Eagle Eyes Group Pty Ltd T/A Eagleyes Security

[2018] FWC 263

[2018] FWC 263

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Eagle Eyes Group Pty Ltd T/A Eagleyes Security
(AG2017/1860)

COMMISSIONER GREGORY MELBOURNE, 12 JANUARY 2018

Application for approval of the Eagle Eyes Group Enterprise Agreement 2017.

Introduction

[1] An application has been made for approval of an enterprise agreement known as the Eagle Eyes Group Enterprise Agreement 2017 (“the Agreement”). The application is made under s.185 of the Fair Work Act 2009 (Cth) (“the Act”) by Eagle Eyes Group Pty Ltd T/A Eagleyes Security (“Eagleyes Security”). It is a single enterprise agreement. The Form F17 Employer’s Statutory Declaration indicates that the business is involved in the provision of security services and, at the time the Agreement was made, there were 10 employees to be covered, who were all employed on either a part-time or casual basis.

[2] The proposed Agreement contains a number of significant differences from the terms and conditions contained in the underlying Security Services Industry Award 2010 1(“the Award”). In particular, it contains what are often described as “rolled up” rates of pay. These are set out in the so–called “Work Pattern Definitions,” which each provide for a specific hourly rate to be paid for work performed at all times, depending on which of the five different work patterns an employee is rostered to work. These arrangements obviously intend to apply in place of the traditional Award wage rate structure based around an ordinary time hourly rate of pay, with additional penalty rates then applying for work performed outside of the ordinary time spread of hours.

[3] The proposed Agreement also contains a number of other provisions which are different from those in the Award. This includes those dealing with part-time work, hours of work more generally, and rostering. In addition, the Agreement does not contain specific provision for the payment of allowances, but looks to deal with this entitlement by referring back to the Award.

[4] The Form F16 indicates that there were no Union bargaining representatives involved in the agreement making process. It also indicates that there were no employee bargaining representatives either, so it can be presumed that the Agreement was not a product of a process of bargaining and negotiation, but was instead developed by Eagleyes Security and presented to its employees for their consideration and, hopefully, approval. However, none of this is intended to imply any criticism of the structure of the proposed Agreement, or the processes involved in having it approved by a majority of the employees to be covered. It is now required to be to be assessed against the relevant statutory requirements.

[5] On 27 June 2017, the Commission received correspondence from the New South Wales Branch of United Voice indicating that while the Union was not a bargaining representative for the Agreement it believed there were a number of issues “….which would prevent it being approved.” 2 The Union also requested copies of the Application and the Employer’s Statutory Declaration, and indicated that it may wish to make further submissions “to assist the Commission when these documents are supplied.”3 It also advised that in foreshadowing the possibility of making submissions it relied on s.590(1) of the Act which provides, in part, that the Commission may “inform itself in relation to any matter before it in such manner as it considers appropriate.”4

[6] The Commission subsequently informed the Applicant’s representative and United Voice that in view of the issues raised by both the Commission and the Union it intended to list the matter for hearing to enable further submissions and evidence to be provided. The Commission also forwarded correspondence to Eagleyes Security’s representative on 20 September 2017 detailing various matters that the Commission sought further clarification about. The issues detailed in that correspondence are set out below:

“National Employment Standards

•  Annual leave – the Security Services Industry Award provides for annual leave to be taken by direction after 8 weeks’ have accrued, whereas the Agreement only requires 4 weeks’ to have been accrued.

•  Is the annual leave loading paid in circumstances where annual leave is cashed out in accordance with sub clause 5.1.7 of the Agreement. Section 94(4) of the Fair Work Act would require to be included in any such payment.

•  Personal leave – under the Agreement the leave entitlement is accrued for each completed 4 week period of service, whereas it accrues progressively under the relevant provisions in the Act.

•  Public holidays – Is sub clause 5.6.2 in the Agreement intended to replicate section 114(3) of the Act, i.e. if the employer requests an employee to work on a public holiday the employee may refuse if the request is not reasonable or the refusal is reasonable.

•  Termination of employment – sub clause 2.2.3 in the Agreement refers to trainees or apprentices. In what circumstances would trainees or apprentices be employed in the security industry?

Other matters

•  The consultation term does not invite employees to provide their views about the impact of changes to the regular roster or ordinary hours of work. Therefore, if the Agreement is approved the model term would be required to be included.

•  What does the reference to “salaried rate” in sub clause 5.1.7 (b) of the Agreement refer to?

•  The Agreement provides for averaging of hours over 8 weeks, whereas the Security Services Industry Award only provides for averaging arrangements to apply over a maximum 4 week period.

•  The Award only allows for 12 hour shifts to be worked in circumstances where certain conditions are in place. These conditions do not apply under the terms of the proposed Agreement.

•  Under the terms of the Agreement it appears that part-time hours can be varied without the agreement of the employee. The only requirement is for any changes to be made in advance of the release of the roster. This appears to be a distinctly different situation to that which applies under the Security Services Industry Award, which requires that part-time hours be agreed upon by the employer and the employee in advance and can then only be varied by Agreement. When hours are worked in excess of those agreed overtime entitlements apply.

•  There does not appear to be a limit on the number of hours that can be worked by a casual employee in any week. Do casual employees have an entitlement to overtime payments under the terms and conditions contained in the proposed Agreement.

