Health Services Union
[2023] FWCFB 190
•17 OCTOBER 2023
| [2023] FWCFB 190 [Note: A copy of the zombie agreement to which this decision relates (AC324212) is available on our website.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional instruments
Health Services Union
(AG2023/2515)
FAMILY BASED CARE DIRECT CARE WORKER EMPLOYEE COLLECTIVE AGREEMENT 2009
| Health and welfare services | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 17 OCTOBER 2023 |
Application to extend the default period for the Family Based Care Direct Care Worker Employee Collective Agreement 2009
Introduction
The Health Services Union, Tasmania Branch (HACSU) has applied under item 20A(4) of Sch 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth) (Transitional Act) to extend the default period for the Family Based Care (North) Inc. Direct Care Worker Employee Collective Agreement 2009-2012 (the Agreement) for a period of four years. The Agreement covers employees engaged in classifications that would now be covered by the Social, Community, Home Care and Disability Services Award 2020.
The application to extend the Agreement was made on 26 July 2023.
The Agreement is a collective agreement-based transitional instrument within the meaning of subitem 2(5)(c) of Schedule 3 of the Transitional Act which continued to apply to employees of Family Based Care Association (Northern Region) Inc (Family Based Care) because of item 3 of Schedule 3. Family Based Care was purchased by Integratedliving Australia Ltd (Integratedliving) in 2014. Integratedliving is the current employer of 40 employees covered by the Agreement and does not oppose the application.
The Transitional Act was amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay)Act 2022 to provide for the automatic termination of all remaining transitional instruments. Pursuant to subitem 20A(1) and (2) of Sch 3 of the Transitional Act, the Agreement will terminate on 6 December 2023 unless it is extended under subitems 20A(6) or (11)(e). The main features of item 20A of Sch 3 of the Transitional Act are described in detail in the Full Bench decision in Suncoast Scaffold Pty Ltd[1] and we rely upon what is said in that decision.
The application is made under subitem (4)(c). Under subitem (6), the Commission is required to extend the default period for an Agreement for a period of no more than 4 years if the Commission is satisfied that subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to do so; or it is reasonable in the circumstances to do so.
HACSU relies on subitem (9) which applies if the application relates to a collective agreement based transitional instrument and it is likely that,as at the time the application is made, the award covered employees for the instrument under subitem (10), viewed as a group, would be better off overall if the instrument applied to the employees than if the relevant modern award or awards referred to in that subitem applied to the employees. We refer to this as the better off overall test or BOOT.
The relevant instrument under subitem (10) is the Social, Community, Home Care and Disability Services Award 2020 (the Award).
Background
The matter was listed for directions on 4 August 2023. With the consent of HACSU, the Commission’s Agreements Team prepared a BOOT analysis of the terms of the Agreement relative to the Award.
On 14 August 2023, the Commission provided HACSU and Integratedliving with the Commission’s analysis.
HACSU filed submissions regarding the BOOT analysis, further submissions regarding Item 20A of Schedule 3 to the Transitional Act, and Annexures including witness statements and a guidance document on the provision of funding relating to Stage 2 of the Aged Care Work Value Case prepared by the Australian Government. No submissions were received from Integratedliving.
We are required to apply a two stage test. First, whether we are satisfied the employees will be better off overall if the Agreement does not sunset. Second, if we are satisfied, whether it is appropriate in the circumstances to extend the default period. If the test is satisfied, we will need to determine how long to extend the default period.
Better Off Overall
Arising from the Commission’s analysis and the submissions from HACSU, we note the following matters relevant to the BOOT.
Wage Rates
Clause 4.2 of the Agreement sets out the rates of pay which, in accordance with clause 4.2(d), are to be increased in accordance with the annual pay rate decisions by the Australian Fair Pay Commission or equivalent body.
The Commission’s analysis found that the rates of pay in the Agreement are below the Award. In those circumstances item 13, Sch 9 of the Transitional Act operates such that the base rates of pay in the Agreement are deemed to be the same as the Award.
HACSU submitted that the Australian Government guidance document on the provision of funding relating to Stage 2 of the Aged Care Work Value Case results in the employees under the Agreement being paid in excess of the Award. This may be the case, but for the purpose of applying subitem 20A(9) of Sch 3 the Commission is required to consider the rates in the Agreement against the rates in the Award. The guidance document may set actual rates but as the Full Bench has observed on a number of occasions the exercise here is one of comparing the rates payable under the industrial instruments[2].
We proceed on the basis that, for the purpose of the BOOT, the rates in the Agreement are the same as the Award and the employees will not be better off in terms of wages payable under the Agreement if it remains in place.
