City of Fremantle
[2011] FWA 3519
•20 JUNE 2011
Note: An appeal pursuant to s.604 (C2011/5055) was lodged against this decision - refer to Full Bench decision dated 22 November 2011 [[2011] FWAFB 7161] for result of appeal.
[2011] FWA 3519 |
|
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
City of Fremantle
(AG2011/5103)
CITY OF FREMANTLE WORKFORCE AGREEMENT 2010-2014
Local government administration | |
COMMISSIONER CLOGHAN | PERTH, 20 JUNE 2011 |
Application for approval of the City of Fremantle Workforce Agreement 2010-2014.
[1] On 6 January 2011, the City of Fremantle made an application to Fair Work Australia for approval of a single enterprise agreement to be known as the City of Fremantle Workforce Agreement 2010-2014 (“the Agreement”)
[2] The application was made pursuant to s.185 of the Fair Work Act 2009 (“the FW Act”)
[3] The Agreement was made following a ballot of employees on 24 December 2010 pursuant to s.182 (1) of the FW Act.
[4] The Australian Municipal, Administrative, Clerical and Services Union (West Australian Branch) (“ASU”)was a bargaining representative for the Agreement along with other persons and the Western Australian Shire Councils, Municipal Road Boards, Health Boards, Parks Cemeteries and Racecourse, Public Authorities, Water Board Union. (“LGRCEU”).
[5] On 11 January 2011, the ASU gave notice pursuant to s.183 of the FW Act that the ASU sought to be covered by the Agreement. In giving written notice seeking to be covered by the Agreement, the ASU positively identifies that it was a bargaining representative for the Agreement.
[6] On 14 January 2011 the ASU asserted in an email to the Tribunal that “we don’t think that [the Agreement] should pass the Better Off Overall Test (BOOT) and there are too many inequities in it” 1. The ASU indicated that it would provide additional information if there was an opportunity.
[7] Before I turn my attention to the reasons asserted from the ASU that the Agreement does not pass the BOOT, it is necessary to examine correspondence sent to the ASU and employees who would be covered by the proposed agreement on 29 April 2010.
[8] The correspondence attaches a copy of the Notice of Employee Representational Rights which states:
“City of Fremantle gives notice that it is bargaining in relation to an enterprise agreement, namely the City of Fremantle Salaried Officers Agreement 2010 which is proposed to cover all employees currently on this agreement, and non award employees except those on performance based contracts” 2 (my emphasis)
[9] I now return to the assertion by the ASU that the Agreement does not pass the BOOT.
ASU SUBMISSIONS PRIOR TO HEARING
[10] On 9 February 2011, the ASU advised that, “we have a number of concerns...The most significant is in relation to a group who will be disadvantaged if the Agreement is registered in its current form” 3.
[11] The ASU states that the proposed Agreement provides for employees in Schedules A1 and B1 to have different terms and conditions. This statement is correct. The employees in Schedule B1 are as follows:
Swimming Instructor Level 1
Cleaner
Creche Assistant
Group Exercise Instructor Level 1
Gymnasium Instructor Level 1
Netball Umpire
Swimming Instructor Level 2
Bar Attendant (Events)
Exhibition Installation Officer
Personal Trainer
CCTV Operator
Group Exercise Instructor Level 2
Gymnasium Instructor Level 2
Senior Netball Umpire
Swimming Instructor Level 3
CCTV Team Leader
Gymnasium Instructor Level 3
Group Exercise Instructor Level 3
On Deck Officer
Art Tutor
[12] The ASU asserts that the employees in Schedule B1 are covered with the provisions of the City of Fremantle Officers Award 2001 and not covered by the Local Government Industry Award 2010 (“the Modern Local Government Award”) 4.
[13] Having made the assertion, the Applicant concludes:
“The ASU believe that the roles listed at Schedule B of the Proposed Agreement fall within the terms described under Schedule B of the Award [City of Fremantle Officers’ Award 2002] and as such those employees should be entitled to the same benefits of the Proposed Agreement as all other employees of the City” 5 (my emphasis)
[14] Communication between the parties and the Tribunal took place until the hearing on 26 May 2011.
[15] In short, the ASU submits that the comparator for Schedule B1 employees in the Agreement for the purposes of the Better Off Overall Test (“BOOT”), should be the City of Fremantle Officers’ Award 2002 and not the Modern Local Government Award.
RELEVANT STATUTORY FRAMEWORK
[16] The relevant provisions in the FW Act are as follows:
182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
...
