Integrated Protective Services Pty Ltd T/A Integrated Protective Services

[2016] FWC 6630

[2016] FWC 6630

The attached document replaces the document previously issued with code [2016] FWCA 6180 on 13 September 2016.

Karina Jones

Relief Associate to Commissioner Gregory

Dated 16 September 2016

[2016] FWC 6630

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Integrated Protective Services Pty Ltd T/A Integrated Protective Services
(AG2016/467)

COMMISSIONER GREGORY MELBOURNE, 16 SEPTEMBER 2016

Application for approval of the Integrated Protective Services Enterprise Agreement 2015.

[1] This decision deals with an application for approval of an enterprise agreement known as the Integrated Protective Services Enterprise Agreement 2015 (“the Agreement”). The application is made under s.185 of the Fair Work Act 2009 (Cth) (“the Act”) by the Employer, Integrated Protective Services Pty Ltd T/A Integrated Protective Services (“IPS”).

[2] The application and the accompanying Statutory Declaration indicate that at the time the application was made IPS employed 14 employees engaged in the provision of security services. These employees are located at various Centrelink offices in the Melbourne CBD, as well as in regional Victoria. The Form F17 Statutory Declaration provided by Mr Harkanwar Singh, the Managing Director of IPS, confirms that five of those employees are engaged on a part-time basis, and eight are casual employees.

[3] The wage rate arrangements are a significant feature of the conditions contained in the Agreement and involve what are often described as “rolled up arrangements,” whereby a higher hourly rate is provided for, compared to the ordinary time rates in the underlying Awards. However, the Agreement does not contain the additional penalty rates that apply under the relevant Awards for work performed in the evenings, at weekends, and on public holidays. This is acknowledged in the Statutory Declaration provided by Mr Singh when it summarises the conditions in the proposed Agreement that are “more beneficial” than the underlying Award(s), and those that are “less beneficial.”

[4] After reviewing the application and the terms and conditions contained in the proposed Agreement the Commission forwarded correspondence to the Applicant’s representative about various issues concerning satisfaction with the requirements of the “better off overall” test. The Applicant’s representative, Mr David Price, provided correspondence in response which indicated IPS was prepared to provide various undertakings to respond to the concerns raised by the Commission. In summary, the undertakings propose to limit the number of hours that can be worked under the various rosters in the evenings and at weekends, when the higher penalty rates would otherwise apply under the relevant Awards.

[5] Following receipt of the application the Commission was also contacted by Mr Craig Gouldson, who indicated he was employed by IPS and wished to make submissions in response to the application. The Commission then decided that the application would be set down for hearing to enable this to occur, and to deal with the remaining issues concerning satisfaction with the requirements of the “better off overall” test.

[6] Mr Price was given permission to appear on behalf of the Applicant under s.596(2)(a) of the Act as the matter involves a degree of complexity and his involvement might enable it to be dealt with more effectively. It is also noted that Mr Price stated in the proceedings that he was a Bargaining Representative for IPS, however, the Form F16 application indicates he is the Applicant’s representative, and not an Employer Bargaining Representative. The application, in fact, indicates there was no Employer Bargaining Representative. Mr Price appeared by video link. Mr Gouldson appeared in the proceedings by telephone.

The Issues to be Determined

[7] Section 193(1) of the Act provides that an enterprise agreement passes the “better off overall” test if the Commission is satisfied, at the test time, that each Award covered employee, and each prospective Award covered employee, would be “better off overall” if the Agreement covered them instead of the relevant modern Award. It is well established that the test requires identification of terms that are more beneficial for the employees, and those which are less beneficial, with an overall assessment then being made about whether the employees would be “better off overall” under the terms and conditions contained in the Agreement.

[8] The recent Full Bench decision in Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo 1 also makes clear that the assessment must be carried out in a way that ensures each employee would be “better off overall” under the Agreement, and it is not sufficient for the Commission to simply be satisfied that a majority of employees would be better off. The Full Bench made this clear in the following terms:

“However the application of the BOOT requires satisfaction, as at the test time, that each Award covered employee and each prospective employee would be better off overall under the Agreement.” 2

[9] The relevant Awards in this case in the context of the “better off overall” test assessment are the Security Services Industry Award 2010 3 and in the case of the Loss Prevention Officers, who are classified at the Retail LPO level in the proposed Agreement, the General Retail Industry Award 20104.

