Great Hospitality Pty Ltd

[2017] FWC 5823

[2017] FWC 5823

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Great Hospitality Pty Ltd
(AG2017/1546)

DEPUTY PRESIDENT ASBURY BRISBANE, 8 NOVEMBER 2017

Application for approval of the Great Hospitality Collective Agreement 2017 – Voluntary substitution of weekend days for week days – Preference of employees not relevant to BOOT consideration – Agreement does not pass BOOT – Application for approval of agreement refused.

BACKGROUND

[1] This Decision concerns an application by Great Hospitality Pty Ltd (GHPL/the Company) under s. 185 of the Fair Work Act 2009 (the Act) for approval of the Great Hospitality Collective Agreement 2017. The application was made on 3 May 2017. The Agreement was initially allocated to Commissioner Lee who dealt with the application for approval with the assistance of the Commission’s Member Support Research Team. There was a significant amount of correspondence to GHPL in relation to issues and concerns which Commissioner Lee had with the Agreement including:

• 4 May 2017 issue with Notice of Employee Representational Rights;



• 15 June 2017 forms and signature requirements; pre-approval requirements and better off overall test (BOOT) issues;



• 31 July 2017 forms and signature requirements and BOOT issues;



• 17 August forms and signature requirements and BOOT issues; and



• 15 September BOOT issues.

[2] While the employer responded to all correspondence, and offered some undertakings, its responses did not address all of the concerns in relation to whether the Agreement passed the BOOT. The matter was referred to me on 12 October 2017 to consider whether the Agreement should be approved. I conducted a hearing in relation to the application for approval of the Agreement on 25 October 2017.

BOOT ISSUES

Relevant Awards

[3] The relevant awards for the purpose of assessing whether the Agreement passes the BOOT are the:

• Amusement, Events and Recreation Award 2010 (Amusement Award);



• Hospitality Industry (General) Award 2010 (Hospitality Award); and



• Restaurant Industry Award 2010 (Restaurant Award)

Part-time employment

[4] Clause 4.5 of the Agreement provides for a minimum period of engagement for part-time employees of two hours per week. The Restaurant Award requires that part-time employees are rostered for a minimum of three consecutive hours on any shift. All of the Awards provide that part-time employees are employees who have reasonably predictable hours of work and that the employer will agree in writing with the employee on a regular pattern of work specifying at least the hours to be worked each day, which days of the week will be worked and the actual starting and finishing times on each day. All of the Awards further provide that any agreed variation to the regular pattern of work will be agreed in writing and all work in excess or outside of the part-time employee’s ordinary hours will be paid at the relevant overtime rate.

[5] The Agreement provides that the employer “must inform” the part-time employee of the ordinary hours of work, days to be worked and the starting and finishing time and that these times may be varied by agreement in writing which may be via text or email. My concern is that the requirement for written agreement to changes to ordinary hours has been altered and I do not accept that it is appropriate to record changes to hours by text message, given that the agreed hours are the basis upon which a part-time employee is entitled to overtime.

Casual employment

[6] Clause 4.5(c) of the Agreement provides for casual employment. At subclause (ii) there is provision for a two hour minimum engagement or payment for restaurant or hospitality employees, which can be altered by mutual agreement. The Restaurant, Hospitality and Amusement Award provide for a three hour minimum engagement and none of the Awards allow for a reduction including a reduction that is mutually agreed. Clause 5 of the Agreement contains a provision entitled Multi Hiring in the following terms:

“5.1 Permanent Employees may be separately engaged as casual Employees for duties with other alternate clients or in separate sections of Employer’s or Employer’s client’s business from that in which the Employee engages in their usual employment. Such Employees will be paid the appropriate rate of pay for a Casual Employee performing that work. This provision will only operate by mutual agreement between the parties and does not apply where overtime would normally be paid. “

