Health Services Union (Applicant) v Claro Disability Services Pty Ltd (Respondent)
[2024] FWCFB 294
•25 JUNE 2024
| [2024] FWCFB 294 |
| 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
(Applicant)
v
Claro Disability Services Pty Ltd
(Respondent)
(AG2023/4551 & 4552)
AHC RESIDENTIAL SERVICES (VICTORIA) COLLECTIVE AGREEMENT 2009-2012 & DISABILITY AND SUPPORT SERVICES CERTIFIED AGREEMENT 2005-2008
| Health and welfare services | |
| DEPUTY PRESIDENT SLEVIN COMMISSIONER CRAWFORD COMMISSIONER TRAN | SYDNEY, 25 JUNE 2024 |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 Sch. 3, Item 20A(4) Schedule 7 Item 30(4) -Applications to extend default period for agreement-based transitional instruments.
Introduction
The present applications are applications by the Health Services Union (HSU) to extend the default periods for the AHC Residential Services (Victoria) Collective Agreement 2009-2012 (2009 Agreement) and the AHCS Collective Agreement 2008-2011 (2008 Agreement) pursuant to the Fair Work (Transitional Provisions and Consequential Amendments Act 2009 (Cth) (Transitional Act). The agreements cover employees engaged as disability services workers in regional Victoria.
At the same time these applications were made the HSU applied pursuant to the Transitional Act, to extend a number of Agreements that apply to disability services workers in regional Victoria (the HSU applications). The current applications were amongst those. We determined all of the HSU applications save for these matters in an earlier decision.[1] The employer covered by the two agreements, Claro Disability Services Pty Ltd (Claro), opposes the applications.
Each of these applications included an error. The application for the 2008 Agreement identified an agreement made in 2005 which was the predecessor agreement to the 2008 Agreement. Claro raised jurisdictional objections to that matter proceeding. In an earlier decision,[2] we found we had jurisdiction to hear the matter and amended the application to refer to the 2008 Agreement pursuant to s. 586 of the Fair Work Act 2009 (FW Act).
The application to extend the 2009 Agreement was made on the basis that it was an agreement-based transitional instrument and sought to extend the default period pursuant to item 20A(4) of Sch 3 of the Transitional Act. The 2009 Agreement is not an agreement-based transitional instrument. It is an enterprise agreement made during the bridging period for the purposes of Sch 7 of the Transitional Act. The HSU sought to amend the application and now seeks to extend the default period for an enterprise agreement made during the bridging period pursuant to item 30(4) of Sch 7 to the Transitional Act. Claro expressed no view on the amendment, and we grant it. We will consider the application for the 2009 Agreement under Sch 7 of the Transitional Act.
The grounds relied upon by the HSU in all of the HSU applications are identical. They are repeated in the applications for the 2009 and 2008 Agreements. They are:
1. The Applicant contends that employees would be better off overall if the Agreement continued to apply to them than if the relevant modern award applied.
2. The relevant modern award is the Social, Community, Home Care and Disability Services Industry Award 2010 (‘the SCHADS Award’), being the award that covers employers and employees in the social and community services sector.
3. The Agreement contains several entitlements that are superior to those provided for by the SCHADS Award.
4. The Applicant submits that the criteria in subitem (9) are met, and further, that it is appropriate to extend the Agreement for the following additional reasons:
a. The Applicant has consulted with members covered by the agreement and the membership have indicated a firm desire to continue to be covered by it.
b. A review of the National Disability Insurance Scheme (NDIS) is currently underway and due to provide a final report in October 2023. The outcome of that review may change the bargaining position of the covered employees. For this reason it is appropriate to extend the coverage of the agreement to allow the parties to consider bargaining after accounting for any changes resulting from that review.
c. The Federal Government are currently considering the recommendation arising from the Disability Royal Commission’s report and are due to provide a response in approximately March 2024. This response may change the bargaining position of the covered employees. For this reason it is appropriate to extend the coverage of the agreement to allow the parties to consider bargaining after accounting for any changes resulting from that review.
