GrainCorp Operations Limited T/A GrainCorp
[2018] FWCA 1250
•1 MARCH 2018
| [2018] FWCA 1250 |
| FAIR WORK COMMISSION |
| decision |
Fair Work Act 2009
s.185—Enterprise agreement
GrainCorp Operations Limited T/A GrainCorp
(AG2017/3580)
GrainCorp Operations Limited (Queensland Terminals) Enterprise Agreement 2017.
| Storage services | |
| Deputy President Masson | MELBOURNE, 1 MARCH 2018 |
Application for approval of the GrainCorp Operations Limited (Queensland Terminals) Enterprise Agreement 2017.
An application has been made for approval of the GrainCorp Operations Limited (Queensland Terminals) Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by GrainCorp Operations Limited T/A GrainCorp (the Applicant). The Agreement is a single enterprise agreement.
A notice of employee representational rights was provided to employees on 27 February 2017[1] and the notice complied with the regulations.[2] Employees were provided with access to the proposed Agreement and information about the effect of the terms of the Agreement along with a notice of the time and place and method of voting was provided to employees on 26 July 2017. Voting occurred in the period 3 to 4 August 2017 and a majority of those who voted approved the Agreement.[3]
The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test (BOOT) was the Storage Services and Wholesale Award 2010 (the Award).[4]
The statutory declaration noted that some of the provisions in the proposed Agreement were more beneficial than the Award or were not conferred by the Award. Some less beneficial terms were also identified.
The Australian Workers Union (the AWU) filed a statutory declaration on 24 August 2017, and in doing so, objected to the approval of the Agreement.
In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of issues in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and BOOT assessment considerations. The Commission wrote to the Applicant on 8 November 2017 and identified the following issues:
(1) Clause 6 of the Agreement identified the operative date as the date on which the Commission approved the Agreement contrary to s 54(1) of the Act;
(2) Clause 9 Consultation did not appear to comply with the requirements of s 205 of the Act and that the model consultation term as set out in Schedule 2.3 of the Fair Work Regulations would be taken to be a term of the Agreement should the Agreement be approved.
(3) Clause 46(c) of the Agreement provides that 17.5% annual leave loading “…does not apply to proportionate leave paid out on termination” raising a concern that it did not comply with the NES.
(4) Clause 52 of the Agreement did not appear to provide that employees would be entitled to gazetted public holidays as provided by s 115(1)(b) – Meaning of Public Holiday under the Act.
(5) Clause 37(e) of the Agreement provides that the period of notice in the termination clause did not apply to apprentices. Additionally it appeared that words were missing from the beginning of clause 37(e). This appeared to be contrary to s 123 of the Act which does not provide for apprentices to be excluded from notice of termination.
(6) Clause 42(c) provides that the redundancy benefit entitlements will be “three weeks’ pay for each completed year of service..” which was inconsistent with s 119(2) of the Act with respect to employees with at least one but less than two years continuous service.
(7) Clause 24 of the Agreement appeared to provide for shift work to be undertaken by employees, however no definition of a ‘shift worker’ for the purposes of the NES as required by s 196(2) of the Act had been provided.
(8) A number of BOOT concerns were raised including the following potentially less beneficial provisions in the Agreement:
· Overtime provisions;
· Weekend penalties;
· Part-time employees entitlement to overtime;
· Span of hours provisions; and
· Afternoon and night shift penalties
The Applicant provided submissions and undertakings on 20 November 2017 in order to address the matters raised by the Commission. The Applicant also provided revised undertakings on 21 December 2017.
Applicant undertakings
Clause 6 – Period of Operations
With respect to Clause 6 of the Agreement the following undertaking was provided:
“The agreement comes into operation seven (7) days after the agreement is approved.”
Clause 16 – Part-Time Employment
With respect to Clause 16 of the Agreement the following undertaking was provided:
“The sixth paragraph of Clause 16 will apply to the effect that all time worked in excess of the hours as mutually arranged under Clause 16 will be overtime and paid for at the overtime rates prescribed for other employees under this Agreement. The entitlements under Clause 34 Compensation for Non Payment of Overtime also apply to part-time employees.”
