FBIS International Protective Services (Aust) Pty Ltd T/A FBIS

[2012] FWA 10043

[2012] FWA 10043

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

FBIS International Protective Services (Aust) Pty Ltd T/A FBIS
(AG2012/10484)

COMMISSIONER BISSETT MELBOURNE, 29 NOVEMBER 2012

FBIS International Protective Services (Aust) Collective Agreement 2012 - 2016.

[1] FBIS International Protective Services (Aust) Pty Ltd T/A FBIS (FBIS) has made an application for approval of the FBIS International Protective Services (Aust) Collective Agreement 2012 - 2016 (the Agreement). The application was lodged with Fair Work Australia (FWA) on 16 August 2012. The Agreement will cover employees of FBIS working in the security industry. The relevant award applying to the employees is the Security Services Industry Award 2012 (the Award).

[2] The Maritime Union of Australia (MUA) is a bargaining representative for the Agreement. On 23 August 2012 the MUA lodged a Form F18 (Declaration of Employee Organisation) in which it indicated that it did not consider the Agreement met the better off overall test as required under the Fair Work Act 2009 (the Act).

[3] A hearing was held with respect to the Agreement on 6 September 2012. On 18 September 2012, at my request, FBIS provided a roster for a specific group of employees working at TT-Line. On 25 September 2012 the MUA provided written submissions with respect to public holidays.

[4] On 28 September 2012 I provided written advice to FBIS and the MUA (and other bargaining representatives) indicating my view with respect to whether or not the Agreement would pass the better off overall test (the BOOT) and undertakings I considered may assist in this respect.

[5] On 4 October 2012 the MUA provided rosters for employees at TT-Line which were different to those provided by FBIS. Further information was sought from the MUA with respect to the rosters to enable an analysis to be undertaken to determine if employees working on that roster would be better off overall when compared to the Award. This information was provided on 17 October 2012.

[6] On 18 October 2012 a further notice of listing for a hearing of the Agreement application on 29 October 2012 was sent to FBIS, the MUA and other bargaining representatives. On 24 October 2012 FBIS sought an adjournment of the hearing date for one week to enable it to further consider the undertakings sought. On 25 October 2012 I emailed the parties to advise them of the matters I required them to address at the hearing. I granted the adjournment sought, conditional upon receiving a commitment from both FBIS and the MUA that they would meet in the week beginning 29 October 2012 and come to some understanding as to the rosters that applied to TT-Line employees and that following the meeting my chambers would be advised of those rosters or alternatively agreed undertakings. The hearing was re-scheduled to 7 November 2012.

[7] Following the hearing on 7 November 2012 final written submissions were made by FBIS and the MUA.

Provisions in excess of the Award

[8] It is agreed that the Agreement provides the following provisions which are in excess of the conditions contained within the Award:

• Superannuation contributions;



• Payment whilst on leave for shiftworkers at the composite rate;



• Improvement in allowances;



• Additional allowances.

Areas of concern

[9] Concerns with the Agreement raised in correspondence and hearings on the Agreement have centred around five key areas:

• Overtime payments for employees working part-time



• Shiftwork rosters



• Payment for shiftworkers who work in excess of the 42 rostered hours per week



• Employees at TT-Line operations in Davenport



• Payment for public holidays.

Overtime payment for employees working part time

[10] The Agreement provides the following with respect to part-time employees:

2.2.4 Part-Time Employment

2.2.4.1 A part-time Employee is an Employee who:

(a) is engaged on an on-going basis to work fewer than 38 ordinary hours per week or, where the Company operates a roster, an average of fewer than 38 hours per week over the roster cycle;

(b) has reasonably predictable hours of work; and

(c) receives, on a pro rata basis, equivalent pay and conditions to those of full-time Employees who do the same kind of work

[11] It may not be clear from this clause if part-time employees are entitled to overtime payments after working their ordinary hours which are 38 hours per week (or an average of 38 hours).

[12] An undertaking to the effect that overtime is payable to such employees for any hours additional to their ordinary hours was sought from FBIS.

[13] FBIS has indicated it is prepared to give such an undertaking. The MUA supports the undertaking.