The Evidence and Submissions

[10] Mr Price did not seek to provide further submissions or evidence in the proceedings on behalf of IPS, but did respond to various matters raised by the Commission. He indicated, firstly, that the previous undertaking provided in relation to the “Rotating Weekdays/Weeknight/Weekend Worker Roster” was intended to limit the amount of work that could be provided to those employees at certain times, given that the Agreement does not contain the penalty rate entitlements for work in the evenings that apply under the terms of the underlying Awards.

[11] The undertaking proposed that at least 33% of the time worked on this roster would be required to be worked during normal day time hours on Monday to Friday. It also proposed that no more than 25% of the work performed in any week could be worked on Saturday or Sunday. The remaining balance of available time (42%) could be rostered in the evenings. Mr Price also submitted that while these limitations were proposed for this roster, if an employee did work more hours on the weekend then they would be considered to be engaged on the “Rotating Weeknight/Weekend Worker Roster” and would then be paid at the rate applicable for that roster. Mr Price acknowledged that this requires what might be described as a self regulation mechanism to be administered, whereby the Employer is required to ensure the hours worked on any particular roster are confined to the particular allocated timeframes.

[12] He also confirmed in regard to the “Rotating Weeknight/Weekend Worker Roster” that the undertaking proposed would limit the total number of hours that could be worked at the weekend on that roster to 35% of the total hours worked in any week.

[13] The Commission also raised an issue in regard to the proposed part-time work provisions against the background of the terms and conditions in the underlying Awards, which provide that an employee is entitled to overtime payments in any circumstances where they are required to work hours in excess of those previously agreed to in writing.

[14] Mr Price initially stated in response that the part-time provisions in the proposed Agreement replicate those in the underlying Awards, and the hours of work under the Agreement are to be agreed to in writing, and any change to those arrangements must also be confirmed in writing, in advance, otherwise overtime entitlements apply.

[15] However, the Commission noted in response that it was concerned about the implications of sub paragraph 4.3.4 of the Agreement, which concern the ability of the Employer to change rosters, in some circumstances without any notice being provided to employees. It was suggested that this had the consequent result that IPS could change the part-time hours of work at any time, without notice, and without any overtime obligation arising.

[16] The Commission also raised an issue about the entitlements to apply to Security Managers under the Agreement, which involve a proposed reconciliation arrangement. An employee in this classification is not entitled to overtime payments, however, a reconciliation is to be carried out from time to time to ensure the salary they receive is over and above what they would otherwise be entitled to if the overtime provisions in the underlying Security Services Industry Award 2010 applied.

[17] The Commission was subsequently advised that there is only one employee engaged in this position at this time, and it is proposed that he be paid a salary because of the fluctuations in working hours that are involved in the role. The reconciliation mechanism was therefore designed to ensure the employee was not disadvantaged in those circumstances.

[18] Mr Gouldson also provided submissions about a number of the terms and conditions contained in the proposed Agreement, and suggested changes should be made to those entitlements in order to provide enhanced benefits for the employees. He also had concerns about whether some of the proposed terms and conditions meet the requirements of the National Employment Standards.

[19] He also said he could not recall being given the Notice of Employee Representational Rights, or being provided with a copy of the proposed Agreement prior to the ballot to approve it. He further said he did not participate in the voting process and could not recall being offered an opportunity to participate. He said he commenced working with IPS on a regular basis on 19 February 2016, but had worked on some occasions previously. He said he was employed on a casual basis and typically worked for around 42 hours each week.

[20] He also said that since making contact with the Commission to indicate his interest in the application he had not been offered any further casual shifts by IPS since 22 July 2016. This was despite his expectation at the time that he would continue to receive ongoing casual work. He said he did not know why he had not been offered further casual work and was now unsure about his ongoing employment status with IPS.

Consideration

[21] The wage rate and roster arrangements in the Agreement are relatively complex. Five different wage rates and rosters are proposed as follows:

• Non-rotating day worker – (works only between 6a.m. to 6p.m., Monday to Friday)



• Rotating weekdays/weeknight worker – (works Monday to Friday with less than half ordinary hours worked outside day worker hours)



• Non-rotating weeknight shift worker – (works Monday to Friday between 6p.m. to 6a.m. only)



• Rotating weekdays/weeknight/weekend worker – (works weekdays, weeknights and weekends, but with at least a third of hours worked between 6a.m. to 6p.m., Monday to Friday)



• Rotating weeknight/weekend worker – (only works in the evenings and at weekends)



• A further additional rate is then provided for work performed on public holidays

[22] As indicated previously the various wage rates in each of these rosters are to apply for all time worked, and there is no entitlement to the additional penalty rates that apply under the relevant Awards for work performed in the evening or at weekends. The Employer’s Statutory Declaration also confirms there is no entitlement to annual leave loading under the Agreement, and the proposed casual loading is 24%, compared to 25% under the relevant Awards. In addition, the Agreement does not make provision for a number of the allowances that apply under the Awards, including the first aid, supervision and meal allowances.

