Country Fire Authority

[2014] FWCA 9335

[2014] FWCA 9335

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Country Fire Authority
(AG2014/9829)

COUNTRY FIRE AUTHORITY FISKVILLE HOSPITALITY AGREEMENT 2014

State and Territory government administration
COMMISSIONER WILSON	MELBOURNE, 19 DECEMBER 2014

Application for approval of the Country Fire Authority Fiskville Hospitality Agreement 2014.

[1] An application has been made for approval of a single-enterprise agreement known as the Country Fire Authority Fiskville Hospitality Agreement 2014 (the Fiskville Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act).

[1] The application for approval of the agreement was filed by the Country Fire Authority on 10 November 2014, and approval of the agreement is supported by the United Firefighters’ Union of Australia.

[2] Section 186 of the Act requires that the Fair Work Commission must approve an agreement subject being satisfied of certain requirements.

[3] Importantly, and as set out in s.186(2)(d) of the Act, before an agreement can be approved by the FWC, it is necessary to be satisfied that the agreement passes the better off overall test. Section 193 sets out when an agreement passes the test. So far as is relevant that section provides;

“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 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.

(2) ...

(3) ...

(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.

...” 1

[4] Since the parties are unable to agree the modern award that is used as the reference point for the conduct of the “better off overall” test it is necessary for me to consider and determine that question before proceeding to consider whether other aspects of the application require or allow approval of the agreement by me.

[5] The importance of ascertaining modern award coverage is because a failure to do so, or a failure to accurately ascertain coverage, may lead the FWC to draw a wrong conclusion as to the agreement’s passage of the BOOT. The importance of identifying the correct modern award coverage has been considered by the Full Bench in several decisions.

[6] In CFMEU v BJ Jarrad Pty Ltd, 2 the Full Bench considered an appeal against a decision to approve an agreement with the BOOT being undertaken against a modern award that was advocated by the employer, but contested by the union. In short, the employer, BJ Jarrad Pty Ltd argued that the Plumbing and Fire Sprinklers Award 2010 applied and the CFMEU argued that the applicable award was the Building and Construction On-site Award 2010. In considering the matter, the Full Bench held as follows;

“[11] An appeal under s.604 of the Act involves an appeal by way of rehearing, with the powers of the Full Bench being exercisable only if there is error on the part of the primary decision-maker. The nature of the error which an appellant must demonstrate will depend upon the nature of the decision appealed against.

[12] In conducting the BOOT, the Commission is required to form an overall impression of an enterprise agreement in which “no one [consideration] and no combination of [considerations] is necessarily determinative of the result” and the decision-maker is “allowed some latitude as to the choice of the decision to be made”. A decision with respect to the BOOT is therefore a discretionary decision. The majority of the High Court in Coal and Allied Operations Pty v Australian Industrial Relations Commission explained how error may be identified where a discretionary decision is involved:

“Because a decision-maker charged with the making of a discretionary decision has some latitude as to the decision to be made, the correctness of the decision can only be challenged by showing error in the decision-making process. And unless the relevant statute directs otherwise, it is only if there is error in that process that a discretionary decision can be set aside by an appellate tribunal. The errors that might be made in the decision-making process were identified, in relation to judicial discretions, in House v The King in these terms:

‘If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.’”

[13] However before the BOOT can be conducted, it is necessary to correctly identify the modern award that covers the employees to whom the enterprise agreement will apply. If the BOOT is conducted by reference to the wrong award, the Commission may “act... upon a wrong principle” or “allow extraneous or irrelevant matters to guide [it]” so as constitute error in the decision-making process of the kind described in House v The King. The question of the applicable modern award is a mixed question of fact and law, though perhaps “primarily a question of law”.” 3 (references omitted)

[7] In making the reference that the task is primarily a question of law, the Full Bench was following and endorsing the reasoning set out in the earlier Full Bench matter of Australian Workers’ Union v Coffey Information Pty Ltd. 4

[8] There are several possibilities for modern award coverage in this matter, and indeed there is the possibility that there is no modern award coverage.