•  Does the reference to “reasonable additional hours” in sub clause 4.2.1 refer to hours that are paid as overtime?

•  Sub clause 3.4.1 of the Agreement indicates that all allowances that would apply under the terms of clause 15 of the Security Services industry Award will also apply to employees covered by the terms of the Agreement. However, the Award conditions are not incorporated into the Agreement. This suggests that an undertaking might be required. It is also suggested that the terms of the undertaking should make specific reference to each of the award allowances that might apply, and what the relevant amounts are.

•  Under the terms of sub clause 4.4.1 of the Agreement an unpaid meal break is only available after 6 hours have been worked, whereas it is available after 5 hours have been worked under the Award.

•  There does not appear to be any call back entitlement as provided for in sub clause 21.5 of the Award. Are there any circumstances where employees covered by the terms and conditions contained in the Agreement could be called back to work?

•  There does not appear to be any minimum payment for each part of a split shift as provided for by sub clause 21. 7 of the Award.

•  Rosters are only required to be posted 3 days in advance under sub clause 4.3.3 of the Agreement, whereas the Award provides that they are to be posted 7 days in advance.

•  Sub clause 6.2.3 in the Agreement refers to the deduction of a deposit in respect of a uniform being provided. What is the amount of this deduction?

•  Wage rates – the Commission’s assessment of the wage rate arrangements set out in sub clause 3.2.1(a) and (b) of the Agreement is based on the so-called “Work Pattern Definitions” that apply to each of the 5 different roster patterns. Further explanation is sought in regard to how these are intended to operate. For example, when an employee is first engaged are they told that they will work in accordance with one of those five roster categories? Why does an averaging period of 8 weeks apply? Are casual employees employed on the same basis? What happens if these roster patterns are changed from time to time? In addition, the roster patterns clearly involve a degree of complexity. The Commission’s assessments, in terms of the “better off overall” test, are based on the work pattern definitions being strictly applied in the case of each roster in the manner stated. How can the Commission be satisfied they will be applied correctly in practice?” 5

[7] In the hearing on 22 September 2017 the Applicant’s representative objected to United Voice being heard as it was not a bargaining representative. It was therefore necessary to determine this issue and the Commission subsequently handed down an Interim Decision in [2017] FWC 6036 indicating it had decided, “…based on the particular circumstances involved in this matter, to provide United Voice with the opportunity to be heard in regard to the application on the basis that it might assist the Commission in carrying out its statutory responsibilities, particularly those concerned with the requirements of the “better off overall” test assessment.” 6

[8] Mr Nicholas Arends of ER Strategies was given permission to appear on behalf of Eagleyes Security under s.596(2)(a) as the application involved a degree of complexity and his involvement might enable it to be dealt with more efficiently. Mr Haren Pararajasingham and Mr Michael Vance appeared on behalf of United Voice.

The Issues to be Determined

[9] Section 186(1) of the Act requires the Commission on application for approval of an enterprise agreement to approve the agreement “if the requirement set out in this section and section 187 are met.” 7 Section 186(2), firstly, requires that the Commission must be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement,”8 and, secondly, that “the agreement passes the better off overall test.”9

[10] Section 188 of the Act then deals with when employees can be said to have genuinely agreed to an enterprise agreement. It states:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) sub sections 180(2),(3) and (5) (which deal with pre approval steps);

(ii) sub section 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.” 10

[11] As indicated, s.186(2)(d) 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.” 11

[12] Section 193(6) also provides that the “test time” is the time the application for approval is made under section 185.

[13] It is well established that the application of the “better off overall” test requires the identification of terms and conditions in the proposed Agreement that are more beneficial for the employees, and those which are less beneficial, with an overall assessment then being made about whether the employees would be “better off overall” under the Agreement.

[14] The Full Bench decision in Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo 12 makes clear that the assessment must be carried out in a way that ensures each employee, and each prospective employee, would be “better off overall” under the Agreement. It is not sufficient for the Commission to simply be satisfied that a majority of the employees would be better off. The Full Bench made this clear in the following terms:

“However the application of the BOOT requires satisfaction, as at the test time, that each Award covered employee and each prospective employee would be better off overall under the Agreement.” 13

[15] The Commission is now required to determine whether the relevant statutory requirements have been satisfied in the context of the present application.

The Evidence and Submissions

Eagleyes Security

[16] In the hearing on 22 September 2017, Eagleyes Security made reference to the various matters raised previously by the Commission, which are set out at an earlier point in this decision. It indicated that it now intended to provide further written submissions in response to those matters. It also proposed to provide various undertakings as part of this response. It also intended to provide examples of what it described as “a normal working period,” 14 and “the calculations that are in line with the regular roster,”15 in order to explain how these arrangements are intended to operate so as to satisfy the requirements of the “better off overall” test. It was accordingly agreed that the matter be adjourned to enable these additional submissions and materials to be provided.

[17] They were subsequently provided to the Commission on 25 October 2017. Eagleyes Security, firstly, proposes the following series of undertakings:

“1.3.3 Does this Agreement exclude or modify Award conditions?

Whilst it remains in force, this Agreement shall operate to the exclusion of any other Agreement or Award that may have application to the Employees’ employment now or in the future unless stated otherwise.

2.2.3 When will the Employer not be required to give the above notice of termination?

The period of notice in Part 2.2.1 will not apply in the case of:

(a) Employees terminated for reasons that are serious misconduct;

(b) Casual Employees;

(c) Employees engaged for a specified period or task.