[23] There are also a number of other subtle distinctions when the terms and conditions contained in the Agreement and the Awards are compared. For example, under the Security Services Industry Award 2010 an employee, who is required to perform work from time to time to which a higher rate of pay applies, is entitled to payment at the higher rate for the actual time worked. However, under the Agreement the higher duties entitlement only applies if the employee is required to work for four or more hours at the higher level.

[24] The additional undertakings now proposed by the Applicant’s representative add further complexity to these arrangements by seeking to place further restrictions on the amount of time that can be worked at certain times under particular roster arrangements. For example, under the “Rotating Weekday/Weeknight/Weekend Worker Roster” it is proposed to further restrict that roster by providing that not more than 25% of the total hours in any week can be worked on the weekends.

[25] It is also proposed that the “Rotating Weeknight/Weekend Worker Roster” would be qualified by providing that no more than 35% of the total hours in any week could be worked on the weekends. However, it is also noted that these new undertakings do not include an undertaking previously proposed whereby the “averaging period of up to 12 months” would be replaced with the words “averaging period of up to 4 weeks.” The Commission has accordingly proceeded to consider the application based on the original wording contained in the Agreement, which involves an “averaging period of up to 12 months.” This is significantly different from the conditions contained in the underlying Awards.

[26] For example, one likely consequence of this extended averaging period is that overtime entitlements that would apply under the Awards would be avoided under the Agreement because of the ability to average hours over an entire year. Clearly, during the course of a year there will likely be quieter periods when additional hours worked during busy periods can be offset. As indicated, this is a significant difference from the obligations contained in the underlying Awards.

[27] As indicated, the proposed undertakings add further complexity to the wage rate arrangements, and represent a further shift away from the original approach which was to have a single hourly rate apply for each roster arrangement, set at a level that satisfies the requirements of the “better off overall” test, and paid whenever those hours are worked under each roster. The changes, and the additional complexity involved, also assume the Employer is going to take on the responsibility of managing, on an ongoing basis, what are already complicated roster arrangements in a way that ensures the hours worked by any employee comply with the roster requirements.

[28] A further detailed review of the wage arrangements based on the most recent undertakings has also now being carried out. One additional matter is also noted at this point. The General Retail Industry Award 2010 is indicated in the application to be the relevant Award in terms of the Retail LPO classification. However, the submissions in the proceedings indicate the employees to be covered by the Agreement are located at various Centrelink offices. This does appear to raise an issue about whether Centrelink offices can properly be considered to be “retail establishments,” which are the relevant businesses to which the General Retail Industry Award 2010 applies. It follows that there is a potential issue about whether it is appropriate for that Award to be considered in the context of the present application. However, I have not found it necessary to determine that matter conclusively at this time, given the decision I have come to in this matter.

[29] It is not intended to set out in complete detail the various assessments carried out in regard to the wage rate arrangements in the Agreement, and those that would apply instead if the relevant Awards have coverage of the employees. However, the following examples are referred to by way of illustration.

[30] The first involves the Retail LPO classification and the “Rotating Weeknight/Weekend Worker Roster.” Based on the undertaking proposed the calculations the Commission has carried out are based on 60% of the work being performed in the evening and 35% at weekends, with the remaining amount being attributed to work on public holidays. A 38 hour week has been used for the purpose of the exercise. When an assessment is made based upon the weekend work being divided between Saturday and Sunday the calculations indicate an employee earning $1,195.00 under the Agreement would be better off than an employee covered by the Award who earns $1,166.00. However, if the same assessment is done, based on all of the weekend work being performed on Sunday, it indicates the employee would continue to earn $1,195.00 under the Agreement, but an amount of $1,230.00 under the General Retail Industry Award 2010.