Clause 24 - Annual Leave and Shiftworkers
With respect to Clause 12 of the Agreement the following undertaking was provided:
“For the purpose of the additional week of annual leave provided for in s 87(1)(b) of the Act, a seven day shiftworker who is regularly rostered to work on Sundays and public holidays will be entitled to that additional annual leave.”
Clause 35 – Performance Bonus
With respect to Clause 35 of the Agreement the following undertaking was provided:
“Clause 35 will apply to the effect that the Performance Bonus Payment will not be conditional on individual performance, but will be calculated based on the formula in clauses 35(b) and (c), and distributed in accordance with clauses 35(h), 35(i) and 35(l).”
Clause 37(e) - Notice of termination periods and exclusions
With respect to clause 37(e) of the Agreement the following undertaking which addressed a typographical error was provided:
“This sub-clause deals with the circumstances where notice of termination periods do not apply under the Agreement, and the preamble to clause 37(e) will state:
(e) the period of notice in this clause does not apply.”
Clause 37(3)(e)(ii)- Notice of Termination by Employer -Apprentices
With respect to clause 37 (3)(e)(ii) of the Agreement the following undertaking was provided:
“The terms of this clause will not exclude the National Employment Standards, with respect to the eligibility of apprentices to receive notice of termination.”
Clause 42(c) - Redundancy Benefits
With respect to clause 42(c) of the Agreement the following undertaking was provided:
“No employee covered by Clause 42 of the Agreement will receive a redundancy benefit lower than they would be entitled to under the National Employment Standards (NES).”
Clause 46(c)-Annual Leave Loading
With respect to clause 46(c) under the Agreement the following undertaking was provided:
“If, when the employment of an employee ends, the employee has a period of untaken paid annual leave, the Company must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.”
Clause 47 – Carers Leave Paragraph iii (Unpaid Carer’s Leave)
With respect to Clause 47 of the Agreement the following undertaking was provided:
“The terms of this clause will not exclude the National Employment Standards. Paragraph iii of Clause 47 - Carer’s Leave, dealing with Unpaid Carers leave, will have no effect. The Company will provide Unpaid Carers leave in accordance with the preamble to clause 47 and section 102 of the Act.”
Clause 52 – Public Holidays
With respect to Clause 52 of the Agreement the following undertaking was provided:
“The terms of this clause will not exclude the National Employment Standards. The Company will recognise the nominated public holidays and applicable gazetted public holidays which apply pursuant to section 115 of the Act.”
AWU Objections to Agreement
Notwithstanding the undertakings provided by the Applicant, the AWU pressed its objections to the approval of the Agreement.
A Mention/Directions Hearing was conducted on 7 December 2017 following which the parties were required to file submissions and materials on which they sought to rely. The Applicant and AWU agreed to the Commission dealing with the matter on the papers in circumstances where cross examination of witnesses was not required. The AWU subsequently sought an opportunity to cross-examine witnesses and a Hearing was conducted on 21 February 2018.
AWU Case
The AWU contended that the Agreement should not be approved by the Commission, by reason of the Agreement failing to satisfy the BOOT with respect to a range of issues.
Overtime
The primary submission made by the AWU was that the Agreement conditions and the undertakings provided by the Applicant failed to account for the overtime hours that were required to be worked during peak season.
The AWU submitted that notwithstanding the combined effect of Clause 34 and Clause 35 of the Agreement and the undertaking[5] provided by the Applicant, the AWU still held concerns regarding some employees who may only be able to work up to 10 hours overtime per week before they became worse off under the Agreement versus the Award.
