IKC Sheds Pty Ltd

[2013] FWC 8551

[2013] FWC 8551

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

IKC Sheds Pty Ltd
(AG2013/11079)

COMMISSIONER RYAN MELBOURNE, 30 OCTOBER 2013

Application for approval of the IKC Sheds Pty Ltd Enterprise Agreement 2013.

[1] Application has been made pursuant to s.185 of the Fair Work Act 2009 (the Act) by IKC Sheds Pty Ltd (the Employer) for approval of the IKC Sheds Pty Ltd Enterprise Agreement 2013 (the agreement). The application for approval was supported by a Statutory Declaration (Form F17) of Ms Julie Budarick, Director/Administration Manager on behalf of the Employer.

[2] The Form F17 identified, in response to question 2.5, that:

“Copies were distributed for review and the opportunity to ask questions at a toolbox meeting held on 9th September 2013. We discussed the terms and conditions of the Agreement with staff, answered questions etc. We made necessary amendments to the Agreement to create a final version. All employees were given a copy of the final agreement on 30th September 2013.”

[3] The Form F17 identified, in response to question 2.6, that employees were advised on 30 September 2013 that they would be required to vote on 3 October 2013.

[4] The Form F17 identified, in response to question 2.8, that voting did commence on 3 October 2013.

[5] I have considered the procedure implemented by the Employer in light of the requirements of the Act.

[6] Section 180 of the Act provides as follows:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).”

[7] In the present matter the ‘access period’ for the purposes of s.180(4) commenced on 30 September 2013 when the employees were provided with the final version of the agreement and told that voting would commence on 3 October 2013. The voting for the agreement commenced 3 days later on 3 October 2013.

[8] Therefore there was non-compliance by the Employer with ss.180(2)(a), 180(2)(b) and 180(3) of the Act.

[9] Non compliance with ss.180(2)(a), 180(2)(b) and 180(3) means that the Employer could not, because of s.180(1), make a request under s.181(1) to employees to approve the agreement and thus the employees could not make the agreement by voting for it under s.182.

[10] On this matter alone the application must be, and is, dismissed.

Observations

[11] I take the opportunity to make a number of observations about the contents of the agreement. These observations do not form part of the decision I have made.

[12] Clause 10 offers a definition of part time employment, however it does not include any of the protections which are provided for in clause 13 of the Manufacturing and Associated Industries and Occupations Award 2010 (the Award). It would appear that an employee employed as a part time employee under the Agreement would not be better off overall if employed under the Agreement notwithstanding a higher wage rate in the Agreement.

[13] Clause 11 provides for ordinary hours to be averaged over a 13 week period. An averaging period of 13 weeks permits the employer to arrange the working of ordinary hours in accordance with the Agreement so that some weeks could contain a very large number of ordinary working hours, up to 70 hours, while other weeks may contain nil hours. This is so because clause 11 permits an employee to work 70 ordinary hours Monday to Saturday. This is an issue going to the Better Off Overall Test (BOOT).

[14] Clause 12 provides that reasonable additional hours may be taken as time off in lieu. The Agreement does not provide for any overtime rates. This is a significant BOOT issue given the corresponding overtime provisions of the Award.

[15] Clause 14 contains a provision for the cost of the replacement of tools which are damaged or los through fault or negligence of the employee to be deducted from an employee’s pay. There is no such corresponding provision in the Award, therefore this is an issue which goes to the BOOT. In addition the clause does not contemplate a dispute arising over whether the loss or damage occurred due to negligence and therefore does not stipulate how such a dispute would be resolved. At the very least this clause should reference the dispute resolution procedure in the Agreement.

[16] Clause 15 provides for a living away from home allowance of $25 per night on each occasion that an employee is working in a remote location and is unable to return to their normal place of residence at night. This clause falls far short of the combined provisions offered by the Award and is an issue which goes to the BOOT.

[17] In relation to the wage rates in clause 18, I simply note that there are no additional payments for overtime, no penalties for weekend work and no payment of allowances or special rates as provided in the Award. As there is no valid application before me, I do not have to assess the wage rates. However, if there was a valid application before me, careful consideration would have to be given to determine whether an employee would be better off overall under the terms of the Agreement as opposed to the Award, including looking at patterns of work of employees.

[18] Clause 19 at subclause 19.2.2 provides that the employer, in the absence of agreement between the employer and the employee, can decide when an employee takes annual leave. This provision does not accord with s.88(2) of the Act which states that:

“The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.”

[19] Clause 20.5 provides a more onerous obligation on employees to provide proof when taking personal leave when compared to s.107(3) of the Act which refers to “evidence that would satisfy a reasonable person”.

[20] Clause 24 appears to restrict employees’ choice of superannuation fund to just two funds named in the clause, including the employer’s default superannuation fund. This clause offers a lesser benefit to employees than that provided for under the Award. This is a BOOT issue.

[21] Finally, there is a cross referencing error in sub-clause 26.2.1.

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