[31] A similar outcome would result using the Level 1 Retail LPO classification based on the “Rotating Weekday/Weeknight/Weekend Worker Roster” with 33% of the time worked during daytime hours, Monday to Friday, 37% worked in the evenings on Monday to Friday, and the balance worked at the weekends. Again, if the majority of the weekend work is performed on Sunday an employee would not be better off under the Agreement when compared with the Award. These assessments have also not taken account of the fact that there are a number of additional entitlements that apply under the Award, but are not provided for under the terms and conditions contained in the Agreement.

[32] In addition, this assessment has not taken into account the fact that the Agreement provides for averaging over a period of up to 12 months, meaning that significant additional hours could be worked at particular times of the year, without attracting any entitlement to overtime because of the extended averaging period. As indicated previously this is a significantly different entitlement to that provided for in the underlying Awards.

[33] In conclusion, as a consequence of these assessments I am not satisfied it is possible to conclude, at the test time, that each Award covered employee, and each prospective Award covered employee, would be “better off overall” under the terms and conditions contained in the Agreement.

[34] The entitlements of part-time employees also need to be considered in terms of the “better off overall” test. This is again an important consideration, given a significant proportion of the employees to be covered by the Agreement are engaged on a part-time basis.

[35] The underlying Security Services Industry Award 2010 makes clear that a part-time employee is an employee who is engaged to work fewer than 38 ordinary hours per week and “has reasonably predictable hours of work.” It goes on to state in sub clause 10.4(b):

(b) At the time of engagement the employer and the part-time employee will agree in writing on a regular pattern of work either:

(i) specifying at least the hours worked each day, which stays of the week the employee will work and the actual starting and finishing times each day; or

(ii) specifying the roster that the employee will work (including the actual starting and finishing times for each shift) together with days or parts of days on which the employee will not be rostered.

(c) Any agreed variation to the hours of work will be recorded in writing.

(d) All time worked in excess of the hours as agreed under clause 10.4(b) or varied under clause 10.4(c) will be overtime and paid for at the rates prescribed in clause 23 –Overtime.

[36] The overtime provisions in clause 23 5 indicate overtime is payable at the rate of time and a half for the first two hours for work performed on Monday to Friday, and at double time thereafter. Different arrangements apply for work at weekends and on public holidays.

[37] Similar part-time employment arrangements also apply under the General Industry Retail Award 2010.

[38] The provisions in the Award are clear and specific in regard to part-time work. They intend, firstly, that a regular pattern of work will be agreed upon at the outset. Secondly, any variation to these arrangements will entitle overtime payments.

[39] The provisions to do with part-time work in the Agreement are set out in sub clause 4.1.2. They state as follows:

“4.1.2 What are the hours of work for a part-time Employee?

(a) The arrangement of hours of work for part-time Employees will be agreed in writing on commencement and implemented as follows:

● A minimum of 3 hours per week and a maximum of 37 hours per week over an averaging period of up to 12 months;

● Other than for unpaid breaks, a minimum of 3 hours per shift and a maximum of 12 hours per shift except for employees at job level Integrated Protective Services Level 1 where a maximum of 9 hours per shift can be worked;

● All ordinary time worked to be within a span of 12 hours per day;

● A maximum of 10 consecutive days may be worked with 4 non-working days; and

● Broken shifts may be worked with a maximum of one break of more than 1 hour between work periods per day, in which case an additional 2.5% loading will be paid on the hours worked after the break.

(b) Any agreed variation to the hours of work for a part time Employee will be recorded in writing and is subject to the minimum and maximum hours limitations in (a) above.

(c) Any variation to the agreed hours in writing under part (a) & (b) not made in advance of the release of the roster will be subject to overtime penalties provided in clause 4.2.3.”

[40] The Commission raised a concern with the Applicant’s representative during the course of the proceedings about whether the part-time terms and conditions in the Agreement reflect the provisions in the underlying Awards. In this context the Commission referred, in particular, to sub clause 4.3.4 of the Agreement, which indicates rosters can generally be changed by giving at least seven days’ notice, although “in the case of emergency, unforeseen operational contingency (such as a client request), absenteeism, or sickness” the Employer is not required to provide any notice.

[41] The ability to change rosters on a daily basis, without notice, appears to create a situation whereby the hours of work for part-time employees could be changed regularly and without notice, creating a significant difference from the conditions in the Security Services Industry Award 2010. However, it is also noted that a further undertaking now proposed by the Applicant’s representative would delete sub clause 4.3.4 from the Agreement.

