Feenix NSW Pty Ltd ATF Feenix NSW Family Trust T/A Feenix Pty Ltd

[2019] FWCA 2620

[2019] FWCA 2620

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Feenix NSW Pty Ltd ATF Feenix NSW Family Trust T/A Feenix Pty Ltd
(AG2018/5638)

FEENIX ENTERPRISE AGREEMENT 2018 - 2022

Building, metal and civil construction industries
DEPUTY PRESIDENT KOVACIC	CANBERRA, 16 APRIL 2019

Application for approval of the Feenix Enterprise Agreement 2018 - 2022.

[1] An application was made on 8 October 2018 for approval of an enterprise agreement known as the Feenix Enterprise Agreement 2018-2022 (the Agreement). The application was made by Feenix NSW ATF Feenix Family Trust Pty Ltd T/A Feenix Pty Ltd (Feenix) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] On 16 October 2018 the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) sent an email to the Fair Work Commission (the Commission) stating that it was a bargaining representative for the Agreement, that it wished to be heard in respect of the application and requesting a copy of the documentation submitted by Feenix in relation to this application. The requested material was provided to the CFMMEU later that day. On 23 October 2018 the CFMMEU advised the Commission that it was not a bargaining representative for the Agreement, reiterated its desire to be heard in respect of the application and requested that the Commission exercise the discretion available to it under s.590 of the Act to allow it to be heard.

[3] On 8 January 2019 the Commission sought Feenix’s views on the CFMMEU’s request to be heard. Feenix responded on 24 January 2019 objecting to the CFMMEU’s request on the basis that it was not a bargaining representative and had not had a presence in its business or with its employees in previous enterprise bargaining negotiations.

[4] On 11 February 2019 the Commission’s Agreements Team sent the following email to Feenix and the CFMMEU setting out the Commission’s preliminary views regarding the Agreement.

“I refer to our previous correspondence and confirm the Deputy President has further considered the Application in light of the submissions provided to date.

Concerns raised by the CFMMEU

The Deputy President has considered the submissions provided to date and has indicated that he would like to hear from the CFMMEU in relation to the Application in accordance with their request. Accordingly, the CFMMEU is invited to provide any written submissions it may wish to make regarding the Agreement (including the issues identified by the Deputy President as set out below) by close of business on Monday 18 February 2019. Those written submissions should be copied to the Applicant.

Preliminary issues identified regarding the Agreement:

After considering the Agreement, the Deputy President has identified the following:

Explanation of agreement (q 2.6 of F17)

The Deputy President has considered the response provided at question 2.6 of the Form F17 and seeks further information in relation to the steps taken to explain the terms and effect of the agreement to employees. When providing your response you are invited to provide a revised Form F17. The Deputy President also seeks a copy of the ‘summary document’ which was provided to employees.

Shift worker definition

The Deputy President notes that the definition of a shiftworker contained under the Agreement is different to the definition provided under the Building and Construction General On-Site Award (‘the Award’) and that in some circumstances employees who meet the Award definition may not be entitled to the additional week of annual leave due to not meeting the definition outlined under the Agreement. You are invited to provide an undertaking in order to address this concern.

Less beneficial terms (q 3.5 of F17)

In relation to question 3.5 of the Form F17 it is noted that the employer has not listed all the less beneficial terms which we identified upon a preliminary assessment of the Agreement. The Deputy President invites you to provide a revised Form F17 which lists the less beneficial terms contained the Agreement. The Deputy President further asks that you provide an explanation as to how these less beneficial terms were explained to employees – you may wish to address this aspect at question 2.6 of the Form F17.

BOOT Assessment based on Award considered as being incorporated:

Award Incorporation

Clause 4.2 states ‘this Agreement is intended to be interpreted in conjunction with, and is complementary to the Building and Construction General On-Site Award (the Award).’ We have interpreted this to mean that the Award is incorporated and subsequently the better off overall test has been assessed based on this assumption. Please see the issues identified below.

Hours of work/overtime

Clause 8.1 states that employees may start at 5am. The clause states that this is in accordance with clause 33.1a (viii) of the Award however the Award has a starting span of 7am (or 6am by mutual agreement). As a result it appears that under the Agreement employees may work from 5am with no entitlement to overtime penalties. Modelling suggests part time and casual employees may not be better off if they regularly work between 5am and 6am without payment of overtime. You are invited to provide undertakings in relation to this concern.

50 hour week model

Level 4 – Workshop employees

A 50 hour week model has been conducted on the basis of Level 4 employees receiving a productivity allowance of $3.00 per hour based on the allowance in Appendix 1 of the Agreement. Modelling suggests that if these employees do not receive crib time, meal allowance or fares allowance where entitled in accordance with the Award, they do not appear better off under the agreement. We note these employees also do not appear entitled to the fares allowance in Appendix 1 as this appears payable only to on-site employees. Given this classification has the highest wage differential to the Award, all other classifications that are workshop employees would not appear better off without these allowances. You are invited to provide undertakings/and or submission in relations to this.