2.2.4 If an Employee provides the Employer with a period of notice of resignation that is more than the required period of notice does an Employer have to accept this longer period?

This clause no longer applies.

3.2.1 (a) The Base Rate of Pay to be paid to all Employees will be as set out below:

FULL-TIME AND PART-TIME EMPLOYEES HOURLY BASE RATES OF PAY*

FROM THE DATE OF APPROVAL OF THE AGREEMENT BY FWC

Job level	Non-rotating day worker	Rotating weekday / weeknight worker	Non-rotating weeknight shift worker	Rotating weekday / weeknight / weekend worker	Rotating Weeknight / weekend worker
EAGLE EYES GROUP LEVEL 1	20.89	23.07	27.02	27.84	31.79
Eagle eyes group level 2	21.50	23.77	27.79	28.17	32.13
Eagle eyes group level 3	23.00	24.97	28.76	30.17	33.06
Security manager	26.05	28.22	31.80	32.56	34.71

*Note that the above Adult base rates of pay must always be equal to or above the modern award base rate as determined by FWC from time to time.

4.1.1 What are the hours of work for a full-time Employee?

(a) The arrangement of hours of work for a full-time Employee will be implemented as follows:

An average of 38 hours per week over an averaging period of up to 8 weeks;

Other than for unpaid breaks, a minimum of 7.6 hours per shift and a maximum of 12 hours per shift can be worked;

All ordinary time worked to be within a span of 12 hours per day;

8 rostered days off per 4 week cycle;

A maximum of 10 consecutive days may be worked with up to 4 rostered days off; and

Broken shifts may be worked with a maximum of one break of more than 1 hour between work periods per day, in which case an additional payment of $13.23 for the shift will be made.

4.1.2 What are the hours of work for a part-time Employee?

(a) The arrangement of hours of work for part-time Employees will be agreed in writing on commencement and implemented as follows:

A minimum of 4 hours per week and a maximum of 37 hours per week over an averaging period of up to 4 weeks;

Other than for unpaid breaks, a minimum of 4 hours per shift and a maximum of 12 hours per shift can be worked;

All ordinary time worked to be within a span of 12 hours per day;

A maximum of 10 consecutive days may be worked with 4 non-working days; and

Broken shifts may be worked with a maximum of one break of more than 1 hour between work periods per day, in which case an additional payment of $13.23 for the shift will be made.

(b) Any agreed variation to the hours of work for a part time Employee will be recorded in writing and is subject to the minimum and maximum hours limitations in (a) above.

(c) Any variation to the agreed hours in writing under part (a) & (b) not made in advance of the release of the roster will be subject to overtime penalties provided

In Part 4.2.3.

4.4.1 When are Employees entitled to an unpaid Meal Break?

All Employees will be allowed an unpaid Meal Break of between 30 and 60 minutes if they work 5 or more consecutive hours in a shift. However, an Employee may elect to forgo the unpaid Meal Break if they are rostered to work up to a maximum of 8 continuous hours, provided that Security Managers are entitled to take their break when the operational requirements of the business demand allow.

5.1.5 Can the Employer make a full-time/part-time Employee take accumulated annual leave?

Yes. After attempting to reach a genuine agreement, the Employer can reasonably require, by providing a minimum of 4 weeks’ notice, a full-time/part-time Employee to take accumulated annual leave if the Employee has accumulated more than 8 weeks leave (10 week if a shift worker) at the time the Employer gives the direction. Provided that the Employer can only direct an Employee to take less than or equal to 4 weeks of the Employee’s accumulated annual leave once in any 3 month period and at no time causing the annual leave balance to be less than 6 weeks.

5.1.6 Are full-time/part-time Employees paid annual leave loading?

Yes. A full-time/ part-time employee receives a 17.5% loading on the non- rotating day worker hourly rate when on annual leave. This leave loading is applicable on any outstanding annual leave paid out upon termination.

5.2.4 How is personal/carer’s leave accumulated?

For each year of service with his or her employer, a permanent full-time employee is entitled to 10 days of paid personal/carer’s leave, or pro rata equivalent for part time employees and an employee’s entitlement to paid personal/carer’s leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.

6.2.3 Can Eagle Eyes Group request a deposit if you are provided a uniform?

Yes, the Employer may deduct a deposit from your wage a sum up to the value of $150, provided that the deposit may by agreement between you and the Employer be paid by you over an agreed number of pay periods.

6.2.5 What will happen if you do not return the uniform?

Eagle Eyes Group may keep the deposit or deduct from any monies owed to you, an amount up to the dollar value for the uniform provided, if the uniform is not returned or not returned in good condition. Fair wear and tear is excepted.” 16

[18] As indicated, the undertakings, firstly, propose to deal with the issues raised by the Commission about the entitlement to annual leave in two separate undertakings. An undertaking is also proposed in response to the issue raised about personal leave entitlements. The reference in sub clause 2.2.3 to trainees and apprentices is also to be removed by an undertaking. The issue about unpaid meal breaks is also dealt with in same way. It would allow for a paid break after five hours, which is in line with the Award entitlement. However, it would also allow an employee to elect to forego an unpaid break for a period of up to eight hours. This could only occur at the employee’s election, but does create the potential for extended periods of time to be worked without a break. The Agreement also does not provide for any additional payment in cases where a split shift is worked. An undertaking is proposed in response, which would create a specific entitlement on such occasions. A further undertaking is also proposed in regard to the provisions dealing with deductions from pay when a uniform is provided. It makes clear that an amount of $150 may be deducted, and this deduction can be made over an agreed number of pay periods.

