Independent Education Union of Australia
[2020] FWCA 4388
•26 AUGUST 2020
| [2020] FWCA 4388 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.225 - Application for termination of an enterprise agreement after its nominal expiry date
Independent Education Union of Australia
(AG2020/2324)
NT CHRISTIAN SCHOOLS FAMILY GROUP HOME HOUSE PARENT ENTERPRISE AGREEMENT 2013
Educational services | |
COMMISSIONER SPENCER | BRISBANE, 26 AUGUST 2020 |
Application for termination of the NT Christian Schools Family Group Home House Parent Enterprise Agreement 2013.
[1] An application pursuant to s.225 of the Fair Work Act 2009 (the Act) was made by the Independent Education Union of Australia (the Applicant) to terminate the NT Christian Schools Family Group Home House Parent Enterprise Agreement 2013 (the Agreement). The Employer in this matter is NT Christian Schools.
[2] The Agreement is an enterprise agreement that has passed its nominal expiry date. The nominal expiry date for the Agreement was 4 February 2017. The Agreement covers the Independent Education Union of Australia (the Union).
[3] The Commission must be satisfied that the requirements in s.225 and s.226 of the Act are met prior to approving the termination of the Agreement.
[4] Sections 225 and 226 of the FW Act relevantly provide:
“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”
[5] The application was supported by a statutory declaration of Ms Danielle Wilson, Industrial Officer of the Union, sworn on 7 August 2020. Ms Wilson’s statutory declaration declared, among other things, information as to why termination of the Agreement is not contrary to the public interest and the likely effect the termination of the Agreement would have on the employees still covered by the Agreement. Directions were issued for the filing of further information and submissions in support of the application.
[6] Ms Phoebe Van Bentum, CEO of the Employer provided submissions in response to the Directions. The submissions addressed a range of matters in relation to the negotiation of the new agreement between the parties. These submissions did not record an objection to the termination of the Agreement.
Submissions of the Union
[7] In response to the Directions, Ms Wilson filed a statement in support of the application to terminate the Agreement and a statutory declaration sworn by Ms Wilson.
[8] Ms Wilson submitted that on 26 May 2020, an explanatory email was sent to employees with three documents attached. In this email, the views of the employees were sought regarding the termination of the Agreement. The three documents attached to the email were:
(a) A comparison document – a one-page document that provides a comparison of the conditions in the Agreement as compared to what is in the Educational Services (Schools) General Staff Award 2010 (the Award), the instrument that would apply in absence of the Agreement;
(b) A wage comparison – a two-page document that provides a comparison of the wages outlined in the Agreement (and the basis for them) and wages outlined in the Award;
(c) Reasons and Consequences of Terminating the Agreement document.
[9] The document referred to at [7](c) above is detailed below:
“Reasons for, and the Consequences of, Terminating the NT Christian Schools Family Group Home House Parent Enterprise Agreement 2013
This document outlines the reasons for, and the consequences of, the lodgement of the application by the IEUA-QNT to terminate the abovementioned agreement:
CURRENT SITUATION AND REASONS
• Under the Agreement, House Parents receive a salary that is inclusive of leave loading, allowances, penalties and additional hours. At present, we understand this salary is approximately $55,435 per annum.
• Under the Agreement, House Parents are required to work public holidays, with limited down time in term time and the weekly hours scheduled are 47.5 per week. This equates to 1900 hours per annum over 40 weeks, however all house parents are required to work for 42 weeks and are not paid additional wages for the additional two weeks. This dilutes the annual salary paid.
• Under the Agreement, House Parents are entitled to receive six weeks per annum annual leave, which is standard in the education sector in the Northern Territory, however it seems the additional two weeks is absorbed through a longstanding administrative arrangement based on the 4-week entitlement in the Award. We suspect the two weeks in question are actually the additional weeks unaccounted for in the school year as per above.
• Under the Agreement, House Parents receive 6 single days per term rostered off duty, which means they are always working at least 6 days per week and mostly 7 days, and those days cannot be readily rostered with their house parent partner. The current hours of duty arrangements are onerous on the employees.
• Under the Agreement, House parents are required to pay a before-tax deduction of $646 per fortnight each ($1292 per house parent couple or $16,810 each/$33,620 per house parent couple per annum) to pay for their accommodation, access to utilities, use of the employer-provided minibus and their lodgings. Under this Award, these expenses would be covered by the employer. This significantly reduces their in-hand income and cannot be considered a “non-cash benefit”.
• The Built-Up salary referred to in the Agreement as projected, equates to more than the base rate in the Award, but with the before tax accommodation deduction and the salary being inclusive of all possible penalties, loadings and additional hours, this does not make each House Parent better off overall.
CONSEQUENCES OF TERMINTION
• If the termination of this Agreement is approved, the employer will be required to make payment of wages and entitlements to employees which are, as a minimum, at least those provided by the Award. This would include entitlements such as allowances for accommodation or sleepover, meal allowances, penalties for work on public holidays, overtime and other entitlements for work done over and above the base salary based on a 38-hour week or, where averaged, offering the full annual payment inclusive of some penalties over 52 weeks.