[7] There is no such term in any of the Awards relevant to the BOOT. Arguably the Agreement clause allows an employee to perform work on a casual basis that is the same work that is performed by an employee as a full time or part time employee, for another client of the employer, in circumstances where the performance of that work as a full time or part time employee would attract overtime payments under the relevant award. The clause simply provides that the duties normally performed by a full time or weekly employee can be performed for alternative clients or in an alternative part of the employer’s business. The duties are the same and only the location in which they are carried out or the client for who they are performed, differs.
Qualifying period

[8] Clause 9.1 of the Agreement subjects all employees to a probation or qualifying period. There is no equivalent provision in any of the relevant awards. It is also not clear how the purported right in the Agreement for the employer to terminate employees during the probationary period is intended to operate in relation to the right of an employee to seek a remedy for unfair dismissal.

Broken shifts

[9] Clause 12.2 of the Agreement provides for the working of broken shifts. There is no provision allowing for such shifts to be worked in the Amusement Award and both the Hospitality and Restaurant Awards prescribe a split shift allowance. There is no allowance or additional remuneration for split shifts in the Agreement.

Weekend substitution

[10] Clauses 12.8 – 12.14 provide for an arrangement entitled “Weekend Substitution”. The provisions are in the following terms:

“12.8 Weekend substitution. Given the nature of the Employer’s business, Employees have the flexibility to request a substitution of their weekends. This clause allows the parties to mutually agree what days will be the standard working week for the particular employee, in order to meet the individual needs of the Employee.

12.9 The Employee may therefore request to work weekends as ordinary hours of works, and to be paid at the ordinary rate of pay that would normally apply for Monday to Friday work, and take their weekend break over two mutually agreed days during the normal working week (Monday to Friday). Importantly, the Employee will not be disadvantaged by this arrangement, and will be better off overall, due to the fact that the Award penalties for weekend days will still apply, but will be applied to the agreed weekend substitution days and not the traditional weekend days of Saturday and Sunday, and will allow the Employee better flexibility to suit their individual needs.

12.10 When nominating weekend substitution days, the parties should seek to mutually agree on consecutive days. If this is not possible due to the Employee’s personal circumstances, the days may be non-consecutive. If non-consecutive days are chosen, the first substitution day that falls on each week shall be treated as a Saturday (for the purpose of calculating penalties) and the second day that falls each week shall be treated as a Sunday (for the purpose of calculating penalties).

12.11 To access the weekend substitution provision, the Employee shall make application in writing to the employer using the Great Hospitality Weekend Substitution Application/Agreement Form attached as Schedule 2 to this Agreement.

12.12 Once approved by the Employer, the arrangement may be reviewed at any point on the request of either Employer or Employee. If as part of this review process either the Employer or Employee wish to terminate or vary the arrangement, this may be done by providing 6 weeks’ notice to the to the other party in writing.

12.13 If the Employer or Employee seek to terminate the arrangement, the Employee shall revert (at the expiry of the 6 weeks’ notice period) to the ordinary hours but for the operation of this Agreement are prescribed in the relevant Modern Award that would ordinarily govern the Employee’s terms and conditions of employment. In addition, the ordinary hours allocated to the Employee in these circumstances shall be governed by the operational requirements of the Employer. If the circumstances are such that a significant change to ordinary hours arises, the consultative process will be followed in accordance with clause 32 of this Agreement.

12.14 If the Employer or Employee seek to vary the arrangement, they shall provide the other party with a proposed alternate arrangement in writing. The proposed alternate arrangement shall not be unreasonably rejected. If Agreement between the parties cannot be reached the Employee shall revert (at the expiry of the 6 weeks’ notice period) to the ordinary hours but for the operation of this Agreement are prescribed in the relevant Modern Award that would ordinarily govern the Employee’s terms and conditions of employment. In addition, the ordinary hours allocated to the Employee in these circumstances shall be governed by the operational requirements of the Employer. If the circumstances are such that a significant change to ordinary hours arises, the consultative process will be followed in accordance with clause 32 of this Agreement.”