[42] However, despite this I am satisfied there are still significant differences between the part-time provisions in the Agreement and those in the underlying Awards. The Agreement, firstly, provides that part-time hours of work can be averaged over a 12 month period. Secondly, it provides that a minimum of three hours per shift and a maximum of 12 hours per shift can be worked, whereas the Award limits the minimum daily hours to four and the maximum daily hours to 10, except where agreement exists between the Employer and the majority of employees in the workplace for hours to be worked up to a maximum of 12 hours per shift. However, in these circumstances the Award also requires that a variety of arrangements such as proper health monitoring procedures, suitable roster arrangements, proper supervision, adequate breaks, and an adequate trial or review process be in place. The Award also makes clear that 12 hour rosters can be introduced on a regular basis, although it anticipates this will occur through the use of regular rostered overtime.

[43] In terms of any variations to agreed part-time hours the Agreement also provides that any variations will be recorded in writing and, further, that any variation to agreed hours not made in advance of the release of the roster will be subject to overtime penalties. (It is also noted that overtime is only calculated on the basis of the non-rotating day work rate regardless of the roster actually being worked by the part-time employee).

[44] The proposed deletion of sub clause 4.3.4 from the Agreement would remove the notice requirement regarding roster changes. Sub clause 4.3.3 also provides that the roster will be drawn up and “where practicable” posted three days in advance of the commencement of the roster cycle. This again is a significant difference from the provisions contained in the underlying Awards and creates the ability for part-time work hours to be varied on a regular basis without requiring overtime penalties to be paid. The Awards by contrast establish a framework in which overtime payments are to be paid in circumstances where variations to agreed part-time hours occur. This is presumably intended to prevent the hours of work of part-time employees being varied on a regular basis in a way that would normally be associated with casual engagements.

[45] The submissions made by Mr Gouldson in the proceedings are also noted. He indicated that he cannot recall being provided with a copy of the draft Agreement, or being provided with an opportunity to vote in the ballot to approve the Agreement. However, the subsequent advice provided by the Applicant’s representative indicates Mr Gouldson may not have been in the workplace at the time.

[46] Mr Gouldson also indicated that despite working for IPS on a regular basis over a period of several months at the Centrelink office in Geelong, and working approximately 42 hours each week, he has not been offered any further casual shifts since mid July, being around the time when he indicated an interest in making submissions about the present application. He also indicated that he was now unsure about whether he was going to be provided with any further casual employment opportunities in the future. It is noted in response that the Applicant’s representative did not provide any further information by way of explanation about this situation.

Conclusion

[47] In conclusion, I am not satisfied that it is possible to conclude that each of the employees to be covered by the proposed Agreement would be “better off overall” when compared to the terms and conditions contained in the Security Services Industry Award 2010 or the General Retail Industry Award 2010. In coming to this conclusion I have had particular regard to the comparisons made about the respective wage arrangements, and the provisions to apply to part-time employees. However, it is also noted that there are a number of other aspects of the Agreement that do not replicate the terms and conditions contained in the underlying Awards and, in fact, provide inferior conditions. It follows, in conclusion, that I am not satisfied that the Agreement can be approved because its terms and conditions do not satisfy the requirements of the “better off overall” test.

[48] I have also considered whether further undertakings could be sought from the Applicant in an endeavour to deal with the issues identified. However, the Applicant has already proposed two separate sets of undertakings. On the latter occasion an undertaking that was initially proposed was withdrawn. Previous decisions of the Commission have emphasised that the process of providing and considering undertakings is not intended to be a negotiation process designed to eventually get an Agreement “over the line.” The obvious concern in this regard is that such processes can lead to an outcome that is significantly different from what was in contemplation by the parties when the Agreement was made, and subsequently voted on. Therefore, I do not consider it is appropriate in the current circumstances to explore the possibility of obtaining additional undertakings from the Applicant, particularly as two separate sets of undertakings have already been proposed and considered.

[49] In conclusion, I am not satisfied that the terms and conditions contained in the proposed Agreement satisfy the requirements of the “better off overall” test. The application is accordingly dismissed.

COMMISSIONER

Appearances:

Mr David Price of ER Strategies Pty Ltd appeared on behalf of Integrated Protective Services Pty Ltd T/A Integrated Protective Services.

Mr Craig Gouldson appeared as a person wishing to be heard in this matter.

Hearing details:

2016.

Melbourne, Sydney

1 August

 1   [2016] FWCFB 2887

 2   Ibid at [15]

 3   [MA000016]

 4   [MA000004]

 5   Above n 3, cl 23

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