CSL Australia Pty Ltd

[2018] FWCA 7562

[2018] FWCA 7562

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

CSL Australia Pty Ltd
(AG2018/4922)

MV GOLIATH OFFICERS AND ENGINEERS ENTERPRISE AGREEMENT 2018

Maritime industry
COMMISSIONER MCKENNA	SYDNEY, 17 DECEMBER 2018

Application for approval of the MV Goliath Officers and Engineers Enterprise Agreement 2018.

[1] An application has been made for the approval of an enterprise agreement known as the MV Goliath Officers and Engineers Enterprise Agreement 2018 (“the Agreement”). The application was made by CSL Australia Pty Ltd pursuant to s.185 of the Fair Work Act 2009 (“the Act”). The Agreement is a single-enterprise agreement.

[2] The Agreement is the latest iteration of an agreement which appears to have existed, in one form or another, since at least 2009 (Inco Ships Pty Ltd Officer Collective Agreement 2009 MV Goliath). As such, I infer that the employer and employees were well-versed in the mechanics of the operation of the Agreement in their bargaining upon it.

[3] The Agreement contains a range of provisions which concern deductions from wages, being provisions which were flagged as a potential concern. In consequence, the employer pre-emptively, upon the identification of those matters as a potential concern, promptly proposed a number of undertakings the overall effect of which was to address certain clauses largely concerned with unilateral deductions (albeit deductions are addressed elsewhere in the Agreement, such as clause 15.2). The undertaking that were proposed read in part:

“2. Clause 14.5(b) will be taken not to be a term of the Agreement.

3. The introductory paragraph at clause 26.5 will be deleted and replaced with the following:

26.5 Nothing in this Agreement prevents the Company and an employee entering into an agreement if the Company pays for training courses or further study at a maritime college or other tertiary institution for higher or additional certification or qualification, and the course or study was at the employee’s request, that the Company will meet the costs on condition that the employee successfully completes the course or study and that:

4. Clause 26.5(e) of the Agreement will be delated and replaced with the following:

(e) any payment that becomes payable to the Company by the employee pursuant to an agreement made under this clause becomes a debt owing to the Company. By agreement, the employee may repay the amount owing to the Company. The employee may agree in writing that the amount owing to the Company may be deducted from any monies or entitlements owed to the employee. If agreement is not reached on repayment, the Company may initiate proceedings to recover the amount by lawful means.

5. A new clause 26.6 will be inserted to read as follows:

Any agreement entered into under clause 26.5 will specify in writing the agreed value of the cost of training.

6. Clause 17.2 of the Agreement will be deleted and replaced with the following:

17.2 If the employee fails to give the required period of notice, the amount equal to the salary for the notice period not given becomes a debt owing to the Company. By agreement, the employee may repay the amount owing to the Company. The employee may agree in writing that the amount owing to the Company may be deducted from any monies or entitlements owed to the employee. If agreement is not reached on repayment, the Company may initiate proceedings to recover the amount by lawful means.

7. Clause 20.1 of the Agreement will be deleted.

8. Clause 20.2(a) of the Agreement will be deleted and replaced with the following:

(a) The following are repayable by an employee to the Company upon termination of employment:

(i) any debts that the employee owes the Company; and

(ii) any un-accrued leave taken in advance by the employee.

9. The introductory paragraph at Clause 20.2(b) of the Agreement will be deleted and replaced with the following:

If, upon termination of employment, there are any debts owing by an employee to the Company, the Employee may agree in writing that the amount owing to the Employer may be deducted from any monies or entitlements owed to the Employee. If agreement is not reached on repayment, the Company may initiate proceedings to recover the amount by lawful means. The following amounts are “debts” that may be owed by an Employee to the Company having arisen out of the course of the employment relationship:

10. The following will be added as a new clause 27.8:

This clause provides Company-specific detail and supplements the NES which deals with maximum weekly hours. An employee’s working hours under this Agreement will comprise no more than an average of 38 ordinary hours per week, plus any reasonable additional hours the employee is required to work under this Agreement.

11. Clause 32 of the Agreement will be deleted and replaced with the following:

Where an employee’s leave has been exhausted, with the Company's agreement the employee may take up to 14 days’ leave in advance, or alternatively the employee may take leave without pay. All leave paid in advance is recoverable from the employee. In this circumstance, an employee will be required to work out negative leave at a time mutually agreed between the Company and the employee. In the event of an employee's employment terminating prior to the employee working out the negative leave, the amount remaining in advance to the employee will become a debt owing to the Company. The employee may agree in writing that the amount owing to the Company may be deducted from any monies or entitlements owed to the employee. If agreement is not reached on repayment, the Company may initiate proceedings to recover the amount by lawful means.

