Chubb Fire & Security Pty Ltd T/A Chubb Fire Safety

[2017] FWC 6302

[2017] FWC 6302

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single enterprise agreement

Chubb Fire & Security Pty Ltd T/A Chubb Fire Safety
(AG2017/2772)

DEPUTY PRESIDENT COLMAN MELBOURNE, 29 NOVEMBER 2017

Application for approval of the Chubb Fire & Security Regional Queensland Portable Technician Enterprise Agreement 2017-2020 – application dismissed.

[1] This decision concerns an application by Chubb Fire & Security Pty Ltd (Applicant) for approval of an enterprise agreement known as the Chubb Fire & Security Regional Queensland Portable Technician Enterprise Agreement 2017 - 2020 (Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Act) and relates to a single enterprise agreement.

[2] The employees whose employment is covered by the Agreement perform a variety of work that is covered by the Manufacturing and Associated Industries and Occupations Award 2010 (Award). This is the relevant modern award for the purposes of the ‘better off overall test’ in s.193 of the Act. The Agreement does not incorporate the Award.

[3] The application was allocated to my chambers on 19 September 2017. On 28 September 2017, the Commission raised with the Applicant 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.

[4] There remained an outstanding issue relating to provisions in the Agreement that deal with so-called ‘Lifestyle Rosters’. Clause 12.7.1 provides that such rosters are designed to enable the company to carry out operations 24 hours a day, on any day of the week. The rosters are based on an average of 38 ordinary hours per week (clause 12.8.11). A number of ‘sample lifestyle rosters’ are referred to in clause 12.8.12 and set out in Appendix C. However, the Agreement states that rosters can be ‘implemented or changed’ to meet the necessary operational requirements (clause 12.7.4).

[5] The wages that apply to employees who do not work lifestyle rosters are provided for in clause 17 and Appendix A. The Commission’s analysis establishes that employees not working lifestyle rosters would be better off overall under the Agreement than under the Award; overtime and penalty arrangements in the Agreement are similar to those in the Award, and the Agreement provides for base rates of pay that are higher than those in the Award.

[6] However, wages payable to employees working lifestyle rosters reflect an all-up rate. Clause 18 states that for such employees, ‘total weekly rostered salary takes into account all hours worked including rostered overtime, all penalties, shift allowances, annual leave loading, public holiday payments (averaged), permanent shift annual leave payment, breaks and other allowances and payments that would otherwise be payable under the Award.’

[7] Although express reference is made here to the Award, the intention is evidently that overtime, loadings, penalties and allowances that would otherwise apply under the Agreement would also not apply to employees working lifestyle rosters. This is clear from the fact that clause 18 of the Agreement states specifically that salaries for lifestyle rosters do not include three particular payments made to employees under the Agreement, namely non-rostered overtime (clause 14), meal breaks (clause 15) and other allowances (clause 20). Other payments under the Agreement are by inference included in the salaries for employees on lifestyle rosters.

[8] Appendix C sets out a ‘roster salary table’ that shows a salary for each classification in each of the 24 lifestyle rosters. However, the rosters provided are referred to as ‘samples’ (see clause 12.7.2). The Agreement allows other lifestyle rosters to be introduced. It is not clear what rate of pay would apply to employees working on any newly introduced lifestyle roster or how a rate of pay would be calculated.

[9] If employees working on a new lifestyle roster simply received the regular wages and benefits provided to employees not working lifestyle rosters, together with the other provisions in the Agreement, they would be better off overall under the Agreement than under the Award. However, as noted above, clause 18 of the Agreement makes clear that wages for employees on lifestyle rosters will be a composite rate. An employee on a new lifestyle roster working hours that would otherwise have attracted significant overtime and penalty payments under the Award might not be better off overall under the Agreement than under the Award.

[10] The Commission advised the Applicant of its concerns in relation to the lifestyle rosters. There followed an exchange of correspondence concerning the wording of appropriate undertakings that might allow the Commission to be satisfied that each award covered employee and each prospective award covered employee would be better off overall under the Agreement than under the Award.

[11] On 30 October 2017, the Applicant provided an undertaking as follows:

1. Where an employee works a “lifestyle roster” under Appendix C and Clause 12.7, the Company will undertake a wage reconciliation at least once in 4 weeks, as a minimum time period for this to occur, to ensure that the employee is better off overall against the relevant Modern Award.

2. Where a wage reconciliation on a lifestyle roster determines that there is a shortfall in wages or other monetary entitlements, such that the employee is not ‘better off overall’ when compared to the Modern Award, the company will provide the balance to the employee in monetary terms to ‘top up’ any shortfall against the equivalent award classification for the employee and their hours worked on the lifestyle roster. This undertaking is to ensure the employee will be no worse off than the Award with respect to working on a lifestyle roster.

[12] Whilst this proposed undertaking went some way to addressing the relevant concerns, it did not go far enough. The undertaking stated in paragraph 2 that the company would ‘top up’ the ‘shortfall’ against the Award, such that the employee would be ‘no worse off than under the Award.’ The statutory requirement is that employees be better off overall under the Agreement than under the Award; it is not sufficient that they be on equivalent terms to the Award.

[13] On 15 November 2017, the Applicant offered to provide a revised undertaking in the following terms:

“The Employer will reconcile the wages of any employee assigned to a Lifestyle Roster and compare the employee’s ‘take home’ wages under the Agreement as against the Award. The employer also undertakes that this reconciliation would take place as a minimum, once in every 4 weeks, in line with the company pay cycle timing, and provide that should there be any shortfall of wages against the Award on such reconciliation of a Lifestyle Roster, that this amount of short fall would be paid to the employee in the immediate following pay run.”

[14] On 20 November 2017, the Commission advised the company that the proposed reconciliation clause still did not ensure that employees were better off overall under the Agreement than under the Award.

[15] On 24 November 2017, the Commission received an email from the Applicant advising that it would not be providing an amended undertaking and would rely upon the undertaking previously provided to the Commission in support of its application for approval of the Agreement.

Better Off Overall Test

[16] 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.’

[17] In the present matter, the company was prepared to provide an undertaking that if employees on lifestyle rosters suffered a shortfall of wages against the Award, they would pay the balance in the next pay cycle. They were not prepared to amend that undertaking to provide that employees would receive more than the shortfall, such that employees would be better off overall as against the Award. However this is the question that the Commission is directed by s.193 of the Act to consider: the Commission must be satisfied that each award covered employee and each prospective award covered employee would be better off under the Agreement than under the Award.

[18] In the present matter, the provisions in the Agreement relating to lifestyle rosters allow for the possibility of working arrangements to be introduced that would result in employees not being better off overall under the Agreement than under the Award. The company’s undertaking has not fully addressed this concern. The Commission can only act within its jurisdiction. Approving the Agreement in its current form would exceed jurisdiction. Moreover, it would leave the Agreement vulnerable to subsequent claims of invalidity.

Conclusion

[19] 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.

[20] Accordingly, the application is dismissed.

DEPUTY PRESIDENT

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