[9] The Country Fire Authority contends in submissions it filed, and orally, that there is no current modern award that applies to the employees covered by the agreement.

[10] While the UFU argues as its primary submission that the Hospitality Industry (General) Award 2010 5 (the HIGA Award) is the modern award applying to the work of this agreement,the CFA specifically argues that the HIGA Award is incapable of application to the Fiskville Agreement employees.

[11] The argument that developed before me in this regard relies upon one of two alternatives;

● firstly the CFA is not in the industry covered by the award; and

● secondly, the work of the facility is specifically excluded from coverage by cl.4.1(c), which provides that residential colleges are not covered by the modern award, with the CFA submitting that the facility is a “residential college” within the plain meaning of those words.

[12] Contrary to this position, the UFU argues the exclusion does not apply, as the Fiskville facility is not exclusively a residential facility and that it is more accurately described as a training facility with accommodation. The UFU’s primary argument is therefore that the Fiskville facility is covered by the HIGA. Its alternative argument is that Fiskville Agreement employees may be covered by the Educational Services (Post-Secondary Education) Award 2010. 6

[13] In addition to these considerations, there is the possibility of application of the relevant industry award, the Fire Fighting Industry Award 2010. 7 No party in these proceedings put forward that this award applied. I find, after reference to its terms, that it does not apply to the Fiskville employees. Clause 4 of that award provides for coverage of the “employers throughout Australia in the firefighting industry and their employees in the classifications listed in schedule Schedule B – Classifications to the exclusion of any other modern award”. Consideration of the classifications set out within the schedule B shows that the work described is that of professional firefighting, with plainly no intention to cover ancillary work, such as that of hospitality employees.

[14] The CFA submitted that a fourth possibility, that the work of the Fiskville Agreement employees is covered by the Miscellaneous Award 2010 8 does not arise, since the Coverage clause of that award provides it does not cover employees without an industry award classification where their employer works in an industry covered by modern award. I concur with this submission and find that the Miscellaneous Award 2010 has no application to the employees covered by the CFA Fiskville Hospitality Agreement 2014.

[15] The Commission has had the benefit of considering all of these arguments, as well as the material filed at the time of the making of the application, and has considered the possibilities for modern award coverage.

[16] The work of the Fiskville Agreement employees is described in detail in the classification definitions set out in Schedule 3 of the agreement filed in the Commission. In addition, the work of the Fiskville site was summarised in the CFA’s written submissions as follows;

“5. The Fiskville campus operated by CFA is formally entitled the “Victorian Emergency Management Training Centre”. As such, the centre provides residential and non-residential training courses for CFA recruits, operational fire fighting staff, other CFA staff, volunteer fire fighters and some public clients/customers.

6. The Centre facilities include dedicated indoor instructional rooms, a large auditorium, outdoor training facilities [inclusive of a PAD 9], administration building, a common cafeteria style dining room with attached bar and lounge, and 125 separate serviced accommodation units.

7. Some relevant measures of activity at the Centre are as follows:

Meals prepared Residents

2012 - 58721 2012 - 14770

2013 - 60612 2013 - 13277

2014 - 83840 2014 - 28047”

[17] The CFA submits the centre has a current staffing establishment of 44 FTE, with 12 FTE positions undertaking work covered by this agreement.

[18] The UFU submits about the work of the centre and its staff;

“... the facility is not exclusively a residential facility. It is more accurately described as a training facility with accommodation rather than a residential college.

6. Employees covered by the agreement may provide services for corporate clients and MFB firefighters, as well as CFA staff, who do not attend the college on a ‘live-in basis’.

7. Most employees covered by the agreement also perform the majority of their duties in a building that is separate to the residential facilities of the college.”

[19] Having determined that neither the Fire Fighting Industry Award 2010 or the Miscellaneous Award 2010 have application to work of employees covered by this agreement, it becomes necessary to consider whether the work is covered alternately by the Educational Services (Post-Secondary Education) Award 2010 or the HIGA.