[4] Section 172 of the Act provides that enterprise agreements may be made about “permitted matters”, relevantly including deductions for any purpose authorised by an employee:

“172  Making an enterprise agreement

Enterprise agreements may be made about permitted matters

(1)  An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:

(a)  matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b)  matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;

(c)  deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d)  how the agreement will operate.” (my underlining)

[5] I consider, however, it is the case that the provisions of s.323-327 of the Act are, in and of themselves, engaged in relation to matters of this nature. For example, an employer must pay an employee amounts payable to the employee in relation to the performance of work in full (s.323(1)(a)) and deductions made contrary to those envisaged in s.324 (permitted deductions) and s.325 (unreasonable requirements to spend or pay amount) have no effect given the operation of s.326 of the Act. (Although this Agreement did not involve any employees aged under 21, I separately note also the provisions of s.326(4) of the Act in relation to deductions or payments in relation to employees aged under 18.)

[6] As to the matters identified in the Fair Work Regulations 2009 as to deductions, see also reg 2.12 which reads as follows:

“2.12  Certain terms have no effect—reasonable deductions

(1) For subsection 326(2) of the Act, a circumstance in which a deduction mentioned in subsection 326(1) of the Act is reasonable is that:

(a)  the deduction is made in respect of the provision of goods or services:

(i)  by an employer, or a party related to the employer; and

(ii)  to an employee; and

(b)  the goods or services are provided in the ordinary course of the business of the employer or related party; and

(c)  the goods or services are provided to members of the general public on:

(i)  the same terms and conditions as those on which the goods or services were provided to the employee; or

(ii)  on terms and conditions that are not more favourable to the members of the general public.

Example 1:    A deduction of health insurance fees made by an employer that is a health fund.

Example 2:    A deduction for a loan repayment made by an employer that is a financial institution.

(2) For subsection 326(2) of the Act, a circumstance in which a deduction mentioned in subsection 326(1) of the Act is reasonable is that the deduction is for the purpose of recovering costs directly incurred by the employer as a result of the voluntary private use of particular property of the employer by an employee (whether authorised or not).

Examples of costs

1     The cost of items purchased on a corporate credit card for personal use by the employee.

2     The cost of personal calls on a company mobile phone.

3     The cost of petrol purchased for the private use of a company vehicle by the employee.”

[7] Given that s.190 of the Act is expressed to apply circumstances where the Commission has a concern that an agreement does not meet the requirements set out in s.186 and s.187 of the Act, the undertaking as to such matters do not seem apt. Provisions running counter to the Act concerning relevant deductions will have no effect.

[8] Separately, a number of individual employee bargaining representatives participated in the telephone proceedings concerning the application for the approval of the Agreement and raised issues concerning long service leave. In this regard, the clause 36 of the Agreement provides that from the date of commencement of the Agreement, an employee’s long service will accrue in accordance with the legislation in the employee’s “State or Territory of Association, as amended from time to time”. In that regard, certain explanatory information that was provided to the employees dealt with long service leave and explained: “The Long Service Clause in the current EBA absorbs Long Service leave into base wages.” Advice was sought from me by the employees as to their long service leave entitlements, but as I explained they will need to seek their own advice as to such matters. In such respects, I note the operation of s.113 of the Act concerning entitlement to long service leave and also decisions such as Armacell Australia Pty Ltd [2010] FWAFB 9985.

[9] Apart from making passing note about the matters concerning deductions and long service leave, I am otherwise satisfied that the relevant requirements of the Act have been met. The pay rates are substantially higher that the relevant comparator, even allowing for the rolled-up nature of some payments; and, as to hours, s.62 of the Act will have force and effect as part of the National Employment Standards.

[10] The Australian Maritime Officers Union has given notice under s.183 of the Act that it wishes to be covered by the Agreement. In accordance with s.201(2) of the Act, I note that the Agreement covers the organisation.

[11] The Agreement is approved and, in accordance with s.54 of the Act, will operate from seven days after the issuing of this approval decision. The nominal expiry date of the Agreement is four years from the date on which this agreement is approved by the Fair Work Commission.

COMMISSIONER

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