183 Entitlement of an employee organisation to have an enterprise agreement cover it
(1) After an enterprise agreement that is not a greenfields agreement is made, an employee organisation that was a bargaining representative for the proposed enterprise agreement concerned may give FWA a written notice stating that the organisation wants the enterprise agreement to cover it.
...
186 When FWA must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under section 185, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2) FWA must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: FWA may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
...
193 Passing the better off overall test
When a non-greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if FWA 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.
…
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by FWA was made under section 185.
ASU SUBMISSIONS AT THE HEARING
[17] The ASU understanding is, that prior to the introduction of the Modern Local Government Award , “a number of those employees [in Schedule B1] have been identified by the employer as having been award free” 6.
[18] The ASU assert that the employees in Schedule B1 should have been employed pursuant to the City of Fremantle Salaried Officers’ Award 2002. Further, should the Schedule B1 employees have been employed pursuant to the City of Fremantle Salaried Officers’ Award 2002, they would now be bound by the existing agreement 7.
[19] The ASU assert that on the basis of what should have occurred with the employment conditions of Schedule B1 employees, “for the purposes of the BOOT test it [the City of Fremantle Salaried Officers’ Award 2002] should have been applied to all employees seeking to be covered by the agreement before you” 8 (my emphasis).
[20] The ASU submit that there is “no need for a group of employees to be identified on a schedule B to the agreement. This schedule provides them with lesser conditions than those employees on schedule A, and as such we believe it should not pass the BOOT test” 9.
[21] The ASU advised that it had recently lodged an application in the Federal Magistrates Court to determine the appropriate award coverage for a member listed on Schedule B1 in the Agreement.
CITY OF FREMANTLE’S EVIDENCE AND SUBMISSION AT THE HEARING
[22] Ms Caranna gave evidence on behalf of the City of Fremantle. Ms Caranna has been employed in the City of Fremantle Human Resources department for 25 years and has been the Manager for the last 15 years.
[23] Ms Caranna provided the Tribunal with a “City of Fremantle Industrial Framework 1992 to 2010” 10. The framework illustrates that, for the purposes of this application, from 1992 to 1 January 2010 Schedule B1 employees were categorised as “non award or minimum conditions”, that is, employees who did not fall within any industrial instrument to which the City of Fremantle was bound. On 1 January 2010, with the introduction of the Modern Local Government Award, all Schedule B1 employees “were now covered by one industry award”11.
[24] When asked, Ms Caranna gave evidence that, with one exception since 1992, the ASU have only formally challenged the award/agreement coverage of all employees, and that was for a refuge worker role 12. The non award/agreement status of Schedule B1 employees has never been challenge by the ASU.
[25] Ms Caranna gave evidence that of the approximately 418 employees to be covered by the Proposed Agreement, approximately 120 would be categorised as Schedule B1. If the number of Schedule B1 employees was converted to Full Time Equivalents (FTEs), their ratio to overall FTEs would be very low as some employees are only employed seasonally or for particular events.
[26] Schedule B1 employees are engaged by way of a letter of offer and acceptance.
[27] In cross examination, the ASU stated that it was “not in a position...to repudiate” the City of Fremantle’s “version of history” 13. This statement was made despite the fact that a senior officer of the ASU, Mr Burlinson, has been involved in agreement making with the City of Fremantle in the past 20 years.
CONSIDERATION
[28] Section 186 of the FW Act provides that the Tribunal must approve (subject to certain requirements) an enterprise agreement when it has been “made” and a bargaining representative has made application to FWA. In this application, it is not contested that the proposed enterprise agreement was made on 24 December 2010 when a majority of those employees who cast a valid vote, voted in favour of the agreement.
[29] It is not contested that the City of Fremantle has properly made application to FWA.
[30] For the purposes of this application, the ASU assert that the proposed agreement does not pass the BOOT.
[31] Section 193 of the FW Act sets out how a proposed enterprise agreement passes the BOOT. Subsection 193(i) provides that the test is an overall test - it is not a line by line comparison between a term under the proposed enterprise agreement and the comparator industrial instrument.
[32] Applying the BOOT is a comparison between industrial instruments. BOOT is not a comparison between each and every individual employee’s conditions of employment covered by the respective industrial instrument. In this respect, paragraph 818 of the Explanatory Memorandum to the Fair Work Bill 2008 is illustrative of the approach to be taken by the Tribunal when it states:
“In the context of the approval of enterprise agreements, the better off overall test does not require FWA to enquire into each employee’s individual circumstances.”
[33] The Tribunal’s role is therefore to determine whether the total package of conditions under the proposed enterprise agreement overall is better than the package of conditions in appropriate reference instrument.