5. The Applicant further submits that it is appropriate to extend the default period until a decision arises from B2023/1235 Application for a supported bargaining authorisation – social, community, home care and disability services sector. The matter is before Deputy President Wright and directions were issued with respect to this matter on 22 November 2023.
Background
Zenitas Healthcare Pty Ltd owns Claro. Zenitas was involved in mergers and acquisitions in the disability care sector from 2016. That activity included the acquisition of Claro on around 31 May 2018 through the acquisition of all the shares in Australian Home Care Services Pty Ltd. It brought them together under an operational brand of Claro Aged Care & Disability Services. Zenitas’ companies and businesses had different employment arrangements under a range of industrial instruments resulting in varying terms and conditions within its business. These arrangements included a combination of the SCHADS Award, three zombie agreements, and some ‘grandfathered’ terms and conditions from a previously terminated enterprise agreement in South Australia.
The three zombie agreements were the 2009 Agreement, the 2008 Agreement and the AHC NSW Carers Agreement 2009-2012. No application was made to extend the NSW Agreement. Claro is in the process of standardising the terms and conditions applying to all of its employees and sees the termination of the zombie agreements as an opportunity to have the SCHADS Award apply across all of its businesses. It does not propose to enter into an enterprise agreement to cover its employees.
Claro provided some information about its workforce. 196 of its employees are covered by the 2009 Agreement. Those employees are residential services workers who are involved in providing support services to persons with a disability. The services are provided in supported accommodation. Of these 196 employees, 101 employees were engaged on a permanent part time basis and 95 employees were engaged on a casual basis. Claro's hours of operations are 12 midnight to 12 midnight, Monday to Sunday (including public holidays), so long as there are clients with a disability who require support.
Consideration
The Transitional Act was amended by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (SJBP) to provide for the termination of all transitional instruments. The SJBP Act refers to agreements of this kind as ‘zombie agreements.’ For the purposes of the application to extend the 2008 Agreement, items 20A(1) and (2) of Schedule 3 to the Transitional Act, provide that zombie agreements were to terminate on 6 December 2023 (the end of the default period) unless extended by the Commission. Where an application to extend the default period is made the agreement subject to the application continues to apply, pursuant to subitem 20A(11), pending the Commission’s decision. Similar provisions in Sch 7 apply to the 2009 Agreement.
For the purposes of the application relating to the 2008 Agreement, under subitem 20A(6) of Sch 3, where an application is made for the default period to be extended, the Commission must grant the application for a period of no more than four years if either (a), subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to do so, or (b), it is reasonable in the circumstances to do so. Subitem (7) applies if bargaining for a replacement agreement is occurring. Subitem (8) relates to individual agreement-based transitional instruments. Subitem (9) applies if the application relates to a collective agreement-based transitional agreement and it is likely that as at the time the application is made, the award covered employees, viewed as a group, would be better off overall if the agreement continued to apply than if the relevant modern award applied.
So far as the 2008 Agreement is concerned, subitem (7) does not apply as bargaining for a replacement agreement is not occurring. The 2008 Agreement is a collective agreement and subitem (8) does not apply. The application to extend the default period is made on the ground that subitem (9) applies as the employees covered by the 2008 Agreement would be better off overall if the 2008 Agreement continued to apply to them than if the relevant modern award applied, and it is otherwise appropriate to do so. The relevant modern award is the SCHADS Award and potentially the Clerks – Private Sector Award 2020 (Clerks Award). The HSU contends in the alternative that it would be reasonable in the circumstances to extend the default period for the Agreement under subitem (6)(b).
Schedule 7, which applies to the 2009 Agreement, provides at subitem 30(6) that the Commission must extend the default period for a period of no more than four years if either: (a) subitem (7) or (8) applies and it is otherwise appropriate in the circumstances to do so; or (b) it is reasonable in the circumstances to do so. Subitem (7) applies if bargaining for a replacement agreement is occurring and subitem (8) applies if the application relates to a collective agreement-based transitional agreement and it is likely that as at the time the application is made, the award covered employees, viewed as a group, would be better off overall if the agreement continued to apply than if the relevant modern award applied.