[19] A further undertaking is proposed in response to the issue raised by the Commission about the payment of allowances. The original wording in the Agreement states at sub clause 3.4.1, “The Employer unless specifically provided elsewhere in the Agreement will pay any applicable allowances contained in Clause 15 of the Security Services Industry Award 2010.” 17 The Commission indicated in response that the Award conditions are not incorporated, and suggested this might need to be dealt with by way of an undertaking. It also suggested that the terms of the undertaking should make specific reference to each of the allowances in the Award that might apply, and what the relevant entitlements are in each case.

[20] The Applicant’s response in its written submission simply states, “Refer to proposed undertaking clause 1.1.3.” 18 The undertaking referred to is actually numbered 1.3.3 and states:

“Does this Agreement exclude or modify Award conditions?

Whilst it remains in force, this Agreement shall operate to the exclusion of any other Agreement or Award that may have application to the Employees’ employment now or in the future unless stated otherwise.” 19

This appears to confirm that the Agreement does not intend to incorporate any of the Award terms, including those dealing with the entitlement to allowances. This is reinforced by sub clause 1.3.3, which states “The provisions of this Agreement completely exclude the award.” 20

[21] In response to the issues raised about the part-time work provisions Eagleyes Security submits that “Clause 4.1.2 (a) offers further flexibility by taking into account changes in rosters at short notice in order to accommodate client demand. In consideration of the variation of agreed hours not made in advance of the roster, overtime penalty rates will apply to the hours worked.” 21

[22] In dealing with the issues raised about rostering, Eagleyes Security relies on its oral submissions in the hearing on 22 September 2017. The issue raised by the Commission relates to the fact that, under the Agreement, rosters are only required to be posted three days in advance, whereas the Award requires they be posted seven days in advance. In addition, the obligation in the Agreement to post three days in advance is qualified by the words “where practicable.” 22 This would in fact appear to actually enable rosters to be changed with little or no notice if it is deemed impracticable to provide the three days’ notice. Eagleyes Security indicated in its oral submissions:

“Now, we contend that due to the nature of the industry rosters are required to be changed at relatively short notice from time to time. The period for notice as agreed by the parties offers flexibility to meet client demand, especially, as I said, within the industry. It’s expected that due to established client relationships hours and patterns of work are reasonably predictable each week. So this clause essentially allows greater flexibility between the parties and I would argue that that should remain as such.” 23

[23] Eagleyes Security again refers to its oral submissions in response to the issue raised about the deduction of a deposit when a uniform is provided. It submits the cost of some items of clothing including, for example, all weather jackets, can be expensive and the deposit is intended to ensure all items are returned. In addition, where the clothing involves a uniform with an embossed logo there is the potential for “….illegal activity and brand image if an ex-employee wears or continues to wear the uniform.” 24 The deduction of a deposit is therefore proposed in response. It can be an amount of up to $150 and can, by agreement, be paid over an agreed number of pay periods. An amount can then be deducted if the uniform is not returned, or is not returned in good condition, noting that fair wear and tear is excepted.

[24] Eagleyes Security, finally, provides the following responses to the issues raised by the Commission about wage rates and the so-called “Work Pattern Definitions.” It states:

“•  The employee is expected to be paid at the rate of pay according to one of the five roster categories worked in accordance with their roster.

•  Averaging up to 8 weeks is applied to offer flexibility, and to effectively manage fluctuations in workload that may be experienced from time to time. The Applicant advised that rosters are generally fixed and predictable. This is according to existing client requirements. The Agreement reflects this arrangement.

•  If roster patterns are changed from time to time employees will be notified accordingly. i.e. consultation clause.

•  Casual employees are expected to be employed on the same basis.

•  Refer to attached assessment.” 25

[25] The “attached assessment” referred to in the last of these dot points makes reference to an extensive series of spreadsheets, which were also provided to the Commission, detailing the actual rosters being worked by the security guards employed by Eagleyes Security at its different client locations.

United Voice

[26] As indicated, United Voice was not a bargaining representative for the Agreement but was given permission to appear in the Interim Decision handed down on 16 November 2017. 26 It then provided a written submission, dated 27 November 2017, but advised at the same time that it did not seek to provide further oral submissions. It also relies on the submissions contained in its earlier correspondence of 27 June 2017.

[27] United Voice refers, firstly, in its written submissions to the rosters set out in the spreadsheets provided by Eagleyes Security. It notes at the outset that seven of those rosters fall outside of the roster arrangements set out in the Work Pattern Definitions in sub clause 3.2.1(a) of the Agreement. This is because each has rostered hours on Saturday and/or Sunday that are in excess of 35% of all time worked, meaning that they do not fit within either of the two Work Pattern Definitions that provide for work to be rostered at the weekends.

[28] It does acknowledge that “rolled up” rates of pay can be accepted if tied to a specific roster, or when sufficient caveats are in place to prevent rostering at times that don’t result in the employees being “better off overall.” However, it submits that the proposed Agreement does not include either of these safeguards.

