Downer EDI Works Pty Ltd

[2017] FWCA 4482

[2017] FWCA 4482

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.210—Enterprise agreement

Downer EDI Works Pty Ltd
(AG2017/2464)

DOWNER INFRASTRUCTURE NORTHERN TERRITORY ENTERPRISE AGREEMENT 2016

Building, metal and civil construction industries
DEPUTY PRESIDENT BOOTH	SYDNEY, 29 AUGUST 2017

Application for variation of the Downer Infrastructure Northern Territory Enterprise Agreement 2016.

[1] Downer EDI Works Pty Ltd T/A Downer Australia (Downer) have applied to the Fair Work Commission (the Commission) for the approval of a variation of the Downer Infrastructure Northern Territory Enterprise Agreement 2016 (the Agreement) pursuant to section 210 of the Fair Work Act 2009 (the Act).

[2] The Agreement is a single-enterprise agreement with a nominal expiry of 30 June 2020. The variation to the Agreement was made on 13 June 2016.

[3] Pursuant to the decision approving the Agreement, the Workers Transport Workers’ Union of Australia (TWU) is covered by the Agreement.

[4] The variation seeks to amend reference to parties “bound” by the Agreement, to parties “covered” by the Agreement, insert a definition of the term “Parties”, change a reference to “EBA Committee” to “Parties” and update a reference to the Building Code 2013 to The Code for the Tendering and Performance of Building Work 2016 (the Code).

[5] Sections 210 and 211 of the Act set out the conditions which must be met for an Agreement to be varied by the Commission. S. 210 of the Act provides as follows:

210 Application for the FWC’s approval of a variation of an enterprise agreement

Application for approval

(1) If a variation of an enterprise agreement has been made, a person covered by the agreement must apply to the FWC for approval of the variation.

Material to accompany the application

(2) The application must be accompanied by:

(a) a signed copy of the variation; and

(b) a copy of the agreement as proposed to be varied; and

(c) any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the variation is made; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

Signature requirements

(4) The regulations may prescribe requirements relating to the signing of variations of enterprise agreements.”

[6] Section 211 of the Act states:

211 When FWC must approve a variation of an enterprise agreement

Approval of variation by the FWC

(1) If an application for the approval of a variation of an enterprise agreement is made under section 210, the FWC must approve the variation if:

(a) the FWC is satisfied that had an application been made under section 185 for the approval of the agreement as proposed to be varied, the FWC would have been required to approve the agreement under section 186; and

(b) the FWC is satisfied that the agreement as proposed to be varied would not specify a date as its nominal expiry date which is more than 4 years after the day on which the FWC approved the agreement;

unless the FWC is satisfied that there are serious public interest grounds for not approving the variation.

Note: The FWC may approve a variation under this section with undertakings (see section 212).

Modification of approval requirements

(2) For the purposes of the FWC deciding whether it is satisfied of the matter referred to in paragraph (1)(a), the FWC must:

(a) take into account subsections (3) and (4) and any regulations made for the purposes of subsection (6); and

(b) comply with subsection (5); and

(c) disregard sections 190 and 191 (which deal with the approval of enterprise agreements with undertakings).

(3) The following provisions:

(a) section 180 (which deals with pre-approval steps);

(b) subsection 186(2) (which deals with the FWC’s approval of enterprise agreements);

(c) section 188 (which deals with genuine agreement);

have effect as if:

(d) references in sections 180 and 188 to the proposed enterprise agreement, or the enterprise agreement, were references to the proposed variation, or the variation, of the enterprise agreement (as the case may be); and

(e) references in those provisions to the employees employed at the time who will be covered by the proposed enterprise agreement, or the employees covered by the enterprise agreement, were references to the affected employees for the variation; and

(f) references in section 180 to subsection 181(1) were references to subsection 208(1); and

(g) the words “if the agreement is not a greenfields agreement--” in paragraph 186(2)(a) were omitted; and

(h) paragraph 186(2)(b) were omitted; and

(ha) references in paragraphs 186(2)(c) and (d) to the agreement were references to the enterprise agreement as proposed to be varied; and

(hb) subparagraph 188(a)(ii) were omitted; and

(j) the words “182(1) or (2)” in paragraph 188(b) were omitted and the words “209(1) or (2)” were substituted.

(4) Section 193 (which deals with passing the better off overall test) has effect as if:

(a) the words “that is not a greenfields agreement” in subsection (1) were omitted; and

(b) subsection (3) were omitted; and

(c) the words “the agreement” in subsection (6) were omitted and the words “the variation of the enterprise agreement” were substituted; and

(d) the reference in subsection (6) to section 185 were a reference to section 210.

(5) For the purposes of determining whether an enterprise agreement as proposed to be varied passes the better off overall test, the FWC must disregard any individual flexibility arrangement that has been agreed to by an award covered employee and his or her employer under the flexibility term in the agreement.

Regulations may prescribe additional modifications

(6) The regulations may provide that, for the purposes of the FWC deciding whether it is satisfied of the matter referred to in paragraph (1)(a), specified provisions of this Part have effect with such modifications as are prescribed by the regulations.

[7] Pursuant to section 210(2)(c) and Rule 25(1) of the Fair Work Commission Rules 2013, Downer made a statutory declaration in support of the variation. There was however no statutory declaration made by the TWU. The TWU advised the Commission by way of email that it objected to the variation and wished to be heard on the matter.

[8] Pursuant to section 211 of the Act, in order to approve a variation of an enterprise agreement, the FWC needs to be satisfied that,had an application been made under subsection 182(4) or section 185 of the Act for the approval of the agreement as proposed to be varied, the FWC would have been required to approve the agreement under section 186 of the Act. This requires thatthe variation has been genuinely agreed to by the employees covered by the Agreement, the variation is made in accordance with the Act, and that there are no serious public interest grounds for not approving the variation.