Shiftwork rosters

[14] The Agreement states, with respect to rosters:

2.3 ROSTERS

2.3.1 Subject to the provisions of this clause, full-time, part-time, and fixed term Employees, shall, by a legible notice displayed in a place accessible to such Employees, be notified of the commencing and ceasing times of ordinary hours of work rostered by the Company no later than one week prior to the operative date of such roster or any subsequent operative date as a result of an amendment thereto.

[15] The Agreement covers both shiftworkers and non-shiftworkers. The majority of the shiftworkers currently work a 4 on - 4 off 12 hour shift pattern - that is they work four days on followed by four days off with each shift being 12 hours long. This averages at a 42 hour week. The rates of pay for shiftworkers are contained in Schedule C to the Agreement. This provides an hourly rate of pay for all hours worked. This rate of pay incorporates relevant payment for annual leave loading, allowances whilst on leave, loadings for overtime and shiftwork and penalty rates.

[16] From the analysis undertaken for the purpose of the BOOT it appears that this group of employees may not be better off overall if they work additional hours in excess of the 42 rostered hours per week.

[17] The MUA submits that the employees were not provided with a roster at the time they voted for the Agreement and hence could not know the roster to which the rates of pay would apply. In addition it says that the operation of clause 2.3.1 allows for the roster to be changed with one week’s notice and that such a change could result in employees not being better off overall under the Agreement.

[18] I had previously indicated to FBIS my concern with respect to the capacity to alter the roster and the effect this may have on employees.

[19] FBIS indicated during the first hearing of the application that employees working shiftwork have been working the 4 on - 4 off roster for many years and, whilst the roster may not have been produced to employees specifically at the time they voted on the Agreement, they were well aware of the roster that operated.

[20] In addition, FBIS is prepared to give an undertaking to the effect that:

(a) Subject to (b) below, the existing 12 hour, 4 on - 4 off roster shall apply for the life of the Agreement at all FBIS sites where the roster is currently being worked.

(b) In the event that there is a need to change the 12 hour, 4 on - 4 off roster at any site, no other roster of work will be worked under the terms of the Agreement unless the roster of work would pass the Better Off Overall Test (BOOT). To pass the BOOT in accordance with this undertaking an employee who works a different roster under the terms of the Agreement to the roster referred to in (a) above must be better off than if the roster of work was worked under the terms of the Security Services Industry Award 2010. 1

[21] The MUA has indicated that it does not oppose the proposed undertaking except that any change in the roster should be undertaken in accordance with clause 6 of the Agreement (which deals with consultation).

Payment for hours in addition to 42 rostered hours for shiftworkers

[22] In undertaking an analysis of the Agreement for the purposes of the BOOT it became apparent that shiftworkers working hours in excess of their average 42 hours per week may not be better off under the Agreement when compared to the Award.

[23] FBIS has indicated that it is prepared to give an undertaking to the effect that

Any employee who works any hours in addition to their rostered 42 hours per week average shall be paid at the applicable rate contained in Schedule B to the Agreement, plus all applicable penalties, loadings and overtime payable under clause 3.5 of the Agreement for all such additional hours worked. 2

[24] The MUA submits that the undertaking should be in the following terms:

Any employee who works more than 42 hours per week shall be paid the applicable rate contained in Schedule B of the Agreement, plus all applicable penalties, loadings and overtime payable under clause 3.5 of the Agreement for all such additional hours worked. 3

[25] Schedule B of the Agreement provides rates of pay for non-shiftwork employees. These rates are equivalent to the Award rates plus 3.5%. The penalties in clause 3.5 of the Agreement are penalties payable for shiftwork and overtime.

TT-Line operations

[26] Some employees of FBIS covered by the Agreement work at TT-Line in Melbourne and in Devonport. The employees in Melbourne work the 12 hour 4 on-4 off roster described above and will be affected by undertakings that may be given with respect to employees on such arrangements.

[27] The employees working at the TT-Line operations in Devonport do not work the 12 hour 4 on - 4 off shift arrangement. This is because there is not enough work to support such an arrangement.

[28] Both FBIS and the MUA have provided various shift rosters actually worked by the employees at Devonport. Despite repeated requests I have not been provided with any on-going agreed roster for Devonport.

[29] On the roster provided by FBIS it would seem that, under the rates of pay in Schedule C of the Agreement, the employees would be better off overall.