[20] Examination of the coverage clause of the Educational Services (Post-Secondary Education) Award 2010 leaves me satisfied that the award also does not apply to the work covered by this agreement. The award specifies it covers the “post-secondary educational services industry” which term is defined in some detail in clause 4.3. While certainly the material before me leads to the conclusion that the CFA is engaged in significant training activity, a distinction can be drawn between that training activity on the one hand and the activities which are described within the award’s definition of “post-secondary educational services”. The work of the Fiskville facility is associated with developing CFA staff and volunteers, so as to be proficient and safe in fighting fires, as well as to provide limited training assistance to like organisations such as the MFB. These things are separate and distinct from educational activities that might ordinarily be undertaken by students in the market served by the post-secondary educational services industry.

[21] There was debate before me about the potential application, or residual application, of the Motels Accommodation and Resorts Award 1998, (the Motels Award) with the CFA submitting this was an award that had common rule application in Victoria, and which became a State Reference Common Rule pursuant to Schedule 3 of the Fair Work Transitional Provisions and Consequential Amendments Act 2009. Save for the submission that there has been no application to modernise or terminate the award, which submission I accept, the submissions on this matter were insufficient for me to make any findings about the status of the Motels Award. In any event, because that award has not been the subject of an application for modernisation, it is not a modern award, meaning that the it has no relevance so far as the better off overall test within s.193 is concerned.

[22] That leaves the possibility the work of Fiskville Agreement employees is covered by the HIGA. That possibility arises only if I hold that the CFA is in the “hospitality industry” as well as finding that Fiskville is not a residential college.

[23] It is apparent from a consideration of the HIGA cl.4.2 which sets out the meaning of the term “hospitality industry” that the coverage of the modern award is for employers who operate in the business of hospitality as separate and distinct to employers who operate in some other business, but who provide hospitality incidental to their business. I am unable therefore to find that the work covered by the Fiskville Agreement is within the hospitality industry within the meaning of the HIGA.

[24] For the sake of completeness, I give consideration to whether the Fiskville facility could be considered to be a “residential college”.

[25] The CFA referred the Commission to submissions to the proceedings that made the HIGA regarding the exclusion of “residential colleges”, submitting in particular that the LHMU advocate had put the following;

“If I take you to, for example, paragraph 4.5(b), the intention is that direct employees of boarding schools engaged in say catering activities or a combination of activities would not be covered by the award, but should there be contract catering facilities in a boarding school or a residential college then the contracting catering employer would be. So your Honour, the intention is to make it clear that the catering employees who supply to another business covered by this award, this proposed award, but direct employees of a business outside of hospitality are not. Thank you, your Honour.”

[26] The CFA also drew attention to a submission by another advocate on the subject from Australian Business Industrial who submitted;

“That part of the application is confined to employers or that is caterers who provide non retail catering services in facilities or institutions which residential care - sorry, residential facilities are provided and as described in the ground reasons in the application examples of those institutions are aged care facilities, boarding schools, residential colleges and as I’m instructed, another example would be an ambulance officer training school as is currently the case with Mr Doneley’s company Catering Industries”

[27] The CFA also submitted “that the term ‘residential College’ is not to be narrowly interpreted, and also that the Modern hospitality award would apply at Fiskville in the event that CFA engaged an external catering contractor to provide the services currently provided by direct employees”.

[28] The submissions referred to above, made at the time of formation of the modern award, reinforce that enterprises that are in the industry of catering or hospitality are covered by the HIGA, and that enterprises that are not within the industry, and in which the provision of catering and hospitality is incidental to the main purpose of the enterprise are not intended to be covered. The interaction of the HIGA clause 4.1(c), which excludes residential colleges from coverage, and clause 4.2 which sets out the industry coverage, is therefore consistent - to be covered, one needs to be in the industry of the provision of hospitality.