[29] In addition, because Eagleyes Security has now demonstrated that some employees are working rostered hours that fall outside of the Work Pattern Definitions it is not possible to identify what wage rates apply to those employees because no rates are provided for in the Agreement, other than those associated with the roster arrangements set out in the Work Pattern Definitions.

[30] United Voice also notes that the F17 Employer’s Statutory Declaration states that Eagleyes Security had 10 employees who were to be covered by the proposed Agreement. However, the rosters set out in the spreadsheets indicate there were 36 employees working in the period ending 17 September, 2017. It questions how this discrepancy can be explained.

[31] It also refers to the various undertakings now proposed by Eagleyes Security and submits:

•  The undertaking in relation to sub clause 5.1.6 does not reflect the Award entitlement as it refers only to payment of the leave loading when taking annual leave, whereas the Award provides for either the loading, or the penalties that the employee would have earned had they continued working, to be paid, whichever is the greater amount.

•  It questions whether the explanation provided by Eagleyes Security about the reference to “reasonable additional hours” makes clear there is an entitlement to overtime payments when these hours are worked.

•  No undertaking has been provided which creates an entitlement to the allowances in the Award, despite the suggestion by Eagleyes Security to the contrary.

•  The undertakings about working broken shifts do not provide any minimum engagement requirement for each part of a broken shift, whereas sub clause 21.7 in the Award provides for each part to be a minimum of 3 hours.

•  The undertaking dealing with the deduction of a uniform deposit needs to be considered in conjunction with the requirement for the Commission to be satisfied that the “better off overall” test has been met.

•  United Voice also notes that Eagleyes Security has now proposed 12 separate undertakings in total. It submits that this also requires the Commission to consider whether, in totality, they result in “substantial change” to the proposed Agreement, leaving it in breach of s.190(3)(b) of the Act.

[32] United Voice also raises the following issues about the processes involved in making the Agreement:

•  A summary document was given to employees at the time they were provided with copies of the proposed Agreement. It purported to contain a comparison between the rates in the Agreement and those in the underlying Security Services Industry Award 2010. However, it submits that no such comparison was actually provided. United Voice therefore questions how the Commission is able to conclude that s.180(5) of the Act has been satisfied. It requires that the employer take all reasonable steps to ensure the terms of the Agreement, and the effect of those terms, are explained to the relevant employees. It also requires that the explanation be provided in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees.

•  It also refers to the content of the ballot paper. It, firstly, requires the employees to identify themselves. It also includes the following statement for those voting to approve the Agreement. “I approve the proposed Eagle Eyes Group Enterprise Agreement 2017 which has been fully explained to me and which I have access to a copy of”. 27 It submits that this is potentially in breach of s.181(1) of the Act.

[33] United Voice finally makes reference to the hours of work provisions in the Agreement and submits they are inferior to those in the Award. It points to the reduction in notice of change of shift from seven to three days, or less if not practicable to provide. Its earlier correspondence also makes reference to various additional matters relating to the hours of work provisions. A number of these matters were also raised with Eagleyes Security by the Commission.

Consideration

[34] The statutory framework of bargaining and agreement making is designed to enable employers and employees to put in place working conditions and work arrangements that are best suited to the needs of both the workplace and its employees. Arrangements involving “rolled up” rates of pay, in place of the traditional Award structure of payments, are clearly a legitimate option when looking to tailor arrangements in this way. They can be administratively efficient for the employer in that a single rate of pay applies for all time worked. They can also provide a degree of certainty for employees in that they know that a particular hourly rate will apply for all time worked. However, any such arrangements are also obviously required to satisfy the relevant statutory requirements including, in particular, the requirements of the “better off overall” test.

[35] That assessment in this case is required to be carried out in conjunction with the terms and conditions contained in the underlying Security Services Industry Award 2010. The Commission is also now required to consider the additional undertakings proposed by Eagleyes Security. The Commission has also been provided with detailed examples of rosters, setting out the actual hours being worked by the employees to be covered by the proposed Agreement.

[36] The terms and conditions in the Agreement, even with the additional undertakings, still have some distinct features when compared to the terms and conditions contained in the Security Services Industry Award 2010. Some of the important differences are as follows:

•  Rosters – sub clause 21.12 in the Award provides that rosters, once notified, may not be changed without the payment of overtime unless seven days’ notice has been given, unless the parties have otherwise agreed. However, the Agreement provides for a different approach. It states in sub clause 4.3.3 that “Rosters will be drawn up and where practicable posted 3 days in advance of the commencement of the roster cycle.” 28 Once posted they may then only be changed by mutual agreement. Therefore, Eagleyes Security is required to post rosters three days in advance of the commencement of the roster cycle, where practicable. However, if it is deemed not practicable to comply with this obligation it can vary rosters without notice.

•  Part-time work – this ability to change rosters with little or no notice also needs to be considered in conjunction with the part-time work provisions in the Agreement. Under the Award part-time hours of work have to be agreed on by the employer and the employee in advance, and can then only be varied by agreement. When hours are worked in excess of those agreed then overtime entitlements apply, unless there has been a further agreement to vary those hours. However, under the terms of the Agreement it appears the hours of a part-time employee can be varied without agreement. The only requirement is for any change to be made in advance of the release of the roster. Given that rosters can be varied with little or no notice this creates a far more flexible regime of part-time work than provided for by the Award. Eagleyes Security submits that sub clause 4.1.2(c) is designed to offer “further flexibility by taking into account changes in rosters at short notice in order to accommodate client demand.” 29 The ability to be able to service client needs is not questioned. However, the Commission is also required to have regard to the relevant statutory requirements. In this context it appears that the flexible framework of part-time work provided for by the Agreement has more in common with casual employee work arrangements, and could operate to deny entitlements to overtime that would otherwise apply under the terms of the Award.

