D & D Traffic Management Pty Ltd

[2015] FWC 3913

[2015] FWC 3913

FAIR WORK COMMISSION

DECISION

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

D & D Traffic Management Pty Ltd
(AG2015/2141)

SENIOR DEPUTY PRESIDENT DRAKE SYDNEY, 26 JUNE 2015

Application for approval of the D & D Traffic Management & Other Work - Enterprise Agreement 2015.

[1] An application pursuant to section 185 of the Fair Work Act 2009 (the Act) was lodged on 11 March 2015 by D & D Traffic Management Pty Ltd (D&D). The application sought approval of the D & D Traffic Management and Other Work - Enterprise Agreement 2015 (the Agreement). Approval of the Agreement is opposed by the Australian Workers’ Union (AWU).I listed the application for hearing in Sydney on 2 April 2015.

[2] Mr Gounis appeared for the AWU. Mr Murray from the Australian Industry Group (AIG) appeared for D&D.

[3] Mr Gounis had already outlined the AWU's objections to the Agreement in correspondence dated 25 March 2015. He addressed those objections in greater detail at the hearing on 2 April 2015.

[4] Following Mr Gounis’ oral submissions I allowed Mr Murray an opportunity to provide a written response. He provided that written response on 1 May 2015. Mr Gounis then provided reply submissions on 22 May 2015.

In relation to Traffic Controllers the AWU made the following submissions:

[5] The rate of pay for a Level 1 Trainee Traffic Controller in the Agreement is below the minimum rate of pay for the corresponding CW2 classification in the Building & Construction Industry General On-site Award 2010 (Building Award). It submitted that the CW2 classification is the appropriate award classification for comparison, as ‘traffic controller’ is listed as an indicative role for the classification. All traffic controllers covered by the Agreement must hold relevant qualifications and are required to work under minimal supervision. They are not trainees as defined in the Building Award. The Agreement does not distinguish between the duties performed by a Level 1 Trainee Traffic Controller and a Level 2 Traffic Controller.

[6] Further, several terms in the Agreement may inhibit an employee’s ability to progress from a Level 1 Trainee Traffic Controller to a Level 2 Traffic Controller. Such terms include the requirement that Level 1 Trainee Traffic Controller employees must complete 800 hours of continuous experience before being eligible for promotion to Level 2 Traffic Controller. Additionally, promotion from a Level 1 Trainee Traffic Controller to a Level 2 Traffic Controller is entirely at D and D’s discretion. There is a risk that ‘fully trained’ traffic controllers may be engaged as Level 1 Trainee Traffic Controllers instead of Level 2 Traffic Controllers and receive a below-award rate of pay. Although D and D is required to maintain at least 33% of employees at each level, it is possible that 66% of traffic controllers under the Agreement could be employed as Level 1 Trainee Traffic Controllers regardless of their level of training.

In relation to Traffic Controllers AIG made the following submissions:

[7] The rate of pay for a Level 1 Trainee Traffic Controller in the Agreement is above the minimum rate of pay for the CW1(b) classification in the Building Award. The Agreement defines Level 1 Trainee Traffic Controllers as new entrants to the industry with less than 800 hours (approx. 5 months full-time) experience. Also, Level 1 Trainee Traffic Controllers work under general, not limited, supervision. As such, the CW1(b) classification is the appropriate classification for comparison for the purposes of the Better Off Overall Test (BOOT).

[8] Promotion from a Level 1 Trainee Traffic Controller to a Level 2 Traffic Controller is based on an employee obtaining experience and the requisite level of competency in a manner similar to the promotion of an employee from the CW1 to CW2 classification under the Building Award. The requirement that 33% of employees must be retained at each level does not prevent employees from being promoted. However, the requirement can be omitted from the Agreement through an undertaking.

In relation to Customer Service Officers the AWU made the following submissions:

[9] Customer Service Officers under the Agreement should not be treated as award-free employees for the purposes of the BOOT. The work they perform is covered by the Security Services Industry Award 2010 (the Security Award), the Passenger Vehicle Transportation Award 2010 (Passenger Transport Award) or the Rail Industry Award 2010 (Rail Industry Award) as appropriate. The rates of pay offered to Customer Service Officers under the Agreement are below all corresponding minimum rates of pay in the awards listed.

In relation to Customer Service Officers AIG made the following submissions:

[10] The work of Customer Service Officers (CSOs) is not covered by the Building Award as CSOs do not perform work at construction sites. Further, CSOs are not covered by theSecurity Awardas the work of a CSO does not involve crowd control or traffic control incidental to security work, or any other function listed for a security officer. CSOs under the Agreement are defined as working ‘outside the building and construction industry and the security services industry’. Finally, the Agreement contains a separate Security Officer classification for employees who perform security work.