[30] On the roster provided by the MUA some employees would be better off overall whilst others would not be. The determination of whether an employee would be better off overall under the Agreement compared to the Award is highly dependent on the shifts actually worked. An employee predominantly working weekday shifts would be better off overall whilst an employee working weekday and weekend shifts would not. This is because of the variation in penalties paid across a full week under the Award and the inclusion of these in the rate paid for all hours worked in the Agreement. The analysis undertaken by Fair Work Australia (FWA) indicates that, depending on the shift, employees can be anywhere between 30% worse off and 75% better off under the Agreement compared to the Award.

[31] FBIS says that the actual rosters worked by the employees at Devonport are based on the individual preferences of employees.

[32] The MUA says that the requirement of the Act with respect to the BOOT is that

An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if FWA 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. 4

[33] With respect to the Devonport TT-Line operations employees the MUA says that because no roster can be provided it is not possible for me to be satisfied that each award covered employee will be better off overall. For this reason it submits that I cannot be satisfied the Agreement passes the BOOT.

[34] FBIS has proposed that the issue of TT-Line operations employees be dealt with via an undertaking in the following form:

That the Agreement will not operate in a manner that would allow FBIS employees working on the TT-Line operations in Devonport, Tasmania and Station Pier, Melbourne to receive any less in terms of entitlements than they would receive under the Security Services Industry Award 2010. 5

[35] On the alternative FBIS proposes that the undertaking provide that the rostering arrangements in the Agreement not operate in a manner such that the FBIS employees at the TT-Line operations in Devonport would receive lesser in entitlements than they would under the Award. Alternatively FBIS is prepared to give an undertaking that FBIS employees at the TT-Line operations in Devonport will be paid in accordance with Schedule B of the Agreement and any applicable penalties in clause 3.5 of the Agreement.

[36] The MUA submits that an undertaking is deficient if it does not result in employees being better off overall as required by the Act.

Public holidays

[37] In calculating the all in rate payable to shiftworkers (set out in Schedule C to the Agreement) FBIS calculated that, over a year, employees work on average seven public holidays. There is no express provision in the Agreement for payment for public holidays in excess of the seven factored into the pay rate.

[38] FBIS says that if an employee does not work on a particular public holiday there is no payment made for that day.

[39] The National Employment Standards (NES) provides for public holidays in s.115(1) of the Act. Section 115(1)(a) specifies eight public holidays and s.115(1)(b) provides for additional public holidays declared or prescribed under a State or Territory law as a public holiday. The Act also provides for substitute days.

[40] Section 116 of the Act states:

116 Payment for absence on public holiday

If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay forthe employee’s ordinary hours of work on the day or part-day.

Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.

[41] The MUA says that FBIS employees covered by the Agreement are employed across all states and territories. The number of public holidays across all states and territories varies between 13 (South Australia) and 10 (NSW, Tasmania and Western Australia). Further, it says that the Act provides that employees should be paid for public holidays whether they are worked or not. The Agreement does not provide for such payment.

[42] The MUA submits that, by not providing for payment for public holidays in excess of seven per annum (incorporated into the rate of pay) and by not providing for payment to employees absent from employment on public holidays the Agreement excludes provisions of the NES, contrary to the Act. The Act states:

55 Interaction between the National Employment Standards and a modern award or enterprise agreement

National Employment Standards must not be excluded

(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.

[43] The MUA refers to the decision of O’Callaghan SDP in Hull-Moody Finishes Pty Ltd 6 in support of its contention that the exclusion of payment for all public holidays is a breach of the NES.

[44] In Hull-Moodie the Senior Deputy President, after setting out the provisions of s.116 of the Act, found that:

[34] The agreement provides that employees are entitled to public holidays but does not provide specific payment for those holidays, on the basis that those payments are again included in the hourly rate. Again, I do not consider that this provision is consistent with the National Employment Standard.

[45] The MUA says that this finding was not considered in the Full Bench in Warren, Hull-Moody Finishes Pty Ltd & Sidotti 7 which overturned the Senior Deputy President’s decision.

[46] Finally the MUA submits that the Award provides, at clause 29, that where a system of rostered days off has been implemented and a rostered day off falls on a public holiday the next working day is taken in substitution for the rostered day off. The Award anticipates that the rostering of days off may result in a public holiday falling on an employee’s day off hence providing for a substitute day. This clause, the MUA submits, puts the note in s.116 of the Act in context.

