation, being the CHRSL&SC Enterprise Agreement 2019 (2019 Agreement), suggesting the rates of pay in the Agreement may have been included in error.
The Applicant provided an undertaking to address this concern.
The undertaking provided seeks to:
· increase the minimum ordinary hourly rates of pay in Schedule F of the Agreement;
· increase the minimum hourly rates of pay for full-time and part-time employees, including Monday to Friday, weekend and public holiday rates; and
· increase the minimum hourly rates of pay for casual employees, including Monday to Friday, weekend and public holiday rates.
Trainees
Clause 15.2 of the Agreement provides that the conditions applying to trainees shall be those contained in Schedule E of the Miscellaneous Award 2010, which sets out minimum rates and conditions for employees undertaking a traineeship. The Commission raised the concern that it is therefore unclear how trainees would be better off overall under the Agreement compared to the relevant award.
The Applicant submitted it does not currently employee any trainees but nevertheless provided an undertaking to address the concern.[6] In particular, the undertaking provided that clause 15.2 of the Agreement would be amended to read:
“15.2 Conditions applying to trainees shall be those contained within Schedule E of the Miscellaneous Award 2020 which sets out the minimum wage rates and conditions for Employees undertaking traineeship. In addition, the following clauses will apply to trainees:
a.Clause 41 –Birthday leave
b.Clause 39 –Blood Donation Leave
c.Clause 29.3 –Shoe allowance
d.Clause 29.4 –Laundry allowance”.
The effect of the undertaking is that it extends the terms of the Miscellaneous Award 2020, as well as the additional entitlements in the Agreement, to trainees.
Part-time employees
Clause 10.4 of the Award provides:
“10.4 Setting guaranteed hours and availability
At the time of engaging a part-time employee, the employer must agree in writing with the employee on all of the following:
(a)the number of hours of work which is guaranteed to be provided and paid to the employee each week or, where the employer operates a roster, the number of hours of work which is guaranteed to be provided and paid to the employee over the roster cycle (the guaranteed hours); and
(b)the days of the week on which, and hours on those days during which, the employee is available to work the guaranteed hours (the employee’s availability).”
Clause 10.7 of the Award provides that a part-time employee:
“(a) must not be rostered to work any hours outside the employee’s availability; and
(b)must not be rostered to work in excess of 12 or fewer than 3 hours in any one day; and
(c)must have 2 days off each week”.
Clause 10.13(b)(ii) of the Award provides that all time worked by a part-time employee in excess of the employee’s rostered hours will be overtime and must be paid at overtime rates.
The Agreement filed with the application is silent on these safeguards for part-time employees and does not provide for payment of overtime for work outside rostered hours. The Commission raised the concern that, as a result, it may be the case that, depending on their working arrangements, part-time employees are not better off overall.
In response to this concern, the Applicant submitted:[7]
· clause 10.4 of the Award does not offer safeguards in practice as the practice of the Applicant when rostering part-time employees is that the employee provides their availability and the Applicant rosters them in accordance with their availability;
· part-time employees are provided with a guaranteed number of hours each week in their employment contact, with clause 20.1 of the Agreement providing a safeguard by providing part-time employees with a minimum of 32 ordinary hours per 28 day cycle;
· practically, if the Applicant was to roster part-time employees where they have indicated they are not available they would not turn up for shifts;
· clause 10.13(b)(ii) of the Award has limited application as the rostering provision in the Agreement provides protections as to when a roster can be changed for part-time employees and, if the Applicant did not comply with these provisions, it would be a breach of the Agreement; and
· part-time employees are better off as their ordinary rates (as varied by the proposed undertakings) are higher than Award rates.
Overtime
Clauses 22 of the Agreement provides:
“22. REQUEST TO WORK EXTRA HOURS
22.1 Employees may elect to make themselves available to work additional hours of shifts on the Club’s roster from time to time because of the Employee’s personal circumstances, over and above the Employee’s ordinary hours of work (“Extra Hours”). Examples of personal circumstances are family and/or carer’s responsibilities and financial circumstances, but may also include other situations.
22.2 Where an Employee elects to make themselves available to work Extra Hours from time to time, such an election should be made in writing in the form attached as Schedule E. It is not compulsory for an Employee to elect to perform Extra Hours.
22.3 Where an Employee elects to be available to work Extra Hours and accepts an offer from the Club to work Extra Hours, the Employee will be paid at their ordinary time rate and any applicable weekend or public holiday loading in Schedule F – Minimum Rates of Pay excluding the overtime penalty, for all Extra Hours actually worked.
