Construction, Forestry, Maritime, Mining and Energy Union v Career Boss Commercial Pty Ltd
[2018] FWCFB 2620
•10 MAY 2018
| [2018] FWCFB 2620 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Construction, Forestry, Maritime, Mining and Energy Union
v
Career Boss Commercial Pty Ltd
(C2018/865)
SENIOR DEPUTY PRESIDENT HAMBERGER | SYDNEY, 10 MAY 2018 |
Appeal against decision [2018] FWCA 633 of Commissioner McKinnon at Melbourne on 31 January 2018 in matter number AG2018/20 approving the Career Boss Commercial Enterprise Agreement 2017 – permission to appeal granted – appeal upheld – decision quashed – application remitted for re-determination.
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has lodged an appeal pursuant to s.604 of the Fair Work Act 2009 (Cth) (FW Act), for which permission is required, against a decision of Commissioner McKinnon issued on 31 January 2018 1 (Decision) in which she approved the Career Boss Commercial Enterprise Agreement 2017 (Agreement). The Decision was as follows:
‘[1] An application has been made for approval of an enterprise agreement known as the Career Boss Commercial Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Career Boss Commercial Pty Ltd. The Agreement is a single enterprise agreement.
[2] The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.
[3] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
[4] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 7 February 2018. The nominal expiry date of the Agreement is 30 January 2022.’
[2] The CFMMEU’s notice of appeal identified the following ground of appeal:
‘The Fair Work Commission (Commission) erred in law by approving the Career Boss Commercial Enterprise Agreement 2017 (Agreement), given it could not be satisfied that the Agreement passed the better off overall test, subject to the undertakings provided by the Respondent.’
[3] The CFMMEU attached to its outline of submissions tables which compared the earnings of prospective award covered employees engaged in four different classifications under the Building and Construction General On-site Award 2010 2 (Award) and the Agreement. The comparisons contain a number of assumptions. The first is as to hours of work. The comparison tables provide for an employee working a 50-hour week between Monday and Friday between 7:00 am and 5:30 pm, or 7:00 pm and 5:30 am. The second is as to allowances. The comparison tables provide for an hourly multi-storey allowance of $0.55, on the assumption that the employee is working on a project involving the construction of a multi-storey building of more than 5 and less than 15 storeys. The third is as to rates of pay. The comparison table assumes daily hire engagement as entitling such an employee to the daily-hire rates under the Award. The comparison tables purport to show that:
• A CW3 prospective rigger is $76.72 worse off per week under the Agreement when compared with a CW3 daily-hire rigger under the Award;
• A CW3 prospective night shift rigger is $282.94 worse off per week under the Agreement when compared with a CW3 daily-hire night shift rigger under the Award;
• A CW1 prospective employee is $74.38 worse off per week under the Agreement when compared with a CW1(d) daily-hire employee under the Award; and
• A CW1 prospective night-shift employee is $270.57 worse off per week under the Agreement when compared with a CW1(d) daily-hire night shift employee under the Award.
[4] Career Boss Commercial Pty Ltd (the respondent) provided its own comparison tables in response. These adopted the same hours of work assumptions that the CFMMEU used in its comparison tables, but compared the weekly-hire rates under the Award with the rates for the equivalent classification under the Agreement. It also assumed that no notification of overtime is given, meaning that the meal allowance is payable under the Agreement, and a crib break is not taken before commencing overtime. The respondent’s tables purport to show that all four categories of prospective employees would earn more if the Agreement applied than if the Award applied: $40.31 more for a CW3 rigger, $25.42 for a night-shift rigger, $63.17 for a CW1 rigger, and $38.72 for a CW1 night-shift rigger.
Consideration
[5] The application of the better off overall test (BOOT) in s.193 of the FW Act requires the identification of terms in an agreement which are more beneficial for an award or prospective award covered employee, terms which are less beneficial, and an overall assessment of whether such an employee would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee. 3 The overall assessment involves a global comparison.4 However, it is clear from s.193(1) of the FW Act that this global comparison must be satisfied in relation to each award-covered and prospective award-covered employee.5 The test is not directed at whether most employees or most classes of employees are better off.6
[6] We note that there have been three recent Full Bench decisions dealing with appeals against decisions to approve enterprise agreements in the construction industry. 7 We adopt the same approach taken in those decisions in relation to assessing agreements in the construction industry for the purposes of the BOOT. Specifically, we accept, as did each Full Bench in the aforementioned decisions, that it is a common pattern of work in the construction industry that award-covered employees work 50 hours per week, comprising 38 ordinary hours and 12 overtime hours. The respondent did not advance any evidence nor did it provide any cogent reason why we should depart from applying the BOOT in this case on that pattern of work. Indeed, as already noted, its comparison tables adopted that assumption as to hours of work.
[7] There are four points of difference between the CFMMEU and the respondent as to how to apply the BOOT when comparing the position of an award covered employee under the Agreement to that which pertains under the Award:
• The first is whether one should use the pay rates for daily hire employees in the Award for the purpose of comparison with the Agreement, as contended by the CFMMEU, or whether one should use the pay rates for weekly hire employees, as contended by the respondent.
• The second is how one should treat the meal allowance in the Agreement. The respondent includes the payment of the allowance in its calculations and the CFMMEU contends that it should not be included.
• The third concerns how one should calculate night shift workers’ pay rates under the Agreement.
• The final point concerns how one should take into account the Agreement’s failure to provide for a crib break at the commencement of overtime like clause 35.3(b) of the Award does.
Daily versus weekly hire
[8] The Agreement at clause 5.1 states that:
‘…employees will be employed in one of the following categories:
Full-time weekly hire Employees;
Part-time weekly employees;
Specified period of time or specified task; or
Casual Employees.’