[11] There is also a form in Schedule 2 of the Agreement by which an employee can request to enter into a weekend substitution arrangement. The form provides for an employee making such a request to state the reasons why the arrangement: “will be beneficial to my personal circumstances.”

[12] Essentially the weekend substitution clauses provide for employees to voluntarily work weekends as ordinary days and have days off in lieu during the week, with substitute days being treated as weekend days if work is performed on them. This clause is no more than a clause whereby employees can volunteer to work days which under the Awards would attract penalty rates, and not be paid penalty rates for such work because it is “voluntary”. I do not accept that the two substitute days off that the employee has during the week compensate for the loss of penalty rates.

[13] Under the Awards employees can work on any days of the week with penalty rates being payable for ordinary hours worked on weekends. Penalty rates for ordinary weekend work are payable under the Awards regardless of any other days the employee has off or works. It has been long established that the BOOT requires a comparison between the terms of a relevant award and the terms of an agreement to establish whether the employee would be paid more for working the same hours at the same times under the agreement than they would be under the award.

[14] The desire of an employee to work particular hours or on particular days is not a factor that can be taken into consideration in applying the BOOT. Under the proposed term in the Agreement, an employee can work on weekends at times that would attract a penalty under the Award and be paid ordinary rates, on the basis that the employee would have a non-penalty week day off. I think it improbable that employees would work on the substituted days so that they would receive penalty rates and there is no guarantee that they would work on such substituted days so as to offset the loss of penalty rates for the weekend days on which they would work if a substitution arrangement was in place.

TOIL

[15] At clause 14, the Agreement has a time off in lieu (TOIL) provision which may be implemented at the employer’s discretion. Overtime dealt with in this way is to be taken as time off on a time for time basis. Under the Restaurant Award, TOIL may be implemented by written agreement between the employer and the employee and the time off is required to be equivalent to the overtime payment that would have been paid. Written agreement is also required under the Hospitality and Amusement Awards on each occasion that TOIL is taken but TOIL is taken on an hour for hour basis rather than for time equivalent to the overtime rate that would have been paid. Both awards provide that TOIL must be taken within six months of accrual or paid out at overtime rates and that the employee can request at any time to be paid overtime instead of taking the time off. These additional award provisions are not found in the Agreement.

Variation of the Agreement

[16] Clause 15.6 is headed “Legislative changes to the management of penalties” and is in the following terms:

“If during the life of this Agreement either State or Federal legislation changes (legislative changes) with respect to the management of penalties and these changes relate directly to Employees covered by classifications specified in this Agreement, the Agreement may be altered to the extent of any inconsistency that applies between the legislative changes and this Agreement, at the full discretion of the Employer if it so chooses.”

[17] It appears that this provision allows for the Agreement to be varied, other than in accordance with the provisions of the Act.

CORRESPONDENCE FROM THE COMMISSION

[18] Prior to the file being allocated to me for hearing, a number of issues were raised in correspondence sent on behalf of Commissioner Lee by Commission Staff in the Member Support Research Team. In email correspondence dated 15 June 2017, the following BOOT issues were raised:

• The rates of pay in the Agreement for some casual employees are the same rates as those in the relevant Awards;



• While clause 13.1 of the Agreement indicates that the casual loading is included in the rates and clause 14.5(c) of the Agreement indicates that the casual loading is 25%, the rates in clause 13.1 are not 25% above the rates for full time employees;



• The Agreement provides for junior employees who would otherwise be covered by the Amusement Award to receive lower rates that the Award for 16-18 year olds because of the percentages used to calculate those rates and if engaged on a casual basis those employees would receive rates that are below or the same as the Award and therefore would not be better off under the Agreement;



• Clause 14.7 of the Agreement provides for overtime penalties for exhibition employees after 12 hours per day or 56 per week while the Amusement Award provides for overtime after 10 hours per day or 38 hours per week; and



• Public holiday rates for casual employees under the Amusement Award are 275% while the Agreement provides for 250% rates for such employees on public holidays.