Apprentices

The agreement covers apprentices (clause 6.1.1) however clause 6.1.6 states that Apprentices shall be engaged in accordance with clause 15 of the Award. The agreement does not provide any further information as to Apprentice rates or entitlements, other than that they receive a productivity allowance of $1.50 per hour for each hour worked (Appendix 1 (2). Apprentices may also be entitled to fares and travel patterns allowance if they are working on-site (Appendix 1 (1)).

Modelling has been conducted based on a 50 hour week model with Adult Apprentices being paid at Award rates with the productivity allowance and fares and travel allowance being payable. Employees do not appear better off under the agreement if not receiving crib, meal or fares allowances where applicable. You are invited to provide undertakings/and or submission in relations to this.

BOOT Assessment based on Award considered as not being incorporated - additional concerns

If the Award is not incorporated, it does not appear that employees may be further impacted by the following:

The agreement is silent on:

•  Overtime for work outside agreed hours (see cl 13.3 (b) of the Award and the overtime provision at clause 36.2 of the Award);

•  Modern Award Shift penalties;

•  All other relevant Modern Award allowances which employees may ordinarily be entitled to such as multistorey allowance.

Could you please address the concerns outlined above by providing undertakings and/or submissions where necessary. The Deputy President also seeks clarification as to whether the Award is incorporated by clause 4.2 of the Agreement.

Undertakings

If undertakings are to be provided, please ensure that they are:

•  signed in accordance with regulation 2.07 of the Fair Work Regulations 2009 which provides that an undertaking must be signed by each employer who gives the undertaking.

The Commission may only accept an undertaking if it is satisfied that the undertaking is not likely to cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement (s.190(3) of the Fair Work Act 2009 (Cth)(the Act)).

The Commission must not accept an undertaking unless it has sought the views of each person who the Commission knows is a bargaining representative for the agreement (s.190(4) of the Act). Therefore the Commission seeks the views of the bargaining representatives for the Agreement. Any views should be raised with the Commission no later than two business days after the Applicant’s response is received by the Commission.

In the absence of any response from the bargaining representatives, the application may be determined based on the material before the Commission.

More information about undertakings can be found on the Fair Work Commission’s website.

Please provide your response to the concerns outlined in the above table and any written submissions filed by the CFMMEU as soon as possible, but by no later than close of business Monday 18 February 2019.

If you require additional time to respond to the concerns outlined or have any queries in relation to this correspondence, please contact the undersigned at [email protected].”

[5] On 25 February 2019 Feenix responded to the Commission’s email of 11 February 2019. Attached to the Applicant’s response were an amended Form F17 – Employer’s statutory declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement), responses to the various issues raised by the Commission and several undertakings.

[6] Also on 25 February 2019 the CFMMEU filed its submissions in respect of the application. In summary, the CFMMEU opposed the approval of the Agreement on the basis that:

(a) the Agreement, drawing on the decision in Application by Falcon Mining Pty Ltd 1 had not been genuinely agreed to by employees covered by the Agreement, primarily because the Form F17 did not identify any provisions that were less beneficial than the relevant modern award despite the various better off overall test (BOOT) related issues identified in the Commission’s email of 11 February 2019; and

(b) the effect of the terms of the Agreement had not been explained to the relevant employees.

[7] In circumstances where Feenix’s response of 25 February 2019 did not resolve all of the issues raised in the Commission’s email of 11 February 2019, the application was listed for a telephone hearing on 25 March 2019. At that hearing Mr Adrian Boothman, an employment relations consultant, appeared with permission for Feenix together with Ms Carly Fleming, Feenix’s Administration Manager. Mr Dale Syron, a paralegal with the CFMMEU, appeared for the CFMMEU.

Feenix’s case

[8] Key aspects of Feenix’s submissions at the telephone hearing were that:

•  the current agreement, the Feenix NSW Pty Ltd ATF Feenix NSW Family Trust & Feenix QLD Ltd Multi Enterprise Collective Workplace Agreement 2, had passed its nominal expiry date on 14 March 2014;

•  an application for approval of a replacement agreement was lodged with the Commission on 18 March 2018 but was subsequently withdrawn on 23 August 2018 as a result of a number of concerns raised by the Commission;

•  as a result in respect of the Agreement currently before the Commission it painstakingly went through the various pre-approval steps to ensure that the relevant requirements of the Act were satisfied, with a copy of the Agreement and a summary document regarding the Agreement circulated to employees on 10 September 2018;

•  at a meeting on 11 September 2018 the Agreement was read out page by page and the summary document was discussed, with voting on the Agreement occurring over the period 21-24 September 2018;

•  at that meeting employees were invited to ask any questions they had regarding the Agreement, with employees also able to ask any further questions and/or raise any other issues concerning the Agreement prior to the vote commencing on 21 September 2018;