•  Split shifts – Eagleyes Security has now provided an undertaking that an additional payment of $13.23 will be paid in circumstances where split shifts are required to be worked. However, the undertaking does not provide for any minimum engagement period for each separate period of duty, whereas the Award provides for a minimum payment of three hours for each period.

•  Annual leave – Eagleyes Security has provided an undertaking that a loading of 17.5% will be paid when annual leave is taken or paid out on termination. However, this is calculated on the lowest rate of pay in the Agreement, being the Non-Rotating Day Work rate. By contrast the Award provides, in sub clause 24.6, for the payment to be the greater of the amount the employee would have earned during the period of leave for working their normal hours, exclusive of overtime, had they not been on leave, or their ordinary time rate, together with any applicable allowances, plus a loading of 17.5%.

•  Allowances – The Agreement states at sub clause 3.4, “The Employer unless specifically provided elsewhere in the Agreement will pay any applicable allowances contained in Clause 15 of the Security Services Industry Award 2010.” 30 However, it also indicates at sub clause 1.3.3, “The provisions of this Agreement completely exclude the award.”31 In previous correspondence with the Applicant’s representative the Commission made reference to these sub clauses and suggested an undertaking might be required to clarify the entitlement to allowances. The Commission also indicated in that correspondence, “It is also suggested that the terms of the undertaking should make specific reference to each of the Award allowances that might apply, and what the relevant amounts are.”32 The Applicant has proposed an undertaking in response in the following terms:

“Does this Agreement exclude or modify Award conditions?

While it remains in force, this Agreement shall operate to the exclusion of any other Agreement or Award that may have application to the Employees’ employment now or in the future unless stated otherwise.” 33

•  position in regard to the entitlement to allowances accordingly remains unclear, given that the Award is not specifically incorporated.

•  Hours of work – Without going into specific details, the Agreement generally contains more flexible conditions about hours of work than the Award. For example, it allows for 12 hour shifts to be worked without the corresponding conditions that the Award requires to be in place before such shifts can be rostered.

[37] I now turn to examine the examples of the roster arrangements provided by Eagleyes Security. As indicated, these are set out in the detailed spreadsheets provided to the Commission. It is understood that they detail the actual rostered hours that are worked by the employees to be covered by the proposed Agreement at each of the different locations where Eagleyes Security provides security services to its clients. They have been provided in response to the issues raised previously by the Commission. They are set out at an earlier point in this decision, but are now restated for the sake of clarity:

•  “Wage rates – the Commission’s assessment of the wage rate arrangements set out in sub clause 3.2.1(a) and (b) of the Agreement is based on the so-called “Work Pattern Definitions” that apply to each of the 5 different roster patterns. Further explanation is sought in regard to how these are intended to operate. For example, when an employee is first engaged are they told that they will work in accordance with one of those five roster categories? Why does an averaging period of 8 weeks apply? Are casual employees employed on the same basis? What happens if these roster patterns are changed from time to time? In addition, the roster patterns clearly involve a degree of complexity. The Commission’s assessments, in terms of the “better off overall” test, are based on the work pattern definitions being strictly applied in the case of each roster in the manner stated. How can the Commission be satisfied they will be applied correctly in practice?” 34

[38] Eagleyes Security responded to this set of questions by indicating:

•  “The employee is expected to be paid at the rate of pay according to one of the five roster categories worked in accordance with their roster.

•  Averaging up to 8 weeks is applied to offer flexibility, and to effectively manage fluctuations in workload that maybe experience from time to time. The Applicant advised that rosters are generally fixed and predictable. This is according to existing client requirements. The agreement reflects this arrangement.

•  If roster patterns are changed from time to time employees will be notified accordingly. i.e. consultation clause.

•  Casual employees are expected to be employed on the same basis.

•  Refer to attached assessment.” 35 (This reference is to the examples of the actual rosters being worked by the employees, which was included with the response provided by Eagleyes Security’s representative.

[39] In examining the rosters the Commission has initially looked at two aspects, in particular. It has looked, firstly, at whether each roster falls into one of the roster patterns, or Work Pattern Definitions, set out in clause 3.2 of the Agreement. This is a critical requirement. If an employee is not working a roster that falls within one of these five defined roster patterns then it is not possible to determine what wage rates are applicable to them because the rates set out in the Agreement are confined to only those five work pattern rosters. No provision is made for any other rates.

[40] The Commission has then looked at whether the rosters that do fall within one of the five Work Pattern Definitions patterns leave the employees “better off overall” when compared to the terms and conditions contained in the Security Services Industry Award 2010.

[41] After examining the rosters in detail the first thing that can be said is that a significant number of them do not fit within any of the five Work Pattern Definitions in sub clause 3.2.1(a) of the Agreement. This is primarily because the amount of time that is being rostered on either Saturday or Sunday is greater than the maximum percentage that is allowed by either of the two Work Pattern Definitions that provide for work to be performed on those days. These are the “Rotating Weekday/Weeknight/Weekend Worker” work pattern definition, which provides for not more than 25% of the total hours worked to be worked on Saturday or Sunday, or the “Rotating Weeknight/Weekend Worker” work pattern definition, which provides for no more than 35% of the total hours worked to be worked on the weekend.