22.4 An Employee's ordinary hours and any Extra Hours must not exceed 192 hours in a four (4) week roster period for full-time and casual employees, and less than 192 hours in a four (4) week roster for part-time Employees.
22.5 Extra Hours do not include any overtime worked by an Employee at the request or direction of the Club. An Employee may withdraw or amend any election to work Extra Hours at any time so long as the Employee first completes any Extra Hours on the current roster.”
The Commission raised the concern that clause 22 of the Agreement may present a reduction from the overtime provisions under clauses 10.13, 11.4, 15 and 22 of the Award, as it appears to have the effect that an employee may work “extra hours” under the Agreement at ordinary rates where they would otherwise would be entitled to overtime rates. As a result, employees who work “extra hours” may not be better off overall.
The Applicant provided an undertaking which has the effect of removing clause 22.
Shift triggers and penalties
Clause 24.4 of the Award provides penalties for late and early work and states:
“(a) Employees other than maintenance or horticultural employees will be entitled to the
following additional penalty for work performed at the following times:
(i)Monday to Friday, 7.00 pm to midnight: $2.37 per hour for such time worked; and
(ii)Monday to Friday, midnight to 7.00 am: $3.55 per hour for such time worked.
(b)The amount payable will be paid on a pro-rata basis for a part hour.”
The Agreement filed with the application is silent on penalties for late and early work and the Commission raised the concern that, as a result, employees who perform late and/or early work may not be better off overall.
The Applicant submitted employees are better off under the Agreement because:[8]
· the entitlement to late and early shift penalties can be incorporated into above Award wages and submitted that employees are currently paid $2.11 to $2.77 an hour above the Award rate for their classification;
· the Applicant’s opening hours are 10:00am-1:00pm, Sunday to Wednesday, and 10:00am-3:00am, Thursday to Saturday, which means there are only 9 hours a week that attract the $3.55 per hour penalty as the penalty is not payable on the weekend; and
· in accordance with health and safety obligations and managing fatigue, the Applicant has a rotating roster to ensure a particular employee is not working until close every shift.
The Applicant filed further submissions on 4 October 2022, submitting that:[9]
· the Agreement does not provide for early and late shift penalties as the rates of pay are significantly higher to compensate staff for not receiving these penalties;
· seven hours is generally the shift length used by the Applicant for night shifts;
· on 27 September 2022, the Commission was provided with casual rates to show that all seven-hour shifts performed by a casual employee would result with the employee being better off;
· the Applicant’s operating hours mean that there are only nine and half hours of early work penalties that can apply in a week and an employee would never be rostered only to work early hours. As there is a minimum engagement of three hours for a casual, this could only occur on a Thursday night and the Applicant is unaware of a shift like this being rostered;
· the Applicant generally uses casuals regularly and it would be usual for them to only have one shift in a week; and
· the Applicant uses rotating rosters to ensure employees get day and night shifts.
The Applicant has also provided some rosters and performed BOOT testing on employees who work the most night shifts and submits that, according to this modelling, employees were at least $60 to $144 dollars better off for the week.[10]
The Applicant submits that, as employees are paid significantly above the Award, they are still better off without receiving early and late penalties.[11]
On 7 October 2022, the United Workers’ Unions filed submission in reply, indicating that, while it accepts it would be unlikely for an employee to be rostered on each of the Applicant’s shifts finishing at 3.30am, it is unclear as to why the shift penalty of $3.55 was not included in the modelling provided by the Applicant and that the modelling provided shows four rosters in which hours are worked after 12am.[12]
While this may be the case, the modelling provided by the Applicant suggests that the difference between the rates payable under the Agreement with the Applicant’s undertaking, together with the additional benefits in the Agreement, are sufficient to address this BOOT concern raised by the Commission.
Time off in lieu of overtime
Clause 25.4 of the Agreement provides that, on termination of employment, the Applicant will pay an employee the equivalent amount of any accumulated time off in lieu (TOIL) hours not taken as time off at the ordinary hourly rate applicable to the employee when it was worked.
Clause 22.8(h) of the Award provides that if, on the termination of the employee’s employment, TOIL has not been taken, the employer must pay the employee for the overtime at the overtime rate applicable to the overtime when worked.
The Commission raised the concern that as a result, employees who accrue TOIL may not be better off overall.