•  of the seven employees covered by the Agreement, five are longstanding employees with the remaining two engaged over the past year or so;

•  the Agreement varied the expired current agreement by incorporating the various undertakings proffered in respect of the expired current agreement in the Agreement but was otherwise very similar to the expired current agreement;

•  the expired current agreement provided for an all-inclusive hourly rate of pay whereas the Agreement provided for an hourly rate of pay plus site and travel allowances, with these changes highlighted to employees by Ms Fleming at the meeting of 11 September 2018;

•  all seven employees voted in favour of the Agreement;

•  with regard to clause 4.2 of the Agreement, the intention was to incorporate the terms of the Building and Construction General On-site Award 2010 3 (the Award) into the Agreement, with Feenix willing to provide an undertaking to make that clear;

•  with regard to the BOOT, the Agreement provided for annual wage increases of 2.5% plus a $25/day travel and fares allowance (Appendix 1) and a $5/hour productivity allowance (Appendix 1) for employees who work on-site;

•  with regard to Level 4 Workshop employees and apprentices it had proffered an undertaking stating that it did not currently employ or intend to employ anyone in these classifications for the life of the Agreement;

•  it is a balustrading company which only used imported product meaning that it did not employ any workshop employees, adding that if site workers came into the factory to make some minor modifications they only did so for an hour or two and were paid as if on-site;

•  if circumstances changed and it commenced fabrication again it would require a completely separate agreement as such work would not be covered by the Award;

•  it did not employ any apprentices as it could not offer them the variety of work to ensure they got exposure to the necessary breadth of trade skills;

•  all employees were site based;

•  employees mainly worked between 6am and 4pm, with 5am starts a very rare occurrence, e.g. where rectification work needed to be done out of hours;

•  employees did not often work more than 40 hours per week;

•  it did not work shift work;

•  the Award allowances which would otherwise apply were meal and multi-storey allowances as well as crib time; and

•  the Agreement passed the BOOT and should be approved.

The CFMMEU’s case

[9] At the telephone hearing the CFMMEU reiterated that it was not a bargaining representative for the Agreement and stated that it relied on its written submissions of 25 February 2019. Beyond that the CFMMEU submitted with regard to the undertaking proffered by Feenix that it “doesn’t currently or intend to employ both Level 4 – Workshop employees and Apprentices for the life of the Agreement” that:

•  it was possible that a Level 3 Workshop employee could progress to Level 4 Workshop employee during the life of the Agreement; and

•  Level 4 Workshop employees and Apprentices could be employed during the life of the Agreement and that the Agreement did not pass the BOOT in respect of these prospective employees.

Consideration of the issues

[10] Having regard to the revised Form F17, the other material provided by Feenix as part of its response of 25 February 2019 and Feenix’s submissions at the telephone hearing regarding the steps it took to explain the terms of the Agreement and their effect to employees, I am satisfied that Feenix to all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained to the relevant employees and that the explanation was provided in an appropriate manner as required by s.180(5) of the Act. Particularly relevant considerations in this regard were that fact that employees are presently covered by an expired agreement, the key changes to that expired agreement were highlighted to employees in the meeting of 11 September 2018 and that 5 of the 7 employees who voted on the Agreement are longstanding employees of Feenix. Similarly, based on both the revised Form F17 and Feenix’s submissions, I am satisfied that the requirements of ss.180(2) and (3) of the Act have been met. Accordingly, I am satisfied that the Agreement was genuinely agreed to by the employees covered by the Agreement.

[11] As to the various BOOT issues raised by the Commission, having regard to both the undertakings proffered by Feenix and its submissions at the telephone hearing I am satisfied that the Agreement passes the BOOT. The Commission’s assessment is that the rates of pay provided for in the Agreement are between 4.63% and 8.2% above the equivalent Award rate and adequately compensate employees for the changed arrangements in respect of hours of work and overtime provided for in the Agreement when compared to the Award. In particular, I note that the Commission’s concerns regarding Level 4 – Workshop employees and apprentices were addressed as a result of Feenix’s submissions and revised undertakings in respect of apprentices.

[12] Finally, I note that the revised undertakings proffered by Feenix on 12 April 2019 are acceptable. I also note that those revised undertakings do not cause either financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.

[13] Against that background, the Agreement can now be approved.

Conclusion

[14] Subject to concerns that have been addressed by way of undertakings, I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[15] As noted, pursuant to s.190(3), I have accepted undertakings from Feenix. In accordance with s.191(1) of the Act those undertakings are taken to be a term of the Agreement. A copy of those undertakings are attached to this decision.

[16] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 23 April 2019. The nominal expiry date of the Agreement is 16 April 2023.

Appearances:

A. Boothman for the Applicant.

D. Syron for the Construction, Forestry, Maritime, Mining and Energy Union.

Telephone Hearing details:

2019.

Canberra and Sydney:

March 25.

Annexure A

 1   [2016] FWC 5315

 2   AE892114

 3   MA000020

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