Entitlements
The Commission’s analysis was that entitlements in the Agreement to Sunday and public holidays penalties and annual leave loading (other than for shiftworkers) are also the same as the Award.
The analysis identified the following more beneficial Agreement terms:
Long service leave accrues on the basis of 13 weeks leave after 10 years of continuous service. The Award is silent in relation to long service leave so the entitlement for Award based employees is that provided for in Long Service Leave Act 1976 (Tas), which is 8 and two-thirds weeks leave after completion of 10 years of continuous service.
Greater sleepover allowance of $70 compared to $55.89 under the Award. However, under clause 25.7(e) of the Award employees are paid at overtime rates where required to perform work during a sleepover shift with a minimum one-hour payment. Under clause 4.4(e) of the Agreement employees are only entitled to payment where the employees’ sleep is interrupted three or more times or for a total period of 2 or more hours. These matters may cancel out the more beneficial allowance.
Three days compassionate leave, compared to two days under the Award which refers to the entitlement under the Fair Work Act 2009 (FW Act). However, compassionate leave under clause 5.3 of the Agreement is limited to the death or near death of a relative and does not extend to miscarriage as otherwise provided in the Award and the FW Act.
The Commission’s analysis identified a number of areas where the Agreement was less beneficial than the Award including in relation to minimum engagements, casual loading, shift penalties and overtime, the lack of a definition of shiftworker for the purpose of additional annual leave, the absence of allowances, the provision of a lower per kilometre travel allowance, fewer penalties and other safeguards for matters such as interrupted sleep on sleepovers, and less generous provisions where client cancellation occurs.
HACSU’s submission disagreed that the Agreement was less beneficial in relation to minimum engagements and travel allowance. HACSU also pointed to a number of benefits in the Agreement including non-monetary benefits such as procedures for participation in performance reviews and management, clear disciplinary procedures, identified safe work practices, protection of privacy, clear position descriptions, rights to training and support, the provision of client care plans, access to vaccinations, occupational and health and safety rights such as smoke free working environments, rights to participate in occupational health and safety issues more broadly, and clear processes for accident and incident reporting.
HACSU also submitted that many of the matters identified in the BOOT analysis, where the Agreement provides less favourable entitlements to the Award, do not apply to employees. Out of the 40 employees who are covered by the Agreement, only one is a casual. The part-time employees covered by the Agreement have been employed for more than a decade so the Award protections for part-time employees which require Integratedliving to agree with new employees on guaranteed hours and a regular pattern of work do not apply. Employees do not undertake sleepovers or 24-hour shifts and cannot be compelled to work overtime or work shift or weekend hours. Matters such as 24-hour shift rates, overtime afternoon and night shift rates and many of the allowances therefore do not have application to the employees.
Otherwise Appropriate
HACSU submits that its members have instructed it that employees want the conditions contained in the Agreement to be retained beyond the default period on the basis that the Agreement provides important benefits above the Award. This is supported by three witness statements from employees and a petition signed by 17 employees.
HACSU wrote to Integratedliving on 28 April 2023 proposing that the parties commence bargaining for a replacement agreement. Integratedliving responded by stating ‘We will further consider your proposal for an enterprise agreement, particularly in light of the impending sunset of the Family Based Care Direct Care Worker Collective Agreement 2009.’
On 11 May 2023, HACSU wrote to Integratedliving about a number of issues. Included in the correspondence was the following request: ‘We note that you are considering our proposal for enterprise agreement to cover Tasmania although would be grateful if you could advise asap. Our Agreement based members are keen to protect certain terms of that Agreement so we will make application for that Agreement to continue beyond the proposed sunset unless a new EBA is resolved for that time.’ Integratedliving replied about a number of other matters but did not confirm that it would agree to commence bargaining for a replacement agreement.
On 22 May 2023, HACSU responded by stating ‘It appears that by omission, Integratedliving is not agreeing to commence bargaining for a Tasmanian EBA. If we are incorrect about that, please advise.’
It is evident that Integratedliving has neither agreed to bargain with HACSU for a replacement enterprise agreement nor has it initiated bargaining with employees. HACSU states that its members report, that Integratedliving’s management has indicated to employees that come the sunset of the Agreement, the transferring employees will revert to the Award and more beneficial conditions (including a greater long service leave entitlement) will be lost.
HACSU submitted the purpose of the sunset provision in the Transitional Act was to either cause adverse terms and conditions to expire or to encourage parties to bargain to update old terms and conditions. The purpose was not to see employees lose long standing and important more beneficial conditions of employment or for employers to deliberately eschew bargaining in order to benefit financially by reversion to the Award.