Bargaining for an agreement to replace the 2009 Agreement is not occurring and subitem 30(7) does not apply. The application is made on the ground that subitem 30(8) applies as the employees covered by the 2009 Agreement would be better off overall if the Agreement continued to apply than if the SCHADS award applied and it is otherwise appropriate to do so. The HSU contends in the alternative that it would be reasonable in the circumstances to extend the default period for the 2008 Agreement under subitem (6)(b).
The main features of item 20A of Sch 3 are described in detail in the Full Bench in Suncoast Scaffold Pty Ltd [2023] FWCFB 105 where the better off overall criterion was described in this way:
[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.
Are the employees better off under the 2008 Agreement?
The Commission’s Agreements Team provided an analysis of the terms of the 2008 Agreement against the Award. The 2008 Agreement covers employees who are "engaged in the provision of 'personal care services', 'home care services', and 'ancillary services' and ' the performance of clerical and administrative duties'".[3] It covers full time, part time and casual employees. The employees would otherwise be covered by the SCHADS Award or the Clerks Award. The Agreement operates to the exclusion of the Awards and for the purposes of this analysis, the Awards are not taken to be incorporated. Employees can be engaged as shiftworkers.
The rates of pay under the 2008 Agreement are less than the Awards and so are deemed to be the Award rates, having regard to Item 13 of Schedule 9 of the Transitional Act. As a result, the employees are not better off under the 2008 Agreement so far as rates of pay are concerned.
The 2008 Agreement provides less beneficial terms such as hours of work provisions for personal carers, maximum daily hour provisions, rostering provisions, part time safeguards and minimum engagement. For casual employees the casual loading and minimum engagement and public holiday penalties are less beneficial.
The 2008 Agreement is silent on shift provisions including penalties and is silent on penalties for working ordinary hours on Saturdays and Sundays. The 2008 Agreement also provides that all overtime is paid at the employee’s ordinary rate or casual employee’s ordinary rate.
For employees covered by the SCHADS Award, the 2008 Agreement also provides less beneficial sleepover and 24-hour care provisions. The Agreements Team concluded the 2008 Agreement does not appear to contain any provisions more beneficial when compared to the Awards and as such, all employees cannot be considered better off overall.
The HSU disagreed with the Agreement Team’s analysis and contended that the employees viewed as a group are better off overall if the 2008 Agreement continues to apply. The HSU suggests that the 2008 Agreement allows employees to work up to 12 hours per shift. It submitted that this flexibility is preferred by employees who seek to consolidate their work hours into longer shifts with fewer breaks, enabling them to work intensively one week and enjoy more days off the next. It also contended that while the SCHADS Award may have better overtime provisions, employers typically manage work schedules to avoid overtime payments. The HSU submitted the 10% shift allowance in the 2008 Agreement, while less than the SCHADS Award, may surpass the 12.5% in the SCHADS Award due to its application to the majority of hours worked between 6pm and 6am on both weekdays and weekends, which includes compounded penalties not offered by the SCHADS Award.