[34] Before turning to the appropriate reference instruments, it is necessary to state that the BOOT is carried out at the “test time”. Pursuant to s.193(b) the “test time” for this Agreement is 6 January 2011, when the application was made to FWA.
[35] There is no dispute by the ASU that salaried officers in Schedule A1 pass the BOOT. The issue for the ASU is that the Agreement does not pass the BOOT in relation to a majority of employees in Schedule B1. The ASU has not particularised the majority of employees, or occupations, but offered to provide additional information.
[36] The occupational group in Schedule B1 are set out in paragraph [11] of this Decision.
[37] Ms Caranna, with 25 yeas service in the City of Fremantle’s Human Resources department, gave unequivocal evidence that the employees in Schedule B1 have been exempt from past agreements applicable to the Employer. Until the introduction of the Modern Local Government Industry Award 2010, the employees were considered “non award or minimum conditions” 14. The ASU did not contradict this evidence of the City of Fremantle but indicated that it, “is not in a position at this time to repudiate [the Employer’s evidence]”15.
[38] To assist the ASU to repudiate the evidence of the City of Fremantle that the employees in Schedule B1 had been award/agreement free for over 20 years, and subject to minimum conditions of employment since 1993, I invited the Union to make a submission to the Tribunal by 4pm on the day following the hearing. The Union did not make a submission but provided a statement essentially emphasising its primary position.
[39] I am satisfied, on the evidence before the Tribunal, that the employees engaged in the occupations set out in Schedule B1 to the Agreement have, until the introduction of the Modern Local Government Industry Award 2010, been employed on common law contracts. Accordingly, the appropriate award for the purposes of the BOOT is the Modern Local Government Industry Award 2010. Having applied the comparator instrument, I am satisfied that the employees in Schedule B1 are better off overall than if they were employed under the Modern Local Government Industry Award 2010.
[40] However, I consider it appropriate to respond to the ASU’s assertions in support of its view that some, if not all, of the employees in Schedule B1 of the Agreement are covered by the City of Fremantle Officers’ Award 2002.
[41] Firstly, it was uncontested evidence that the ASU have not attempted, in the past 20 years, to establish, as a matter of law, that the employees in Schedule B1 of the Agreement, are covered by an award or agreement which covered the employees in Schedule A1.
[42] I accept, to use Ms Butler’s words, “...it’s a dangerous assumption to just assume that silence means consent” 16. However, it is a reasonable inference for the Employer to conclude that the ASU has agreed with the industrial status, or coverage, of the employees during the past 20 years. In saying this, the past approach does not preclude the Union from challenging the status of these employees at any particular time in the future.
[43] Secondly, the contention that a great majority of those employees in Schedule B1 are “un-unionised and disorganised” 17 is acknowledged. However, this does not excuse the lack of positive action to address, what the ASU asserts, has been their wrongful employment under common law contracts.
[44] In conclusion, as a matter of analysis, the ASU is saying to the Tribunal what should have happened regarding award coverage of Schedule B1 employees in the Agreement. What should have happened for the ASU, has now become the premise which is intended to lead to the conclusion that the City of Fremantle Officers’ Award 2002 becomes the comparator for BOOT purposes. However, as an argument, the assertion of what should be the case is contradictory to what actually was the case at the “test time”, and for approximately 20 years before.
[45] I am unable to accept the ASU’s approach. First, to satisfy the Tribunal that the City of Fremantle Officers’ Award 2002 is the comparator, it should be either known to be correct (which it was not) or shown to be correct (which it was not). Second, in the absence of being unable to demonstrate the correctness of the City of Fremantle Officers’ Award 2002 as a comparator industrial instrument, there is no evidence to satisfy me that the Employer’s comparator is wrong for the BOOT.
[46] In short, the ASU is proposing an argument rather than demonstrating a substantive reason for its objection to the Tribunal approving the Agreement pursuant to the BOOT.
[47] For the reasons above, I am satisfied that, based upon the material in the application and the documentation provided to the Tribunal (and the ASU) , that the proposed enterprise agreement passes the BOOT in addition to the remaining requirements in ss.186, 187 and 188 as are relevant. Accordingly, a decision will be issued pursuant to s.186 of the FW Act approving the Agreement.
COMMISSIONER
1 Email communication to Tribunal.
2 Attached to application.
3 Email correspondence to Tribunal.
4 Ibid
5 Email correspondence to Tribunal.
6 PN 19
7 PN 68
8 PN 12
9 PN 12
10 Exhibit A1
11 Exhibit A1 and PN 174
12 PN 161 - 163
13 PN 233
14 PN 143
15 PN 233
16 PN 259
17 PN 265
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