Corestaff Qld Pty Ltd T/A CoreStaff

[2015] FWC 2454

[2015] FWC 2454

FAIR WORK COMMISSION

DECISION

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

Corestaff Qld Pty Ltd T/A CoreStaff
(AG2015/1754)

DEPUTY PRESIDENT ASBURY BRISBANE, 15 APRIL 2015

Application for approval of the CoreStaff Qld Black Coal Enterprise Agreement 2015.

[1] Corestaff Qld Pty Ltd (the Applicant) applies for the approval of the CoreStaff Qld Black Coal Enterprise Agreement 2015 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement that is expressed to apply to the Applicant and employees of the Applicant engaged to work in Queensland that would otherwise be covered by the Black Coal Mining Industry Award 2010 (the Award). The Applicant was represented by the Australian Industry Group (AIG).

[2] The Applicant provides labour hire and recruitment services in Queensland.

[3] The Construction, Forestry, Mining and Energy Union (the CFMEU) sought to be heard in relation to the application for approval to raise a number of “concerns”. The CFMEU was directed to file a written submission in relation to those matters upon which it requested to be heard. The CFMEU was also directed to file submissions in relation to the basis upon which it sought to be heard by the Commission. The CFMEU filed submissions in accordance with those Directions.

[4] The Applicant was directed to file any submissions in reply to the CFMEU’s submissions in relation to permission to be heard and the substantive matters raised by the CFMEU.

[5] Following receipt of the Applicant’s submissions the matter was listed for Hearing. At the conclusion of the Hearing I indicated that I did not consider that there were any jurisdictional impediments to approving the Agreement subject to a further consideration of the Better Off Overall Test (the BOOT). This decision sets out my reasons for reaching that conclusion and setting out concerns I have in relation to the BOOT, to allow the Applicant an opportunity to consider the provision of any undertakings to address my concerns.

Should the CFMEU be heard in relation to the application?

[6] The CFMEU accepted that it was not a bargaining representative in relation to this Agreement. Consequently the CFMEU did not have a “right” to appear in relation to the application. The CFMEU sought that the Commission hear the CFMEU on the basis of the Commission’s power under s.590 of the Act.

[7] The Applicant objected to the CFMEU being granted a right to appear or otherwise being heard from in relation to the application.

[8] Section 590 provides:

“590 Powers of the FWC to inform itself

(1) The FWC may, except as provided by this Act, inform itself in relation to any matter before it in such manner as it considers appropriate.

(2) Without limiting subsection (1), the FWC may inform itself in the following ways:

(a) by requiring a person to attend before the FWC;

(b) by inviting, subject to any terms and conditions determined by the FWC, oral or written submissions;

(c) by requiring a person to provide copies of documents or records, or to provide any other information to the FWC;

(d) by taking evidence under oath or affirmation in accordance with the regulations (if any);

(e) by requiring an FWC Member, a Full Bench or an Expert Panel to prepare a report;

(f) by conducting inquiries;

(g) by undertaking or commissioning research;

(h) by conducting a conference (see section 592);

(i) by holding a hearing (see section 593).”

[9] I indicated at the time of the Hearing that I would hear from the CFMEU and indicated my reasons for doing so. My reasons for hearing from the CFMEU are that the discretion under s.590 of the Act is broad. I identified a number of concerns in relation to the application that were also raised by the CFMEU and believed that I would be assisted by hearing from the CFMEU in that regard. The circumstances of the Agreement are that the wage rates in the Agreement are minimally above the Award and there are reductions to some Award entitlements. The workforce that participated in bargaining for the Agreement is small and comprises only four employees of whom 2 cast a valid vote. The CFMEU’s role in the industry in which the Agreement will operate, while not of itself determinative, is a factor that I considered in exercising my discretion.

[10] The CFMEU submitted that the fact that I had sought written submissions from the CFMEU was a factor that should be considered in favour of exercising my discretion to further hear from the CFMEU and that it would not be appropriate to deny the CFMEU a further opportunity to be heard. I note that this is not a factor that I have taken into account in exercising the discretion and if I had it would not have been a matter that weighed in favour of exercising the discretion. It would not be uncommon for the Commission to seek a party wishing to be heard to ask that party to particularise the matters that it wishes to be heard on. This material then informs the exercise of the discretion but does not mandate its exercise. It would have been open to me to receive the written submissions only, or, after having received them, refusing to take them into account or otherwise hearing from the CFMEU.

[11] I now turn to consider the matters raised by the CFMEU which are as follows:

● The Agreement cannot satisfy the Commission that the group of employees covered by the Agreement was fairly chosen;
● The Agreement was not genuinely agreed to;
● The Agreement contravened s.55 of the Act;
● The Agreement contained unlawful provisions;
● The Agreement otherwise does not pass the BOOT.

