Fresarm Pty Ltd Enterprise Agreement 2011
[2011] FWA 3840
•20 JUNE 2011
[2011] FWA 3840 |
|
DECISION |
Fair Work Act 2009
s.185—Approval of enterprise agreement
Fresarm Pty Ltd
(AG2011/9316)
FRESARM PTY LTD ENTERPRISE AGREEMENT 2011
Security Services | |
DEPUTY PRESIDENT BARTEL | ADELAIDE 20 JUNE 2011 |
Fresarm Pty Ltd Enterprise Agreement 2011.
[1] An application for approval of an enterprise agreement known as the Fresarm Pty Ltd Enterprise Agreement 2011 (the Agreement) has been made by the Fresarm Pty Ltd (the employer). The application has been made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is a single enterprise agreement.
[2] The modern award that applies to the employer and relevant employees is the Security Services Industry Award 2010 (the Award). The employees covered by the Agreement are Crowd Controllers and Security Guards. The employees were previously covered by the Security Officers’ Award (the NAPSA). The transitional arrangements in Schedule A of the Award apply in relation to rates of pay, penalties and loadings, which were lower under the NAPSA than the corresponding provisions of the Award.
[3] On 20 May 2010 I issued a Preliminary Findings statement. The employer was given the option of a hearing or responding in writing, and chose the latter. The preliminary findings included the following passages:
“I understand clause 12.1 of the Agreement deals with the span on ordinary hours, not the ordinary hours of work for employees. The Agreement does not include weekly ordinary hours of work and is therefore less beneficial than the Security Services Industry Award 2010 (the Award) in terms of the entitlement to overtime for security guards. It also raises issues about compliance with the National Employment Standards, particularly s.62(1) dealing with maximum weekly hours of work. These matters are relevant to the requirements for approval as set out in s.186(2)(c) and (d) of the Act dealing with terms of the Agreement that contravene the NES and the better off overall test, respectively.
An assessment of the ‘loaded’ rate for casual crowd controllers is unable to be undertaken in the absence of information about the roster pattern for, or hours worked by these employees. It is apparent that the ‘loaded’ rate exceeds the rate otherwise payable under the Award for work performed within the ordinary span of hours Monday to Friday, but the assessment of the overall benefit of the Agreement is dependent on the extent to which employees work outside this span and would otherwise be entitled to a higher rate under the Award. Information about the roster patterns of employees is sought. This matter is relevant to the assessment of the better off overall test.
I request that a copy of the letter dated 15 April 2011, as referred to in Q2.4, 2.5 and 2.6 of the Form F17 Employer’s Declaration, be forwarded to the Tribunal. This is relevant to the overall process of approval of the Agreement and the issue of genuine agreement by the employees, in accordance with s.188 of the Act.
There are a number of award provisions (in addition to penalty rates and overtime provisions for casual crowd controllers) that will cease to apply to casual employees as a result of the exclusion of the Award as set out in clause 6 of the Agreement. These include health, safety and welfare issues associated with working 12 hour shifts (cl. 21.2(a) of the Award); the provision of uniforms and torches to employees, when required (cl. 15.11 of the Award); and call back provisions (cl.21.5 of the Award). The employer is invited to make comment about these matters.
All employees are identified as Security Officer Level 1 under the Award. The definitions of “security guard” and “crowd controller” in clauses 5.1 and 5.2 of the Agreement, respectively, could potentially line up with two or more classification levels under the Award. More information about the duties performed is sought. This is also relevant to the assessment of the better off overall test.”
[4] A response to the Preliminary Findings was received from Piper Alderman, solicitors, on behalf of the employer on 3 June 2011. 1 It is convenient to deal with the employer’s response in relation to each matter in the order set out above.
Weekly Ordinary Hours of Work
[5] The employer has proposed an undertaking to the effect that the ordinary hours of work for Security Guards will be between 6.00am and 6.00pm Monday to Friday (excluding public holidays) and that the maximum ordinary hours of work will be 38 per week. In view of my comment in paragraph [4] of the Preliminary Findings, I take this undertaking to confirm that full time security guards work 60 hours per week, with overtime paid for 22 of those hours. Such a level of compulsory overtime is not consistent with the reasonable hours provisions of the National Employment Standards.
The loaded rate for Crowd controllers
[6] The Agreement provides an all-up rate for casual Crowd Controllers which compensates them for, among other things, casual loading, overtime and penalty rates for weekend work, night shifts and public holiday work. The employer now proposes an undertaking that Crowd Controllers be paid for hours in excess of 38 per week.
[7] The employer has provided rosters for Crowd Controllers for the week commencing 14 March to the week commencing 16 May 2011. I have done calculations over that period under the Award (using the transitional rates calculated in accordance with Schedule A of the Award) and the Agreement. I selected two employees at random. Each was better off under the Agreement. In doing these calculations I factored in the employer’s undertakings in relation to overtime and payment of the supervisory allowance (see paragraph [19], below).
[8] I note that the Agreement has a nominal expiry date of 30 June 2015. From 1 July 2014 the transitional provisions in Schedule A will cease to operate and the Award rates of pay and penalties will apply. Applying the provisions of the Award, both employees are worse off under the Agreement, the second employee significantly so. Both employees are also worse off under the Agreement in the year to July 2013 but to a lesser extent.
[9] In order to approve the Agreement, the Tribunal must be satisfied that the Agreement meets the better off overall test. Section 193 of the Act relevantly provides that:
“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 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.
...
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
...
Test time
(6) The test time is the time the application for approval of the agreement by FWA was made under section 185.
...”