[19] The correspondence also raised concerns and questions about the operation of the weekend substitution provision and the TOIL provisions in the Agreement.

[20] In a letter dated 21 June 2017, GHPL responded to the email of 15 June. That letter set out a table of rates showing the same rates as those in the Agreement except that the headings on the columns were amended to indicate that the permanent rate included a 17.5% leave loading and the casual rate included casual loading. The table set out in the 21 June letter also included an additional column containing an “Ordinary Time Rate” which is lower than the rates in the Agreement. In relation to junior employees under the Amusement Award, a table was provided which included increased percentages for employees from 16 – 18 years of age.

[21] In relation to weekend substitution, an undertaking was offered to the effect that where the relevant Award provided for a Saturday penalty rate such rate would be applied to the first substituted day of the week and the Award Sunday penalty rate would be applied to the second substituted day in any week where an employee worked on those days. In relation to exhibition employees, the letter asserted that clause 14.7 of the Agreement provides for 200% loading for work in excess of 12 hours in any day. This response does not appear to address the fact that the Amusement Award provides for ordinary hours of 38 per week and overtime at the rate of time and a-half for first three hours and double time thereafter for hours in excess of 38 while the Agreement provides for hours in excess of 56 per week to be paid at double time.

[22] In relation to TOIL, an undertaking was offered whereby the Company would not apply the provision allowing it to require employees to take TOIL instead of being paid overtime rates and would instead reach written agreement with employees in relation to TOIL. Further, the Company undertook that for employees otherwise covered by the Restaurant Award, TOIL would be calculated on the basis of the overtime rate rather than on an hour for hour basis. The Company also offered an undertaking with respect to casual employees who would be covered by the Amusement Award working public holidays, which does not appear to address the issue raised.

[23] In a second email dated 31 July sent on behalf of Commissioner Lee, the Company was informed that the additional column of rates it had provided in the table in its proposed undertakings contained rates that were said to be “Ordinary Time Rates” which were lower than the rates in the Agreement and did not appear in the Agreement when it was voted on by employees. The Company was informed that this undertaking would not be accepted on the basis that it reduced the terms of the Agreement on which employees had voted. It was also pointed out to the Company that the proposed undertaking in relation to weekend substitution did not deal with the disadvantage employees would suffer under the Agreement if they worked on weekends and then did not work on the days substituted for weekends so that weekends had been worked at ordinary rates resulting in employees not being better off under the Agreement than they would be under the Award. In relation to overtime for exhibition employees, the issue of 56 hours in a week being worked under the Agreement before overtime would be payable compared to 76 in a fortnight under the Amusement Award was reiterated.

[24] In a further series of proposed undertakings set out in a letter of response dated 2 August 2017, the Company maintained its position about the table of rates set out in its correspondence of 21 June. In relation to the weekend substitution point, the Company asserted that employees have flexibility to request a substitution of their weekends and that this is a benefit to employees who wish to have “their weekend” on days other than Saturday and Sunday because it is convenient to their circumstances. It is further asserted that this choice is a benefit which makes the employees better off overall and that this type of substitution is consistent with paragraphs 867 and 868 of the Fair Work Bill 2008 Explanatory Memorandum. The Company proposed an undertaking to amend the Employee Application Form for weekend substitution in Schedule 2 of the Agreement by including a statement on behalf of an employee seeking to implement such an arrangement that for reasons set out in the Application Form: “which I consider will make me better off than receiving penalty rates for Saturday and Sunday work.”

