Casinos Austria International (Cairns) Pty Ltd T/A The Reef Hotel Casino
[2017] FWC 5247
•30 OCTOBER 2017
| [2017] FWC 5247 |
| FAIR WORK COMMISSION |
| decision |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Casinos Austria International (Cairns) Pty Ltd T/A The Reef Hotel Casino
(AG2017/3007)
| Deputy President Colman | MELBOURNE, 30 OCTOBER 2017 |
Application for approval of The Reef Hotel Casino Cairns Complex and Staff Enterprise Agreement 2017-2020 – weekend and shift work – reconciliation clause – ‘better off overall test’ not met – application dismissed.
This decision concerns an application by Casinos Austria International (Cairns) Pty Ltd (Applicant) for approval of an enterprise agreement known as The Reef Hotel Casino Cairns Complex and Staff Enterprise Agreement 2017-2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) and relates to a single enterprise agreement. The Australian Workers Union (AWU) supported the application.
The employees whose employment is covered by the Agreement perform a variety of work that is covered by the Hospitality Industry (General) Award 2010 (Hospitality Award), the Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing Award), the Plumbing and Fire Sprinklers Award 2010 (Plumbing Award) and the Gardening and Landscaping Services Award 2010 (Gardening Award). These are the relevant modern awards for the purposes of the ‘better off overall test’ (BOOT) in s.193 of the Act.
On 14 August 2017, an email was sent from the Commission to the Applicant raising a number of concerns in relation to the approval requirements in s.186 of the Act. In subsequent correspondence with the Commission, the Applicant provided undertakings addressing certain concerns.
There remained two outstanding issues.
First, unlike the relevant awards, the Agreement does not provide for penalties in relation to shift and weekend work. Rather it provides for loaded rates of pay that are designed to compensate employees for the absence of shift and weekend penalties that would otherwise apply under the relevant awards. However, the Commission’s modelling indicates that employees who regularly work shift work and on weekends would in various cases be worse off under the Agreement than they would be under the relevant awards.
In particular, employees covered by any of the relevant awards would be worse off under the Agreement when working ordinary hours on both Saturday and Sunday as part of an ordinary 38 hour week; or when engaged as casual or part-time employees working a majority of hours on weekends. Further, employees covered by the Hospitality Award (Levels 3 to 6) or the Manufacturing Award would be worse off under the Agreement than under the relevant award when working regular hours on Sunday as part of an ordinary 38 hour week. In relation to shift work, employees covered by the Manufacturing Award would be worse off under the Agreement when engaged on permanent night shift; employees covered by the Plumbing Award would be worse off under the Agreement when working two or more shifts a week; and employees covered by the Gardening Award would be worse off when working more than half of their ordinary hours on shift work.
The second outstanding matter relates to the company’s proposed reconciliation clause. Taking into account certain undertakings that were earlier offered by the Applicant in relation to this clause, it reads as follows:
“A2. Reconciliation
A.2.1 To ensure that Employees are not disadvantaged over the life of the Agreement, each Employee covered by the Agreement will be entitled to request in writing a reconciliation at the anniversary date of the approval of the Agreement or on the termination of their employment with the Employer, for the work performed in the previous twelve (12) months to establish whether for work performed under the Agreement in the preceding year the Employee’s total remuneration is less than the Employee would have received under the relevant Award.
A.2.2 Where reconciliation establishes that an Employee has been paid less under the Agreement than the Employee would have been paid for performing the same work during the same hours under the relevant Award, the Employee will be reimbursed for the difference plus a quarter of one percent (.25%) between the amount paid under the Award and the amount paid under the Agreement.
A.2.3 Where an employee has requested in writing a roster for their own personal requirements that includes significant work on weekends and late nights that Employee will not be reimbursed for the difference between the amount paid under the Award and the amount paid under the Agreement, for the period of the request.”[1]
The Commission advised the Applicant that it had concerns about the reconciliation clause, as it appears to allow for employees to be worse off under the Agreement than the relevant awards.