[47] The MUA therefore submits that FBIS should be required to provide an undertaking that that it will pay its employees for all public holidays occurring annually in the state or territory in which the employee works.

[48] FBIS submits that the note following s.116 of the Act makes it clear that if you are not rostered to work you are not entitled to payment for a public holiday. It submits that the note can be considered as part of the Act in accordance with s.13(1) of the Acts Interpretation Act 1901 (Cth) (the AI Act). Alternatively it says that, if the note does not form part of the Act in accordance with s.13(1) of the AI Act it constitutes extrinsic material in accordance with s.15AB of the AI Act and can be called on to assist in interpreting the intent of s.116 of the Act.

[49] Further, FBIS submits that its interpretation of s.116 of the Act is consistent with the Explanatory Memorandum to the Fair Work Bill 2008 (the Explanatory Memorandum) at paragraphs 460-461.

[50] With respect to the decision in Hull-Moody FBIS submits that whilst the decision was overturned by a Full Bench on the grounds that the Senior Deputy President was wrong with respect to annual leave, by analogy, this reasoning can be extended to public holidays. Hence no reliance can be placed on the decision at first instance.

[51] FBIS rejects that the Agreement excludes the operation of the NES in whole or in part.

Consideration

[52] Provisions relating to the approval of enterprise agreements by FWA are set out in Subdivision B of Part 4 of the Act. As is relevant to the facts in this case FWA must be satisfied that the terms of the Agreement do not contravene the NES and that the Agreement passes the BOOT. 8 The Act does however allow an Agreement to be approved with undertakings:

190 FWA may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under section 185; and

(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.

Undertakings

(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

FWA must seek views of bargaining representatives

(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.

Signature requirements

(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.

[53] It is necessary for me to consider each of the matters outlined above and determine if they contravene the NES and/or would result in the Agreement not passing the BOOT and, if so, if the matter can be overcome by undertakings in accordance with the Act.

[54] To the extent that those matters may result in the Agreement not passing the BOOT, FBIS has provided possible undertakings that it says will ensure that the Agreement does pass the BOOT. The MUA has commented on these proposed undertakings. No other bargaining representatives have commented on the proposed undertakings.

[55] The full submissions of both FBIS and the MUA have been considered in reaching my conclusions with respect to the Agreement.

[56] I have set out below my consideration and proposals to resolve the difficulties I find with the Agreement in respect to each of the matters raised.

Part-time employees

[57] I am prepared to accept an undertaking from FBIS in the form that:

Part-time employees employed pursuant to clause 2.2.4 will receive overtime payments for any hours worked in addition to their ordinary hours of work.

[58] Such an undertaking, in conjunction with other proposed undertakings, will ensure that part-time employees are better off overall under the terms of the Agreement compared to the Award.

Shiftwork rosters

[59] I am satisfied that, in voting for the Agreement, employees were aware of their roster (the same roster has been worked for many years) and that a failure to provide the roster to employees at the time they made the Agreement is not a fatal flaw to the making of the Agreement. Employees were provided with the written text of the Agreement and there is nothing to suggest they were not provided with any other material incorporated by reference in the Agreement. 9 There are no grounds on which it could be concluded that the Agreement was not genuinely made.10 The roster is not incorporated into the Agreement.

[60] It is true however that an assessment of whether the Agreement passes the BOOT must be done on the basis of a roster. The provisions of the Agreement that enable the roster to be altered with one week’s notice may mean that at the time the Agreement is approved it passes the BOOT but two weeks later, due to a roster change, it no longer does so. I accept the submissions of FBIS that it is not its intent to alter the roster but it does need to be able to respond to the demands of clients.

[61] FBIS has proposed an undertaking to deal with this issue. The MUA supports the undertaking but has indicated that any change in rosters should be undertaken in accordance with clause 6 of the Agreement. Clause 6 of the Agreement deals with consultation regarding major workplace change (clause 6.1) and dispute resolution (clause 6.2).

[62] It is my view that clause 6 of the Agreement operates such that any change that effects hours of work and how they are arranged must be subject to consultation. A change in rosters under clause 2.3.1 would constitute a change in program such that the provisions of clause 6.1 would apply. For this reason I do not see a need to include a reference to any changes in the roster being progressed in accordance with clause 6 of the Agreement.