The AWU in support of their submission in relation to the overtime issue relied on witness statements of two employees, Mr Mark Lakkis[6] and Mr Tafi Inivale.[7]
The statement of Mr Lakkis indicates that he had been employed directly by the Applicant for approximately eighteen months. Pay slips for five pay periods were attached to Mr Lakkis’ statement. The payslips indicated that Mr Lakkis had worked levels of overtime in excess of an average of ten hours per week in the particular fortnightly pay periods provided. The AWU submitted that a threshold of ten hours overtime per week, if exceeded, would result in employees being worse off under the Agreement than under the Award. The relevant pay periods and levels of overtime were as follows:
| Pay Period | Fortnightly Overtime Hours |
| 8/08/16 – 21/08/16 | 51 Hours |
| 14/11/16 – 27/11/16 | 31 Hours |
| 5/09/16 – 18/09/16 | 54 hours |
| 20/02/17 – 5/03/17 | 54 hours |
| 20/03/17/ – 2/0 4/17 | 26 ours |
The statement of Mr Inivale indicates that he had been employed directly by the Applicant for approximately five years. Pay slips for six pay periods were attached to Mr Inivale’s statement. The payslips indicated that Mr Inivale had worked levels of overtime in excess of an average of ten hours per week in the particular fortnightly pay periods provided. The relevant pay periods and levels of overtime were as follows:
| Pay Period | Fortnightly Overtime Hours |
| 4/04/16 – 17/04/16 | 23 hours |
| 26/12//16 – 8/01/17 | 63 hours |
| 23/01/17 – 5/02/17 | 43 hours |
| 6/02/17 – 19/02/17 | 41 hours |
| 20/02/17/ - 5/03/17 | 30 hours |
| 6/03/17 – 19/03/17 | 35 hours |
The AWU contended that there were pay periods in which both employees worked at least 55 hours of overtime in the fortnight. Under the storage Services and Wholesale Award 2010 and Stevedoring Award 2010, the AWU contended that such overtime hours (i.e. 55 hours per fortnight) would entitle an employee to $2,932.35 and $3,090.80 respectively in overtime payments under the awards versus the Agreement benefit of $1,762.79.
Weekend Penalties
The AWU expressed dissatisfaction with the Applicant’s response on the issue of weekend penalties and submitted that it failed to address the issues created by the absence of weekend penalty rates.
Overtime for Part-time Employees
The AWU submitted that the Applicant’s response did not adequately address the AWU’s concerns. They claimed that part-time employees, who’s agreed hours per week were 20 hours, may only be able to work up to ten hours overtime per week before being worse off under the Agreement versus the Award.
Span of Hours
The AWU pressed its concerns that the Agreement provides for hours of work that will leave employees worse off when compared to the Stevedoring Award 2010, even when considering the more beneficial provisions stipulated in the Applicant’s Form F17 statutory declaration.
Shift Penalties
The AWU pressed its concerns that some employees who work four or more afternoon shifts per week or who work two or more night shifts per week may not be better off overall under the Stevedoring Industry Award 2010.
Effect of the undertakings
The AWU contended that a significant number of undertakings had been required to be provided by the Applicant. The AWU claimed that the Agreement was substantially different as a consequence of the number and scope of undertakings and therefore should be rejected by the Commission on that basis as well as the identified BOOT issues.
Form F18 Concerns
The AWU also referred to a number of issues that it had raised in its Form F18 statutory declaration including:
· AWU does not consider the Agreement a good outcome for its members;
· The Agreement was taken to a ballot by the Applicant without the AWU having an adequate opportunity to respond to the Applicant’s offer; and
· A number of casual employees were engaged during the access period.
The AWU did not elaborate on these concerns in their submissions or lead any evidence in relation to the issues raised in their Form F18.
The AWU in closing oral submission referred to the Full Bench decision in Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery[8] (Beechworth). In doing so they sought to draw a comparison between the reconciliation provision at issue in that case and the performance bonus payments available under Clause 34 and Clause 35 of the Agreement in the present matter.
The AWU submitted that the four month frequency with which the reconciliation provision was able to be applied under the proposed Beechworth Agreement was insufficient to satisfy the Full Bench in that matter as to whether employees were better off overall. Relying on Beechworth, the AWU submitted that in undertaking the BOOT in the present matter, the twelve month frequency of bonus payments under the Agreement was directly analogous and should consequently lead to the Commission finding that the Agreement does not meet the BOOT.
