ES Randle & Co Pty Ltd

[2023] FWC 3076

[2023] FWC 3076

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

ES Randle & Co Pty Ltd

(AG2023/3004)

COMMISSIONER MCKINNON SYDNEY, 23 NOVEMBER 2023

Application for approval of the ES Randle & Co Enterprise Agreement 2023

1. ES Randle & Co Pty Ltd (ES Randle) has applied for approval of a single enterprise agreement known as the ES Randle & Co Enterprise Agreement 2023 (the Agreement) under s.185 of the Fair Work Act 2009 (the Act). The Agreement is intended to replace the ES Randle & Co Pty Ltd – Certified Agreement 2004 (existing Agreement) which nominally expired on 1 September 2007 and which, if not replaced, will sunset on 6 December 2023.[1]

1. On the materials, it appears that the Construction, Forestry, Maritime, Mining and Energy Union (the Union) was a bargaining representative for the Agreement because it had at least one member who was employed by ES Randle at the time the Agreement was made. ES Randle has indicated that it may take issue with the Union’s status as a bargaining representative having regard to the scope of the Union’s rules. A further opportunity will be provided to ES Randle to confirm its position in the matter after the issue of this Decision.

1. In the meantime, ES Randle did not object to the Union being heard in relation to whether the Agreement can be approved. The Union was allowed to participate in the hearing of the application and objected to approval of the Agreement on the basis that it will not leave employees better off overall than if the Ports, Harbours and Enclosed Water Vessels Award 2020 (the Award) applied to their employment.

The better off overall test

1. The Agreement applies to casual employees (linesmen, general purpose hands, deck hands and masters) engaged in the mooring and unmooring of vessels in and around the Port of Brisbane. While the coverage clause in the Agreement is expressed broadly, ES Randle submits that the Agreement covers all of its casual employees and there is no evidence to the contrary. These employees are operationally distinct because they are the group of employees who perform mooring and unmooring duties. Other employees in the business predominantly undertake administrative, managerial or supervisory work.

1. The established but irregular pattern of work in the business, and one which is likely to continue for the foreseeable future, relies on vessels arriving at the Port on all days and nights of the week, including weekends. Most vessels arrive between Monday to Friday, and usually arrivals are known 24 hours in advance. Employees are employed on a casual basis and if rostered, work on the basis of a minimum 3 hour ‘Callout’ in connection with the arrival or departure of the vessel.

1. A 3‑hour Callout can be the totality of the engagement for an employee. It involves working on the mooring or unmooring of the vessel, known as a “Job”. If another vessel arrives at port during the same Callout and the same employees are asked to attend to that vessel too, work on the second vessel is classed as a separate Job. About 30% of shifts worked by employees involve multiple jobs. The remainder involve employees working a single job per Callout, which can be at any time, including on the weekend and at night.

1. Similar to piece work arrangements, employees are paid ‘per Job’ with a minimum payment of 3 hours per Callout. An additional 2 hours pay is paid for the second and subsequent Jobs, or employees are paid for time worked if that amount is greater. An employee may be asked to start a new Job after the end of the 3‑hour Callout, or to perform more than one type of duties during their Callout. This triggers a second Callout (and so a minimum engagement of 6 hours on that day). On average, a Job takes 38 minutes. If employees are also required to perform “Hose Connection Duties”, the minimum Callout (and payment) is 4 hours, not 3.

1. The primary matter in dispute is whether the rates of pay in the Agreement are sufficient to compensate for the absence of other modern award entitlements including a minimum 2 days rostered off each week, breaks during the working day, and various allowances. ES Randle is confident that employees will be better off overall under the Agreement because of how employees are paid for their time, as well as more beneficial long service leave entitlements. 17 of the 18 employees covered by the Agreement voted unanimously to approve the Agreement. Of those, 6 employees have since signed a statement in support of the Agreement for my information.

1. The Union submits that rates of pay in the Agreement are either equivalent to the Award (during the day, Monday to Friday) or lower (at nights, on weekends and on public holidays). The parties are at odds in relation to how the Award regulates ordinary hours of work for casual employees. The Union submits that ordinary hours can only be performed from Monday to Friday, 6.00am to 6.00pm and that all work outside of these parameters, or in excess of 8 hours per day, is overtime and paid accordingly, including with a casual loading.

1. ES Randle submits that casual employees can work ordinary hours on weekends and public holidays, and that rates of pay for this work are prescribed in Schedule A to the Award. In dollar terms, ES Randle’s position departs from the Union position only in relation to whether casual loading is added to those rates. It says the loading does not apply to ordinary hours of work performed by casual employees on weekends and public holidays.

1. Clause 12.2 of the Award is headed “Span of Hours”. It provides that “ordinary hours may be worked between 6.00am and 6.00pm for up to 8 hours per day, Monday to Friday, inclusive.”