[63] As to the wording of the undertaking proposed by FBIS I am of the view that it requires some slight adjustments but only to ensure that there is no confusion.

[64] An undertaking in the following form would satisfy me that employees covered by the Agreement who work the 12 hour 4 on - 4 off roster would, in conjunction with other undertakings I require as set out in this decision, be better off overall under the Agreement compared to the Award:

(a) Subject to (b) below, the existing 12 hour, 4 on - 4 off roster shall apply for the life of the Agreement at all FBIS sites where the roster is currently being worked.

(b) In the event that there is a need to change the 12 hour, 4 on - 4 off roster at any site, any employee who works the changed roster as opposed to the roster referred to in (a) above must be better off on the changed roster than if the roster of work was worked under the terms of the Security Services Industry Award 2010.

Payment for hours in addition to 42 rostered hours for shiftworkers

[65] I am satisfied that employees working the 12 hour 4 on - 4 off roster, under the terms of the Agreement as submitted for approval, may not be better off overall under the Agreement when compared to the Award when they work hours in addition to the rostered shift. The analysis undertaken by FWA suggests that where an employee working the 12 hour 4 on - 4 off roster works an additional hour of work over the roster they will be worse off if that time is worked on a Sunday when they are not otherwise rostered to work or when the time is worked immediately upon the completion of a shift. The employee would be marginally better off if the overtime is for no more than one hour and is worked on a Monday - Saturday when the employee is not otherwise rostered to work but not better off overall for any time worked beyond one hour.

[66] FBIS has proposed an undertaking. The MUA suggests some changes to the proposed undertaking.

[67] Considering the pattern of hours worked by employees I am prepared to accept an undertaking in the following form:

Any employee who works any hours in addition to their rostered hours shall be paid at the applicable rate contained in schedule B to the Agreement, plus all applicable penalties, loading and overtime payments under clause 3.5 of the Agreement for all such additional hours.

TT-Line operations

[68] It is of concern to me that neither FBIS nor the MUA could provide to me an agreed copy of the roster at the TT-Line operations in Devonport. Without knowledge of working patterns it is impossible to undertake an assessment of the Agreement as required by the Act. It is a requirement of the Act that each award covered employee and prospective award covered employee must be better off overall if I am to determine that the Agreement meets the BOOT.

[69] It would appear, on the submissions made during the hearing, that the rosters actually worked by individuals are worked to suit the individuals and I infer from this that the patterns of work have developed over time and that the rosters actually worked may well not be the rosters that would be developed if the hours and days of work were spread equitably amongst the required workforce. This means that a consideration of the rosters actually worked by individuals may not be a true reflection or provide an accurate assessment for the purposes of the BOOT. That is, it is as if the rosters as provided to FWA reflect shift swaps taken by employees to arrange hours to meet their individual needs. The unpicking of the private arrangements from the true rosters does not appear possible.

[70] There is no disagreement between the parties that this matter can be resolved by way of an undertaking.

[71] I have considered the various forms of undertaking proposed by FBIS. I have also considered the submission of FBIS that it is prepared to tailor the proposed undertaking to deal with the rates only 11 (that is exclude the improvements in superannuation and allowances from such an assessment). I am prepared to accept an undertaking in the following form to overcome this issue identified with the Agreement:

The rostering arrangements for FBIS employees working on the TT-Line operations in Devonport Tasmania will not operate in such a way that employees will receive less for the roster worked than they would receive if the roster was worked in accordance with the terms of the Security Services Industry Award 2010.

[72] Such an undertaking will not adversely affect the ability of FBIS to consult employees and their representatives in any new roster proposal.

[73] I accept that employees covered by the Agreement will receive improved benefits in other conditions including superannuation and allowances. These improvements in conjunction with this undertaking will ensure that these employees are better off overall.

Public holidays

[74] The fist issue to decide is if provisions of the Agreement exclude the NES with respect to public holidays. I am satisfied that if the NES is excluded the Agreement cannot be approved in its current form.

[75] Section 186 of the Act requires that FWA must approve an agreement if FWA is satisfied that the requirements of that section and s.187 of the Act are met. Section 186(2) requires that FWA must be satisfied that the terms of the agreement do not contravene s.55 of the Act. Section 55 requires that the agreement not exclude any provisions of the NES. If the agreement operates to exclude the NES the agreement cannot be approved.