The Applicant provided an undertaking to address this concern. The relevant undertaking has the effect that, on termination of the employee’s employment, the Applicant will pay the employee the equivalent of any accumulated time off in lieu hours not taken as time off at the overtime rate applicable to the overtime when it was worked.
Allowances and entitlements
Clause 19.2(b) of the Award provides that the first aid allowance is to be paid for all purposes. While clause 28 and Schedule H of the Agreement provide a first aid allowance, the Agreement does not provide that that allowance is paid for all purposes.
The Applicant submitted that employees are better off overall under the Agreement because:[13]
· although the first aid allowance is not payable for all purposes under the Agreement, employees are better off under the Agreement as the ordinary rates (as adjusted in the proposed undertakings) are higher than Award rates;
· the Applicant pays annual leave loading at the greater of 17.5% or the shift allowance and weekend penalties in respect of the ordinary time the employee would have worked. This entitlement is above the Award and an employee may be entitled to a higher annual leave loading whilst on annual leave if it would be the greater amount. This could also include the first aid allowance; and
· employees also get a shoe allowance of 43c per day for a casual employee and $5.35 per week for other employees, which is above Award conditions.
The Commission also raised the concern that Agreement appears to be silent on the following allowances/entitlements that are otherwise provided in the Award and, as a result, employees who are entitled to receive these allowances and entitlements may not be better off overall:
· broken period of work allowance;
· vehicle allowance;
· working late/early entitlement; and
· working away from usual place of work entitlement.
In relation to broken periods of work, the Applicant submitted:[14]
· it does not use broken periods of work other than for one role, being the kitchen user role, due to a staff shortage;
· full-time employees have a span of 14 hours which limits the use of broken periods of work and also have a minimum shift length of 4 hours which provides a safeguard above the Award;
· part-time employees have a span of 14 hours and minimum shift length of 3 hours which provide safeguards; and
· full-time and part-time employees are better off as their ordinary rates (as adjusted in the proposed undertakings) are higher than Award rates and they receive additional entitlements under the Agreement including:
obirthday leave;
oan additional 10 minute meal break for shifts over 6 hours; and
oin the case of part-time employees, payment for public holidays not worked.
On 26 September 2022, the United Workers’ Union submitted that the Applicant appears to be relying on the proposed higher hourly rate to capture entitlements or allowances that are missing in the Agreement, however noted that clause 5(n) of the Agreement specifically provides that the ‘Ordinary Hourly Rate’ “…does not include incentive-based payments and bonuses, loadings… monetary allowances, overtime or penalty rates…”.[15] The United Workers’ Union submitted that, if the intention of the proposed Agreement is to pay employees with a base hourly rate exclusive of other “monetary allowances, overtime or penalty rates”, then undertakings must include all allowances and entitlements as provided in the Award or the Agreement risks failing the BOOT.[16]
On 27 September 2022, the Applicant subsequently provided revised undertakings further increasing the rates of pay provided in the original undertaking and, on 4 October 2022, provided the Commission rosters to show how broken shifts are used, in the limited circumstances of staff shortages, and accompanying modelling. The Applicant submitted that these employees usually work in the kitchen doing lunch and dinner service and do not work past 10:00pm as service has stopped before this time.[17] The Applicant submitted that, taking into account the modelling and additional provisions in the Agreement including the 10 minute paid break, shoe allowance and birthday leave, employees are significantly better off.[18]
Higher duties
Clause 17 of the Agreement provides that an employee employed on duties carrying a higher rate than the employee’s ordinary classification will be paid the higher rate for the time so worked at the higher classification level.
Clause 18.11 of the Award provides that an employee employed for 2 or more hours of one day on duties carrying a higher rate than the employee’s ordinary classification will be paid the higher rate for the whole day. However, if the employee is employed for less than 2 hours on such duties, the employee is entitled to be paid the higher rate for the time worked at the higher classification.
The Commission raised the concern that, as a result, employees who perform higher duties may not be better off overall.
The Applicant provided an undertaking to address the concern. The undertaking would have the effect that, if an employee is employed for 2 or more hours of one day on higher duties, they will be paid the higher rate for that day and, if the employee is employed for less than 2 hours on higher duties, they will be entitled to be paid the higher rate for the time worked at the higher classification.
Consideration
Section 190 of the Act applies if an application for approval of an enterprise agreement has been made under ss.182(4) or 185 and the Commission has a concern that the agreement does not meet the requirements set out in ss.186 and 187, which includes concerns about the Agreement passing the BOOT.
