Central Highlands Region Water Corporation T/A Central Highlands Water
[2023] FWCA 1090
•18 APRIL 2023
| [2023] FWCA 1090 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.218A - application to vary an agreement to correct or amend errors, defects or irregularities
Central Highlands Region Water Corporation T/A Central Highlands Water
(AG2023/821)
CENTRAL HIGHLANDS WATER ENTERPRISE AGREEMENT 2021
| Water, sewerage and drainage services | |
| DEPUTY PRESIDENT O'NEILL | MELBOURNE, 18 APRIL 2023 |
Application for variation of the Central Highlands Water Enterprise Agreement 2021
Central Highlands Region Water Corporation (the Applicant) has applied pursuant to s.218A of the Fair Work Act 2009 (Cth) (the Act) to vary the Central Highlands Water Enterprise Agreement 2021 (the Agreement) to correct or amend an error, defect or irregularity in the Agreement.
The Agreement was approved by the Commission on 17 August 2022 and commenced operation on 24 August 2022. The Applicant is the sole employer covered by the Agreement. The Australian Municipal, Administrative, Clerical and Services Union and The Association of Professional Engineers, Scientists and Managers, Australia are also covered by the Agreement.
The Applicant seeks to vary clause 29.7 by inserting an additional subclause (Top Band clause):
“Where an employee is at the top of their Classification Band, they can be eligible for a Progression Equivalent Gratuity to the value of 1.5% of the rate of pay as long as they meet the criteria outlined in Clause 29.6 and 29.7.3. A Progression Equivalent Gratuity is a one off payment payable upon employees meeting the criteria as outlined.”
Consideration
Section 218A, which came into effect on 7 December 2022 as part of the reforms contained within the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, provides for the variation of enterprise agreements to correct or amend an obvious error, defect or irregularity:
“(1) The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form).
(2) The FWC may vary an enterprise agreement under subsection (1);
(a) on its own initiative; or
(b) on application by any of the following:
(i) one or more of the employers covered by the agreement;
(ii) an employee covered by the agreement;
(iii) an employee organisation covered by the agreement.
(3) If the FWC varies an enterprise agreement under subsection (1), the variation operates from the day specified in the decision to vary the agreement.”
Further, the Explanatory Memorandum in support of the Bill provides as follows:
“772. This part would remove unnecessary complexity in the agreement-making process by amending the FW Act to:
· simplify the process for correcting any obvious errors, defects or irregularities in enterprise agreements; and
· provide a simple remedy to address the situation where the wrong version of an enterprise agreement or variation has been inadvertently submitted to, and approved by, the FWC.”
As Deputy President Masson observed in Application by Victorian Hospitals’ Industrial Association:[1]
“[9] It is apparent from the text of s. 218A and the supporting Explanatory Memorandum that s. 218A is intended to overcome the statutory limitation imposed by s.602 of the Act that was most recently identified by the Full Bench in Advantaged Care Pty Ltd v Health Services Union (Advantaged Care). In that decision the Full Bench confirmed that the Commission could not amend the text of an agreement to correct an obvious error, defect or irregularity pursuant to s. 602 of the Act and that other provisions within the Act, such as ss. 210 or 217, might be used to rectify such error, defect or irregularity.
[10] There are limitations to the use of ss. 210 and 217 of the Act in varying an agreement to address an obvious error, defect or irregularity. For example, it may be considered costly and impractical to conduct a ballot of employees for the purpose of obtaining approval for the variation of an agreement pursuant to s. 210 of the Act, where the variation sought is not substantive. Section 217 might also not be amenable to correcting an obvious error, defect or irregularity where the error does not create uncertainty or ambiguity. It is accepted that s. 218A confers an additional discretion for the Commission to amend an error, defect, or irregularity in an agreement, be that in form or substance.”
The Applicant submits the omission of the Top Band clause is an obvious error within the meaning of s.218A of the Act which arose during the course of drafting the Agreement prior to conducting the ballot.
The previous agreement included the same Top Band clause at clause 25.9 and the retention of the Top Band clause was discussed during bargaining negotiations for the Agreement. The Applicant submits it was the understanding of all parties that the Top Band clause should be included in the Agreement. The following documents were provided in support of this submission:
· An extract of the bargaining meeting minutes from 19 August 2021 which demonstrate the Applicant’s position was to offset the retention of the Top Band clause with the removal of another proposed allowance.
· A copy of the marked up draft Agreement dated 19 August 2021 in which the Top Band clause appears at clause 25.2 with a comment that says “CHW, ASU and PA Agree to retain in EA”.
· A proposed changes document circulated to employees on 1 July 2022 outlining the proposed changes to the Agreement, including the retention of the Top Band clause.
The views of the employee organisations covered by the Agreement were sought and both ASU and APESMA support the application.
Based on the material before the Commission, it is clear to me that all parties involved in the Agreement intended for the Top Band clause to remain in the Agreement. I accept that the omission of the Top Band clause was an obvious error that occurred during the drafting process, which was not identified until after the Agreement was approved. In my view, this is the type of error contemplated by s.218A of the Act.
The Applicant also submits the omission of the Top Band clause may disadvantage employees by preventing them from receiving a progression equivalent gratuity payment. While disadvantage is not a factor I am expressly required to take into account, I have also considered that the omission of the Top Band clause may disadvantage employees by denying them a benefit they were intended to receive under the Agreement.
For the reasons set out above, I am satisfied the omission of the Top Band clause is an obvious error within the meaning of s.218A of the Act. In accordance with s.218A(3), the variation will operate from the date of this decision. An Order to that effect will be issued separately.
DEPUTY PRESIDENT
<AE517052 PR761108>
[1] [2022] FWCA 4390 at [9]-[10]
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