[76] With respect to public holidays the NES states:

114 Entitlement to be absent from employment on public holiday

Employee entitled to be absent on public holiday

(1) An employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.

Reasonable requests to work on public holidays

(2) However, an employer may request an employee to work on a public holiday if the request is reasonable.

(3) If an employer requests an employee to work on a public holiday, the employee may refuse the request if:

(a) the request is not reasonable; or

(b) the refusal is reasonable.

(4) In determining whether a request, or a refusal of a request, to work on a public holiday is reasonable,the following must be taken into account:

(a) the nature of the employer’s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee;

(b) the employee’s personal circumstances, including family responsibilities;

(c) whether the employee could reasonably expect that the employer might request work on the public holiday;

(d) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday;

(e) the type of employment of the employee (for example, whether full-time, part-time, casual or shiftwork);

(f) the amount of notice in advance of the public holiday given by the employer when making the request;

(g) in relation to the refusal of a request—the amount of notice in advance of the public holiday given by the employee when refusing the request;

(h) any other relevant matter.

115 Meaning of public holiday

The public holidays

(1) The following are public holidays:

(a) each of these days:

(i) 1 January (New Year’s Day);

(ii) 26 January (Australia Day);

(iii) Good Friday;

(iv) Easter Monday;

(v) 25 April (Anzac Day);

(vi) the Queen’s birthday holiday (on the day on which it is celebrated in a State or Territory or a region of a State or Territory);

(vii) 25 December (Christmas Day);

(viii) 26 December (Boxing Day);

(b) any other day, or part-day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday, other than a day or part-day, or a kind of day or part-day, that is excluded by the regulations from counting as a public holiday.

Substituted public holidays under State or Territory laws

(2) If, under (or in accordance with a procedure under) a law of a State or Territory, a day or part-day is substituted for a day or part-day that would otherwise be a public holiday because of subsection (1), then the substituted day or part-day is the public holiday.

Substituted public holidays under modern awards and enterprise agreements

(3) A modern award or enterprise agreement may include terms providing for an employer and employee to agree on the substitution of a day or part-day for a day or part-day that would otherwise be a public holiday because of subsection (1) or (2).

Substituted public holidays for award/agreement free employees

(4) An employer and an award/agreement free employee may agree on the substitution of a day or part-day for a day or part-day that would otherwise be a public holiday because of subsection (1) or (2).

Note: This Act does not exclude State and Territory laws that deal with the declaration, prescription or substitution of public holidays, but it does exclude State and Territory laws that relate to the rights and obligations of an employee or employer in relation to public holidays (see paragraph 27(2)(j)).

116 Payment for absence on public holiday

If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay forthe employee’s ordinary hours of work on the day or part-day.

Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.

[77] The plain wording of s.114 and s.116 indicates that an employee is entitled to be absent on a public holiday and that the employer is required to pay the employee at the base rate of pay for that day.

[78] Sub-sections 114(2)-(4) establish circumstances under which it may be reasonable for an employer to require an employee to work on a public holiday. Consideration of reasonableness includes the type of employment and the payment made for such work.

[79] In this case the relevant work is shiftwork (there are some non-shiftworkers covered by the Agreement). This work is carried out 24 hours a day on every day of the year. A payment for working seven public holidays is incorporated into the rate of pay for shiftworkers in the Agreement (Schedule C) on the basis that this is the average number of public holidays worked by shiftworkers.

[80] Each party referred me to the decision on Hull-Moodie the appeal decision in Warren in support of its respective argument. I have considered these decisions closely. I do not consider either of these decisions provide any guidance as to how I should approach the issues in this Agreement. The primary area of consideration in Hull-Moodie, and therefore in the appeal, dealt with the effect of the pay arrangements in that agreement on leave that was or could be taken by employees. The effect of the agreement being considered by the Senior Deputy President and the Full Bench was that an employee was entitled to leave and public holidays but would not be paid for such time away from the workplace. After considering in detail provisions relating to annual leave and personal leave the Senior Deputy President then finds:

[34] The agreement provides that employees are entitled to public holidays but does not provide specific payment for those holidays, on the basis that those payments are again included in the hourly rate. Again, I do not consider that this provision is consistent with the National Employment Standard.