Section 190(2) of the Act provides that the Commission may approve the agreement under s.186 if satisfied that an undertaking accepted by the Commission under s.190(3) meets the concern.
The Applicant has put forward seven undertakings to address the concerns of the Commission in relation to the BOOT and has also provided further modelling to the Commission. In its final submissions on 4 October 2022, the Applicant submitted that, with these undertakings, employees are significantly better off overall relative to the Award.[19] In its reply submissions, the United Workers’ Union submitted that it supports the position of the Applicant in respect of its submissions of 4 October 2022, with the exception of the modelling provided in relation to early and late shift penalties,[20] which I have dealt with above.
While the undertakings, supported by further modelling, appear to meet the concerns raised by the Commission, s.190(3) of the Act provides that the Commission may only accept a written undertaking where it 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.
Acceptance of the Applicant’s undertakings is clearly not likely to cause financial detriment to any employee covered by the Agreement.
The next question I need to consider is whether the undertakings result in substantial changes to the Agreement. In Re Hyatt Ground Engineering Pty Ltd,[21] the Commission said:
“[30] The sense in which the word ‘substantial’ appears in s.190(3)(b) is in my view to describe changes to the agreement as result of undertakings offered where the changes are not ‘trivial or minimal’ or ‘phemeral or nominal’.
[31] In this sense ‘substantial’ is not a quantitative term but a qualitative term. A number of trivial or minimal changes to the agreement may not constitute a substantial change to the agreement. However even a single change to a provision of the agreement where the change was not trivial or minimal would constitute a substantial change to the agreement.”
Some of the undertakings are relatively minor, such as the undertaking seeking to clarify that the definition of shiftworker is for the purposes of the NES. However, those that are more fundamental are the inclusion of new minimum rates in the Agreement.
I have considered the difference between the terms in the Agreement presented to employees and the undertakings that, if accepted, would become terms of the Agreement. It is clear to me that the inclusion of the rates from the 2019 Agreement was a drafting error and I find that it is highly unlikely that this is what employees covered by the Agreement understood this is what they were agreeing to. Rather, it is likely that they understood that the rates as set out in the PowerPoint presentation given to them in information sessions held on 1 August 2022 were the rates in the Agreement and they simply did not see the error that had been made prior to the vote. Further, and taking into account clause 12.2 of the Agreement, which provides that casual employees will be paid the rates of pay set out at Schedule F of the Agreement, clause 13 and clause 21, which all deal with casual employment, it is apparent to me that casual employees were intended to be covered by the Agreement and derive their rates of pay from the Agreement. The undertaking provided by the Applicant clarifies this. While the rates of pay in the revised undertakings provided by the Applicant are higher than those set out in the PowerPoint presentation, I am satisfied that this does not result in substantial changes to the Agreement. Further when the undertakings are considered in their entirety, I am satisfied that they do not result in substantial changes to the Agreement.
There is, however, a residual matter to consider and that is whether the errors that have been made impact whether the Agreement has been genuinely agreed.
Genuine agreement
Section 188 of the Act sets out when employees have genuinely agreed to an enterprise agreement, providing:
“When employees have genuinely agreed to an enterprise agreement
(1) 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) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.”
Section 180(5) of the Act provides:
“Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.”
It is declared in the response to question 22 of the Form F17 that, on 1 August 2022, information sessions were held in person and online, a PowerPoint presentation was given and a comparison document was discussed. Copies of the PowerPoint presentation and the comparison document have been filed with the application (as Attachments I, J and J.2).
The Commission noted that, when the presentation content is considered alongside the content of the Agreement, the following issues arise, which suggest there may not have been genuine agreement:
· the rates of pay in the Agreement presented to employees were below those in the Award;
· clause 2 of Schedule F of the Agreement states that the pay rate tables at clauses 2 and 3 of Schedule F apply from the “first pay period after the first anniversary of the commencement date of the Agreement”. However, these rates of pay do not appear to reflect the 3% pay increase at clause 45.1(a) of the Agreement that applies on the first full pay period on or following 1 July 2023; and
· clause 12.2 of the Agreement provides that casual employees will be provided the rates of pay set out at Schedule F of the Agreement yet the note under clause 4 of Schedule F to the Agreement provides that the casual rates at clause 3 of Schedule F “do not form part of this Agreement and are included only for the purpose of clarifying and providing a quick reference for the applicable rates of pay”.