[11] There is no single Modern Award which appropriately covers CSOs. They should therefore be treated as award-free employees for the purposes of the BOOT.

In relation to All Shift Employees the AWU made the following submissions:

[12] The Agreement does not offer the following Building Award entitlements to night shift employees:

● higher shift penalty rates where shift work on a project does not continue for more than five consecutive nights;
● afternoon shift penalties; and
● weekend penalty rates in lieu of shift penalty rates when shifts are worked on weekends.

[13] As short-term shift work is likely in the industry, not offering the higher shift penalty rates may result in groups of employees being worse off under the Agreement. Regarding weekend penalties, if it was D and D’s intention for weekend penalties to be paid in lieu of shift penalties on weekends, an undertaking should be provided to confirm this as the terms of the Agreement are unclear on this point. Further, the award minimum of 10 hours rest break between shifts should apply in lieu of the 8 hour minimum prescribed by the Agreement.

In relation to All Shift Employees AIG made the following submissions:

[14] D and D is usually contracted to provide traffic management services for construction projects lasting months or years. Shift work is performed continuously throughout the life of these projects. Consequently, the higher award shift penalty rate for shifts that do not continue for more than five consecutive nights is unlikely to be payable to employees under the Agreement.

[15] The majority of employees covered by the Agreement would fall into the civil construction stream of the Building Award. The Agreement offers a night shift penalty rate that is double the standard night shift penalty rate and equal to the permanent night shift penalty rate for civil construction employees under the Building Award.

[16] The Agreement does offer weekend penalty rates in lieu of shift penalty rates where shift work is performed on weekends. If required, an undertaking can be provided to remove any ambiguity in this regard.Further, weekend penalty rates offered under the Agreement are higher than those provided to civil construction employees under the Building Award.

[17] An afternoon shift penalty has not been included in the Agreement as D and D does not schedule afternoon shifts. The Agreement offers overtime rates for hours worked after 6pm, which are higher than Building Award shift penalty rates.

[18] In response to the AWU’s submission, an undertaking requiring a minimum 10 hours between shifts for employees in the building and construction industry can be provided if requested.

In relation to Allowances the AWU made the following submissions:

[19] Travel entitlements under the Agreement are generally lower when compared to the entitlements under the Building Award. The Agreement increases the radial area for the fares allowance from 50 km from the relevant GPO to 70 km from D and D’s depot. Many employees will need to travel a greater distance to qualify for a travel time allowance. 

[20] Further, employees who are required to travel beyond the radial area do not receive any payment for the costs incurred during travel. Under the Building Award such employees receive $0.47 per kilometre travelled beyond the radial boundary when using their own vehicle.

[21] The amount employees are likely to receive for picking up and dropping off other employees ($25 per occasion) is less than what they would receive under the Building Award. In the Building Award travel time for employees transporting other employees is regarded as time worked, and is usually paid at overtime rates. This also applies to employees transporting other employees to a distant work site, or between accommodation and a distant work site, under the Building Award.

[22] Team leader allowances are higher under the Agreement for a small number of employees but for most employees are generally lower.

[23] The living away from home allowance is $10 higher compared to the equivalent entitlement in the Building Award. However, employees under the Agreement are not entitled to a daily fare allowance when working at a distant site.

In relation to Allowances AIG made the following submissions:

[24] The Agreement entitlement of a 70 km radial area for the daily fares allowance, centred on D and D’s nearest depot, benefits employees based in the Illawarra region, as it will increase their prospects of being employed on a greater number of projects. An undertaking to reduce the radial area to 50 km can be provided if requested.

[25] In response the AWU submitted that the impact of travel allowances on employment prospects must be disregarded for the purposes of the BOOT, which is only concerned with comparing Agreement and award entitlements.

[26] Regarding the union’s submissions regarding the centre of the radial area, Mr Murray submitted that although moving the centre to D&D’s nearest depot may result in employees having to travel further to claim travel time payments, it could equally mean they will not have to travel as far. Therefore, the centre of the radial area is immaterial for the BOOT. Moreover, D and D’s depot is the appropriate centre for any radial area as it is the centre of employment for employees.

[27] Employees who have not been provided with a company vehicle are generally not required to travel beyond the radial area. However, D&D is willing to undertake to pay $0.47 per km for any kilometres travelled beyond the radial boundary by employees using their own vehicles.