[25] In further email correspondence on behalf of Commissioner Lee dated 17 August 2017, the concern about casual rates was maintained and it was pointed out that the rates in the Agreement were exactly the same as those in the Award, so that the Commissioner could not be satisfied that casual employees were better off. Further, the Company was informed that the Commissioner’s view was that including text in the form by which employees could apply for weekend substitution to the effect that the employee believed that he or she was better off overall, did not satisfy the Commissioner that this was the case. It was again reiterated that while employees might receive weekend penalties if they worked on the substituted days, if those days were not worked and an employee worked on weekends at ordinary rates, the employee would not be better off overall.

[26] In correspondence dated 21 August 2017 in response to the email of 17 August 2017, the Company gave an undertaking to increase casual rates by $0.10 per hour. The table showing this increase still contained the lower rates which were not in the Agreement that employees voted on. Further, the Company went on to reiterate its position that the ability of employees to “request a substitution of their weekends” is a benefit to employees who wish to elect to have their weekend on days other than Saturdays and Sundays to suit their personal convenience, which makes the employee better off overall. In a response to the Company’s correspondence of 21 August a further email dated 15 September 2017 was sent to the Company on behalf of Commissioner Lee. In relation to the weekend substitution provision, the email states:

“The Commissioner reiterates that the Awards do not provide for such arrangement and generally all work on Saturdays and Sundays is compensated by a penalty rate. The fact that employees will not receive weekend penalties on Saturdays and Sundays where most of their hours will be worked, is an issue, as employees are unlikely to ever work on their substituted weekend. As the rates of pay in the agreement are only 7% to 10% above the Awards for permanent employees and 0.39% to 3% above the Awards for casual employees, the Commissioner does not believe that employees are better off overall with the weekend substitution provisions under the Agreement. The Commissioner’s viewpoint has not changed even if this provision in invoked at the employee’s request.”

[27] The email to the Company of 15 September 2017 went on to raise other additional BOOT issues including:

• That the Agreement does not appear to offer overtime rates to part-time employees for time worked in excess of or outside their agreed hours, contrary to the relevant Award provisions;



• Clause 15.6 “Legislative changes to the management of penalties” appears unclear but may allow the employer to reduce Agreement penalties without applying to the Commission to vary the Agreement, which may also raise genuine agreement issues as to whether this provision was explained to employees;



• Inconsistency with allowances in the Agreement and clause 16.1 providing for allowances to be administered in terms of the relevant Award;



• Clause 27 of the Agreement requiring uniforms to be worn without providing for a laundry allowance as provided for in all of the relevant Awards; and



• Clause 19.7 of the Agreement appears to provide for rest breaks between shifts in less favourable terms than would be applicable to employees under the Amusement Award.

[28] The email dated 15 September also indicated that the Company may provide undertakings to address the issues raised by the Commissioner or could seek a hearing in relation to the application for approval of the Agreement. The Company responded to this email on 22 September 2017 maintaining its position with respect to the weekend substitution provision and reiterating that the choice of days off in a week would result in employees being better off overall. The Company also offered undertakings in relation to the other matters. In relation to the question of whether it sought a hearing the Company stated that as it had already expended a significant amount of resources and time in the application it would appreciate an indication of whether having reviewed its correspondence, the Commissioner would be prepared to approve the Agreement.

[29] It was determined that the Agreement could not be approved at that point, and that a hearing was required. The matter was then allocated to me. As previously noted, I conducted a hearing in relation to the application for approval of the Agreement.

HEARING

[30] At the hearing on 25 October 2017, Mr Procter of ClarkeKann Lawyers sought permission to represent GHPL. I granted permission on the basis that no issue of fairness arose and there are some issues of complexity. I informed the Company of concerns which I had about whether the Agreement passed the BOOT. In doing so I made it clear that I did not consider my consideration of the Agreement as being limited to the matters raised by the Member Support Research Team and conveyed on behalf of Commissioner Lee. Rather, I would satisfy myself as to whether the Agreement passes the BOOT and decide whether I would accept the undertakings offered by the Company in response to the concerns raised on behalf of Commissioner Lee. The concerns I have in relation to whether the Agreement passes the BOOT are dealt with above. I also share the concerned identified in the correspondence on behalf of Commissioner Lee. Undertakings addressing some of those concerns have been offered by the Company.