The AWU also referred during closing oral submissions to s 323(1)(c) of the Act, which they argued required employees to be paid on a monthly basis for overtime and that the annual payment to be made under Clause 34 of the Agreement would not meet the statutory requirements of s 323(1) of the Act.
Applicant Case
The Applicant submitted that the Commission must approve the Agreement, as it was validly made in accordance with the Act and satisfied the BOOT.
The Applicant submitted that the relevant modern award for the purpose of applying the BOOT in relation to the Agreement was the Storage Services and Wholesale Award 2010 (the Award). The Applicant relied on submissions furnished in its submission dated 21 December 2017[9] which it contended had not been challenged by the AWU. The Applicant also relied on the witness statement of Mr Joshua Connell.[10]
In response to the AWU’s contentions regarding the BOOT issues, the Applicant submitted that the AWU submissions:
· Did not properly recognise the higher hourly rates under the Agreement versus the Award (e.g. $36.25 under the Agreement versus $20.20 under the Award for a Grade 5 worker);
· Focussed on a small number of unrepresentative fortnights in Mr Lakkis and Mr Inivale’s earnings records, rather than consider working patterns over a longer period; and
· Ignored the annual bonus payments made to employees under Clause 34 and Clause 35 of the Agreement which produced payments to employees in the range of $10,531 to $11,350 for the last financial year.
In addressing the BOOT issues raised by the AWU, the Applicant relied on the witness statement of Mr Joshua Connell and in particular a comparative earnings analysis. That analysis compared the earnings of all employees under the Agreement versus the Award for the twelve month period 1 October 2016 to 30 September 2017.[11] Mr Connell stated that the analysis revealed that all employees received significantly higher earnings under the Agreement than would be the case had they been paid under the Award. Mr Connell gave evidence that the comparative analysis did not include the annual performance bonus that would have further improved the comparison in favour of the Agreement.[12]
With respect to Mr Lakkis and Mr Inivale, Mr Connell stated that the comparative analysis revealed Mr Lakkis was 33.81% better off under the Agreement, whereas Mr Inivale was 43.56% better off under the Agreement. That margin would be further increased should the 2017 financial year bonus payments under Clause 34 and Clause 35 be taken into account, which in the case of Mr Lakkis and Mr Inivale were $10,171.25 and $9585 respectively.[13]
The Applicant submitted that the earnings analysis revealed that in respect of pay, employees would be better off under the Agreement versus the Award by a margin of between 13.2% and 84.93%, and on average by 40.02%. That margin did not include the annual performance bonus provided for under Clause 34 and Clause 35 of the Agreement.
Mr Connell also gave unchallenged evidence as to the average levels of overtime per week over the past four years. Those levels of average overtime hours for each of the sites to be covered by the Agreement were:
· Fisherman Island averaged 8.7 hours overtime a week;
· Gladstone averaged 7.2 hours overtime a week;
· Mackay averaged 6.6 hours of overtime a week and
· Pinkenba averaged 5.6 hours of overtime a week.[14]
As regards to the AWU’s concern regarding weekend and shift penalties, the Applicant relied on its comparative earnings analysis. The Applicant also relied on material filed in its submissions dated 21 December 2017, to which were appended details of the incidence of weekend work for the twelve month period ending 30 September 2017. The Applicant submitted that in respect of weekend work:
· 91% of total employees’ working days were week days;
· 6% of employees’ working days were Saturdays; and
· 3% of employees’working days were Sundays.[15]
Mr Connell, under cross examination by the AWU, acknowledged that “peak season”, as referred to by the AWU, did require employees to work high levels of overtime and that those levels of overtime had generated complaints from some employees. He also conceded that the bonus payments employees were entitled to receive under Clause 34 and Clause 35 of the Agreement were only payable if individuals remained employed at the time of payment, which is made on an annual basis in December of each year. Employees who had ceased employment with the Applicant prior to the bonus payments being made were not entitled to pro-rata payments. Mr Connell also conceded that employees could be better off under the Award for short discreet periods in which high levels of overtime were worked.