[42] The rosters contained in the spreadsheets that have been identified as not fitting into any one of the five Work Pattern Definitions are set out below. (The names of the client businesses at which they are being worked have been redacted to maintain confidentiality.)

● Roster 2 for Guards A, C, E, G, I & L of whom all work the same roster.

○ Employee works weekends, weekdays and weeknights with 28.57% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 2 for Guards B, D, F, H, J & M of whom all work the same roster.

○ Employee works weekends, weekdays and weeknights with 28.57% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard A JB Hi Fi Traralgon

○ Employee works weekends, weekdays and weeknights with 27.19% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard A JB Hi Fi Bendigo

○ Employee works weekdays and weekends with 65.08% of their hours are worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard C JB Hi Fi Shepparton

○ Employee works on weekdays and weekends with 28.57% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard E JB Hi Fi Craigieburn

○ Employee works weekends, weekdays and weeknights with 26.31% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard G JB Hi Fi Thomastown

○ Employee works weekends, weekdays and weeknights with 48.27% of their hours are worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard H JB Hi Fi Frankston

○ Employee works weekends, weekdays and weeknights with 47% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 4 – Guard I JB Hi Fi Cranbourne

○ Employee works weekends, weekdays and weeknights with 40.96% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 5 – Guard A

○ Employee works weekends, weekdays and weeknights with 41.10% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 6 – Guard A JB Hi Fi Albury

○ Employee works weekends, weekdays and weeknights with 39.84% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 6 – Guard B JB Hi Fi Port Macquarie

○ Employee works weekends, weekdays and weeknights with 31.48% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 6 – Guard D JB Hi Fi Bathurst

○ Employee works weekends, weekdays and weeknights with 57.14% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

● Roster 7 – Guard A Night Patrol Run

○ Employee works weekdays and weeknights with 94.54% on weeknights and only 4.54% on weekdays. This roster does not come within any of the Roster Pattern Definitions.

● Roster 7 – Guard B Night Patrol Run

○ Employee works weekends, weekdays and weeknights with 50% of their hours worked on the weekend. This roster does not come within any of the Roster Pattern Definitions.

[43] The fact that a significant number of the roster examples do not fit within the prescribed Work Pattern Definitions is a critical concern in terms of the present application. I am satisfied, in fact, that it acts to prevent the Agreement from being approved. A number of things can be highlighted in this context. Firstly, the Work Pattern Definitions are the fundamental component of the structure of the Agreement. They impose limits on when work can be performed in order to demonstrate and enable compliance with the “better off overall” test. They are the only means by which an employee can be employed and rostered under the Agreement. As the Commission has indicated in its previous correspondence to Eagleyes Security, “The Commission’s assessments, in terms of the “better off overall” test, are based on the Work Pattern Definitions being strictly applied in the case of each roster in the manner stated. How can the Commission be satisfied they will be applied correctly in practice?” 36 Despite these concerns Eagleyes Security has demonstrated in the materials it has provided that it is not rostering all of its employees within the limits imposed by these Work Pattern Definitions.

[44] It also means that the Commission is unable to carry out the “better off overall” test assessment for these employees working rosters that do not fit within one of the five Work Pattern Definitions because it is impossible to discern what rates apply to them. The Agreement requires that all employees be engaged in accordance with one of the five Work Pattern Definitions. Therefore, if an employee is not rostered in accordance with these arrangements then it is impossible to ascertain what rates apply to them.

[45] However, if these employees are being paid in accordance with the rates set out in one of the Work Pattern Definitions then I am also satisfied that it can reasonably be concluded that when those rates are compared with those in the Security Services Industry Award 2010 then they would almost certainly fail the “better off overall” test because they are working additional hours on Saturday and Sunday, being the times that the Award provides for the additional penalty rates of time and a half and double time.

[46] The Commission has also analysed the rosters that do fall into one of the roster patterns in clause 3.2 of the Agreement. In terms of carrying out the “better off overall” assessment it has taken into account the penalty rates that would otherwise apply under clause 22 of the Award and the annual leave loading entitlements at clause 24.6 of the Award. A number of the rosters do appear to satisfy the test based on this analysis. However, in some cases the differences are very small, meaning that they might not satisfy the test, given some of the other differences between the Agreement and the Award that have been identified previously. In addition, it appears that under the Roster 1 – Patrol – Guard D roster employees would not be “better off overall.” The details of this assessment are set out below This again mitigates against the Agreement being approved.

Roster 1 – BP Patrol – Guard D

This roster appears to fall into the Rotating Weeknight/Weekend Worker roster pattern, as only 34.8% of hours are rostered on the weekend, with the rest being performed at night.