The HSU also provided the following table of benefits that are said to be more beneficial in the 2018 Agreement:
| 2008 Agreement | SCHADS AWARD |
| Probation - 3 month maximum - Cl 17.1 (4) | None |
| Sleepover - $61.80 includes working up to one hour and $77.30 3 hours of work - Cl 42 | Sleepover - $55.89 -Cl 25.7 |
| Personal Leave - 1st year 10 days, 2nd year 15 days - Cl 25 | Only 10 days personal leave |
| Hours of Work - Home Carer 7am - 7pm M- Fri, Personal Carer Mon to Sun | Day Worker 6am - 8pm Mon to Sun |
| Higher Duties - work in higher classification paid at higher classification immediately | Home Care - 2 hours or less exceed and 2 full day after 5 consecutive days |
| Qualification Allowance - Home Carer Cert III $19 a week/0.50 cents per hour Personal Carer Cert III $38 a wk/$1 per hour | None |
| Blood Donor - give blood and be paid for 2 hours on 4 separate occasions - Cl 31 | None |
| Jury Service - reimbursed by employer hours including penalties/allowances for attending jury service - Cl 32 | None |
| Accident Pay - 26 weeks - Cl 35 | None |
Claro provided its own comparison table which identified clauses in the 2008 Agreement which provide for terms of employment which are more beneficial for employees than the SCHADS Award. In its response, Claro acknowledges the following terms of the 2008 Agreement are more beneficial than the SCHADS Award; cl. 25.2 amount of personal leave, cl. 30 training, cl. 31 blood donors leave, cl. 33 employee assistance program, and cl. 37 salary packaging. A similar table was provided concerning the Clerks Award.
Claro pointed out that the jury service provision in the 2008 Agreement reflects the entitlement in State legislation which would continue to apply if the 2008 Agreement terminates.
Claro’s comparison table identified the following clauses in the 2008 Agreement which provide for terms of employment which are less beneficial for employees than the Awards: cl. 17 employment categories, cl. 17.3 casual, cl. 18 part-time. cl. 17.5 traineeships, cl.18 abandonment of employment, cl. 19 redundancy, cl. 20 termination of employment, cl. 22 meal breaks, cl. 23 overtime, cl 24 annual leave, cl. 25.5 carer’s leave, cl. 26 compassionate leave, cl 27. Parental leave, and cl. 36 rostering.
Regarding higher duties, the 2008 Agreement mandates payment at the higher classification rate for such work, whereas the SCHADS Award stipulates higher pay for the actual time worked or for the entire day/shift, depending on the duration of the higher duties. The 2008 Agreement also permits Claro to reduce employee wages for work of a lower classification, unlike the SCHADS Award which requires reclassification before wage reduction. Claro submits the entitlements for higher duties and multi-skilling are comparable in both the 2008 Agreement and the SCHADS Award.
Claro submits the additional benefits in the 2008 Agreement not provided by the SCHADS Award, including blood donor leave, training payment, and accident pay, are more beneficial but these benefits are rarely used. Moreover, the SCHADS Award offers other allowances not included in the 2008 Agreement. Claro argues that these additional entitlements in the 2008 Agreement should not significantly influence the Commission's assessment of the better off overall criterion.
The submissions going to the better off overall criterion were made in a general way. We were not provided with details identifying the group of employees covered by the 2008 Agreement, the classifications that apply to them, the hours they work and how they work. Those details would assist in making an assessment of whether viewed as a group they would be better off if the 2008 Agreement applied rather than the Awards.
Having considered the limited material provided and having assessed the terms of the 2008 Agreement against the terms SCHADS Award and the Clerks Award, we are not satisfied that it is likely that, as at the time the application is made, the award covered employees, viewed as a group, would be better off overall if the 2008 Agreement continued to apply than if the Awards applied. The lower shift penalties, lack of weekend penalties and less beneficial overtime provisions in particular tend towards this conclusion. The benefits identified by the HSU do not outweigh the lesser entitlements in the 2008 Agreement. Our view may have been different if the relevant group of employees did not work at times that attract these provisions, but as we were not provided with that level of detail, we cannot be satisfied that the better off overall criterion has been met.
We note that Claro also made submissions disagreeing that the Clerks Award also covers employees covered by the 2008 Agreement. The submission turns on the interaction the coverage clauses in the Clerks Award and the SCHADS Award. The question of what award applies to those of Claro’s employees engaged to perform clerical and administrative duties is answered by reference to whether the employees are wholly or principally engaged in clerical work and the environment in which that work is performed. To determine this question the Commission would need to examine both the work performed by employees and the environment in which it is performed. These are matters of fact to be determined by reference to evidence which we do not have before us. The better off overall criterion requires a broad evaluative judgment as to the likelihood of the employees viewed as a group being better off overall if covered by the Agreement compared to the relevant modern award(s). For the reasons outlined we are not satisfied that the clerical employees engaged by Claro would be better off under whichever of the Awards applies.
