e2o Pty Ltd
[2024] FWCA 494
•2 FEBRUARY 2024
| [2024] FWCA 494 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.218A - application to vary an agreement to correct or amend errors, defects or irregularities
e2o Pty Ltd
(AG2024/60)
WAITSIA GAS PLANT PROJECT STAGE 2 ENTERPRISE AGREEMENT
| Oil and gas industry | |
| DEPUTY PRESIDENT O’KEEFFE | PERTH, 2 FEBRUARY 2024 |
Application for variation of the Waitsia Gas Plant Project Stage 2 Enterprise Agreement
E2O Pty Ltd (the Applicant), has applied under s 218A of the Fair Work Act 2009 (the Act) for the Commission to correct or amend an obvious error said to be in the Waitsia Gas Plant Stage 2 Enterprise Agreement (the Agreement).
Section 218A of the Act provides:
Variation of enterprise agreements to correct or amend errors, defects or irregularities
(1) The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form).
(2) The FWC may vary an enterprise agreement under subsection (1):
(a) on its own initiative; or
(b) on application by any of the following:
(i)one or more of the employers covered by the agreement;
(ii) an employee covered by the agreement; or
(iii) an employee organisation covered by the agreement.
(3) If the FWC varies an enterprise agreement under subsection (1), the variation operates from the day specified in the decision to vary the agreement.
Clause 2 of the Agreement states in part that the Agreement covers E2O Pty Ltd. As an employer covered by an enterprise agreement may apply for the Commission to vary an enterprise agreement under s 218A(2)(b) of the Act, the Applicant has standing to make the application.
As Deputy President Gostencnik observed in Metropolitan Memorial Parks Land Manager:
“Before the power conferred by s 218A may be exercised, an obvious error, defect or irregularity (whether in substance or form) must be identified. The error, defect or irregularity must be obvious in the sense that the error, defect or irregularity is easily perceived or understood, or is clear, self-evident, or apparent. A consideration of whether an error, defect or irregularity is obvious is not confined to the text of the agreement. An error, defect or irregularity may not be obvious on the face of the text of an agreement, but the error, defect or irregularity becomes clear or is easily understood when context or surrounding circumstances are examined. Once the error, defect or irregularity is identified, and the Commission is satisfied the error, defect or irregularity is obvious, the Commission has a discretion to vary the enterprise agreement. The power to vary should only be exercised to the extent necessary to remove the error, defect or irregularity.”[1]
The Applicant submits that the error in the Agreement is found in clause 44.1(a) of the Agreement, which states as follows:
“An Employee is entitled to ten (10) paid days of personal leave for each year of continuous service. An employee’s entitlement to paid personal leave accrues progressively during a year of continuous service in accordance with the Employees Ordinary Hours (equivalent to approximately 1.3846 hours for each completed week of continuous service).”
The Applicant contends that the figure of 1.3846 hours is incorrect and that the correct figure is 1.4615 hours. Clause 29(a) of the Agreement provides that the ordinary hours of work of an employee are 38 per week. As such, at the end of a 52-week period, an employee should have 76 hours of personal leave accrued, being the equivalent of ten days of pay. If an employee was to accrue personal leave at the rate of 1.3846 hours per week, at the end of a 52-week period they would have accrued 72 hours of personal leave. If the employee instead accrued personal leave at the rate of 1.4615 hours per week, at the end of the 52-week period they would have 76 hours of annual leave accrued, being the correct figure. As such, I am satisfied that the figure of 1.3846 is an error and should be corrected.
On consideration of the variation sought by the Applicant, I was also concerned that if the wording of the clause were amended to substitute 1.4615 hours for 1.3846 hours, there would still be an error in the clause. The Agreement makes provision for part time employees in clause 15 and the intention is that a part time employee should receive a pro-rata benefit for entitlements. However, clause 44.1(a) does not specify that the benefit of 1.3846 hours applies to full time employees, but merely “an employee”.
As such, I proposed that the clause be varied to read as follows, with amendments shown in bold type:
“An Employee is entitled to ten (10) paid days of personal leave for each year of continuous service. An employee’s entitlement to paid personal leave accrues progressively during a year of continuous service in accordance with the Employees Ordinary Hours (equivalent to approximately 1.4615 hours for each completed week of continuous service for an employee engaged for 38 hours per week).”
I sought the views of the Applicant and the bargaining representatives for the Agreement regarding the variation sought by the Applicant and my additional variation. The Applicant indicated its support for the additional variation I had proposed, and those bargaining representatives who responded by the nominated date for submissions supported both variations.
While s 218A of the Act does not specify what factors should be considered in the exercise of a discretion to vary an enterprise agreement, I am satisfied that an error has been identified, and the variations as set out in paragraph 7 above will correct that error. An order giving effect to those variations will be issued.
DEPUTY PRESIDENT
[1] Metropolitan Memorial Parks Land Manager [2023] FWCA 4374 at [6].
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