However, when this roster is considered in the light of the penalty rate entitlements provided for in clause 22 of the Award and the annual leave loading entitlement sub clause 24, it would appear that the employees would not be “better off overall.” This is demonstrated by the following calculations:

Agreement Ordinary Rate	$32.00	Award Ordinary Rate	$21.15
Hours	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	46	100%	$1,472.00	Weekday 6am to 6pm	0	100%	$0.00
$0.00	Night Span	0	121.7%	$0.00
$0.00	Permanent Night Span	30	130%	$824.85
$0.00	Saturday	0	150%	$0.00
$0.00	Sunday	16	200%	$676.80
$0.00	Public holiday	0	250%	$0.00
$0.00	$0.00
$0.00	$0.00
$0.00	$0.00
Allowances	Amount	Value	Allowances	Amount	Value
Allowance	$0.00	Allowance	$0.00
Allowance	$0.00	Allowance	$0.00
Allowance	$0.00	Allowance	$0.00
Annual Leave	Yes	$113.23	Annual Leave	Yes	$115.51
Leave Loading	Yes	$13.79	Leave Loading	Yes	$0.00
Totals	46.00	Hrs	$1,599.02	Totals	46.00	Hrs	$1,617.16
Agreement Total Weekly Rate			$1,599.02
Award Total Weekly Rate			$1,617.16
Dollar / Actual Percentage Difference			-$18.14
			1.12%
Agreement Percentage Increase Required			1.13%

[47] It is also noted in conclusion that Eagleyes Security has now proposed 14 separate undertakings in seeking to have the Agreement approved. While some of these deal with relatively minor matters, in totality they clearly could be considered to represent “substantial change” to the Agreement that was voted on and approved by the employees. This raises an issue about whether they are able to be accepted, given the provisions contained in s.190(3)(b) of the Act. However, given the decision I have come to in this matter it is not necessary to deal definitively with this issue.

Conclusion

[48] As indicated already I am not satisfied that the Agreement can be approved. The materials provided indicate Eagleyes Security is not rostering employees in accordance with the limitations contained in the Work Pattern Definitions in the Agreement. It is accordingly not possible to identify rates under the Agreement that apply to these employees. In addition, if those employees are being paid in accordance with one of the rates contained in the Work Pattern Definitions then the amount of time they are working on Saturday and/or Sunday inevitably means that they would not be “better off overall” when compared with the entitlements that would otherwise be due to them under the Award.

[49] In addition, there has also been at least one roster identified that does fall within a Work Pattern Definitions in the Agreement, but does not satisfy the “better off overall” test when the rates provided for under that roster are compared with the entitlements in the Award.

[50] There are also a number of other conditions in the Agreement which would leave employees worse off when compared to those in the Award. In this context I refer particularly to the part-time work provisions, the change of roster arrangements, and the entitlements relating to split shifts, annual leave, and the payment of allowances. I am also unable to identify other conditions in the Agreement that are more beneficial and might act to offset these less beneficial provisions.

[51] I am not satisfied, in conclusion, that each employee to be covered by the proposed Agreement would be “better off overall” when the terms and conditions contained in the Agreement are compared with those in the Security Services Industry award 2010. It follows that the Agreement cannot be approved. The application must therefore be dismissed.

COMMISSIONER

Appearances:

H Lewis and N Arends for the Applicant.

H Pararajasingham and M Vance for United Voice.

Hearing details:

2017.

Melbourne (by telephone):

September 22.

 1   MA000016.

 2   Letter from United Voice – New South Wales Branch to Fair Work Commission, dated 27 June 2017, at page 1.

 3   Ibid at page 2.

 4   Fair Work Act 2009 (Cth) s 590(1).

 5   Correspondence from Fair Work Commission to Applicant, dated 20 September 2017.

 6   Application by Eagle Eyes Group Pty Ltd T/A Eagleyes Security [2017] FWC 6036 at [21].

 7   Fair Work Act 2009 (Cth) s 186(1).

 8   Fair Work Act 2009 (Cth) s 186(2)(a).

 9   Fair Work Act 2009 (Cth) s 186(2)(b).

 10   Fair Work Act 2009 (Cth)s 188.

 11   Fair Work Act 2009 (Cth) s 193.

 12   [2016] FWCFB 2887.

 13 Ibid at [15].

 14   Transcript at PN132.

 15   Transcript at PN132.

 16   Undertakings from Applicant, received 25 October 2017.

 17   Proposed Eagle Eyes Group Enterprise Agreement 2017 at cl 3.4.1.

 18   Email correspondence from Applicant, dated 25 October 2017.

 19   Undertakings from Applicant, received 25 October 2017, at page 1.

 20   Proposed Eagle Eyes Group Enterprise Agreement 2017 at cl 1.3.3.

 21   Email correspondence from Applicant, received 25 October 2017.

 22   Proposed Eagle Eyes Group Enterprise Agreement 2017 at cl 4.3.3.

 23   Transcript at PN60.

 24   Transcript at PN67.

 25   Email correspondence from Applicant, received 25 October 2017.

 26   [2017] FWC 6036.

 27 Submissions of United Voice, dated 27 November, at [23].

 28   Proposed Eagle Eyes Group Enterprise Agreement 2017 at cl 4.3.3.

 29   Email correspondence from Applicant, received 25 October 2017.

 30   Proposed Eagle Eyes Group Enterprise Agreement 2017 at cl 3.4.1.

 31   Ibid at cl 1.3.3.

 32   Email correspondence from Fair Work Commission to Applicant, dated 20 September 2017.

 33   Undertakings from Applicant, received 25 October 2017, at page 1.

 34   Email correspondence from Fair Work Commission to Applicant, dated 20 September 2017.

 35   Email correspondence from Applicant, received 25 October 2017.

 36   Email correspondence from Fair Work Commission to Applicant, dated 20 September 2017.

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