Fairly chosen

[12] At the Hearing in this matter the CFMEU did not press this objection. 1 Having considered the material filed by the Applicant I am satisfied that the group of employees covered by the Agreement was fairly chosen.

Genuinely agreed

[13] Section 188 of the Act provides:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

[14] The CFMEU submitted that as the Agreement contained an hours of work clause that provides for the employer to determine hours of work and that the Award did not provide for such employees could not have genuinely agreed to the Agreement knowing that the hours of work provisions in the Agreement did not “make sense and is incapable of being given effect”. The CFMEU did not particularise how this was said to give rise to an issue under s.188 of the Agreement. There was no evidence led to establish that employees knew that the clause did not make sense or how it was incapable of being given effect.

[15] The Applicant disputed that the Award does not provide for the ability to vary the hours of work. The Applicant otherwise submitted that the Agreement had been genuinely agreed to and the hours of work provisions did not give rise to a BOOT issue.

[16] I am satisfied that the Agreement has been genuinely agreed to. The premise of the CFMEU’s submission is that an Agreement must not contain a provision that is not contained in the award or that is detrimental to a term of the Award. The CFMEU’s submission would also have the effect of presuming that employees could not genuinely agree to a detrimental term. Both of these points are plainly incorrect. An Agreement can contain provisions that are not in the Award and terms that are detrimental when compared to a term of the Award. I accept the Applicant’s submission that the clauses are otherwise acceptable as long as they pass the BOOT.

Contravention of s.55

[17] Section 55 of the Act, so far as is presently relevant, provides:

“55 Interaction between the National Employment Standards and a modern award or enterprise agreement

National Employment Standards must not be excluded

(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards...”

[18] The CFMEU submitted that the hours of work provisions would contravene the maximum weekly hours provisions in the National Employment Standards (NES). This was said to be so because the discretion to alter the hours of work was placed in the employer and would entitle the employer to extend the hours of work beyond 38 with no ability for an employee to refuse to work unreasonable additional hours.

[19] I do not agree. It is not uncommon for employers and employees to agree to wider hours of work provisions in an Agreement. The interaction between Agreement provisions and the Act is clear. Even if this clause had the effect of contravening the NES (which I do not think it does) then s.56 of the Act would operate such that the term has no effect to the extent that it contravenes s.55. So, if the hours of work provisions did contravene the NES by removing an employee’s right to refuse to work unreasonable additional hours, it would have no effect.

[20] In any event, I note that clauses 5.4 and 5.5 of the Agreement refer to the NES as a minimum standard and that they “apply to employees covered by” the Agreement. The right of employees to refuse to work additional hours where they are unreasonable, pursuant to s.62 of the Act, is a matter that employees can be alerted to by way of an undertaking.

Unlawful provision

[21] Section 194 of the Act, so far as is relevant provides:

“194 Meaning of unlawful term

A term of an enterprise agreement is an unlawful term if it is:

…

(b) an objectionable term…”

[22] An “objectionable term” is defined as:

“objectionable term means a term that:

(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or

(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;

either of the following:

(c) a contravention of Part 3-1 (which deals with general protections);

(d) the payment of a bargaining services fee.” (underlining added)

[23] Clause 15.1(d) of the Agreement provides:

“CoreStaff cannot guarantee work at the point in time at which an employee becomes available again following a period of absence.”

[24] The CFMEU submitted that the clause is objectionable because it may permit, or purports to permit or have the effect of permitting a contravention of Part 3-1.

[25] The Applicant submitted that as it is engaged in the business of labour hire, it must meet the need of its clients in the provision of labour. Clause 15.1(d) has the effect of setting “clear and transparent expectations” in this regard. The Applicant submitted that when a placement with a client ceases the candidate remains an employee of the Applicant while the Applicant finds the employee another placement.

[26] It was submitted that it is the very nature of labour hire employment that the employer cannot guarantee further work immediately after a placement has ceased. The Applicant’s representative put it as follows during oral submissions:

“That clause is simply to make it clear to labour-hire employees who are being engaged by Corestaff that if a placement ceased with a client, you may not get employment the very next day.  But if, for example, an employee was on personal carer's leave for a period of time, upon the ceasing of that leave, absolutely they would be entitled to return back to their placement.” 2

[27] I raised with the Applicant that if that was the intention of the clause it is unusual that it is placed in a clause titled “Managing absenteeism”. I indicated to the Applicant that it would need to consider the provision of an undertaking in this regard and I require that it provide such, as I am concerned that the clause, on its current drafting, does have a meaning capable of permitting a contravention of Part 3-1 of the Act, or at the very least suggesting that the employer is discouraging employees from taking personal or carer’s leave by informing them that by doing so they may not be offered further work.