[81] There is nothing in the Agreement subject to this decision that suggests an employee not required to attend for work on a public holiday who would otherwise be rostered to work would not receive pay for such an absence. In this respect I find no assistance to the submissions of FBIS or the MUA in the decision of the Senior Deputy President. For the same reason I do not consider the appeal decision in Warren of assistance.

[82] The next issue to consider is whether employees who are not rostered to work on a public holiday are entitled, under the NES, to compensation for that public holiday. FBIS says the note appearing under s.116 of the Act makes it clear that an employee who does not have ordinary hours on the public holiday is not entitled to payment and therefore FBIS shiftworkers who are not rostered to work on the public holiday are not entitled to any payment for that day. The MUA says I cannot take notice of the note and that it does not form part of the legislation. The MUA are correct that the note following section 116 of the Act does not form part of the Act. 12 It is, however, not necessary for me to consider the note any further.

[83] Section 116 is clear that if a person is absent in accordance with the Division the employer must pay the employee. A shiftworker who is not rostered to work on a particular day is not absent in accordance with the Division but rather is absent in accordance with his or her work roster. The absence is not caused by or attributable to the public holiday. The absence is caused by the roster the employee is required to work. The public holidays have no effect on the requirement to attend or not to attend work at any.

[84] The compensation for the requirement to work on a public holiday is set out in the Award. This penalty amount has been incorporated into the rate of pay in Schedule C as if the employee was required to work seven public holidays per annum. Further compensation for shiftworkers is found in an additional weeks’ annual leave which is also replicated in the Agreement.

[85] For these reasons I am not convinced by the MUA’s submission that the Agreement excludes the NES. There is nothing in the Agreement to this effect.

[86] For completeness of this part of the issue I reject the submissions of the MUA in respect to RDOs falling on public holidays. The arrangement of RDOs is not under consideration in this matter. Shiftworkers do not have rostered days off.

[87] The second matter to decide with respect to public holidays is if the Agreement passes the BOOT. FBIS says that on average employees work seven public holidays per annum. It has built penalty rates that would otherwise be payable for working such number of public holidays into the calculation of the rate paid to shiftwork employees under the Agreement. If FBIS is correct and employees work, on average, seven public holidays then there is no basis for concern. Should an employee work more than seven public holidays in any year it may be that this has an adverse effect on the employee when compared to the Award. This is not however a clear cut assessment as there are other improvements over the Award provided for in the Agreement, including improved superannuation entitlements of one half of one percent from the commencement date of the Agreement rising to one per cent in 2015.

[88] To overcome any concern however I am prepared to accept an undertaking from FBIS that, should an employee work more than seven public holidays in any year (taken from the commencement date of the Agreement), they shall assess if the employee remains better off overall compared to the Award and if the employee otherwise would not be better off overall, compensate the employee for working the additional public holidays over the seven compensated for in the Agreement rates.

Conclusion

[89] This decision requires that FBIS provide a number of undertakings in respect of the Agreement. FBIS is required to provide these undertakings within 14 days of the date of this decision.

[90] A further decision will be issued with respect to the Agreement at the conclusion of 14 days.

[91] Either FBIS or the MUA or other bargaining representatives is at liberty to apply to have the matter relisted within the 14 day period to consider the form of the undertakings.

COMMISSIONER

Appearances:

T Lawrence, solicitor, with J Christmas of FBIS.

A Jacka and J Campbell of The Maritime Union of Australia.

Hearing details:

2012.

Melbourne and Sydney:

September 6, November 7.

Final written submissions:

Applicant, 20 November 2012.

The Maritime Union of Australia, 15 November 2012.

 1   Exhibit FBIS 1.

 2   Exhibit FBIS 1.

 3   MUA submission, 15 November 2012.

 4   Section 193(1) of the Act.

 5   Exhibit FBIS 1.

 6   [2011] FWA 5618.

 7   [2011] FWAFB 6709, per Watson VP and Hamberger SDP, Cambridge C dissenting (29 November 2011).

 8   s.186(2)(c) & (d).

 9   s.180(2).

 10   See s.186(2)(b)(i) and s.188.

 11   Transcript PN107-110.

 12   See ss. 13(3) Acts Interpretation Act 1901 (Cth).

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