[9] I listed the matter for hearing by telephone on 4 August 2017. The parties were requested to provide any material they wished to rely on at the hearing by 2 August 2017. Downer provided submissions in support of the application. No material was filed by the TWU. At hearing Ms Laura Gordon appeared for Downer and Mr Edward Lawrie appeared on behalf of the TWU.

[10] Downer submitted that it is covered by the Code and that as a result it had conducted a preliminary review of the Agreement to identify clauses which, in its view, did not meet the requirements of the Code. The variation is intended to address the compliance of these clauses with the code.

[11] The TWU submitted that it was not consulted in relation to the variation. In this respect there appears to have been an unfortunate communication breakdown, with Downer attempting to contact the TWU through an email address of an employee who, it is now clear, no longer works at the TWU.

[12] While it was unfortunate that the TWU were not consulted prior to the variation being made, this is not a basis on which I can refuse to approve the variation.

[13] The TWU also submitted that the Agreement may not meet the Better Off Overall Test (BOOT), in light of recent decisions of the Full Bench interpreting the operation of the (BOOT). The BOOT is contained in s 193 of the Act and is modified and imported into the Commission’s consideration of the approval of an Agreement as varied by s. 211(4).

[14] The Agreement was approved by Commissioner Gregory on 18 October 2016. 1 The Form F17 accompanying the application stated that the Asphalt Industry Award 2010 (the Award) was the modern award that covered the employer and any of the employees covered by this agreement.

[15] The approach taken by the Commission in the past has confirmed that if the variation to an agreement is to be approved, the varied agreement must pass the BOOT. The approach is not a comparison between an agreement and an agreement as varied.

[16] In a decision approving a variation to an enterprise agreement Deputy President Gostencnik said:

“If the variation to the Agreement is to be approved by the Commission the varied Agreement must inter alia pass the better off overall test.” 2

[17] The BOOT is not applied as a line by line analysis. It is a global test requiring me to consider the advantages and disadvantages to award covered employees and prospective award covered employees. The application of the BOOT requires me to identify the terms of the Agreement that are more beneficial to employees when compared to the relevant modern award, as well as the terms that are less beneficial and then to conduct an overall assessment of whether an employee would be better off under the Agreement. 

[18] The variations to the Agreement do not impact the Agreement passing the BOOT. As outlined above, the variations relate primarily to correcting references to correct legislative instruments, and making changes to wording which do not, as far as I can see, affect the rights of each award covered employee, and each prospective award covered employee. The TWU made only general and brief submissions in relation to the BOOT and did not point out any provisions of the Agreement that supported their submission.

[19] However because it has been raised as a general proposition I have examined the Agreement as varied against the Award.

[20] The rates of pay provided in the Agreement are substantially higher than the rates of pay in the Award.

[21] It is apparent that the rates of pay in the Agreement are what could be described as “all in” rates with no additional penalty rates for work on weekends. However night work does attract a loading of 35%.

[22] There are no other obvious provisions that appear to offset the high rates of pay in the Agreement.

[23] In this circumstance I consider that the Agreement passes the BOOT.

[24] The TWU also submitted that the Agreement as varied should not be approved as “it was not in the public interest”. Although it was not squarely put, I understand that this argument is put in relation to s. 211(1) on the basis of “serious public interest grounds”.

[25] The basis for the argument made by the TWU in relation to public interest was essentially that the Agreement as varied may not achieve the purpose intended by Downer, being compliance with the Code. In this regard the TWU noted that Downer had not submitted the Agreement to the Australian Building and Construction Commission for assessment prior to the variation being made. The TWU suggested that compliance with the Code would be more efficiently addressed through the negotiation of a new agreement.

[26] However even if it is the case that the Agreement as varied does not achieve its stated purpose, this is not a basis under the Act on which I can refuse to approve it. In any event, the TWU did not submit that the Agreement as varied did not comply with the Code, only that it was not known what the view of the ABCC was in that regard. I do not consider this is a matter that could be classified as a serious public policy ground.

[27] The TWU did not suggest that the variation had not been genuinely agreed to by the employees covered by the Agreement or that the variation was not is made in accordance with the Act.

[28] S. 210(2)(a) requires that an application to the FWC for approval of a variation of an enterprise agreement be accompanied by a signed copy of the variation.

[29] At the hearing I brought to the attention of Downer that what had actually been filed with the application was a signature page to a new version of the Agreement, entitled “Signatures to the Agreement”. This appears to have been in place of the original signature page of the Agreement. I advised Downer that I would require a signed copy of the actual variation to be able to be satisfied that the requirement in s. 210(2)(a) had been met.

[30] Downer has subsequently provided a signed copy of the variation to my chambers.

[31] I am now satisfied that each of the requirements of ss. 210 and 211 of the Act as are relevant to the application for approval of the variation have been met. In particular I do not consider there is any serious public interest ground that would enable me not to approve the variation of the Agreement.

[32] I approve the variation which is attached to the decision as Annexure A. A consolidated version of the agreement, as varied, is also attached to this decision. In accordance with s. 216 of the Act the variation will operate on and from 29 August 2017.

DEPUTY PRESIDENT

Annexure A

 1   [2016] FWCA 7485.

 2   J. Reynolds Holdings Pty. Ltd. T/A John Reynolds Electrics [2014] FWCA 2661.

Printed by authority of the Commonwealth Government Printer

<Price code C, AE421740  PR595674>