• Employees will lose 2 weeks annual leave in transferring to the Award, however, as the employer will be required to pay them for the full 42 weeks they are directed to be on duty, the net effect will be that employees will continue to be paid for 46 weeks of the year.
• The employer has threatened that if they need to pay the Award rates for employees, this will mean they have to offer serious consideration as to the ongoing viability of the current program. However, this program is fully reliant on Federal funding to operate, and in order to remain eligible for that funding, it is assumed that payment entitlements for staff under this funding would be expected to be at least the Award minimum.”
[10] Ms Wilson stated that the likely affect of the termination of the agreement will have on each of the employees will vary, due to employees’ own personal circumstances and depending on the decision reached in regard to those House Parents who currently have their own children living with them in their workplace.
[11] Ms Wilsons stated that the termination of the Agreement will mean that each employee will be provided with:
• Minimum rates of pay with no reduction for board or lodgings;
• Provisions of accommodation or applicable penalties/allowances;
• A fundamental framework upon which to base the rosters, ensuring House Parents work only 5 of 7 days each week;
• Either penalties and allowances for the hours worked on a term time basis, or where salaries are averaged, receipt of payment for a 52 week year;
• Payment for all public holidays not just the 5 identified in the Agreement;
• Award minimum access to flexible work arrangements which do not comply with the model term;
• Award minimum access to consultation provisions which do not comply with the model term; and
• Award minimum access to dispute resolution procedures which do not comply with the model term.
[12] Ms Wilson noted that the Award offers less than what the Agreement provides in regards to Annual Leave and Personal Leave, however stated that the additional wages from the removal of non-cash benefit payments, appropriate classification, penalties and allowances, or full year payment, excess the monetary value of the loss of this that is currently able to be accessed by employees.
[13] The Union submitted that it is in the public interest to terminate the Agreement on the basis that the Agreement undermines the conditions application to other workers in the boarding House and group home industry, and is detrimental to other employers who are complying with the minimum Award requirements.
NT Christian Schools Response
[14] In written submissions, NT Christian Schools (the Employer) stated that it is “not looking to contest the termination of the 2013 Enterprise Agreement”, however sought to make observations regarding the application made by the Union regarding salary classification levels, hours of duty, compensation regarding public holidays, provision of Board and lodging (non-cash salary benefits), consultation provisions, and other minimum entitlements.
Salary Classification Level
[15] The Employer took issue with the Union’s assertion that employees are not appropriately classified, stating that advice had been received from the Fair Work Ombudsman in September 2012 with regards to classification levels, specifically that House Parents were to be classified at Level 3.
[16] The Employer submitted that the classification in the Award was not designed to consider the unique circumstances of the Family Group Home model, however stated that it supports House Parents to be engaging in duties that could be reasonably be classified at Level 4 under the Award.
Hours of Duty
[17] The Employer submitted that during the negotiations for the Agreement, an indicative hours of work was developed by House Parents. House Parents were required to submit a log of their hours each week to enable the employer to ensure their hours were in line with the Agreement conditions. However, the Employer submitted that it was supportive of more regulated hours of duty.
Compensation regarding public holidays
[18] The Employer noted the Agreement provides for confusion with regards to Public Holidays, and submitted that clause 20 of the Agreement pertaining to public holidays was intended to communicate that no additional remuneration on top of the built up salary renumeration already accounted for would be provided.
Provision of Board and Lodging
[19] The Employer referred to the decision of Vice President Lawler in NT Christian School [2014] FWCA 392, in which the Vice President approved the Agreement and stated:
“[3] I note that the Agreement makes provision for a deduction from gross wages paid to house parents as a payment towards the provision by the employer of accommodation, food, use of a car, phone and internet. There can be little doubt that the value of these nonmonetary benefits exceeds the amount of the deduction. The deduction provided for in the Agreement is not an impediment to approval of the Agreement. However, it would be prudent for the employer to formally seek the agreement of each such employee pursuant to s.324 of the Act to avoid any argument that s.323(1)(a) has effect to oblige the employer to pay more than the net amount provided for in the agreement, after deductions, notwithstanding the terms of the Agreement.”
[20] The Employers stated that the proposed Agreement currently under negotiation will reconceptualise the role of House Parent to ensure it is compliant with clause 19 of the Award.
Consultation Provisions
[21] The Employer stated the consultation provision of the Agreement reflected the requirements at the time the Agreement was made.
Other Minimum Entitlements
[22] The Employer rejected the Union’s asserted that the employer covered by the Agreement do not have access to the minimum entitlements and submitted that all employees have access to the entitlement as provided by the National Employment Standards.
Consideration
[23] Taking into account the information provided in response to the matters in s.226 of the Act, and in accordance with the above material of the Union and the Employer (noting the Employer does not contest the termination of the Agreement), the material satisfies the legislative requirements that the termination of the Agreement is appropriate. The termination will take effect from 26 August 2020.
[24] IOrder accordingly.
COMMISSIONER
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