With respect to part-time employees, the Applicant referred to its undertaking provided on 21 December 2017[16] which provided for the payment of overtime for part-time employees required to work in excess of agreed hours. Further, it was Mr Connell’s evidence that no part-time employees are currently employed, nor are there any plans to employ any part-time employees under the Agreement.[17]
In response to the AWU submissions regarding the number and scope of undertakings, the Applicant submitted that:
Seven of the undertakings related to the interaction of the Agreement with the NES, which the AWU had accepted;[18]
· One of the further three undertakings addressed a clerical error in the final document and was clearly minor in nature;[19]
· Another of the further three undertakings, which deals with part-time employment, responded to a specific concern raised by the Commission;[20]
· The last of the further three undertakings provided that performance bonuses under Clause 35 would not be conditional on individual performance, which in the Applicant’s submission would not alter the substance of the bonus provision; and
· The undertakings would not financially disadvantage employees, would not result in substantial changes to the Agreement and would result in an Agreement that was not fundamentally different to that approved by employees.
Employee Submissions
Submissions were also filed by four employee bargaining representatives, Mr Tommy Koivunen,[21] Mr Ken Mitchell,[22] Mr Derek Broadfoot[23] and Mr Shane Nothdurft[24] from the Gladstone and Brisbane terminals. Each of the submissions supported the application for approval of the Agreement.
Mr Nothdurft was cross-examined by the AWU in relation to his statement. He reaffirmed his view that the employees he represented (numbering three including himself) remained of the view that they were better off overall under the Agreement. He conceded that, while aware that other employees worked overtime, he had not personally worked high levels of overtime since the year 2000 and that the exclusion of the Award overtime penalty provisions would not impact on him personally.
Mr Broadfoot was also cross examined by the AWU in relation to his statement. He confirmed that he represented six employees including himself. He conceded that he was not aware of the exact hours of overtime worked at Fisherman Island and that while as a Supervisor he didn’t work high levels of overtime in his current role, he had worked such levels of overtime in the past.
Agreement Terms
The following terms of the Agreement are relevant to the conduct of the BOOT assessment:
“…
29.Rate of Pay
Wage increases and wage rates are set out in Appendix 1 of this Agreement. Except where another rate is specified, the rates of pay outlined in Appendix 1 will apply for all hours worked including overtime.
….
34Compensation for Non Payment of Overtime
(a) In recognition for non-payment of overtime under this Agreement, permanent employees are entitled to an annual payment as compensation. This payment is historical and will be maintained for as long as overtime penalties are not paid in the Agreement;
(b) Permanent employees are entitled to an annual payment of $0.0721 for each tonne of commodities imported, exported and specific domestic outturn of the Port during the Company’s financial year;
(c) These rates will increase in line with wage increases as set out in Appendix 1 of the Agreement.
(d) In order to determine compensation entitlement of each employee, the total will be divided by:
i.The lesser of the number of employees covered by the Agreement at the Fisherman Islands and Pinkenbar terminals or 17;
ii.The lesser of the number of employees covered by the Agreement at the Gladstone and Mackay terminals or seven.
35. Performance Bonus
a.The Company sees rewarding staff for their contribution to the Company’s success as an important part of the GrainCorp remuneration strategy;
(a) The annual bonus is structured so as to establish a maximum bonus amount based on $0.0515 for each tonne of commodity imported, exported and specific domestic outturn of the Port during the Company’s financial year;
(b) These rates will increase in line with wage increases as set out in Appendix 1 of this Agreement;
…….”