The Applicant submitted generally that it believed the reconciliation clause allowed adequate protection for employees to ensure they were not paid less than award rates. It stated that the company seeks to ensure equitable rostering to share penalty periods, but that there are employees who choose to work only what would be penalty periods. The Applicant stated that it could not accept a change to the reconciliation clause that would allow employees who select their rosters, and only make themselves available for shifts during penalty periods, to have access to the reconciliation clause. It was contended that this would result either in an undue financial burden on the company or the withdrawal of work from these employees to their detriment.[2]
On 25 September 2017, the Commission wrote again to the Applicant, pointing out that s.193 of the Act requires that each employee be ‘better off overall’ under the Agreement than under the relevant award, and seeking any further submissions. On 27 September 2017, the Applicant advised the Commission that it was not in a position to provide further undertakings in relation to the Agreement.
I listed the application for hearing on Thursday, 19 October 2017. However, the Applicant and the AWU advised the Commission that they did not wish to make any further submissions.[3]
Better Off Overall Test
Before the Commission may approve an enterprise agreement, it must be satisfied that the agreement passes the better off overall test (s.186(2)(d)). Section 193 of the Act states:
‘(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.’
As the Full Bench noted in Hart v Coles Supermarkets Australia Pty Ltd, s.193 requires the Commission to be satisfied that a ‘consideration of all the benefits and detriments under the Agreement results in each employee and each prospective employee being better off overall under the Agreement compared to the Award.’[4]
I am not satisfied that the Agreement passes the better off overall test. As indicated above, various employees performing weekend work and shift would be worse off under the Agreement than they would be under the relevant awards.
Further, the reconciliation clause squarely contemplates some employees not being better off overall under the Agreement than under the relevant award, by specifically excluding some such employees from the arrangements that might otherwise seek to rectify that situation. Such employees will remain in a position where they are not better off overall under the Agreement than under the relevant award.
In addition, the reconciliation clause suffers from the problems identified by the Full Bench in Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd.[5] First, it does not create an enforceable right to a payment which would result in the affected employee being better off overall under the Agreement than under the applicable award.[6] Rather, it requires an employee to request the reconciliation. If no request is made then no obligation to make good any shortfall arises and it therefore cannot be certain that affected employees will remain better off overall.
Secondly, the reconciliation request occurs at the anniversary date of the approval of the Agreement or on termination of an employee’s employment, and is referable to work performed in the previous twelve (12) months. As was noted in Beechworth, the inevitable consequence is a delay in payment to an employee which may not be rectified in full by later repayment.[7] I note that the proposed clause provides for reimbursement in the case of a shortfall as against the award (save for the employees excluded by clause A.2.3), plus an additional quarter of one percent of the relevant amount. However, it does not appear to me that this would necessarily offset the detriment of the delay in payment, even taking into account the current low level of interest rates.
The only circumstance in which the Commission may approve an agreement that does not meet the better off overall test is set out in s.189. Under this provision the Commission may approve an agreement that does not pass the better off overall test if it is satisfied that, because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest (s.189(2)). An example of when the Commission might be so satisfied is where the agreement is part of a reasonable strategy to deal with a short term crisis in, and to assist in the revival of, the enterprise of an employer covered by the agreement (s.189(3)).
There was no suggestion in the present matter that exceptional circumstances existed that would justify the exercise of the Commission’s discretion under s.189. I do not consider it to be exceptional that employees might request particular working arrangements that lead to their disadvantage vis-a-vis the relevant award.
Conclusion
I am not satisfied that the Agreement passes the better off overall test. The requirement for approval set out in s.186(2)(d) has therefore not been met.
Accordingly, the application is dismissed.
DEPUTY PRESIDENT
[1] Undertaking received on 19 September 2017
[2] Applicant’s email dated 19 September 2017, paragraph 4
[3] Applicant’s email dated 19 October 2017. Union’s email dated 19 October 2017
[4] [2016] FWCFB 2887 at [33]
[5] [2017] FWCFB 1664, at [41] to [46]
[6] Ibid [42]
[7] Ibid [45]
Printed by authority of the Commonwealth Government Printer
<Price code A, PR596705>
0
0