Irving Warren

[2019] FWC 3017

[2019] FWC 3017

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Irving Warren
(AG2018/6374)

COMMISSIONER MCKINNON MELBOURNE, 2 MAY 2019

Application for approval of the All Districts Coating Enterprise Agreement 2018.

[1] Application has been made by Irving Warren under s.185 of the Fair Work Act 2009 (the Act) for approval of a single enterprise agreement known as the All Districts Coating Enterprise Agreement 2018 (the Agreement). The employer covered by the Agreement is All Districts Coating (NSW) Pty Ltd.

[2] On 20 March 2019, a number of concerns in relation to the application were raised with the Applicant by email and an opportunity for undertakings was provided. The Applicant provided its substantive response to those concerns on 10 April 2019. A telephone hearing was held on 12 April 2019. In the course of the hearing, it became apparent that the wrong version of the Agreement had been lodged (that is, a draft prepared two weeks prior to the vote to approve the Agreement). Had it been necessary to deal with that error, I consider that it might have been capable of resolution under section 586 of the Act. Following the hearing, further submissions and revised undertakings were provided to the Commission on 29 April 2019.

[3] The concerns raised with the Applicant dealt with a range of issues, including whether the Agreement was genuinely agreed, the nominal expiry date, the definition of shift worker, terms that may exclude the National Employment Standards (NES) and the better off overall test. The Building and Construction General On-site Award 2010 (the Award) is the relevant modern award for the purposes of the better off overall test.

[4] Further submissions and a statutory declaration were filed dealing with the concerns identified in relation to whether the Agreement was genuinely agreed.

[5] The nominal expiry date in the Agreement is more than four years from the date of approval. An undertaking has been given which does not address the concern, because the nominal expiry date remains one week longer than the maximum four year term.

[6] No adequate response has been received in relation to whether the meaning of ‘shift worker’ in the Agreement complies with the requirement in section 196 of the Act in relation to annual leave accrual for shift workers. While shift work may not be commonly worked, both the Award and the Agreement provide for it. That is sufficient to enliven the requirement in section 196.

[7] The concern in relation to the NES has been addressed by the provision of an undertaking.

[8] As to the better off overall test, concerns were raised in relation to:

1. Commencement and finishing times, as clause 37.3 provides for the variation of ordinary hours without restriction. This concern has been resolved by the provision of an undertaking on 29 April 2019.

2. Meal allowances, for which there is no provision in the Agreement. This concern has not been resolved except by way of explanation as to the inclusive nature of rates of pay.

3. Other allowances, as clause 34 of the Agreement provides for site and general wage related allowances to be paid in accordance with clause 21 of the Award, but otherwise excludes allowances contained in clauses 20, 22 and clause 25 of the Award. This concern has not been resolved except by way of explanation as to the inclusive nature of rates of pay.

4. Redundancy, as the Agreement provides for redundancy in accordance with the NES rather than the Award. An undertaking has been given to resolve the concern.

5. Casual rates of pay for overtime, which is not clearly expressed and so difficult to quantify. An undertaking has been given to resolve the concern.

[9] A separate concern in relation to “safety allowance” was resolved by lodgement of the version of the Agreement that was actually made.

[10] The primary concern in relation to the better off overall test is that rates of pay may not be sufficient to compensate for the working of a 50 hour week. The Applicant submits that a 50 hour working week would be unusual for employees in this case and that historically, employees have worked approximately 40 Saturdays per year and an average of approximately 12 hours overtime per year. No evidentiary basis to underpin the submission has been provided. Accepting it at face value, the difficulty is that there are few limits on the overtime that can be worked under the Agreement, just as there is no certainty that patterns of work will remain the same over the life of the Agreement.

[11] I am satisfied that Level 4 and 5 employees will be better off overall under the Agreement than if the Award applied to their employment because their rates of pay are higher than the Award by a margin of 38.78% to 40.87%. The margin is lower for Level 1, 2 and 3 employees (ranging from 12.78% to 20.38%). These employees will not always be better off overall under the Agreement than the Award if they working up to 50 hours per week.

[12] For example, employees working 12 hour shifts will not be better off overall under the Agreement as compared to under the Award. While the Agreement limits the working of more than ten hour days to no more than four consecutive days (clause 37.6), a working week of 48 hours nonetheless results in Level 1, 2 and 3 employees earning less under the Agreement than they would under the Award.

[13] On the material before me, I am not able to be satisfied that the Agreement will leave each employee better off overall than if the Award applied to their employment.

[14] In conclusion, the Agreement does not appear to meet the requirements of the Act in relation to the nominal expiry date, the definition of shift workers and the better off overall test. While undertakings have been given to address some of the concerns, those matters remain unresolved for the reasons set out above.

[15] It follows that I am not satisfied that the Agreement is capable of approval under the Act. The application is dismissed.

COMMISSIONER

Appearances:

I Warren for the Applicant

Telephone Hearing details:

2019.

Melbourne:

April 12.

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