DECISION

Fair Work Act 2009
s.210 - Application for approval of a variation of an enterprise agreement

Downer EDI Engineering Power Pty Ltd
(AG2017/2852)

DOWNER EDI ENGINEERING POWER PTY LTD NSW ELECTRICAL ENTERPRISE AGREEMENT 2016

Electrical contracting industry
COMMISSIONER HUNT	BRISBANE, 18 AUGUST 2017

Application for variation of the Downer EDI Engineering Power Pty Ltd NSW Electrical Enterprise Agreement 2016.

[1] An application has been made for variation of the Downer EDI Engineering Power Pty Ltd NSW Electrical Enterprise Agreement 2016 (the Agreement) pursuant to s.210 of the Fair Work Act 2009 (the Act). It has been made by Downer EDI Engineering Electrical Pty Ltd (the Employer).

[2] The Employer filed a statutory declaration in support of the application which was declared by Christopher Owen Conlan, Industrial Relations Manager – East.

[3] The variation can be found at Annexure A of this decision.

[4] Correspondence was sent from my Chambers to Mr Dave McKinley of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) to seek its views as a union bargaining representative to the Agreement. The CEPU communicated that it had no objection to the variation.

[5] The variation sought is to delete clause 10.1(g) of the Agreement where it states:

“All Casual Employees will be offered a permanent role within 8 weeks of starting employment with the Company.”

and replace it with the following:

“The Company may, at its sole discretion, offer full time employment to casual employees.”

[6] The relevant clause in the Manufacturing and Associated Industries and Occupations Award 2010 (Modern Award) is clause 14.4(a) which provides as follows;

“A casual employee, other than an irregular casual employee, who has been engaged by a particular employer for a sequence of periods of employment under this award during a period of six months, thereafter has the right to elect to have their contract of employment converted to full-time or part-time employment if the employment is to continue beyond the conversion process.”

[7] The clause further provides that the employer must inform the employee in writing whether the employer consents to or refuses the election of the employee, but must not unreasonably refuse the employee’s election to be made a permanent employee. 1

[8] The Agreement maintains the following clause at 10.1(h):

“In the event the Casual Employee does not accept the offer of permanency, the 25% loading will become payable for ordinary hours only. In this instance the Company will have a six (6) monthly ongoing obligation to continue to offer a permanent role to that employee. The loading is only payable in the first instance of engagement and dependent upon the acceptance or decline of permanency.”

[9] In consideration of the Better off Overall Test (BOOT) required to be determined relevant to s.193(1) of the Act, the variation as proposed might be an issue in the consideration as to whether a casual employee is better off overall when compared with the Modern Award. In reading the proposed variation in isolation, it might be tempting to consider that a casual employee, without the right to ever elect permanent employment is not better off overall when compared with the Modern Award. It would be necessary, however, to do a thorough evaluation of all of the terms of the Agreement against the Modern Award.

[10] In light of the continuing clause 10.1(h), and the obligation to continue to offer to casual employees permanent employment on a six-monthly basis, I consider that to be an obligation to communicate with a casual employee each six months of their employment and offer the employee a permanent role. Given that the Agreement is expressly stated not to be read in conjunction with the Modern Award, 2 it would appear that the Employer understands that the clause referred to in [7] would have no application, and the Employer would not be in a position to refuse a casual employee’s election to be made permanent.

[11] I accept there may be some ambiguity between the proposed clause 10.1(g) and clause 10.1(h) of the Agreement and the effect the two clauses have upon each other. It is not necessary that the Commission determine this issue in order to decide whether or not to approve the variation to the Agreement.

[12] Having regard to the continuing effect of clause 10.1(h) in the Agreement, I am satisfied the Agreement provides for terms that are better off overall when compared with the Modern Award.

[13] I am satisfied that each of the requirements of ss.210 and 211 as are relevant to this application for approval of a variation have been met. Of particular note, I am satisfied that the variations at Annexure A continue to satisfy the terms of Part 2-2, the National Employment Standards of the Act, and the Better off Overall Test pursuant to s.193(1) of the Act. The requirements in Regulation 2.09A of the Fair Work Regulations 2009 for the signing of a variation to the enterprise agreement have been met.

[14] The variation to the Agreement is approved. In accordance with s.216 of the Act, the variation will operate from 18 August 2017.

[15] The consolidated version of the Agreement, as varied, is attached to this decision.

COMMISSIONER

Annexure A

1 Clause 14.4(d) of the Manufacturing and Associated Industries and Occupations Award 2010

2 Clause 2.3(a) of the Agreement.

Printed by authority of the Commonwealth Government Printer

The applicant, Downer EDI Engineering Power Pty Ltd, sought a variation to the New South Wales Electrical Enterprise Agreement 2016 in order to implement changes to the employees' remuneration and working conditions. The application was brought before the Fair Work Commission, where the union representing the employees contested the proposed changes. The central legal issues revolved around whether the proposed variations were in accordance with the requirements of the Fair Work Act 2009 and whether the applicant had met the burden of proving that the changes were necessary for economic reasons.

The Commission examined whether the applicant had demonstrated that the changes were necessary to maintain or improve the competitiveness, efficiency, or productivity of the business. It also considered whether the changes were fair and reasonable in the circumstances, taking into account the interests of both the employees and the employer. The Commission noted that the applicant had provided evidence of financial difficulties and a need to reduce costs in order to remain competitive. However, the union argued that the proposed changes would result in significant detriment to the employees and were not necessary to achieve the stated objectives.

After carefully weighing the evidence and arguments presented by both parties, the Commission concluded that the proposed variations were not justified. The Commission found that the applicant had not adequately demonstrated that the changes were necessary to maintain or improve the competitiveness, efficiency, or productivity of the business. Furthermore, the Commission determined that the changes would result in significant detriment to the employees, which outweighed any potential benefits to the employer. Accordingly, the application for variation was dismissed.

The Fair Work Commission ordered that the application for variation of the Downer EDI Engineering Power Pty Ltd NSW Electrical Enterprise Agreement 2016 be dismissed and that no further application be made in relation to the same or substantially similar variations without the prior written approval of the Commission. The Commission also ordered that the applicant pay the union's costs of and incidental to the application, to be agreed upon between the parties or, failing agreement, to be assessed by the Commission.

Downer EDI Engineering Power Pty Ltd

DECISION

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