Consequently, as we are not satisfied that subitem 20A(9) of schedule 3 does applies, we cannot extend the default period of the 2008 Agreement under subitem (6)(a).
Are the employees better off under the 2009 Agreement?
Claro provided the following information about the group of employees covered by the 2009 Agreement. Of its employees 196 are covered by the 2009 Agreement. Those employees are residential services workers who are involved in providing support services to persons with a disability. The services are provided in supported accommodation. Of these 101 employees were engaged on a permanent part time basis and 95 employees were engaged on a casual basis. Claro's hours of operations are 12 midnight to 12 midnight, Monday to Sunday (including public holidays), so long as there are clients with a disability who require support.
The Commission’s Agreements Team provided an analysis of the terms of the 2009 Agreement compared with the SCHADS Award. The analysis was as follows.
The Agreement covers employees who would otherwise be covered by the SCHADS Award. The Agreement covers full time, part time and casual employees. It operates to the exclusion of the Award and for the purposes of the analysis, the Award was not taken to be incorporated. Employees can be engaged as shiftworkers.
The rates of pay under the 2009 Agreement are taken to be as per the SCHADS Award, having regard to Item 13 of Schedule 9 of the Transitional Act.
For permanent employees, the 2009 Agreement provides less beneficial terms such as hours of work provisions, part time safeguards and minimum engagement, shift penalties and Sunday overtime penalties. The 2009 Agreement provides either less beneficial allowances or is silent compared to the SCHADS Award. The 2009 Agreement also provides less beneficial sleepover provisions. The Agreements Team concluded full time and part time employees are not better off overall.
For casual employees, the 2009 Agreement provides less beneficial overtime penalties, weekend penalties, public holiday penalties and less beneficial minimum engagement provisions. Given the above less beneficial terms, the Agreements Team concluded casual employees cannot be considered better off overall.
The HSU provided a response which maintained the view that the employees were better off under the 2009 Agreement than the SCHADS Award. It contended the 2009 Agreement allows 12-hour shifts, offering employees flexibility and extended time off, which some find advantageous. It notes that while the overtime provisions in the SCHADS Award are more beneficial, employers manage rosters under the SCHADS Award to avoid overtime, which negates the benefit. It submitted the 10% allowance in the 2009 Agreement can be more beneficial due to its broader application compared to the 12.5% allowance in the SCHADS Award. It also submitted that the 2009 Agreement pays a higher base sleepover rate and more for morning shifts post-sleepovers and includes penalties that the SCHADS Award does not. The HSU submitted that the 2009 Agreement recognises fixed term service for conversion to permanent employment, and the SCHADS Award does not.
The HSU also contended that the 2009 Agreement offers higher penalties and allowances on weekends compared to the SCHADS Award. It provided the following table setting out the 2009 Agreement’s terms that it considered were more beneficial.
