Hospira Australia Pty Ltd

[2013] FWCA 3663

[2013] FWCA 3663

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Hospira Australia Pty Ltd
(AG2013/196)

HOSPIRA AUSTRALIA (MULGRAVE MAINTENANCE & LABORATORY) AMWU/CEPU ENTERPRISE AGREEMENT

Manufacturing and associated industries
COMMISSIONER RYAN	MELBOURNE, 6 JUNE 2013

Hospira Australia (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2012.

[1] An application for approval of the Hospira Australia (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2012 (the Agreement) was made by Hospira Australia Pty Ltd (Hospira) and was filed with the Commission on 30 January 2013. The application identified that there were no individual employee bargaining representatives but that both the AMWU and CEPU were bargaining representatives for the Agreement.

[2] According to the Timeliness Guidelines issued by the President of the Commission an application for approval of an enterprise agreement should be dealt with within 12 weeks of being filed.

[3] The application in this matter is very much an exception to the rule.

[4] The application was allocated to me on 1 February 2013 but unfortunately I was on leave at the time returning on 22 February 2013.

[5] I contacted Hospira on 28 February 2013 to advise Hospira that I had a number of concerns with the Agreement. Hospira did not respond to the Commission until 3 April 2013 when it filed a detailed written submission which included the offering of some undertakings.

Hospira was advised by email on 11 April 2013 of the Commission’s continuing concerns in relation to the Agreement.

[6] On both 23 and 24 April 2013 the AMWU contacted my Chambers to seek information as to the progress of the approval process.

[7] On 24 April 2013 I decided to list the application for hearing on 26 April 2013 in order to progress the matter. On 24 April 2013 Hospira wrote to the Commission requesting that the hearing for the 26 April not proceed and that Hospira would confirm by no later than 7 May 2013 whether it was prepared to offer an undertaking sought by the Commission.

[8] The hearing scheduled for 26 April 2013 was relisted for 1 May 2013. At that hearing the Commission explored with Hospira and the unions the Commission’s concerns and what needed to be done to address those concerns.

[9] On 15 May 2013 Hospira advised the Commission that it was still working on a solution to the concerns raised by the Commission prior to and at the hearing on 1 May 2013.

[10] On 24 May 2013 the AMWU wrote to the Commission expressing concern about the delay in Hospira providing undertakings to the Commission. Between the 24 May 2013 and 5 June 2013 there were a number of email exchanges between Hospira and the unions which concluded with the offering of undertakings by Hospira to the Commission on 5 June 2013 and with the AMWU providing its views as to the appropriateness of those undertakings.

[11] There were two issues of concern raised by the Commission.

[12] The first concerned the coverage clause of the Agreement. I am satisfied that the undertaking offered by Hospira addresses the concern as to coverage.

[13] The second issue of concern related to the part-time employment under the Agreement. The concern of the Commission was that part-time employment as a type of employment in the Agreement was significantly inferior to part-time employment under the modern award. My concern arose through the combined operation of clause 8.1 which sets out the types of employment in the Agreement and clause 3.9 which incorporates the modern award.

[14] The respective clauses of the Agreement are as follows:

“8. EMPLOYMENT CATEGORIES

8.1 In this Agreement:

(i) Full-time employment means all employment other than fixed term, parttime,

or casual.

(ii) Part-time employment means employment for less than the normal weekly ordinary hours specified for a full-time employee, for which all Agreement entitlements are paid on a pro-rata basis calculated by reference to the ordinary time worked.

(iii) Casual employees employed by the Company will be engaged in accordance with clause 14 of the Award.

(iv) Fixed term employees engaged for a specified time or task may have their tenure extended beyond 12 months by agreement with the relevant site delegate. Such agreement will not unreasonably be withheld nor will the Company seek to use fixed term contracts to replace permanent positions. Exceptions to this clause are where contract positions are replacing extended or authorised leave by an existing employee and secondments. Where a project position or sponsored work arrangement (overseas work visa) exceeds 12-months the relevant site delegate will be consulted prior to the position being filled. If employment is to be continued beyond the end date of the contract, the Company will endeavour to notify the employee no later than one (1) month prior to the end date of the contract.

Relationship with the Award

3.9 This Agreement incorporates and applies wholly in conjunction with the Manufacturing and Associated Industries and Occupations Award 2010 (“Award”) (but excluding clause 7 of the Award) as it stood immediately prior to the commencement of this Agreement. Where there is an inconsistency between an express provision of this Agreement and a provision in the Award, the provisions of this Agreement, shall prevail to the extent of the inconsistency.”

[15] The operation of clause 3.9 of the Agreement would appear to incorporate into the Agreement clause 13 of the Award which is as follows:

“13. Part-time employment

13.1 An employee may be engaged to work on a part-time basis involving a regular pattern of hours which average less than 38 ordinary hours per week.

13.2 A part-time employee must be engaged for a minimum of three consecutive hours a shift. In order to meet their personal circumstances, a part-time employee may request and the employer may agree to an engagement for less than the minimum of three hours.

13.3 Before commencing part-time employment, the employee and employer must agree in writing:

(a) on the hours to be worked by the employee, the days on which they will be worked and the commencing and finishing times for the work; and

(b) on the classification applying to the work to be performed in accordance with Schedule B.

13.4 The terms of the agreement in clause 13.3 may be varied by consent in writing.

13.5 The agreement under clause 13.3 or any variation to it under clause 13.4 must be retained by the employer and a copy of the agreement and any variation to it must be provided to the employee by the employer.