The current application for extension of the default period for four years will mean transferring employees that obtain the benefit of a more beneficial long service leave entitlement will be able to see that entitlement crystallise and be able to take advantage of the higher entitlement, enshrine the continuation of other more beneficial entitlements, and encourage Integratedliving to agree to bargain with HACSU for a replacement enterprise agreement.
HACSU also made submissions going to subitem 6(b) that it is ‘reasonable in the circumstances’ to extend the default period. HACSU submitted that the Commonwealth Government's revised funding arrangements in response to the decision in the Aged Care Work Value Case impact both Award-based and Agreement-based employees. Despite the Commission’s analysis, HACSU submits the actual rates of pay under the Agreement have been mandatorily increased by operation of the Government’s guidelines arising from the funding of the Aged Care Work Value Case.
HACSU submits it is reasonable in the circumstances to extend the life of the Agreement because:
(a)Support Workers would risk a considerable drop in actual pay to Award levels (for example, an employee employed as a CSA Level 2b Grade 2 worker currently paid $34.50 per hour (base wage) would, under the equivalent level in the Award (Level 4.1) be paid $32.85.
(b)Long term employees have qualified or will imminently qualify for Long Service Leave and be eligible for 13 weeks long service leave pursuant to the Agreement and not 8.666 weeks pursuant to the Long Service Leave Act 1976.
(c)The employees want the Agreement to continue.
(d)The employees wish to bargain but Integratedliving has eschewed bargaining as it prefers employees reverting to the Award.
Consideration
As noted above, the application relates to a collective agreement-based transitional instrument which satisfies the requirements of subitem 9(a). In relation to the better off overall criterion in subitem 9(b), the Full Bench in Suncoast Scaffold said:2
[15] The requirement for the better off overall criterion in subitem 9(b) to be assessed by reference to the award covered employees ‘viewed as a group’ appears to allow for the possibility that the criterion may be satisfied, notwithstanding that some individual employees are not better off overall than under the relevant award, as long as there is a discernible advantage for the employees considered as a collective. Further, there only needs to be satisfaction as to the ‘likelihood’ of such a discernible collective advantage; that is, it only needs to be probable rather than certain. Taking these matters together, it is apparent that the better off overall criterion is less stringent that the BOOT in s 193 of the FW Act. However, beyond these broad observations, subitem 9(b) discloses no methodology as to how the criterion is to be applied. All that can be said is that a broad evaluative judgment is required based upon an overall comparison of the terms of the transitional instrument and the relevant award(s) in their application to the cohort of award covered employees.
HACSU submits that for the purposes of the BOOT analysis, the Commission should have regard to the Government’s funding guidance which requires Integratedliving to increase the wages for Agreement based employees by the same amounts paid to Award employees. Although we accept that it may be a condition of funding for Integratedliving to pay specific rates to employees, these rates are not incorporated into the Agreement and as such are not relevant to the BOOT analysis.
In the circumstances, we have considered the BOOT analysis on the basis that rates of pay under the Agreement are the same as the Award. We note that the most significant benefit under the Agreement is long service leave which accrues on the basis of 13 weeks leave rather than 8 and two third weeks leave after 10 years of continuous service if the Award applied. As the Agreement applies to employees whose employment transferred to Integratedliving in 2014, all the employees covered by the Agreement will have achieved at least ten years’ service by 2024 and be eligible for the higher long service leave entitlement under the Agreement. We also note the evidence from three employees which confirms that short periods of engagement are common and that these are always paid pursuant to the minimum engagement method in the Agreement which is more favourable than the Award. We also consider that the non-monetary benefits in the Agreement make the employees better off under the Agreement.
Taking into account these benefits and the fact that the aspects of the Agreement which are less favourable to employees compared to the Award do not apply to the employees, we are satisfied that it is likely that,as at the time the application is made, the employees viewed as a group would be better off overall if the Agreement applied to the employees than if the Award applied to the employees.
Having determined that subitem (9) applies, we are now required to consider whether it is otherwise appropriate in the circumstances to extend the default period for the Agreement.
While the Government’s requirement, arising from the Aged Care Work Value Case decision, that Integratedliving pay higher rates to employees covered under the Agreement is not relevant to the BOOT, it is in our view relevant to whether it is otherwise appropriate to extend the default period. HACSU’s evidence shows that employees are currently paid higher hourly rates than the Award and it appears that their pay will be reduced if the Agreement is terminated.
That matter combined with the loss of more favourable long service leave and other entitlements, the wish of the employees for the Agreement to continue while bargaining for a replacement agreement occurs, and the lack of evidence that extending the default period will cause Integratedliving any financial difficulty or affect the viability of Integratedliving’s business lead us to conclude that it is appropriate in all the circumstances to extend the default period.