[10] The better off overall test requires that a ‘global’ assessment be undertaken of the terms of the Agreement relative to the terms of the Award “as at the test time”. As such, the increases in the Award rates of pay over the life of the Agreement are not to be taken into account in the assessment of the better off overall test. Having regard to the undertakings provided by the employer as referred to in paragraphs [6], [17] and [18] of this decision, I consider that the employees are better off overall under the Agreement as at the test time.
The process leading to approval of the Agreement
[11] The employer provided a copy of the letter sent to employees as requested in the preliminary findings statement. The letter, dated 15 April 2011, advises that the Agreement will be available at all work sites and that a copy can be emailed on request. It states that, “I will be holding an information session about this agreement at a time suitable to you. Please call me to organise a time to do so if required.” In relation to the ballot the letter stated:
“.... there will be a ballot vote, which will start on the 23/4/2011 and will end on the 29/4/2011. I will ensure all of you have the ballot papers by this start date. Please make sure you either hand them to me prior to the 29th or get them in the post by the 27th so they can reach me in time by the 29th.”
[12] The letter addresses the rates of pay in the Agreement and the concluding paragraphs are as follows:
“I wish to outline that all security guard rates of pay are based on the Modern Award. Our casual Crowd Control rate from the 1 July 2011 will be $26.20 per hour as a flat rate around the clock. It also increases each year of the agreement. It will be subject to the Fair Work Australia yearly increase, which is usually on the 1st July also. Last year it was around 70 cents per hour, which if the same this year would make the rate around $26.90 per hour from the 1st July 2011. This will be determined some time in early July each year of the agreement.
Please call me anytime on [phone no.] for any questions about the agreement.”
[13] The employer initiated bargaining with the employees on 1 April 2011 when the notice of representational rights was issued. There were no bargaining representatives nominated by the 62 casual employees covered by the Agreement. The Agreement was provided to the employees at their worksites on 15 April 2011. There is no evidence of any discussion with employees. The majority of the employees are casual Crowd Controllers 2.
[14] Clause 6.1 of the Agreement provides that, subject to clause 6.2 and 6.3, the Agreement operates to the exclusion of any other industrial instrument that would otherwise apply, including the Award. Clause 6.2 deals with passing on increases awarded in the Annual Wage Reviews. Clause 6.3 provides that all employees, other than casual employees are entitled to all entitlements arising under the Award in so far as those entitlements are not inconsistent with the terms of this Agreement. I understand the effect of 6.1 and 6.3 to be that the Award is excluded for casual employees.
[15] Section 180(2) of the Act provides:
“Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.”
[16] There is no indication that the Award was provided to any employees or that the employees were advised how and/or where a copy of the Award could be accessed.
The excluded award provisions for casual employees
[17] In response to the request for information contained in paragraph [7] of the Preliminary Findings, the employer has proposed 3 further undertakings, dealing with each of the matters cited as an example in that paragraph: Occupational Health and Safety; Uniforms and Torches; and Call Back.
Duties performed by employees covered by the Agreement
[18] The employer has provided further detail on the duties performed by employees as requested, and on the basis of this information, the classification of Security Officer Level 1 appears correct. The employer has also advised that there are crowd controller supervisors who currently receive an allowance of $3.00 per hour in addition to the ordinary hourly rate for a casual crowd controller. A further undertaking is proposed stipulating the definition of Supervisor and the allowance payable.
Consideration
[19] Sections 180(5) and (6) of the Act provide as follows:
“Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(b) young employees;
(c) employees who did not have a bargaining representative for the agreement.”
[20] I am concerned that the pre-approval process adopted by the employer denied the employees the opportunity to gain a full understanding of the impact of the Agreement. The limited information provided by the employer in the letter of 15 April was the only explanation provided to employees. It did not explain that the employees’ rates of pay and penalties under the Award would increase in accordance with the transitional provisions in Schedule A to a point where the employees would be better off under the Award during the life of the Agreement. The letter did not indicate the range of Award benefits that would no longer apply to the casual Crowd Controllers.
[21] In considering whether the steps taken by the employer to explain the terms of the Agreement were reasonable, the employees’ access to information about the terms and conditions foregone by accepting the Agreement is, in my view, fundamental to an informed consideration of the Agreement. Whether this information is explained in writing, at a meeting or by provision of the Award is a matter to be decided having regard to the circumstances of the employees. The fact that none of these steps were undertaken by the employer in circumstances where there was no bargaining representative for the employees, is significant.
[22] Section 186(2)(a) of the Act provides that Fair Work Australia must be satisfied that the agreement has been genuinely agreed to by the employees covered by it. Section 188 of the Act 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 FWA 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) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 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.”
[23] The obligation on the employer in section 180(5) is to be proactive in providing appropriate explanations and information to employees. An invitation to contact the employer if further information is required is not sufficient to meet the statutory requirement that the employer take “all reasonable steps” to “ensure” that the Agreement and its operation are explained to employees in an appropriate manner when the particular circumstances of the employees are taken into account.
[24] I conclude that the employees have not genuinely agreed to the enterprise agreement within the meaning of s.188 of the Act. In addition, the failure of the employer to provide a copy of the Award to the casual Security Guards, or information on how they may access the Award is contrary to the requirements of s.180(2) of the Act. The application for approval is dismissed.
DEPUTY PRESIDENT
1 The response included a series of rosters and the employer’s letter to employees dated 15 April 2011, as requested in the Preliminary Findings statement. A series of undertakings by the employer was also provided, and these are referred to in the decision.
2 Roster information subsequently provided by the employer indicates 49 crowd controllers worked over the months March - May 2011.
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