In its Form F18, the United Workers’ Union initially indicated it shared the Commission’s concern that there may not have been ‘genuine agreement’ due to the issues identified regarding wage rates. The United Workers’ Union declared that it understood the Applicant agreed to pay a 3% wage increase, back paid to July 2022, and a further 1.6% increase in October 2022 to meet the 4.6% increase in award wages awarded by the Commission. However, the United Workers’ Union noted that clause 45 of the Agreement provides for a 3% increase per year commencing in 2023. The United Workers’ Union indicated it was concerned that not all employees understood that the pay rates, or other clauses in the Agreement which will leave them worse off compared to the Award.
In response to this concern, the Applicant submitted:[22]
· section 188(2) provides that an agreement has been genuinely agreed if the Commission is satisfied that the agreement would have been genuinely agreed but for minor procedural errors made in relation to s.180(5) and the employees were not likely to have been disadvantaged by the errors;
· the terms of the Agreement were explained to employees and the error of not including the correct rates in the Agreement did not impact genuine agreement;
· the Applicant has provided an undertaking to address the incorrect rates which were provided in the lodged Agreement;
· employees were provided with the correct rates in the PowerPoint presentation when the Agreement was explained to them;
· the employee bargaining committee was provided with the correct rates and spoke to a majority of employees and discussed those rates;
· the Applicant has provided an undertaking to make clear that casual rates do form part of the Agreement;
· 49 out of 65 employees voted on the Agreement and of these 98% voted in support;nd
· the voting details show that the minor procedural error was incapable of affecting the overwhelming approval of the Agreement.
The United Workers’ Union submitted that:[23]
· section 188(2) of the Act specifically requires that an error must be “…made in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174 relating to a notice of employee representational rights”;
· the Agreement provided to employees and lodged for approval contained not only the incorrect rates, but also, as noted by the Commission, appeared to specifically exclude casual rates from the Agreement, at odds with clause 12.2;
· the question for the Commission is not just whether the errors identified could have affected the voting outcome but whether these errors should be considered ‘minor technical or procedural errors’ under the Act;
· errors which fall into the category of minor technical or procedural errors must be made in relation to the requirements under s.180(5) of the Act. The errors made by the Applicant go to the very substance of the Agreement, are not errors contemplated by s.188(2) of the Act and are not in relation to the requirements in s.180(5); and
· it is unclear how the voting outcome could rectify the error and genuine agreement cannot be found when the content of the Agreement was so fundamentally wrong.
The United Workers’ Union relied[24] on the findings of the Full Bench in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others[25] that:
“[56] A failure to comply with a procedural requirement will constitute a ‘procedural error’ within the meaning of s.188(2)(a). A procedural requirement is one that requires an employer to follow a particular process or course of action e.g., providing employees with a NERR as soon as practicable, and not later than 14 days after the notification time (s.173(3)), or ensuring there are at least 7 clear days between notifying employees of the voting process and the commencement of that process (s.180(3)).
[57] A failure to comply with a technical requirement will constitute a ‘technical error’ within the meaning of s.188(2)(a). A technical requirement includes an obligation to comply strictly with the form and content of an instrument, such as the NERR.”
The United Workers’ Union submitted that the errors as to rates of pay and the casual exclusion from Schedule F cannot be considered a minor procedural or technical error as contemplated by the Act and the Commission is therefore unable to be satisfied that the proposed agreement could have been genuinely agreed to but for that error.[26]
In response, the Applicant submitted:[27]
· it has complied with s.180(5) of the Act as it requires the employer to ensure that the terms of the Agreement and the effect of those terms are explained to the relevant employees;
· the rates were contained in a Schedule to the Agreement and the terms that needed to be explained to employees were clauses 44 and 45 of the Agreement;
· those clauses were explained to the relevant employees, that employees will be paid no less than the minimum rates of pay in Schedule F, and they were also advised that their wages would increase by 3% on 1 July 2023, 2024 and 2025;
· employees then voted on the Agreement and approved it;
· the Applicant has provided an undertaking to correct the drafting errors; and
· employees are currently being paid rates significantly higher than the ones in the Agreement and the minor drafting error of not including these rates did not affect genuine agreement.