[31] At the hearing I pointed out to Mr Procter that undertakings had been offered in a number of letters from the Company and that I would be prepared to consider those undertakings but that they should be provided in a consolidated form with an indication that the views of bargaining representatives had been sought in relation to them. I also indicated that if the Company wished to continue to press the weekend substitution provision I would consider it but that it would be doubtful that it could be distinguished from clauses considered by Full Benches of the Commission under the category of voluntary additional hours or voluntary overtime clauses. I further outlined my concerns about the multi-hiring clause in the Agreement.

[32] Mr Procter indicated that the Company would not be offering any undertakings other than those previously offered in the correspondence outlined above, and that it would consolidate those undertakings into a single document for the Commission. Mr Procter also advised the Commission that the Company pressed its position with respect to the weekend substitution provision and maintained that it did not result in any employee not being better off overall under the Agreement than the employee would be under the relevant award. The Company did not seek to make any further submissions in relation to this provision and relied on those already made in writing in response to correspondence from the Commission.

[33] I informed the Company that if it wished to reconsider its position with respect to the weekend substitution clause, it could file any additional undertaking in regard to that clause by Friday 27 October 2017. Consolidated undertakings have been received from the Company. I turn now to consider those undertakings and whether they address the BOOT issues that have been identified.

CONSIDERATION

[34] In relation to the weekend substitution clause, GHPL has offered the following undertakings:

“Clause 12.9 – Hours of Work – Weekend substitution – Undertaking made on 21 June 2017

Award penalty rates referred to in clause 12.9 are set out in clause 15.1 for restaurant industry and hospitality industry permanent employees, 15.2 for restaurant industry and hospitality industry casual employees and clause 15.3 for amusement, events and recreation industry permanent employees. Where the relevant Award penalty rates refers to a rate for a “Saturday”, that rate will be applied to the first weekend substitution day, and where the relevant Award penalty rate refers to a rate for a “Sunday”, that rate will be applied to the second weekend substitution day.

Clause 12.8 to 12.14 – Hours of Work – Weekend Substitution – Undertaking made on 2 August 2017

Employees have the flexibility to request a substitution of their weekends. This is a benefit to employees who wish to elect to have their “weekend” on days other than Saturday and Sunday because they are not able to work on those days and it is convenient to their circumstances.

Eg. If an employee elects to substitute Monday and Tuesday as their weekend, they will not be expected to work on their weekend. In the event that they are required to work on their weekend (ie on Monday or Tuesday) and they are able to do so, they will be paid penalty rates for Monday as if it were a Saturday and penalty rates for Tuesday as if it were a Sunday. Therefore Saturday and Sunday form part of the employee’s ordinary hours of work for the purposes of the Weekend Substitution clause.

The employees are not worse off under the Agreement in this respect because the clause is only enlivened if a particular employee makes the request to suit their individual needs, substituting Saturday and Sunday for another two consecutive days, which, if requested for work, will then attract the same penalties.

That employee will be better off because that employee will enjoy other days of the week off, to suit their individual needs. Those needs must be set out in the Part 1 – Employee Application form contained in Schedule 2 to the Agreement.

Whilst the individual employee will be forgoing a penalty payment for any work performed on Saturday or Sunday, they will:

Receive the non-monetary benefit of the flexibility, as set out in the Part 1 – Employee Application form contained in Schedule 2; and

Receive the monetary benefit of penalty rates for any substituted weekend work they are required, and able to work.

This type of substitution is contemplated by the Better off Overall Test (see the illustrative example given in paragraphs 867, and paragraphs 868 of the Fair Work Bill 2008 Explanatory Memorandum). Further, when applying the Better off Overall Test, the Commission is to ensure each employee is better off, but “in the context of the approval of enterprise agreements, the better off overall test does not require (the Commission) to enquire into each employee’s individual circumstances” (paragraphs 818 of the Fair Work Bill 2009 Explanatory Memorandum). Here, the individual circumstances must be such as to ensure the employee is actually better off.

