Daromin Engineering Pty Ltd T/A Daracon Group

[2019] FWCA 6886

[2019] FWCA 6886

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Daromin Engineering Pty Ltd T/A Daracon Group

(AG2019/2714)

Daracon Group Quarries Enterprise Agreement 2018

Quarrying industry
Commissioner Gregory	MELBOURNE, 4 OCTOBER 2019

Application for approval of the Daracon Group Quarries Enterprise Agreement 2018.

1. An application has been made under s.185 of the Fair Work Act 2009 (the Act) for approval of a single enterprise agreement known as the Daracon Group Quarries Enterprise Agreement 2018 (“the Agreement”). The application is made by Daromin Engineering Pty Ltd T/A Daracon Group (“the Daracon Group”).

1. The F17 Employer’s Statutory Declaration indicates that at the time the Agreement was made there were fifty-eight employees intended to be covered. Fifty-six of those employees cast a valid vote in the ballot to approve the Agreement, with forty-one voting in favour.

1. The application also indicates that both the Australian Workers’ Union (“the AWU”) and the Construction, Forestry, Mining and Maritime Employees’ Union (“the CFMMEU”) were Union Bargaining Representatives in the agreement making process. The AWU has also provided a F18 Statutory Declaration which highlights several areas where it claims the underlying Quarrying Award 2010 provides superior entitlements to those contained in the Agreement. However, the AWU subsequently advised that it did not wish to make further submissions in regard to the application.

1. The CFMMEU also contacted the Commission after the application was lodged and indicated that it wished to be heard in relation to the application for approval. It also requested the opportunity to be able to provide written submissions in regard to the application.

1. The Commission accordingly set the matter down for hearing and issued directions regarding the filing and service of evidence and submissions. The hearing was conducted by telephone on 1 October 2019. Mr Shaun Kelleher, Employee Relations Manager & Counsel, appeared on behalf of Daracon Group. Ms Sherri Hayward, Legal/Industrial Officer, appeared on behalf of the CFMMEU.

The Evidence and Submissions

The Daracon Group

1. The Daracon Group acknowledges that the CFMMEU has identified four conditions in the underlying Quarrying Award 2010 which provides superior entitlements to those contained in the Agreement. However, it continues to submit that when the Agreement is considered in its entirety the CFMMEU has not identified any scenario under which an employee would not be better off overall if the Agreement applied to the employee instead of the Award.

1. It also refers to the F17 Employer’s Statutory Declaration that was filed in conjunction with the application and notes that it identifies several terms and conditions in the Agreement that are more beneficial than those contained in the underlying Award. It emphasises, in particular, that the base rates of pay under the Agreement are more than 50 percent higher than the minimum wages provided in the Award for the equivalent classifications. It also identifies some terms and conditions in the Agreement which it acknowledges are less beneficial than those contained in the Award.

1. It continues to submit that if the Commission has any concerns about the content of the Agreement, and whether it passes the requirements of the better off overall test, then they can be dealt with by way of the provision of additional undertakings.

1. It also provided the following submissions in regard to each of the matters highlighted by the CFMMEU.

Rostered days off

1. The Daracon Group acknowledges that different provisions apply in the Agreement in regard to working on scheduled RDO’s, but submits that any detriment is negligible when compared to the overall benefits resulting from the higher wage rates payable under the Agreement.

Higher duties

1. It again acknowledges the differences between the Agreement and the Award conditions in this context, but submits that there is no realistic scenario under which an employee performing higher duties under the Agreement for less than 4 hours would be paid more in an overall sense under the Award, given the other more generous entitlements contained in the Agreement.

Wet weather

1. It submits that the provisions in the Agreement are not materially different to the qualifying conditions imposed by the relevant provisions in the underlying Award. It also notes that employees would be paid at significantly higher rates under the Agreement for ordinary hours of work during periods of ordinary time lost to wet weather.

Overtime breaks

1. This issue concerns, in particular, the fact that the Agreement does not provide for the Award entitlement for a 30 minute break without loss of pay in circumstances where an employee is required to work overtime for more than 2 hours after their normal finishing time where overtime work continues after such a break. The Daracon Group submits that the adequacy of rest breaks is more properly a work health and safety consideration, and nothing in the Agreement prevents employees from taking additional rest breaks when they need to deal with any fatigue issues. It also notes that the Agreement provides for more generous paid rest breaks during ordinary time hours when compared to the conditions contained in the Award.

Junior rates

1. This issue was raised by the Commission during the course of the hearing. The Commission indicated that it had a concern about the reference to junior wage rates in “APPENDIX A – WAGE RATES” of the proposed Agreement, given that the Quarrying Award 2010 does not appear to make provision for junior rates of pay. Therefore, some of the junior rates provided for in the Agreement were less than the Grade 1 Quarry Worker classification rate in the Award. The Commission also noted that the F17 Employer’s Statutory Declaration appeared to indicate that there were no junior employees employed at this time, but it could obviously be possible for juniors to be employed in the future during the life of the Agreement. The Daracon Group indicated in response that it would give further consideration to this issue. It subsequently provided an undertaking indicating that any junior employee engaged under the Agreement would be paid the applicable classification rate for the work performed as specified in the wages table in Appendix A, and that in no circumstances would junior pay relativities be applied.