Statutory Provisions
Section 186(1) of the Act establishes a “basic rule” that where an application for approval of an enterprise agreement is made under s.185 (which prescribes the time in which such an application must be made and its content), the Commission must approve the agreement if the requirements in ss.186 and 187 are met. Sections 186 and 187 set out a range of approval requirements. Section 186(2) sets out approval requirements in relation to the safety net, and relevantly provides as follows:
“186 When the FWC must approve an enterprise agreement—general requirements
…(2) The FWC must be satisfied that:(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; an
(b) if the agreement is a multi‑enterprise agreement:
(i)the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Section 193 prescribes what is necessary to pass the better off overall test. It relevantly provides:
“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 the FWC 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.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”
Does the Agreement satisfy the BOOT?
For the purpose of conducting the BOOT assessment, I have determined that the relevant award for that purpose is the Storage Services and Wholesale Award 2010 having regard to the detailed submissions of the Applicant which were not challenged by the AWU.
Rates of pay, overtime and weekend penalties
The Agreement provides for the payment of flat rates of pay for all hours of work which compensate for the penalty payments that would otherwise be payable under the Storage Award including shift, weekend and overtime penalty payments.[25] Base rates of pay in the Agreement are substantially in excess of base rates of pay in the Award.
It is clear from the evidence of both the Applicant and the AWU that there are peaks and troughs in the Applicant’s Queensland grain terminals activity which is linked to the level of receival and export activity through those terminals. That pattern of activity, which has a direct impact on the hours of work of employees, was revealed through an analysis provided by the Applicant which summarised receival and export volumes over several years.[26]
The AWU contend that the flat rates payable under the Agreement are inadequate having regard to the requirement for employees to work high levels of overtime during peak periods. The AWU relied on the earnings records of two employees, Mr Lakkis and Mr Inivale for several selected fortnightly pay periods during 2016 and 2017 in support of their submission. The AWU urged in its closing submissions that the Commission should, in conducting the BOOT assessment, have regard to and ensure that each employee was better off overall for each discreet pay period, and not apply an assessment over the longer period of twelve months that was submitted by the Applicant.
The AWU also submitted that the Commission in conducting the BOOT assessment should not have regard to the performance bonus payments under Clauses 34 and Clause 35. This was because the bonus payments were delayed and are only paid every twelve months and would, on Mr Connell’s evidence, not be paid to former employees who may have ceased employment prior to the relevant pay period in which the bonus payments were made.
In reply to AWU submissions and evidence, the Applicant provided full earnings records for all employees, including Mr Lakkis and Mr Inivale, for the twelve month period ending 30 September 2017. The earnings comparison did not include bonus payments due under Clause 34 and Clause 35 of the Agreement.
I am satisfied that the selected periods highlighted by the AWU in respect of Mr Lakkis and Mr Inivale would, if considered in isolation, lead to a conclusion that employees working significant levels of overtime would be paid less under the Agreement in those discreet pay periods then would be the case under the Award.
However, an analysis of earnings relying on a small number of discreet selected pay periods does not paint the full picture when seeking to compare the Agreement with the Award for the purposes of the BOOT assessment. I am satisfied that the analysis of the full twelve month period ending 30 September 2017 highlights the superior earnings of all employees under the Agreement versus the Award. The margin of the employees’ earnings under the Agreement over the Award ranges between13.2% and 84.93%, with an average margin of 40.02% above the Award.
There was no rebuttal of the Applicant’s evidence that the 12 month period over which the comparative earnings analysis of all employees had been undertaken was representative of normal patterns of work. In the absence of evidence to the contrary, I am satisfied that the earnings analysis for the twelve month period ending 30 September 2017 can be regarded as representative of the normal earnings and patterns of work, including overtime, shift and weekend work. I am further satisfied that the twelve month period is an appropriate period for comparison having regard to the nature of the Applicant’s operations which includes peaks and troughs in work activity driven by bulk material receival and export fluctuations.
Significantly, the comparison of earnings provided by the Company does not include the additional bonus payments employees would be entitled to receive under Clause 34 and Clause 35 of the Agreement which were in the range of $10,531 to $11,350 for the last financial year. As regards the AWU submission that the bonus payments under Clause 34 and Clause 35 of the Agreement should be considered in similar terms to that of a reconciliation provision as was considered in Beechworth, I find that comparison unconvincing. The reconciliation provision at issue in Beechworth had a very different purpose to that of Clause 34 and Clause 35 of the Agreement and that was to provide a mechanism for the periodic comparison and adjustment of agreement earnings versus the Award. That is not the purpose of the bonus provisions under the Agreement which provides an entitlement to employees that is unrelated to the underlying earnings generated by the hours of work and wage rates in the Agreement.