[29] The term “residential college” is not defined within the HIGA. Neither is it defined within the Macquarie Dictionary or the Butterworths Encyclopaedic Australian Legal Dictionary. However the latter does provide a cross-reference between the term “residential college” and “incorporated college”, which is defined as “[a]n academic residential college that is affiliated with a university”. 10 I consider this definition to be consistent with the plain and ordinary meaning of term “residential college” as it is used within the HIGA, noting however that it is possible the phrase, as used within the award might connote a slightly wider class of residence than the one strictly defined by Butterworths. Even so, I do not consider that the plain and ordinary meaning of the phrase used in the HIGA goes so wide as to cover accommodation facilities connected with any training centre whatsoever.

[30] Were it necessary for me to do so, I would find that the work covered by the Fiskville Agreement is not covered by the Hospitality Industry (General) Award 2010.

[31] In any event, and pertinent to this case, a finding that the work covered by the Fiskville Agreement does not relate to a “residential college” has no particular meaning in relation to a determination of the reference modern award, for the reason that I consider the award does not apply to the CFA, because of the finding I have made about whether the CFA is within the award’s definition of “hospitality industry”.

[32] I therefore find that the Hospitality Industry (General) Award 2010 has no application to the work covered by the Fiskville Agreement.

[33] As a result of this finding, the work of Fiskville Agreement employees is not covered by a modern award.

[34] If it is the case that the Fiskville Agreement employees are not covered by modern award, it follows that the provisions of s.193(1) also have no application to the formation of my view under s.186 as to whether the agreement must be approved. That is, it follows that the assessment of whether an employee “would be better off overall if the agreement applied to the employee and if the relevant modern award applied to the employee” has no application if there is no relevant modern award.

[35] In the event that I am incorrect in my finding that the CFA is not within the scope of the “hospitality industry” within the HIGA and that the CFA is covered by the award, I note that I have given consideration to whether the agreement passes the better off overall test with the HIGA as the relevant modern award. It is the case that while the wage rates in the agreement align with those for in the HIGA, the agreement’s arrangements for overtime and broken shift allowances are marginally less beneficial than the HIGA. Compensating against this possibility is the fact that a $2,500 sign on bonus may otherwise compensate for any deficiency within the overtime and broken shift allowances. These factors were drawn to the parties in the course of my consideration of approval of this agreement, with no appreciable responses provided by the parties on the matter.

[36] While ordinarily the formation of a view about an agreement’s provisions of the nature set out above, might require the identification of a concern to an employer, together with a request for employer consider the provision of a remedial undertaking, pursuant to s.190, it is not necessary me to do so. This is for the reason that, having found that there is no relevant modern award with applications for work of employees covered by the agreement, I do not hold the view that employees covered by the agreement will not be better off if it is approved.

[37] For the sake of completeness, if I am incorrect in my finding about the application of the HIGA to the work of employees covered by this agreement, the scheme of the Fiskville Agreement as a totality, together with the information provided to me in the course of bargaining conferences conducted before me, bring me to the view that despite the factors I have referred to in the paragraph above, employees covered by the agreement would nonetheless be better off overall with the approval of the agreement even if the HIGA is the relevant modern award.

[38] As a result of the foregoing analysis, I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act, as are relevant to this application for approval, have been met.

[39] Because I am so satisfied, I must now approve the agreement.

[40] As a result, the Agreement is approved and, in accordance with s.54 of the Act, will operate from 26 December 2014. The nominal expiry date of the Agreement is 30 September 2017.

COMMISSIONER

 1 Fair Work Act 2009, s.193

 2   [2013] FWCFB 8740

 3   Ibid, at [11] - [13]

 4   [2013] FWCFB 2894, at [18]

 5   MA000009

 6   MA000075

 7   MA000111

 8   MA000104

 9   Practical Area Drill

 10   Lexis Nexis Butterworths Encyclopaedic Australian Legal Dictionary, online edition, accessed 17 December 2014

Printed by authority of the Commonwealth Government Printer

<Price code J, AE411945  PR559433>