The CFMMEU

1. The CFMMEU submits that s.186(2)(d) requires that the Commission be satisfied that a proposed Agreement passes the better of overall test. Section 193 also requires that the Commission be satisfied that each Award covered employee, and any prospective Award covered employees, are better off overall if the Agreement applied to them, rather than the Award. It also notes that clause 3.1 of the Agreement provides that:

“All rates of pay, allowances and conditions under this Agreement shall apply in lieu of the provisions of the Quarrying Award 2010 (MA000037); the relevant modern award for the purposes of the Better Off Overall Test.”

1. It continues to make the following submissions about clauses in the Agreement that it submits are less beneficial than those in the Award.

Rostered Days Off

1. Sub clause 16.2 of the Agreement is less beneficial than the Award because it requires an employee to accumulate seven RDO’s before being paid overtime when working on an RDO. The Award instead provides an entitlement to double time for work performed on a rostered day off, or another day being provided.

Higher Duties

1. The Award provides for a higher duties allowance to be paid. The higher rate is to be paid for the entire shift where such work exceeds a total of two hours on any day. However, the Agreement only provides for this to apply where the employee has worked for more than four hours on that day at the higher classification level.

Wet Weather Work

1. The CFMMEU submits that clause 18 of the Agreement appears to be less beneficial than the Award, as it does not offer an employee an entitlement to be paid when they are not required to work due to inclement weather. The Award instead provides for ordinary time rates to be paid for all time lost.

Overtime Breaks

1. The CFMMEU submits that the absence of provision for a thirty minute break after two hours overtime has been worked after the normal finish time is an important deficiency in the Agreement in regard to the health and safety of the employees to be covered. It continues to submit that this contributes to employees not being better off overall, irrespective of the higher wage rates applying under the terms of the Agreement.

Consideration

1. As the parties have noted s.186 of the Act requires that the Commission must be satisfied that the Agreement passes the “better off overall test.” The requirements of the test are dealt with in s.193(1) in the following terms:

“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.”[1]

1. Section 193(6) also provides that the “test time” is the time the application for approval is made under s.185.

1. The submissions provided by the CFMMEU have obviously identified some areas where the underlying Quarrying Award 2010 provides more generous entitlements when compared to those contained in the proposed Agreement. The existence of these differences is not disputed by the Daracon Group. The AWU has also identified some additional matters in its F18 Statutory Declaration. These relate to Span of Hours/Overtime, Shift Loadings, Weekend Work, Transport of Employees and Leading Hand and Industry Allowances. These differences between the Award and the Agreement have also been acknowledged by the Daracon Group in its F17 Employer’s Statutory Declaration.

1. It also highlights in its declaration various entitlements in the Agreement that are more beneficial when compared to those contained in the Award. These relate to:

·   Shift work,

·   Base rates of pay,

·   Distant work – payment for use of own vehicle,

·   Distant work – payment for travelling time,

·   Distant work – payment for meals and accommodation,

·   Overtime meal allowance.

1. It also lists the following entitlements in the Agreement, which do not exist in the Award:

·   Extended meal breaks during ordinary time,

·   Daily travel allowance,

·   Contamination allowance,

·   Income protection insurance,

·   Additional pay day off,

·   Company vehicle allowance.

1. The Commission has also carried out its own comparison of the respective provisions in the Agreement and the underlying Award. This indicates, for example, that the wage rates at the Level 1 classification in the Agreement are 37.45% higher than those in the Award, and more than 49% higher at each of the other classification levels in the Agreement. There are also more generous afternoon and night shift penalties. The Agreement also provides for a more extensive range of allowances than provided for in the Award.

1. The issues highlighted by the CFMMEU and the AWU are acknowledged. They include the non-monetary entitlement to a rest break after working an amount of overtime. However, I am satisfied, in conclusion, that there is no doubt that all employees to be covered by the proposed Agreement will be better off overall under the entitlements contained in the Agreement when compared to those in the underlying Award. In coming to this conclusion I have had particular regard to the higher rates of pay provided for in the Agreement and the cumulative effect of these higher rates when flowing into penalty rates, and other entitlements.

1. The Daracon Group has also provided an undertaking in response to the issue raised by the Commission in regard to junior rates. It provides that any junior employees who might be employed in the future will be paid the applicable classification rate for the work being performed as specified in the wages table in Appendix A of the Agreement. It continues to make clear that junior pay relativities will not be applied in any circumstances. I am satisfied that this undertaking does not result in substantial change to the Agreement, and does not act to disadvantage any employees to be covered by the Agreement. The undertaking is accordingly accepted and will now be taken to be a term of the Agreement.

1. It is also noted that clause 36 of the Agreement states that the model flexibility term is incorporated into the Agreement. The model term is accordingly considered to be a part of the Agreement.

1. I am otherwise satisfied that each of the requirements in ss.186, 187 and 188, as are relevant to this application for approval, have been met.

1. The Australian Workers’ Union being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers the organisation.

1. The Agreement is approved and, in accordance with s.54 of the Act, will operate from 11 October 2019. The nominal expiry date of the Agreement is 17 December 2021.

COMMISSIONER

Annexure A

[1] Fair Work Act 2009 (Cth) s.193.

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