Further, I do not accept the AWU’s submission that Clause 34 of the Agreement would be in breach of s 323(1)(c) of the Act. The clause in the Agreement is framed as a compensatory benefit linked to the tonnage of commodities handled by the terminals. The clause does not provide for a payment linked to actual hours worked. Consequently, I am not satisfied that the clause, simply because it provides for an annual compensatory bonus payment, can be construed as inconsistent with the obligation to make payments due to employees for the performance of work at least on a monthly basis.
I am consequently satisfied that the remuneration that would be paid to employees under the Agreement would, at test time, be more beneficial than would be the case under the Award. In reaching this conclusion I have had regard to the historical earnings data based on actual rosters and hours of work patterns.
Part-time work
The undertaking[27] provided by the Applicant makes clear that part-time employees will be entitled to payment in accordance with Clause 34 of the Agreement. It is also required under the terms of the undertaking that part-time employees would receive an allocation of overtime consistent with the principles of an “equal share” of overtime in accordance with Clause 25 Equal Share of Overtime. Having regard to the earnings analysis of permanent full-time employees and the undertakings with respect to part-time employees, I am not persuaded by the AWU that part-time employees would be in a lesser position relative to the Award than full time employees.
I am consequently satisfied that subject to acceptance of the undertaking provided by the Applicant, part-time employees would receive earnings more beneficial than under the Award. I also note the evidence of Mr Connell regarding the employment of part-time employees, i.e. there are none currently employed nor are there any plans to engage part-time employees during the life of the Agreement.
Effect of the undertakings
In conducting its assessment of the Agreement, it is open to the Commission to accept undertakings given pursuant to s 190 of the Act. That is, if the Commission is satisfied that the undertaking or undertakings provided are not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.
Of the undertakings provided, seven deal with the interaction of the Agreement with the NES, which the AWU has expressed satisfaction with. Those undertakings are:
· Clause 6 – Period of Operation
· Clause 24 – [Annual Leave and Shiftworkers]
· Clause 37(3)(e)(ii) – [Notice of Termination by Employer – Apprentices]
· Clause 42(c) – [Redundancy Benefits]
· Clause 46(c) – [Annual leave loading]
· Clause 47 – Carer’s Leave – Paragraph (iii) [Unpaid Carer’s leave]
· Clause 52 – Public Holidays
Of the remaining three undertakings, one deals with a typographical error:
· Clause 37(e) – [Notice of termination periods and exclusions]
The final two undertakings address the operation of terms of the Agreement:
· Clause 16 – Part-Time Employment
· Clause 35 – Performance Bonus
It is self-evident that the undertakings provided have been designed to ensure that the Agreement, when read with the undertakings, would pass the better off overall assessment as well as satisfying NES requirements. I am satisfied that each of the undertakings provided would not cause financial detriment to any employee that would be covered by the Agreement.
I have also considered the undertakings in the context of the Agreement as a whole and am not persuaded that the changes constitute a substantial re-writing of the Agreement. I am consequently satisfied that the undertakings cause no financial detriment to any employee and do not constitute substantial change to the Agreement.
Form F18 Issues
The AWU led no evidence or made further submissions in relation to the concerns expressed in their Form F18; specifically:
· AWU does not consider the Agreement a good outcome in terms of its claims for its members;
· The Agreement was taken by the Applicant to a ballot without the AWU having an adequate opportunity to respond to the Applicant’s offer; and
· A number of casual employees were engaged during the access period.
While the Agreement may not represent a “good outcome in terms of its claims” in the eyes of the AWU, or the fact that it may have been taken to a ballot before the AWU believed they had an opportunity to respond, does not mean the Applicant has failed to comply with the necessary agreement making steps. I am not persuaded by the AWU that the agreement making steps taken by the Applicant are contrary to the Act’s requirements.