In its final submissions dated 4 October 2022, the Applicant submitted that the requirements in s.188 of the Act have been met.[28] In its reply submissions dated 7 October 2022, the United Workers’ Union submitted that it supported the position of the Applicant in its 4 October 2022 submissions, with the exception of the modelling provided in relation to early and late shift penalties,[29] which I have dealt with above.
However, despite the position of the parties, there is a residual concern that requires consideration turning to the explanation of the Agreement when the documents discussed with employees are considered alongside the content of the Agreement that was actually voted up.
Consideration
It is declared in the response to question 22 of the Form F17 that:
· on 28 July 2022, staff were sent links to information sessions which were held virtually and also in person;
· on 1 August 2022, information sessions were held at 10:00am and 5:00pm, in person and online. During these information sessions:
othe PowerPoint presentation (Attachment I to the Form F17, entitled “CHRSL&SC Enterprise Agreement 2022 Employee Information Session) was discussed;
oa comparison document was also discussed. The Applicant identifies this as Attachment J to the Form F17, which is a document entitled “Explanation of Terms of the Canley Heights RSL Club Employees Enterprise Agreement (2018-2022)”; and
oemployees were given the opportunity to ask questions, encouraged to go away and re-read the agreement, absorb all the information they have been given, and then ask any further questions;
· managers and union delegates were briefed on the Agreement and continuously approached staff to discuss or answer any questions.
Copies of the PowerPoint presentation and the comparison document have been filed with the application (as Attachments I and J). A further attachment comparing the Award and Agreement (Attachment J.2) has also been filed with the Form F17.
When I consider the documentation filed by the Applicant, it appears to me that the Applicant has sought to explain, in its PowerPoint presentation, the minimum rates of pay that will apply if the Agreement is approved and where they sit relative to the Award, as can be seen on pages 6 and 7 of the PowerPoint presentation. However, aside from this, there is limited further information within the PowerPoint presentation in relation to the terms of the Agreement and its effect.
While the rates in the Agreement reflected the 2019 Agreement and not those explained in the PowerPoint presentation, it is apparent that the inclusion of these rates in the Agreement was an error and I consider it likely that it is those rates in the PowerPoint presentation that employees would have understood to be the rates they were agreeing to, given the emphasis on those rates in that presentation.
This takes me to the comparison document that was discussed with employees (which the Applicant has identified as Attachment J). This is not actually a comparison document but an explanation of the terms of the 2019 Agreement, rather than the Agreement under consideration. This is not necessarily fatal to the application depending on whether there are differences between those two agreements and the nature of the differences between the comparison document and the Agreement under consideration. However, I have had to conduct analysis to understand those differences and understand whether, absent any further information, I can be satisfied on the evidence before me that the terms and effect of the Agreement under consideration have been explained.
Definitions
The comparison document:
· states that negotiations for a replacement agreement will commence in 2021. There is no commitment for the commencement of renegotiations in the Agreement under consideration;
· includes a definition of casual employee being “an employee engaged in a casual or “as required” capacity, in accordance with the needs of the business. Casual ordinary hours may be worked to a maximum of 38 hours per week.” At clause 12, the Agreement under consideration includes a different definition of casual employee being one who is “engaged and paid as such and is employed in accordance with section 15A of the Act”. It is apparent that this change is seeking to bring the Agreement in line with the definition of casual employee in the Act;
· includes a definition of “clothing” meaning “items of clothing that are supplied by the employer to an employee: this includes, uniforms and items provided for the safety and protection of the employee”. A definition of “clothing” is not provided for in the Agreement under consideration, with the Agreement simply referring to clothing as “special clothing” that the Applicant requires the employee to wear and which would attract payment of an allowance where an employee is responsible for laundering the clothing. Notwithstanding that the absence of the definition may lend itself to a broader understanding as to when the allowance might apply, this is not a substantial difference;
· includes a different definition of “confidential information” compared to the Agreement under consideration, although the only place that this is referred to in the Agreement is in the consultation procedure at Schedule B where it states that the Applicant is “not required to disclose confidential of commercially sensitive information to the relevant Employees” and this does not appear to be a substantial difference;
· includes a definition of “crib break” meaning a “paid break where employees are entitled to have a meal and/or brief rest. However, employees may be required to perform work during the break as may be necessary”. The Agreement does not contain such a definition however the term is used in the same context in both Agreements, in relation to recall to duty, and it is likely that both provisions have the same effect notwithstanding the absence of the definition;
· includes a definition of “Dispute settlement procedures” being the “process set down at clause 5” of the 2019 Agreement. Given this term was not referenced elsewhere in the 2019 Agreement or Agreement under consideration, this is not material;
· includes a definition of “full-time” employee that does not appear in the Agreement, being an employee who “is engaged to work an average of 38 hours per week”, and a definition of “part-time” employee that does not appear in the Agreement, being an employee who “is engaged to work less than 38 hours per week and who is not a casual employee”. Notwithstanding this difference, the practical effect is likely to be the same in relation to both agreements;
· includes definitions of “medical certificate” and “registered medical practitioner” that do not appear in the Agreement. The Agreement under consideration appears to bring the evidence requirements for personal leave in line with s.107 of the Act, so this difference is unlikely to have a practical implication;
· includes a definition of “redundancy” that is taken to have the same meaning of the term in the Act. While the Agreement does not contain such a definition, it is subject to the NES provisions and the exclusion of this definition is unlikely to have a practical implication;
· includes a definition of “spread of hours” meaning the “period of time elapsing from the time an employee commences duty to the time the employee ceases duty within any period of 24 hours”, which the Agreement under consideration does not. Noting this term is not actually used in the body of the 2019 Agreement, this difference does not appear to have any impact; and
· includes a definition of “staff meeting” that the Agreement under consideration does not. This difference is unlikely to have a practical impact.