To make this clear, the Company undertakes to include, in the Part 1 – Employee Application form contained in Schedule 2 to the Agreement, the following words after the words “for the following reasons”: “which I consider will make me better off than receiving penalty rates for Saturday and Sunday”.

Clause 12.8 to 12.14 – Hours of Work – Weekend Substitution – Undertaking made on 21 August 2017

Employees have the flexibility to request a substitution of their weekends. This is a benefit to employees who wish to elect to have their ‘weekend’ on days other than Saturdays and Sunday because they are not able to work on those days and it is convenient to their circumstances.

Importantly, the weekend substitution is at the request of the employee in order that they are able to take their weekend on day’s other than Saturday and Sunday so that they can care for children or for other personal reasons.

If the employee does not make this request for a weekend substitution, then they will be administered in line with the Award with regards to weekend penalties.

To give the employee the ability to choose when their weekend is provides a benefit to the employee which we believe makes the employee better off over all.

Clause 12.8 to 12.14 – Hours of Work – Weekend Substitution – Commentary provided on 22 September 2017

Background

The weekend substitution clause does not seek to avoid the payment of penalties and/or loadings associated with working outside agree ordinary hours of work. Importantly this clause provides flexibility to the employee to agree their ordinary hours of work while still allowing for penalties and/or loadings to be paid.

The arrangement we are proposing does not force the employee to take a particular day as their weekend, it provides them with a choice to suit their lifestyle and circumstance. Indeed they are at liberty to choose Saturday and Sunday as their weekend days and this being the cause they will receive weekend penalty rates on Saturday and Sunday for all hours worked. Indeed if no substitution is nominated by the employee Saturday and Sunday will be the default weekend days.

Alternatively if they choose Thursday and Friday as their weekend days as this suit their individual circumstance i.e. child care is difficult for them on those days, but they are required by the company to work they will receive weekend penalty rates on Thursday and Friday for all hours worked. Hence they will be paid the weekend penalty rates when they are most affected and on the days that they normally do not want to work. To be clear in this case, as working on the Saturday and Sunday suits their circumstances Saturday and Sunday form part of the employee’s ordinary hours of work for the purposes of the Weekend Substitution clause as they are not adversely affected.

In summary, as we are a 7 day a week business the employees could still be rostered to work their chosen weekend days and will be paid weekend penalty rates in such circumstances.

Better off overall

As previously stated the employees are not worse off under the Agreement in this respect because the clause is only enlivened if a particular employee makes the request to suit their individual needs, substituting Saturday and Sunday for another two consecutive days, which, if requested for work, will then attract the same penalties.

That employee will be better off because that employee will enjoy other days of the week off, to suit their individual needs.

Whilst the individual employee will be forgoing a penalty payment for any work performed on Saturday or Sunday, they will:

Receive the non-monetary benefit of the flexibility, as set out in the Part 1 – Employee Application form contained in Schedule 2; and

Receive the monetary benefit of penalty rates for any substituted weekend work they are required, and able to work.

Award provisions

Although not expressly stated that Awards can provide for such arrangement and generally all work on Saturdays and Sundays under the Awards is compensated by a penalty rate. This type of substitution is contemplated by the Better off Overall Test (see the illustrative example given in paragraphs 867, and paragraph 868 of the Fair Work Bill 2008 Explanatory Memorandum).

Further, when applying the Better off Overall Test, the Commission is to ensure each employee is better off, but “in the context of the approval of enterprise agreements, the better off overall test does not require (the Commission) to enquire into each employee’s individual circumstances” (paragraphs 818 of the Fair Work Bill 2009 Explanatory Memorandum). Here, the individual circumstances must be such as to ensure the employee is actually better off.

