G.J.E. Pty Ltd

[2012] FWA 9549

Note: An appeal pursuant to s.604 (C2012/6403) was lodged against this decision - refer to Full Bench decision dated 3 April 2013 [[2013] FWCFB 1705] for result of appeal.

[2012] FWA 9549

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

G.J.E. Pty Ltd
(AG2012/9480)

COMMISSIONER GOOLEY MELBOURNE, 13 NOVEMBER 2012

All Equipment Hire Enterprise Agreement 2012.

[1] On 21 September 2012 I issued a decision 1 in which I held that the relevant award for the purpose of the better off over all test was the General Retail Award 2010. In accordance with section 190 of the Fair Work Act 2009 (the FW Act) I provided the Applicant with the opportunity to provide undertakings.

[2] The Applicant did not provide any undertakings, instead making submissions and filing evidence to support its contentions that the decision issued on 21 September 2012 was wrong.

The Submissions of the Applicant

[3] The Applicant submitted that because no decision to approve or not approve the Agreement had been made, Fair Work Australia is able to revisit the decision made. 2 Further it submitted that the decision was not a decision within the meaning of the FW Act.3

[4] I do not accept the submissions of the Applicant on these matters. The process of considering agreements involves a number of steps. One step is a decision that the member of the Tribunal has concerns that the agreement does not pass the better off overall test. The member is then obliged to give the party an opportunity to provide relevant undertakings. 4 The member is then required to consider the undertakings in light of the requirements in section 190.

[5] That preliminary decision is not any less a decision 5 of the Tribunal.

[6] If a party considers a decision of a member of Fair Work Australia is wrong they are able to appeal 6 the decision. That would have been the appropriate action in this case.

[7] In the event that I am wrong about this I have considered the further submissions and evidence of the Applicant in this matter.

[8] It was the Applicant’s evidence that “the business is essentially and substantially an industrial, building and trades equipment hire business. Its predominant purpose is the hiring of this equipment primarily to trades customers, builders, tradespersons and other contractors.” 7 It does however hire equipment “to non-trade, presumably domestic customers.”8

[9] Between April 2012 and September 2012, 71.63% of its total revenue was attributed to payments from existing trade customers while 28.37% came from non trade customers. It was suggested that these figures may overstate the income from non trade customers as not all trade customers are able to be identified. 9

[10] The Applicant submitted that the test to be applied when determining if an employer is covered by a particular industry award is the “substantial character” test. 10

[11] The Applicant submitted that the persons to whom goods are hired are not consumers or alternatively they are not consumers who use the goods for personal or household consumption.

[12] The General Retail Industry Award 2010 provides at clause 4 the coverage of the award as follows:

“4.1 This industry award covers employers throughout Australia in the general retail industry and their employees in the classifications listed in clause 16—Classifications to the exclusion of any other modern award. The award does not cover employers covered by the following awards:

• the Fast Food Industry Award 2010;



• the Meat Industry Award 2010;



• the Hair and Beauty Industry Award 2010; or



• the Pharmacy Industry Award 2010.

4.2 The award does not cover an employee excluded from award coverage by the Act.

4.3 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.4 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.5 This award covers any employer which supplies labour on an on-hire basis in the industry set out in clause 4.1 in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance of work for a business in that industry. This subclause operates subject to the exclusions from coverage in this award.

4.6 This award covers employers which provide group training services for apprentices and/or trainees engaged in the industry and/or parts of industry set out at clause 4.1 and those apprentices and/or trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. This subclause operates subject to the exclusions from coverage in this award.

4.7 Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an award with occupational coverage.”

[13] The general retail industry is defined as follows:

“general retail industry means the sale or hire of goods or services to final consumers for personal or household consumption including:

• food retailing, supermarkets, grocery stores;



• department stores, clothing and soft goods retailing;



• furniture, houseware and appliance retailing;



• recreational goods retailing;



• personal and household goods retailing;



• household equipment repair services;



• bakery shops;

and includes:

• customer information and assistance provided by shopping centres or retail complexes;



• labour hire employees engaged to perform work otherwise covered by this award; and



• newspaper delivery drivers employed by a newsagent.”

[14] I do not accept the submissions that the people who hire goods from the Applicant are not consumers.

[15] The Macquarie dictionary defines a consumer as “someone who uses a commodity or service.” It is clear that the trades customers and non-trades people who hire equipment from the Applicant are consumers.

[16] It was submitted that even if the trades customers were consumers that they do not use the goods for personal or household consumption. They use the equipment to provide services to others. To support its contention that the use of the goods was not for personal consumption the Applicant relied upon the fact that the trade customers passed on GST to their clients.

[17] I do not accept the submissions of the Applicant. As I found in my earlier decision the trades customers who hire the equipment do not on hire the equipment. They hire it for their personal use albeit in their own businesses to provide services to others.

[18] Further the Applicant hires equipment to members of the general public and this is not an insubstantial part of their business.

[19] Whether the trades customers are able to claim a GST credit is not a relevant consideration.

[20] I accept the submissions of the Applicant that the Retail Industry (South Australia) Award did not apply to this business. However that does not change the conclusion I reached about the nature of the business operated by the Applicant.

[21] The Applicant also relied upon research published on the Fair Work Australia website which matched the modern awards with the Australian and New Zealand Standard Industrial Classification (ANZSIC) standards. The Applicant submitted that the ANZSIC does not categorise the type of work performed by this business as being in the retail trade. Construction machinery rental without an operator is in an entirely different classification to the retail trade classifications.

[22] The Applicant submitted that this was not of course determinative of the question before Fair Work Australia, and I agree.

[23] I have reached the same conclusion as I reached in my earlier decision. The business is in the retail industry because it hires equipment to consumers for their personal or household consumption.

[24] As I have found that the relevant award for the purposes of the BOOT is the General Retail Industry Award 2010 I am not satisfied that the Agreement passes the BOOT. The Applicant accepted that if the General Retail Industry Award 2010 was the relevant award the Agreement would not pass the BOOT.

[25] The Applicant was provided with the opportunity to provide undertakings but did not do so. Consequently the application for approval of the Agreement is rejected.

COMMISSIONER

 1   [2012] FWA 8232

 2   Exhibit A1 at [6]

 3   Ibid at [7]

 4   Bupa Care Services Pty Ltd [2010] FWAFB 2762 at [49]

 5 Section 598 of the FW Act

 6 See section 605 of the FW Act

 7   Exhibit A2 at [4]

 8   Ibid

 9   Ibid at [9]

 10   Exhibit A1 at [15]

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