Casual employees
The Agreement introduces new provisions applicable to casual employees at clause 12 that:
· state what the 25% casual loading compensates employees for (clause 12.3);
· provide that the payment of the casual loading is made on the assumption of the characterisation of an employee’s employment as a casual and will not be payable in respect of any period where that employment is not or ceases to be characterised as such (clause 12.4); and
· provide that, if it is determined that a period of an employee’s employment is other than as a casual, and the Applicant is required to pay any amount to the employee as a consequence, casual loadings paid will be an overpayment and the Applicant will be entitled to reduce any amount due by the amount of the overpayment (clause 12.5).
The Agreement introduces new casual notice provisions providing, at clause 49.2, that casual employees are required to give 3 hours’ notice in the event of resignation and, at clause 11.3, that either the Applicant or the casual employee may terminate the employment during the probationary period by giving 3 hours’ notice.
The Agreement has also been updated to bring the casual conversion provisions in line with changes made to the Act.
There is no evidence of these new provisions being explained to employees.
Seasonal employees
The Agreement introduces a new provision at clause 51.1(b) which provides that employees engaged for a specific period of time or for a specific task or tasks, or for the duration of a specified Season, will not be entitled to notice when the employment terminates at the end of the period of time or on completion of the task or tasks at the end of the ‘Season’. A definition of ‘Season’ has been included in clause 5 of the Agreement.
There is no evidence of these new provisions being explained to employees.
Rostered days off
The comparison document:
· includes a definition of “rostered day” meaning the “24 hour period between midnight and midnight that an employee is rostered to work, provided that any work extending past midnight shall be regarded as the previous days’ work. (This does not affect the payment of Saturday and Sunday rates)”. In the 2019 Agreement, the term “rostered day” is used in the context of “rostered days off” (RDO), with the 2019 Agreement providing for full-time and part-time employees to receive eight RDOs per 28-day work cycle with at least two of these days to be taken consecutively; and
· includes details of the above RDO entitlement.
While the rostering arrangements under the Agreement do not use the term ‘RDO’, clauses 19 and 20 provide that full-time and part-time ordinary hours may not be worked for more than 20 days out of a 28 day work cycle which has similar effect. However, the Agreement does not provide a requirement for at least two days off to be consecutive and there is no evidence of this being explained to employees.
Direction to take annual leave
The Agreement sets out an ability to direct an employee to take annual leave by giving at least four (4) weeks’ notice in the following circumstances:
· as a part of a close-down of its operations; or
· where an employee has accrued more than 8 weeks’ annual leave or 10 weeks’ annual leave for a shiftworker.
The comparison document explains that the Applicant has this right, which is set out in clause 28 of the 2019 Agreement. However, the Agreement has removed the safeguards that are contained in both the 2019 Agreement and the Award in relation to a direction to take annual leave and there is no evidence of this being explained to employees.
Family and domestic violence leave
The comparison document explains the 2019 Agreement contains and entitlement to 5 days paid and 5 days unpaid family violence leave per year. The Agreement provides that employees are entitled to family and domestic violence leave in accordance with the NES, therefore removing the paid component of this leave. There is no evidence of this being explained to employees.