Summary
It will be seen from the statutory provisions provided above that an enterprise agreement will be found to have passed the better off overall test if the Commission is satisfied, that at the test time, each award covered employee and each prospective award covered employee employed under the agreement would be better off overall if the agreement applied to the employee rather than if the award applied to the employee.
The application of the BOOT is not applied as a line by line test. Rather, it is a global consideration of the provisions in the agreement compared to the award taking into account those provisions that are less beneficial and weighing them against those provisions that are more beneficial.
In conducting its assessment of the Agreement, it is open to the Commission to accept undertakings given pursuant to s 190 of the Act. That is, if the Commission is satisfied that the undertaking or undertakings provided are not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.
I am satisfied that there are a number of less beneficial provisions under the Agreement; specifically, overtime, weekend and shift penalties. However, I am satisfied that those less beneficial provisions are more than offset by the combination of higher “flat” hourly rates in conjunction with the hours of work patterns. The additional annual overtime and performance bonus payments, while relevant for the BOOT assessment was ultimately unnecessary for the purpose of satisfying the Commission regarding the BOOT. I also note other more beneficial provisions identified in the Applicant’s Form F17 which the AWU has not challenged, including redundancy, parental leave and accident pay.
Conclusion
A copy of the Applicant’s undertakings is attached in Annexure A. Having heard from the Applicant, the AWU and employee bargaining representatives, I am satisfied that the Agreement with the undertakings passes the BOOT.
I am further satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.
Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss 186, 187, 188 and 190 of the Act as are relevant to this application for approval have been met.
Pursuant to s 205(2) of the Act, the model consultation term prescribed by the Fair Work regulations 2009 is taken to be a term of the Agreement.
The AWU, being a bargaining representative for the Agreement, has given notice under s 183 of the Act that it wants the Agreement to cover it. In accordance with s 201(2) of the Act, I note that the Agreement covers the organisation.
The Agreement was approved on 1 March 2018 and, in accordance with s 54 of the Act, will operate from 8 March 2018. The nominal expiry date of the Agreement is 12 April 2020.
DEPUTY PRESIDENT
ANNEXURE A
[1] Section 173 of the Act.
[2] Section 174 of the Act.
[3] Section 180 of the Act .
[4] MA000001.
[5] See paragraph [11].
[6] Statement of Mr. Mark Lakkis, dated 21 February 2018.
[7] Statement of Mr Tafi Inivale, dated 21 February 2018.
[8] [2017]FWCFB 1664.
[9] Applicant’s Submissions, Material and Undertakings, dated 21 December 2017, at paragraph [5].
[10] Exhibit A1, Statement of Mr. Joshua Connell, dated 19 January 2018, at paragraph [7].
[11] Ibid, Attachment 2.
[12] Ibid, at paragraph [8].
[13] Ibid, at paragraph [8(vi)].
[14] Ibid, at paragraph [8(vii)].
[15] Applicant’s Submissions, Material and Undertakings, dated 21 December 2017, at paragraph [7], Attachment titled “Days when worked performed at four GrainCorp Queensland Terminals for 12 months ending 30 September 2017”.
[16] See paragraph [9].
[17] Statement of Mr. Joshua Connell, at paragraph [6].
[18] AWU Submissions, at paragraph [7].
[19] See paragraph [12].
[20] See paragraph [9].
[21] Statement of Mr. Tom Kuivenen, filed 17 January 2017.
[22] Statement of Mr. Kenneth Mitchell, dated 16 January 2017.
[23] Exhibit E2, Statement of Mr. Derek Broadfoot, dated 17 January 2017.
[24] Exhibit E1, Statement of Mr. Shane Northduft, dated 16 January 2017.
[25] GrainCorp Operations Limited (Queensland Terminals) Enterprise Agreement 2017 at Clause 29.
[26] Exhibit A1, Attachment 3.
[27] See paragraph [9]
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