1. Clause 11 of the Award deals with casual employees. Under clause 11.1, “for each ordinary hour worked, a casual employee must be paid…the ordinary hourly rate” for their classification and “a loading of 25% of the ordinary hourly rate”. The casual loading “incorporates the casual employee’s entitlements to annual leave, annual leave loading and any other rates and allowances contained in this award except overtime and shiftwork rates”. Clause 11.2 provides that “when a casual employee works overtime, they must be paid the overtime rates in clause 18.2.” Clause 11.4 provides for a minimum engagement of 3 hours for casual employees for each occasion they are required to attend work.

1. “Ordinary hourly rate” is defined in clause 2 to mean “the hourly rate for the employee’s classification specified in clause 14 – Minimum rates, plus any allowances specified as being included in the employee’s ordinary hourly rate or payable for all purposes.” The same term is separately defined in Schedule A to the Award to mean “the minimum hourly rate of pay for an employee plus any allowance payable for all purposes to which the employee is entitled. Where an allowance is payable for all purposes in accordance with clause 16.2(a), this forms part of the employee’s ordinary hourly rate and must be added to the minimum hourly rate prior to calculating penalties and overtime.” There are only two “all-purpose” allowances in clause 16.2(a), both related to towing.

1. Clause 18 to the Award is headed “Overtime and penalty rates”. Under clause 18.1, “overtime is payable to employees for any time worked outside of ordinary hours on a Monday to Friday (except a public holiday). Clause 18.2 provides that employees will be paid “the following rates” for overtime worked Monday to Friday; work on a Saturday or on a Sunday; or work on a public holiday.” The use of the semi-colons in this clause suggests that there is a distinction between overtime and weekend/public holiday work, although the table in clause 18.2 of the Award makes no such distinction. It describes weekend and public holiday work as “overtime”. The loadings prescribed by the table include a casual loading for such work.

1. Clause 25 of the Award provides for payment at 250% of the ordinary hourly rate with a minimum 4 hours’ work when an employee is required to work a public holiday.

1. Schedule A to the Award contains rates of pay tables, which purport to be summaries of the Award hourly rates of pay “including overtime and penalty rates”. The tables include weekend penalty rates for casual employees, which are exclusive of casual loading. In other words, the rates prescribed by Schedule A are 25% lower than the rates prescribed by clause 18.2 of the Award for casual work on weekends and public holidays.

1. The Award does not, in terms, provide for the working of ordinary hours on weekends. This appears to be a departure from the terms of the previous modern award[2], which provided in clause 20 for “penalty rates for ordinary hours worked on weekends and public holidays”.[3] There is also an apparent inconsistency in the Award in its treatment of casual rates of pay for weekend and public holiday work. While the substantive terms of the Award apply the casual loading to such work, the tables in Schedule A - Summary of Hourly Rates of Pay do not. Further, the penalty prescribed by clause 18.2 for work on public holidays is different to the penalty prescribed for the same purpose by clause 25. In each case, the penalty is described as a percentage of the “ordinary hourly rate”. But the former includes a 25% casual loading, while the latter does not.

1. What rates, then, do apply for the purposes of determining whether casual employees will be better off overall under the Agreement? I will proceed on the basis that it is the penalties set out in clause 18.2 of the Award. These are the rates that are described as applying to overtime (work on Monday to Friday between 6pm and 6am or in excess of 8 hours per day); weekend work; and work on public holidays. In proceeding on this basis, I note the Union’s reference to the observations of the Full Bench in connection with the 4 yearly review of modern awards – Overtime for casuals[4], which did not determine the question of whether ordinary hours can be worked on weekends under the Award.

1. In relation to shift work, the Award does not specify ordinary hours of work for shiftworkers. Clause 19 deals with shift work but only in a limited way. Shift work rates and overtime rates are intended to be mutually exclusive despite the overlap in circumstances in which they might apply (on a literal reading of the Award, any work on afternoon shift (per clause 19.1) would be work outside the span of ordinary hours (per clause 12) and thus also overtime (per clause 18)). I prefer the view that work of this kind could be either shift work or overtime, depending on the context. I have assumed, for the purposes of the better off overall test, that employees covered by the Agreement sometimes work shift work under the Agreement.

1. Adopting these assumptions, the starting point is that minimum rates of pay in the Agreement are the same as the Award during the week and when shift work is performed, and lower than the modern award rates of pay for work on weekends and public holidays. The method of remuneration is such that despite starting at or below the Award, their patterns of work mean that employees will generally be better off overall if they work a mix of shifts during both the week and on weekends. For approximately 30% of shifts, employees will earn significantly more under the Agreement than the Award because a 3‑hour minimum engagement under the Award will attract payment of at least 5 hours' pay under the Agreement. The calculations provided by both ES Randle and the Union demonstrate that for the reasonably foreseeable working patterns in the business, employees are likely to earn more under the Agreement than if the Award applied to their employment.