Having found that we should extend the default period under subitem (6)(a) we do not need to consider the matters raised by HACSU under subitem 6(b).
HACSU seeks an extension of four years. We have discretion in relation to the length of the extension and are not bound to grant the period of extension sought in the application, which is the maximum period.[3]
As observed by the Full Bench in Applications to extend the default period for the One HPA Certified Agreement 2004-2007, the EDS People Agreement 2002 and the Alcatel Lucent Employment Partnership Agreement 2009 (One HPA, EDS and Alcatel Lucent),[4] the default position of the statutory scheme to automatically terminate transitional instruments on 6 December 2023 suggests a policy preference for employees covered by transitional instruments to be regulated by instruments made under the FW Act. Although there is no evidence that Integratedliving proposes to commence or engage in bargaining for a replacement agreement, despite requests that it do so from HACSU, there are avenues available for HACSU to secure the employees’ conditions in a new enterprise agreement, including by applying for a majority support determination under s.236 of the FW Act.
We consider that it is similarly appropriate to extend the default period for the Agreement here to enable bargaining to occur for a replacement agreement.
As to the length of the extension, in ISS Health Services Pty Ltd,[5] the Full Bench ordered an extension of the default period until 6 December 2024 for the Tempo Health Support Services Enterprise Agreement 2004. In that case, the employer had issued a notice of representational rights (NERR). The Full Bench accepted that bargaining would involve some complexity because the Agreement covered a number of different sites and a diverse range of classifications, and pay rates were linked to a South Australian industrial instrument. A previous attempt at bargaining lasted for an extended period and did not succeed. The Full Bench noted there that an extension would allow a period of approximately 18 months from the notification time for the parties to reach an agreement and have it approved, and in the event that the parties run into difficulties in bargaining, they may access the assistance of the Commission under s.240 of the FW Act. Further, as a last resort, the parties may seek an intractable bargaining declaration, leading to arbitration by the Commission pursuant to s.235 of the FW Act.[6]
In One HPA, EDS and Alcatel Lucent, the Full Bench ordered an extension of the default period until 1 August 2026[7] because the employer was not proposing to commence bargaining for a replacement enterprise agreement and it may be necessary for the employees to take a number of steps to facilitate this occurring.
The bargaining in the matter referred to above is complicated by a number of factors including the number of employees, the desire to replace a number of enterprise agreements with a single agreement and the fact that there will be more than one modern award underpinning the bargaining.
In the current matter, we believe an extension of 18 months from the end of the default period is warranted. Bargaining has not commenced. Integratedliving has not agreed to bargain. The objects of the FW Act include at s.3(f) an emphasis on enterprise‑level collective bargaining underpinned by simple good faith bargaining obligations. The FW Act’s bargaining provisions are complex. They do, however, provide parties with access to bargaining through majority support determination under s.236, the resolution of disputes that arise in bargaining under s.240, good faith bargaining orders under s.230, protected industrial action as defined in s.408, or, if necessary, the use of the intractable bargaining provisions in s.235. If it is necessary for the parties here to have access to some or all these provisions, and given Integratedliving’s current approach, it may well be necessary, this will take time.
However, once bargaining has commenced, we believe that the task of negotiating a replacement agreement will be less complex than the replacement of the Agreements in One HPA, EDS and Alcatel Lucent and ISS Health Services Pty Ltd, given that there are a small number of employees and only one Agreement and one modern award involved. We believe that in all of the circumstances, an 18 month period from the end of the default period is an appropriate time for the parties to take the necessary steps to secure the employees’ conditions in a new enterprise agreement.
The default period for the Agreement is extended to 6 June 2025. Orders to give effect to this decision will be published separately.
The Agreement is published, in accordance with subitem 20A(10A)(c), as an annexure to this decision.
DEPUTY PRESIDENT
[1] Suncoast Scaffold Pty Ltd [2023] FWCFB 105
[2] See for example All Seasons Carpet Cleaning Collective Agreement [2023] FWCFB 158, [23]; Drilled Foundations Contracting Pty Ltd and CFMEU Collective Union Agreement 2007 and the Piled Foundations Contracting Pty Ltd and CFMEU Collective Union Agreement 2007 [2023] FWCA 3011, [40]; Payfam Enterprise Pty Ltd T/A Ravenshoe IGA Everyday [2023] FWCFB 173, [45]
[3] Suncoast Scaffold Pty Ltd [2023] FWCFB 105, [18].
[4] [2023] FWCFB 137, [34]
[5] [2023] FWCFB 122
[6] Ibid, [7].
[7] [2023] FWCFB 137, [35]
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