To reiterate, the Company undertakes to include, in the Part 1 – Employee Application form contained in Schedule 2 to the Agreement, the following words after the words “for the following reasons”: “which I consider will make me better off than receiving penalty rates for Saturday and Sunday”.”

[35] Much of the material set out in the consolidated undertakings is submissions. I do not accept that the undertakings address the issues which cause the Agreement to fail the BOOT. The clauses allowing for employees to agree to substitute week days for weekend days and to work on weekend days at ordinary rates, is a voluntary additional hours provision in another guise. The clauses allow employees to agree to work hours on Saturdays and Sundays for which a penalty rate would be payable under the relevant Award, and to be paid less than they would be entitled to be paid under the relevant Award for such hours, on the basis that they have agreed to take other days off in lieu. Under the Award, an employee who agreed to work ordinary hours on weekends and have other days off in lieu during the week would still be entitled to be paid penalty rates for hours worked on weekends. The fact that such an arrangement might suit an employee does not disentitle the employee to penalty payments.

[36] It is well established in numerous decisions of the Commission, including Full Bench Decisions, that in applying the BOOT – and previously the no disadvantage test – consideration is given to the terms of the relevant award and the terms of the agreement. Where the award does not distinguish between hours worked on a voluntary basis and those directed by the employer the analysis does not involve consideration of the wishes of employees or that they have volunteered to at a particular time for ordinary rates. Similarly the comparison does not involve consideration of the fact that employees will not be offered overtime work if they do not agree to do that work at ordinary rates. 1

[37] The first undertaking offered by GHPL on 21 June 2017 in relation to clause 12.9 of the Agreement, does no more than provide an entitlement to penalties on substituted days, on which there is every likelihood that employees will not work, given that the substituted days are days off. In any event under the Awards, an employee would be entitled to overtime rates for work on days off and in addition to be paid at penalty rates for ordinary hours worked on weekends. The Agreement rates are only marginally above the rates in the Award, and are not sufficient to offset the reduction that would result if the clause was utilised.

[38] The second and third series of undertakings offered by GHPL on 2 and 21 August 2017 in relation to clauses 12.8 – 12.14 are not undertakings at all. Both purported undertakings are submissions and for the reasons set out above I do not accept them. In relation to the suggested amendment to the form on which an employee can apply to substitute weekend days for week days offered on 2 August 2017, the fact that an employee who requests to work hours that would attract a penalty rate under the Agreement, does so under the belief that he or she will be better off, does not make it so.

[39] In any event, the Form is a term of the Agreement. An undertaking does not vary an enterprise agreement but rather becomes a term of the Agreement that operates to modify or exclude the operation of a particular provision as a result of the Commission finding that the agreement does not pass the BOOT. An undertaking must be enforceable as a term of the Agreement. The proposed change of wording in the Form could not operate as an undertaking. For the reasons set out above, I am also unable to accept the submissions set out in the commentary appended to the consolidated undertakings document.

[40] Some of the other undertakings offered by GHPL could be capable of acceptance so that I might be satisfied that the Agreement passes the BOOT. However, the Company’s insistence on pressing the weekend substitution provisions means that I am unable to accept that the Agreement passes the BOOT. The wage rates in the Agreement, even with the undertakings in relation to wage rates offered by GHPL, are not sufficient to offset the reductions in Award conditions which would result if the Agreement was approved.

CONCLUSION

[41] For these reasons, the application for approval of the Agreement is refused, the application is dismissed and an Order to that effect will be issued with this Decision.

DEPUTY PRESIDENT

Appearances:

Mr M. Procter of ClarkeKann Lawyers for the Applicant.

Hearing details:

25 October.

Brisbane.

2017.

 1   Bupa Care Services Pty Ltd [2010] FWCFB 2762; Mondex Group Pty Ltd [2015] FWC 1148.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR597504>