13.6 Except as otherwise provided in this award, a part-time employee must be paid for the hours agreed on in accordance with clauses 13.3 and 13.4.

13.7 The terms of this award will apply pro rata to part-time employees on the basis that ordinary weekly hours for full-time employees are 38.

13.8 A part-time employee who is required by the employer to work in excess of the hours agreed under clauses 13.3 and 13.4 must be paid overtime in accordance with clause 40—Overtime.

13.9 Public holidays

(a) Where the part-time employee’s normal paid hours fall on a public holiday prescribed in the NES and work is not performed by the employee, such employee must not lose pay for the day.

(b) Where the part-time employee works on the public holiday, the part-time employee must be paid in accordance with clauses 32.4(e), 36.2(f), 37.5 and 40.9.”

[16] There is a direct inconsistency between clause 8.1(ii) of the Agreement and clause 13 of the Award. Therefore clause 3.9 of the Agreement operates to ensure that the express provision of clause 8.1(ii) of the Agreement prevails over the inconsistent provision of clause 13 of the Award.

[17] The result of this is that part time employment under the Agreement does carry with it the several protections provided by clause 13 of the Award. This concern was raised with Hospira on 28 February 2013 and Hospira provided a draft of an undertaking to address this concern in its written material filed with the Commission on 3 April 2013. The specific undertaking that Hospira was prepared to offer was in the following terms:

“(a) “Clause 13.2 to 13.6 (inclusive) of the Award will apply to part-time employees engaged pursuant to clause B. 1 (ii) of the Proposed Agreement

(b) Overtime rates would apply for work in excess of full time hours”

[18] The proposed undertaking did not go far enough to satisfy my concerns and at the hearing on 1 May 2013 I drew to the attention of Hospira the difference between paragraph (b) of their proposed undertaking and clause 13.8 of the Award.

[19] The position of Hospira was that as the rates of pay in the Agreement were significantly higher than the Award then the BOOT would be passed even with the payment of ordinary rates for hours worked by a part time employee outside their agreed hours but up to 36 hours per week (the full time hours).

[20] As paragraph (b) of the proposed undertaking applied to both additional hours worked by agreement and to additional worked because of a requirement to work from Hospira, I then sought an additional undertaking that overtime would be paid where the additional hours were required to be worked by Hospira. During the hearing Hospira advised the Commission that it would give such an undertaking.

[21] At the conclusion of the hearing on 1 May 2013 I raised with Hospira a further concern flowing from their undertaking in relation to part time employment.

[22] Paragraph (b) of the proposed undertaking would have the effect of extending the ordinary hours of work of a part time employee but without such additional hours necessarily being counted towards leave accrual. I suggested that Hospira should consider this additional matter as part of the exercise of finalising the undertakings they wished to offer the Commission.

[23] The undertaking offered by Hospira on 5 June 2013 contained the following:

“1. Clause 13.2 to 13.5 (inclusive) of the Award will apply to part-time employees engaged pursuant to clause 8.l(ii) of this Agreement.

2. Overtime rates will apply for work performed by part-time employees engaged pursuant to clause 8.l(ii) of this Agreement where such hours worked are in excess of full time hours worked by agreement with the employee. Such agreed hours will count for the purposes of leave accrual.”

[24] The final undertaking does not differentiate between volunteer or required additional hours. This is understandable given that at the hearing on 1 May 2013 the AMWU and an employee of Hospira made very clear that custom and practice at Hospira was that part time employees were never required to work additional hours and that all additional hours were worked by agreement.

[25] In an email to the Commission on 5 June 2013 the AMWU made the following submission in relation to the undertaking concerning part time employment:

“We maintain the view that no undertakings should in fact be required regarding part time employees. Our view is that the Agreement as read operates to incorporate all relevant Award terms for part time workers and that this, in combination with the wage rates and other benefits in the agreement ensure that the agreement will pass the BOOT test with respect to these employees. Our understanding is that current practice is that part time worker do receive overtime penalties for all work in excess of agreed hours. We are therefore concerned that the proposed undertaking may be taken to mean that part time workers must work full time hours before overtime rates will apply. We note further that it is not specified whether each day stands alone in this respect. Whatever the case may be, as the parties did not make this an issue in bargaining, simply put, there should be no change to current practice.”

[26] As can be seen from my analysis of the relationship between the Award and the Agreement, I do not agree with the proposition advanced by the AMWU that “the Agreement as read operates to incorporate all relevant Award terms for part time workers”. Therefore in my view undertakings were necessary to address the concerns I raised.

[27] I note the understanding that the AMWU has in relation to part time employees receiving “overtime penalties for all work in excess of agreed hours”.

[28] I read the undertaking offered by Hospira as confirming this understanding and confirming that all hours worked by a part time employee in excess of agreed hours will be paid at the overtime rate.

[29] I am satisfied that each of the requirements of ss186, 187 and 188 as are relevant to this application for approval have been met.

[30] The undertakings given by Hospira in relation to several clauses of the Agreement are accepted and those undertakings have become terms of the Agreement in accordance with s.191(2) of the Act and are appended at Appendix A.

[31] The AMWU and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, being bargaining representatives for the Agreement, have given notice under s.183 of the Act that they want the Agreement to cover them. As required by s.201(2) I note that the Agreement covers those organisations.

[32] The Agreement is approved and, in accordance with s.54(1), will operate from 13 June 2013. The nominal expiry date of the Agreement is 1 March 2014.

COMMISSIONER

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