| 2009 Agreement | SCHADS AWARD |
| Probation - 3 month maximum - Cl 11.3 | None |
| Fixed term Employee for specific project or task - Cl 15 | None |
| Superannuation salary sacrifice – Cl 23 | None |
| Hours of work - 12 hour shifts allowed - Cl 27 | Hours of Work - 10 hour shifts maximum - Cl 25 |
| Overtime - can occur once work over 9 hours per day - Cl 29 | Overtime after 10 hours a day - Cl 25 (1) (b) (ii) |
| Allowances - rostered majority hours fall between 6pm & 6am - 10% and after sleepover 2 hour shift 10% Mon to Sun - Cl 35 | Shift allowances under award are Mon to Fri only Afternoon shift 12.5% and Night 15% |
| Sleepover - $74.61 includes working up to one hour - Cl 38 | Sleepover - $55.89 -Cl 25.7 |
| Cash out annual leave - employee able to cash out 2 weeks leave once every 12 months - Cl 45 | Cash out annual leave only if this results in a balance not less than 4 weeks - Cl 31.5 |
| Personal Leave - 1st year 12 days, 2nd to 4th year 14 days, 5th year 21 days - Cl 46 | 10 days personal leave |
| Sick Leave - taking single days sick leave with no evidence 5 days in a calendar year - Cl 48 | s 107 FW ACT evidence required to satisfy reasonable person |
| Compassionate Leave – 3 days paid leave on each occasion if death or serious ill immediate family – Cl 52 | Not in SCHADS Award - NES - 2 days compassionate leave per occasion s 104 |
| Long Service Leave - 1 week for every 40 weeks - At 10 years 3 mths LSL access when resigned at 7 years - Cl 53 | Not in SCHADS Award - NES - LSL Act Vic - 1 week for every 60 weeks of service |
| Blood Donor - give blood and be paid for 2 hours on 4 separate occasions - Cl 66 | None |
| Community Emergency Service leave - reserve military, CFA or SES paid leave to perform emergency service - Cl 67 | No paid leave in SCHADS - Cl 108 FW Act entitled to absent work (unpaid) |
| Jury Service - reimbursed by employer hours including penalties/allowances for attending jury service - Cl 68 | None in SCHADS Award NES FW Act s 111 - only base rate of pay and ordinary hours |
| Accident Pay - 39 weeks - Cl 77 | None - deleted 2015 |
| Dispute Resolution - timeframes & Commission able to decide matter by mediation/conciliation/express opinion/recommendation/arbitration - Cl 79.3 | SCHADS - no timeframes and only mediation/conciliation/consent arbitration Cl 9 |
Claro identified the following terms in the 2009 Agreement as less beneficial than the terms of the SCHADS Award: cl. 10 flexibility term, cl. 11 nature of employment (in terms of minimum engagements for casual and part time employees), cl. 13 part time employment, cl. 14 casual employment, cl. 22 superannuation, cl. 28 rosters, cl. 29 entitlement to overtime, cl 32 time off between overtime and next shift, cl. 34 meal breaks, cl. 35, shift allowances, cl. 36 meal allowance, cl. 37 travel allowance, cl 39. entitlement to public holidays, cl 43 taking annual leave, cl. 44 leave loading, cl. 45 cashing out annual leave, cl. 52 entitlement to compassionate leave, cl 58 parental leave, cl. 63 return to work from parental leave, cl. 65 adoption leave, cl. 67 community emergency service leave, and cl. 78 consultation.
Claro identified the following terms of the 2009 Agreement as more beneficial; cl. 9 savings clause, cl. 23 salary sacrifice to superannuation, cl. 26 conversion to salary, cl. 30 right to refuse overtime, cl. 31 time off in lieu of overtime, cl. 38 sleepover allowance, cl. 41 requirement to work on a public holiday, cl. 46 entitlement to personal/carers leave, cl. 48 sick leave, cl. 53 long service leave, cl. 64 paternity leave, cl. 70 special leave, cl.77 accident pay, cl. 79 dispute resolution.
Claro’s submissions responded to the HSU’s claims on the better off overall criterion. On overtime, it notes that the HSU concedes that the overtime provisions in the SCHADS Award are more beneficial and will apply where employees are required to work longer shifts, save for the limited circumstances involving part time and casual employees working more than 9 hours on a weekday. Claro acknowledges that the overtime trigger for part-time and casual employees under clause 28.1(b)(ii) of the SCHADS Award is marginally less beneficial than clause 29.1 of the 2009 Agreement. This is because the overtime trigger under the SCHADS Award is 10 hours whereas the trigger under the 2009 Agreement is nine hours. Claro submits this needs to be balanced against the more beneficial weekly and fortnightly overtime triggers that are provided under the SCHADS Award which are not available under the 2009 Agreement.