1. However, I am concerned that two classes of employees will not be better off overall under the Agreement than the Award: employees whose working hours fall mostly on weekends, and employees for whom the majority of Callouts either start, or finish, or fall, between the hours of 11.00pm and 6.00am.

1. For employees who only (or mostly) work on weekends, hourly rates of pay under the Agreement are lower than comparable Award rates of pay because they assume that the casual loading does not apply (but see paragraph [18] above). There is no guarantee that employees will work sufficient Jobs per Callout to ensure that their earnings each week are above the Award. The indication that 70% of Callouts involve a single Job tends against the proposition.

1. Secondly, employees who undertake single Job Callouts (with or without Hose Connection Duties) that start, finish, or fall between the hours of 11.00pm and 6.00am may not be better off overall under the Agreement. For these employees, rates of pay in the Agreement (other than for work on weekends) are equivalent to the Award. In addition to payment for the shift, however, the Award provides a transport allowance for such work in clause 16.3(g), either in the form of conveyance to or from home as appropriate, or payment for time spent travelling of between 30‑ and 60‑minutes, or a cents per kilometre reimbursement if by arrangement with the employer they use their own vehicle. While the ‘per Job’ payment arrangement in the Agreement will usually leave employees better off overall, this may not be the case for employees whose availability or opportunity for work is mostly limited to late night and/or early morning work.

1. For these reasons, I am not satisfied that each employee concerned will be better off overall under the Agreement than the Award. An undertaking can be given to address the concern if that is a course that ES Randle wishes to take. For example, an undertaking could be given to undertake a periodic reconciliation of wages for the group affected, having regard to the observations of the Full Bench of the Commission in Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery[5] (‘Beechworth’), including that such terms should:

   1. permit employees to receive entitlements that are more (as opposed to merely equivalent) to the Award,
   2. create an enforceable right to payment of any shortfall identified when the reconciliation is conducted,
   3. specify when any such adjustment in wages will be paid, and
   4. require that reconciliation occur frequently, relative to the obligation to pay wages.

Genuine Agreement

1. There is also a concern about whether employees can be said to have genuinely agreed to the Agreement, in connection with how the terms of the Agreement and their effect were explained to employees. Two aspects of the explanation give rise to this concern, and are apparent from the document provided to employees titled Comparison of employment terms – Explanatory document for the proposed ES Randle & Co Enterprise Agreement 2023.

1. Firstly, on page 2 of the table in this document, there is a row dealing with “8. Rates of pay”. Under the heading “Comparison with the Award”, the table says:

“The hourly rates under the Proposed Agreement are consistent with the minimum rates of pay in the Award.”

1. Proceeding on the basis that the observations of the Full Bench referred to at paragraph [18] above were correct, the explanation given to employees was not correct. The hourly rates of pay under the Proposed Agreement are not consistent with the minimum rates of pay in the Award for work on weekends and public holidays.

1. Secondly, and also on page 2 of the table, there is a row dealing with “9. Calculation of pay – minimum guarantee plus piece rate per Job.” Under the heading “Comparison with the Award”, the table says:

“Under the Award, employees are simply paid for the amount of time they work according to an hourly rate of pay.”

1. This statement is inaccurate to the extent that it fails to acknowledge the effect of clause 11.4 of the Award, which provides for a minimum engagement for casual employees of 3 hours’ work.

1. Given the errors in the content of the explanation, I am not presently satisfied that the Agreement has been genuinely agreed to by the employees. Undertakings may be capable of addressing the concern depending on their terms. Alternatively, ES Randle may make submissions about whether the terms of former section 188(2)(a) of the Act apply in the circumstances.

Other approval requirements

1. I am otherwise satisfied that the Agreement meets the requirements for approval of an enterprise agreement set out in ss. 186, 187 and 188 of the Act as are relevant to this application.

Next steps

1. By 4.00pm on Tuesday, 28 November 2023, ES Randle is to:

1. advise whether it wishes to be heard on the question of whether the Union was a bargaining representative for the Agreement, and

2. file any undertakings or further submissions to address the concerns identified above.

1. If relevant, and by 4.00pm on Thursday, 30 November 2023, the Union is to:

1. file a short submission setting out its view in relation to any undertaking(s) or further submissions from ES Randle in relation to the Agreement. 

COMMISSIONER

Appearances:

J Evans of Minter Ellison on behalf of the applicant.
L Edmonds for the Construction, Forestry, Maritime, Mining and Energy Union.

Hearing details:

2023.

Sydney (by video):
October 30.

Final written submissions:

November 14.

[1] Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Sch.3 (item 20A).

[2] Ports, Harbours and Enclosed Water Vessels Award 2010, clause 20.

[3] 4 yearly review of modern awards – Overtime for casuals [2020] FWCFB 4350 at [203].

[4] [2020] FWCFB 4350 at [206].

[5] [2017] FWCFB 1664.

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