[9] The Award on the other hand provides that:
‘Employees under this award will be employed in one of the following categories:
(a) daily hire employees;
(b) full-time weekly hire employees;
(c) part-time weekly hire employees; or
(d) casual employees.’
[10] Under the Award, a daily hire employee receives a ‘follow the job loading’ in recognition that the employee may be dismissed with one hour’s notice, under clause 11. The loading is calculated taking into account ‘a factor of eight days in respect of the incidence of loss of wages for periods of unemployment between jobs’. In other words, the higher hourly rate for a daily hire employee recognises that the work is inherently less secure than that of a weekly hire employee, and that a daily hire employee is more likely to spend time unemployed between jobs.
[11] The Agreement does not provide for employees to be engaged on a daily hire basis. It would be inappropriate to use the Award’s daily hire rate for BOOT purposes, as that rate accounts for disabilities to which an employee or prospective employee employed under the Agreement would not be subject. It follows that the weekly hire employee pay rate is the appropriate rate that should be used when comparing the Award to the Agreement.
Payment of the meal allowance
[12] The CFMMEU submits that the meal allowance in the Agreement should not be included when comparing what employees would receive under the Agreement to payment under the Award. It pointed out that – unlike under the Award – the Agreement provides that the meal allowance is only payable where the employee was not notified of the requirement to work overtime the day before the overtime work is performed.
[13] We agree with the CFMMEU that since the employer would generally be in a position to provide that notification, the comparison between that which employees would be paid under the Award and the Agreement should be based on the assumption that employees would receive the meal allowance under the former, but not the latter. We note that the respondent’s representative said during the hearing that:
‘…the respondent is happy to proceed on the basis that if the prior notification is the day before then they’d pay the meal allowance consistent with the award and the calculations have been done on that basis.’ 8
Calculation of night shift loading
[14] The CFMMEU submitted that the respondent’s calculations as to that which an employee would be paid when working night shift did not accurately reflect the provisions of the Agreement. In particular, the respondent’s calculations had been based on overtime inclusive of the night shift loading. However, clause 15.5 of the Agreement provides that employees working a night shift receive a flat loading of 50 per cent of the applicable ordinary hourly rate for each hour worked. When read in conjunction with clause 10.3, this means that all work performed by such an employee beyond ordinary hours on Monday to Friday would be paid at the rate of time and a half. Under the Award, by comparison, an employee on shift work performing overtime would be paid double time.
[15] We agree that the respondent’s calculations exaggerate how much a night shift employee would be paid under the Agreement, for the reason the CFMMEU advanced in its submissions.
Overtime crib break
[16] The CFMMEU submitted that the respondent has miscalculated the amount of crib break time would be payable. The Agreement does not provide a benefit like that in clause 35.3(b) of the Award, under which an employee required to work two or more hours of overtime is entitled to a crib break, without deduction of pay, of 20 minutes after the normal finishing time. Where the break is not taken, the clause provides that the employee is regarded as having worked 20 minutes more than the time worked and is paid accordingly, which effectively makes the 20 minutes payable at double time. We accept that the crib break is commonly paid out this way in the commercial building industry.
Conclusion
[17] Employees and prospective employees engaged under the Agreement suffer three detriments (concerning payment of the meal allowance, the night shift pay rate and the overtime crib break) when compared to the Award. These are not properly reflected in the respondent’s calculations. The effect of these detriments when assessed on an overall basis is that the Agreement as approved by the Commissioner did not pass the BOOT. In these circumstances, we grant permission to appeal, uphold the appeal and quash the Decision.
[18] By upholding the appeal, we mean no criticism of the Commissioner dealing with the matter at first instance. We would note that the Commissioner did not have the benefit of the comparison tables on which the CFMMEU and the respondent relied in this appeal. We would also observe that the assumptions made as to hours of work were less than those upon which both sets of comparison tables are based, and the Commissioner received no assistance from the information in the employer’s statutory declaration filed in support of its application for approval of the Agreement, which did not identify these detriments but merely responded to the question about detriments with the bland statement that ‘[c]lauses are different from the award clauses’.
[19] The respondent’s application for approval will need to be re-determined. The concerns we have identified might be capable of being met by appropriate undertakings, but it is unnecessary for us to express a conclusive view. We will remit the application to Commissioner McKinnon for determination, having regard to the matters identified in this decision.
[20] We order as follows:
1. Permission to appeal is granted.
2. The appeal is upheld.
3. The Decision in [2018] FWCA 633 is quashed.
4. The application for approval of the Agreement is remitted to Commissioner McKinnon for re-determination.
SENIOR DEPUTY PRESIDENT
Appearances:
K Singh for the Construction, Forestry, Maritime, Mining and Energy Union.
A Drake-Brockman for Career Boss Commercial Pty Ltd.
Hearing details:
Perth.
2018.
April 19.
Printed by authority of the Commonwealth Government Printer
<PR606968 >
1 [2018] FWCA 633.
2 MA000020.
3 AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833; Armacell Australia Pty Ltd [2010] FWAFB 9985.
4 Construction, Forestry, Mining and Energy Union v TR Construction Services Pty Ltd[2017] FWCFB 1928 [20].
5 Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited[2016] FWCFB 2887 [33].
6 Construction, Forestry, Mining and Energy Union v SESLS Industrial Pty Ltd[2017] FWCFB 3659.
7 Construction, Forestry, Mining and Energy Union v Concrete Constructions (WA) Pty Ltd[2017] FWCFB 3912; Construction, Forestry, Mining and Energy Union v Levent Painting Pty Ltd [2017] FWCFB 3911; Construction, Forestry Mining and Energy Union v KAEFER Integrated Services Pty Ltd [2017] FWCFB 5630.
8 PN118.
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