Christan Wright
[2022] FWCA 1691
•23 MAY 2022
| [2022] FWCA 1691 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument
Christan Wright
(AG2021/9300)
Group 1 Security Agreement 2006
| Security services | |
| COMMISSIONER P RYAN | SYDNEY, 23 MAY 2022 |
Application for termination of the Group 1 Security Agreement 2006
Introduction
Mr Christan Wright (Applicant) made an application to the Fair Work Commission to terminate the Group 1 Security Agreement 2006 (Agreement) pursuant to Item 16 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act).
The Agreement covers Group 1 Security Pty Ltd (Employer) and the employees falling with the scope of the classifications set out in clause 19 of the Agreement.
Pursuant to Item 16 of Schedule 3 of the Transitional Act, Subdivision D of Division 7 of Part 2-4 of the Fair Work Act 2009 (FW Act) applies in relation to termination of a collective agreement-based transitional instrument after its nominal expiry date, as if a reference to an enterprise agreement is a reference to collective agreement-based transitional instrument.
Subdivision D of Division 7 of Part 2-4 of the FW Act provides as follows:
Subdivision D—Termination of enterprise agreements after nominal expiry date
“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i)the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii)the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
The Application
The Agreement was made as an employer greenfields agreement under s.330 of the Workplace Relations act 1996 (WR Act) and has a commencement date of 3 July 2006.
In accordance with s.352(2)(a) of the WR Act, and clause 6.2 of the Agreement, the nominal expiry date of the Agreement was the first anniversary of its commencement date. This means the Agreement passed its nominal expiry date on 3 July 2007.
It is not in dispute that the Applicant is an employee covered by the Agreement.
Accordingly, I am satisfied that the Agreement is a collective agreement-based transitional agreement, that it has passed its nominal expiry date, and that the Applicant is an employee covered by the Agreement.
The Agreement
As noted above, the Agreement commenced in 2006 and passed its nominal expiry date in 2007.
The Agreement does not provide for any evening, weekend, or public holiday penalty rates. The Agreement does not provide any overtime penalty rates but does contain a time off in lieu provision.
The casual loading under the Agreement is 20%.
There is no entitlement to annual leave loading provided for in the Agreement.
The views of the employer and employees
The Employer and employees covered by the Agreement were given an opportunity to provide their views and the likely effect that the termination of the Agreement will have on them. The only employee views received were from the Applicant. The Agreement does not cover any employee organisation.
The Applicant submitted that Agreement does not provide for penalty rates for weekends, public holidays, or overtime, which results in security guards being underpaid compared to the Security Services Industry Award 2020 (Security Services Award). The Applicant stated that he receives an hourly rate of $22.85 for all hours worked, irrespective of whether those hours are worked on weekends, public holidays, or as overtime. The Applicant further submitted that security guards covered by the Agreement would be better off overall if the Agreement was terminated, as they would receive the benefits of the Security Services Award.
The Employer stated there were 8 security guards covered by the Agreement. The Employer submitted that under the Agreement it had considerable flexibility to provide employees with overtime hours without any adverse financial impact to it. Furthermore, the Employer submits that transitioning to the Security Services Award would have a significant financial impact on it due to the increased rates of pay that apply to weekend and overtime work, the volume of overtime hours performed by the employees, and that it already had client contracts locked in based on the terms and conditions set out in the Agreement.
The Employer submitted that if the Agreement is terminated that it take effect from January 2024, or in the alternative July 2022.
Consideration
The Agreement passed its nominal expiry date almost 15 years ago. It is clear from the submissions of both the Employer and the Applicant, that the terms and conditions of employment under the Agreement are well below what would otherwise apply under the Security Services Award. In relation to work performed on a public holiday, this could be as much as $35.00 per hour.
The effect of the Employer submissions it has gained a competitive advantage, and is seeking to maintain that competitive advantage, through inferior terms and conditions of employment set out in the Agreement.
In Appeal by United Security Enforcement Corp Pty Ltd t/a United Security Enforcement Corporation [2020] FWCFB 5090 (United Security Enforcement), a Full Bench of the Commission stated:
[53] We likewise consider that it would plainly be contrary to the public interest to approve the Agreement to allow United Security to undercut competitors which, it asserts, have undercut it by finding lawful ways to pay their employees rates of pay and conditions inferior to those in the Security Award, The object of the FW Act in s 3(b) includes a reference to “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders”. Within the context of the current legislative framework, the approval of the Agreement would inevitably invite other businesses (within and outside of Western Australia) to seek the approval of enterprise agreements which provide even less beneficial terms of employment for employees, and the approval of such agreements on the same basis would start (or perhaps continue) a downward wages spiral which would make the Security Award irrelevant to the industry it is intended to regulate. That would be entirely contrary to the object of the FW Act.
While United Security Enforcement concerned an application for approval of an enterprise agreement, I agree with the views of the Full Bench which are apposite to the matter before me.
As stated above, the Agreement does not reflect current industry standards, it is significantly inferior. If the Agreement is terminated, the Security Services Award will apply to the Employer and employees.
Taking into account all of the submissions received, I am satisfied that it is not contrary to the public interest to terminate the Agreement.
Conclusion
For the reasons set out above, I have decided to terminate the Agreement. I will provide the Employer with a short period of time to make the appropriate adjustments to its payroll arrangements.
In these circumstances, I have decided to terminate the Agreement with effect from 20 June 2022.
COMMISSIONER
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