On sleepovers, Claro agrees that the value of the sleepover allowance in the 2009 Agreement is higher than the equivalent allowance in the SCHADS Award. However it contends that as the 2009 Agreement does not provide employees the right to refuse a sleepover shift, give an employee who is required to perform work during the sleepover period payment at overtime rates with a minimum payment of one hour, or require an employee rostered to perform work immediately before or after the sleepover shift be rostered or paid for a minimum of four hours work for at least one of these periods of work, the 2009 Agreement provision is less beneficial.
With respect to the 10% morning shift allowance for the two hours worked following a sleepover shift, Claro disagrees that there is no equivalent entitlement under the SCHADS Award. Clause 25.7(f) of the SCHADS Award sets out that if an employee is required to work immediately after a sleepover period, the employee must work or be paid for a minimum of four hours at the sleepover rate.
Claro agrees that there is no 'fixed term employment' clause under the SCHADS Award but submits this is a neutral consideration as it does not provide an additional entitlement to employees.
With respect to the 10% allowance for ordinary hours worked between 6.00pm and 6.00am under clause 35.1 of the 2009 Agreement, Claro submits that while there is no equivalent entitlement under the SCHADS Award, the award provides for afternoon shift and night shift, with loadings of 12.5% and 15% respectively.
On long service leave Claro agrees that the entitlement under the 2009 Agreement is more beneficial.
Claro submits that the entitlement to compassionate/bereavement leave is more beneficial under the SCHADS Award. The 2009 Agreement does provide for 3 days but it is limited to permanent employees only. The SCHADS Award entitlement also contemplates a broader range of circumstances in which the leave may be taken.
Claro accepts that employees have a more beneficial entitlements under the 2009 Agreement to community emergency leave, blood donor leave, cultural leave, special leave, jury service leave, and accident pay. Claro however notes that these benefits are rarely accessed.
We do not have enough details about how the work is performed by the relevant employees to make a mathematical assessment of the financial impacts for the group. It appears that the 2009 Agreement’s penalties for shift work are less advantageous than the SCHADS Award. The weekend penalty rates and overtime provisions are also less beneficial. These matters will have an impact on casual employees, who we are told account for almost half of the group covered by the 2009 Agreement. We are also told that the more beneficial leave entitlements that apply to permanent employees under the 2009 Agreement are not accessed often. The less beneficial penalties affect all employees, whereas the more beneficial leave provisions only apply to permanent employees. Claro have chosen not to provide modelling based on actual rosters worked which would confirm the extent of the disadvantage. It has informed us that it operates 24 hours per day, 7 days per week.
The submissions going to the better off overall criterion were again made in a general way. We were not provided with details identifying the group of employees covered by the 2009 Agreement, the classifications that apply to them, the hours they work and how they work. Those details would assist in making an assessment of whether viewed as a group they would be better off if the 2009 Agreement applied rather than the SCHADS Award.
Consequently, having considered the limited material provided and having assessed the terms of the 2009 Agreement against the terms SCHADS Award, we are not satisfied that it is likely that, as at the time the application is made, the award covered employees, viewed as a group, would be better off overall if the 2009 Agreement continued to apply than if the SCHADS Award applied. The lower shift penalties, lack of weekend penalties and less beneficial overtime provisions in particular tend towards this conclusion. The benefits identified by the HSU do not outweigh the lesser entitlements in the 2009 Agreement. We hold the same view expressed above about the 2008 Agreement, namely that we may have come to a different conclusion if the group of employees did not work at times that attract shift penalties, overtime and weekend penalties. However, as we were not provided with that level of detail, we cannot be satisfied that the better off overall criterion has been met.
Is it otherwise reasonable to extend the Agreements?
The HSU applies in the alternative to have the default period of the Agreements extended pursuant to subitems 30(6)(b) and 20A(6)(b). The subitems require a consideration of whether it is reasonable in the circumstances to extend the default period. This involves the application of a broad evaluative judgment.
In Suncoast,[4] the Full Bench said:
The ‘reasonable’ criterion in the subitem should, in our view, be applied in accordance with the ordinary meaning of the word – that is, “agreeable to reason or sound judgment”. Reasonableness must be assessed by reference to the circumstances of the case, that is, the relevant matters and conditions accompanying the case. Again, a broad evaluative judgment is required to be made.