Staff meetings and training
The comparison document refers to clause 44 (presumably of the 2019 Agreement) dealing with training and staff meetings and explains that attendance is required and employees will be “paid for either the training or min 2 hours whichever is greater”. Clause 56 of the Agreement under consideration provides for a minimum payment of 1 hour rather than 2 hours. There is no evidence of this being explained to employees.
Conclusion
Based on the evidence regarding the explanation of the Agreement and its terms provided to employees, it is not clear to me that the employees knew what they were voting for. On the one hand, there is an Agreement before the Commission with terms that are modified compared to the 2019 Agreement, but including the rates in the 2019 Agreement. On the other hand, there are explanatory documents which include new rates but refer to the terms in the 2019 Agreement. When the explanatory documents are considered together, they create an impression that employees will be voting on an agreement that is substantially the same as the last one with the exception of the new rates referred to in the PowerPoint presentation, which is the only substantive change that the PowerPoint presentation refers to.
However, there are clearly differences between the two agreements beyond the rates, some of them material, and I am not satisfied that there has been an explanation of the new or different terms of the Agreement the subject of this application, as I have identified above. As such, I am not satisfied that the requirements of s.180(5) of the Act have been met and I am not satisfied that the errors made in relation to the explanation of the terms amount to a ‘minor technical or procedural error’ that can be overcome in accordance with s.188 of the Act.
As I am not satisfied that the Agreement has been genuinely agreed, the application is therefore dismissed.
I make the observation that, while the dismissal of the application will cause some inconvenience for the Applicant, given the errors made in relation to the Agreement itself, which the Applicant has sought to address via numerous undertakings, and the omissions in the explanatory materials that were discussed with employees, there is likely to be a practical utility in revisiting the process. If the Applicant chooses to do so, in addition to updating the Agreement to include the correct rates and address potential BOOT concerns, the Applicant may also wish to revisit the cross referencing of clauses within the body of the Agreement itself. For example, Schedule H contains a table of rates and allowances that include incorrect clause references, being references to clauses in the 2019 Agreement. Addressing such errors will minimise risk of confusion or potential disputation in the future.
COMMISSIONER
[1] United Workers’ Union, ‘Submissions of United Workers’ Union’, filed 26 September 2022, [3].
[2] Applicant, ‘Submissions’, filed 8 September 2022, [2].
[3] [2019] FWCFB 318.
[4] [2019] FWCFB 7599.
[5] Applicant, ‘Submissions’, filed 8 September 2022, [15].
[6] Ibid, [15].
[7] Ibid, [24]-[29].
[8] Ibid, [37]-[40].
[9] Applicant, ‘Submissions Canley Heights RSL & Sporting Club Ltd’, filed 4 October 2022, [3.4]-[3.8].
[10] Ibid, [3.9].
[11] Ibid, [3.10].
[12] United Workers’ Union, ‘Reply Submissions from United Workers’ Union’, filed 7 October 2022, [5].
[13] Applicant, ‘Submissions’, filed 8 September 2022, [42]-[44].
[14] Ibid, [45]-[48].
[15] United Workers’ Union, ‘Submissions of United Workers’ Union’, filed 26 September 2022, [20](b)-(c).
[16] Ibid, [20](d).
[17] Applicant, ‘Submissions Canley Heights RSL & Sporting Club Ltd’, filed 4 October 2022, [3.14].
[18] Ibid, [3.13].
[19] Ibid, [3.1]-[3.3].
[20] United Workers’ Union, ‘Reply Submissions from United Workers’ Union’, filed 7 October 2022, [8]-[9].
[21] [2011] FWA 3527.
[22] Applicant, ‘Submissions’, filed 8 September 2022, [10]-[14].
[23] United Workers’ Union, ‘Submissions of United Workers’ Union’, filed 26 September 2022, [17](b)-(c).
[24] Ibid, [17](d).
[25] [2019] FWCFB 318.
[26] United Workers’ Union, ‘Submissions of United Workers’ Union’, filed 26 September 2022, [17](f).
[27] Applicant, ‘Submissions Canley Heights RSL & Sporting Club Ltd’, filed 27 September 2022, [2]-[6].
[28] Applicant, ‘Submissions Canley Heights RSL & Sporting Club Ltd’, filed 4 October 2022, [4.4].
[29] United Workers’ Union, ‘Reply Submissions from United Workers’ Union’, filed 7 October 2022, [8]-[9].
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