[28] The Agreement driver allowance is paid to employees for each day they are required to drive, regardless of whether they are required to transport other employees. It is very unusual for drivers to be required to transport other employees. The generally short distances between D&D’s depot, work sites and employees’ homes mean that employees transporting other employees can usually expect to travel for less than an hour per day. Drivers transporting employees to distant work sites will receive the driver allowance, the daily fare allowance and payment for time spent travelling outside the radial boundary. Overall, employees would be significantly better off overall over the course of their employment by receiving the Agreement driver allowance.

[29] The Agreement living away from home allowance is $10 higher than the equivalent allowance in the Building Award. D and D will facilitate travel between accommodation and work sites for all employees engaged in distant work. Therefore employees would not be eligible for the award daily fares allowance.

[30] The Agreement offers a two-tiered team leader allowance. The Agreement allowance for both tiers is higher than the equivalent Building Award allowance for a team leader of a small team. D and D’s records show that in the past 12 months only 2.4% of jobs had a team consisting of more than 6 employees. Because Agreement team leader allowance is rotated between employees, this will result in a higher allowance being payable to more employees.

[31] The Agreement offers an allowance for driving a truck-mounted attenuator. No equivalent allowance is offered under the Building Award.

In relation to Redundancy Pay the AWU made the following submissions:

[32] The Building Award prescribes an industry specific redundancy scheme. This scheme provides for severance pay to employees with less than one year of service. The scheme also provides for severance pay for employees leaving their employment in any circumstances, including resignation. As the building and construction industry has a high level of labour mobility, and a majority of employees covered by the Agreement work in the building industry, a failure to adopt the Building Award scheme would leave employees significantly worse off.

In relation to Redundancy Pay AIG to following submissions:

[33] The Agreement’s proposed coverage includes employees who are not covered by the Building Award. These employees cannot be covered by the industry specific redundancy scheme outlined under the Building Award. Incorporating the industry specific scheme would therefore necessitate the simultaneous operation of two redundancy regimes in a single agreement. The Agreement offers a redundancy scheme that will not cause any disadvantage to employees not covered by the Building Award and offers a redundancy scheme that provides higher redundancy payments, in most cases, compared to the industry specific redundancy scheme in the Building Award.

[34] Permanent employees can only be engaged on a weekly hire basis under the Agreement, whereas the Building Award allows for engagement on a daily hire basis. Daily hire employees are not entitled to redundancy pay under the Building Award. The Agreement therefore offers redundancy entitlements to many employees who would not otherwise receive these entitlements under the Building Award.

In relation to All Casual Employees the AWU made the following submissions:

[35] The Agreement does not clearly state that casual employees will be entitled to a minimum of four hours pay per engagement and the Agreement does not provide for any conversion process allowing casual employees to become full or part-time employees.

[36] Employee induction may be regarded as training under the Agreement rather than time worked, and therefore paid. This will result in some employees, especially short-term casuals, being worse off under the Agreement.

In relation to All Casual Employees AIG made the following submissions:

[37] The Agreement offers a minimum of four hours pay for casual employees who have presented for work. In addition, the Agreement requires D&D to give casual employees one hours notice of dismissal if they are not required to attend work, and one hours notice at the end of the day if their services are no longer required. These are additional entitlements not provided under the Building Award which benefit casual employees.

[38] The Building Award does not provide for any payment to casual employees completing required training. The Agreement provision that casual employees will have their course fees covered when they complete a course can therefore be viewed as a benefit to casual employees.

In relation to All Part-Time Employees the AWU following submission:

[39] The Agreement excludes award provisions relating to part-time employees and does not require that part-time employees working in excess of agreed hours be paid overtime rates.

In relation to All Part-Time Employees AIG made the following submission:

[40] D&D does not employ part-time employees, but an undertaking can be provided confirming overtime rates will be paid for hours worked in excess of agreed hours.

[41] On the material before me at present I am not persuaded that the Agreement passes the BOOT. The parties submitted that some of the issues of concern in relation to the BOOT may be able to be remedied by an undertaking. I am not satisfied that undertakings can remedy all issues of concern but, in the circumstances of this Agreement, I think that further conferences between the parties should occur in an attempt to resolve the situation.

[42] The parties may confer privately or I will list this application for conference before me in Sydney. The parties should advise my Chambers of their preference. If agreement cannot be reached I will issue a decision on the basis of the material already before me.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr D Murray, Australian Industry Group, appeared for the Applicant

Mr A Gounis appeared for the Australian Workers’ Union

Hearing details:

2015

Sydney

2 April

Final written submissions:

Applicant’s final submissions: 30 April 2015

Australian Workers’ Union reply submissions: 21 May 2015

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