In Peter Frick,[5] the Full Bench considered that the default position of the statute to automatically terminate transitional instruments on 6 December 2023 suggests a policy preference for employees covered by transitional instruments to be regulated by contemporary instruments made under the FW Act.[6] In Kalfresh Management Services Pty Ltd,[7] the Full Bench expressed the view that where an agreement contains inferior and outdated terms and conditions, this weighs strongly against a conclusion that it is reasonable in the circumstances to extend a default period.[8]
We consider these factors weigh against granting the current applications. Also against extending the Agreements is our view that the employees would not be better off if the Agreements applied. The terms of the Agreement are outdated and do not reflect contemporary standards.
We have also taken into account that Claro has no intention to commence bargaining for a new enterprise agreement replacing the two Agreements. In the earlier decision determining the HSU Applications[9] we considered that it was reasonable to extend the default period of four zombie agreements in the disability sector in Victoria. Our reasons for doing so included that the HSU had made a supported bargaining authorisation application in conjunction with the Australian Education Union pursuant to s242 of the FW Act to permit multi-employer bargaining in the disability sector in Victoria. Extending the agreements in those cases was reasonable because it would preserve the status quo in terms of wages and conditions whilst the supported bargaining application is being determined and provide certainty in terms of wages and conditions and preserve any bargaining leverage employees may have arising from the more beneficial conditions in those agreements. The same approach was taken in the decision of the Full Bench in Applications by Australian Education Union [2024] FWCFB 233 where the Full Bench determined to extend the default periods for 11 zombie agreements that applied in workplaces which were also subject to the joint supported bargaining authorisation application. Claro was included in the supported bargaining application but the application was amended to remove it.
In its application, the HSU also relied on the views of its members that the Agreements should continue. No evidence was given about that matter. Claro disputed that the employees held such a view.
The HSU also relied on the uncertainty associated with the outcomes of the NDIS Review and the Royal Commission recommendations may have in bargaining. The Full Bench considered these matters in Application to extend the default period for the Kirinari Community Services Limited Hume Riverina Branch - Certified Agreement 2006-2008[10]. At the time of determining the application in Kirinari, the NDIS Review and the Royal Commission recommendations had not yet been issued so it was not known what impact they might have. The Royal Commission recommendations were issued on 28 September 2023 and the NDIS Review was published on 27 October 2023. The parties had sufficient time to consider the implications of these matters and we do not regard them as constituting grounds to extend the Agreements.
None of the matters raised by the HSU convince us that we should extend the life of zombie agreements that provides for terms and conditions that are inferior to the Awards. We are of the view that the Agreements should be replaced by a modern instrument that meets the requirements of the FW Act.
For these reasons, we are not satisfied that it is reasonable in the circumstances to extend the default period of the Agreements. The applications are dismissed.
As our decision is to refuse to extend the default periods under subitem 20A(6) of Sch 3 and subitem 30(6) of sch 7 of the Transitional Act, and our decision is made after the sunset date in the Transitional Act, the schedules provide that we must extend the default periods for the Agreements to the day of this decision, or specify a day that is not more than 14 days after the day of this decision. We have decided that to enable the parties to make the necessary administrative arrangements to give effect to the sunsetting of the Agreements, the default periods are extended until 9 July 2024.
DEPUTY PRESIDENT
[1] Applications by Health Services Union [2024] FWCFB 243.
[2] 2024] FWCFB 244.
[3] Clause 5.1.
[4] Id at [17].
[5] [2023] FWCFB 137.
[6] Ibid, [32].
[7]Kallium Management Services Pty Ltd as Trustee for The Kalium Labour Trust T/A Kalfresh Pty Ltd [2023] FWCFB 217.
[8] Ibid, [14].
[9] Applications by Health Services Union [2024] FWCFB 243.
[10] [2023] FWCFB 158 at [36].
Printed by authority of the Commonwealth Government Printer
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