BOOT

[28] The CMFEU provided a number of submissions in relation to whether the Agreement passed the BOOT. I informed the Applicant that I also had a number of concerns in relation to the BOOT.

[29] The Agreement provides for two methods of payment: base rate employees and flat rate employees. The Agreement provides for a minimum rate of pay for base rate employees that is expressed to be 0.5% greater than the Award rate. No other increases in the base rates of pay are prescribed by the Agreement other than that for the life of the Agreement the rates of pay will be 0.5% greater than the Award. Any other increase is at the discretion of the Applicant.

[30] Flat rate employees are remunerated based upon a different rate for day shift, Monday to Friday, night shift, Monday to Friday, weekend rates and a continuous shift rate. There is no express provision for overtime for either base rate of flat rate employees. The Agreement does not define day or night shift.

[31] The primary concern in relation to the BOOT is that the Agreement does not explicitly provide for a number of Award terms and provides for minimum rates of pay and a flat-rate of pay that is marginally above the Award minimum. The Applicant submitted that the Award was in some respects incorporated by clause 5.5. As I identified in the Hearing, the incorporation of the Award is not clear. I require the Applicant to consider the provision of an undertaking that clarifies what terms of the Award are incorporated. The provision of a clear undertaking in this respect may deal with the more specific concerns raised in relation to the BOOT. I will consider an undertaking in this regard.

[32] As discussed above, the hours of work provision in the Agreement is, in my view, extremely broad in favour of the Applicant; in particular clause 12.4. The Applicant submitted during the Hearing that the hours of work provisions in the Agreement were not intended to have such a broad application.

[33] The Agreement raises concerns in satisfying the BOOT when the combination of the ambiguous incorporation of the Award and the hours of work provision is considered. An employee working under the Award is entitled to ordinary hours of work that will be an average of 35 hours per week. The Agreement is the same as the Award in this respect. However, the Award provides for penalty rates of pay for work on Saturday and Sunday that, in respect of base rate employees, the Agreement does not specifically provide for. The Agreement, at clause 12.3, provides that ordinary hours can be worked at anytime. The Agreement, at clause 12.4, provides that the employer may vary “[T]he number of ordinary hours of work”, although I note that it must be “in accordance with the Award and this Agreement”. The limitation in clause 12.4 (that a variation to hours of work must be in accordance with the Award and the Agreement) is not of assistance because of the way that the Award has been incorporated into the Agreement is unclear. The Award also provides for overtime for hours worked outside of or in excess of the ordinary working hours; the Agreement does not.

[34] The Applicant’s representative foreshadowed that the Applicant would be willing to provide an undertaking in this respect. I will consider an undertaking in this regard. For the Applicant’s benefit I state the following matters that the Applicant must consider in formulating any undertaking in respect of the BOOT:

● Award incorporation must be clarified and it may be necessary to particularise which clauses of the Award are incorporated and whether they apply to base rate or flat rate employees; and
● Hours of work and the application of penalty rates, overtime, shift allowances, loading and allowances, although I note that these matters may be rectified once the award incorporation is clarified.

[35] Given the nature of the matters identified and in addition to the undertakings discussed above, it may also be prudent for the Applicant to provide a general undertaking in addition to any specific undertakings they may proffer. The format of a general undertaking which I have accepted in other similar cases is as follows:

● Employees will not be disadvantaged over the life of the Agreement when their terms and conditions under the Agreement are compared to the Black Coal Mining Industry Award 2010 (the Award) as at the date of the approval of this Agreement; and
● Each employee covered by the Agreement is entitled to request a reconciliation on an annual basis to establish whether, for work performed under the Agreement in the preceding year, the employee’s total remuneration is less than the employee would have received under the Award, as at the date of approval of this Agreement, for working the same hours; and
● Where an employee terminates employment, that employee is entitled to request a reconciliation for the year or part of a year immediately preceding termination of employment; and
● Where a reconciliation establishes that an employee has been paid less under the Agreement than the employee would have been paid for performing the same work during the same hours under the Award, as at the date of approval of this Agreement, the employee will be reimbursed for the difference between the amount paid under the Award and the amount paid under the Agreement.

Conclusion

[36] On the basis of the material before the Commission, I am otherwise satisfied that the Agreement is capable of approval. This is subject to the remaining matters being the provision of undertakings in respect of clause 15.1(d) and more generally in relation to the incorporation of the Award and the BOOT.

[37] I provide the Applicant a period of 7 days from the date of this decision to consider the provision of some undertakings. I will consider the further conduct of the application following this. If no undertakings are received I will consider the application on the basis of the material presently before the Commission and these reasons, which may mean that the application for approval is declined.

DEPUTY PRESIDENT

 1   PN59.

 2   PN103.

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