Japara Administration Pty Ltd
[2019] FWCA 5113
•28 AUGUST 2019
| [2019] FWCA 5113 |
| FAIR WORK COMMISSION |
| decision |
Fair Work Act 2009
s.185—Enterprise agreement
Japara Administration Pty Ltd
(AG2019/1383)
Japara Administration Pty Ltd Tasmanian Nurses and Aged Care Employees Enterprise Agreement 2018
| Aged care industry | |
| Deputy President Masson | MELBOURNE, 28 AUGUST 2019 |
Application for approval of the Japara Administration Pty Ltd Tasmanian Nurses and Aged Care Employees Enterprise Agreement 2018.
An application has been made for approval of the Japara Administration Pty Ltd Tasmanian Nurses and Aged Care Employees Enterprise Agreement 2018 (the Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (the Act). It has been made by Japara Administration Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.
A notice of employee representational rights (NERR) was provided to employees on 1 May 2018 [1] and the notice complied with the regulations.[2] Employees were provided with access to the proposed Agreement and information about the effect of the terms of the Agreement along with a notice of the time and place and method of voting was provided to employees on 27 March 2019. Voting occurred in the period 4-10 April 2019 and a majority of those who voted approved the Agreement.[3]
The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant awards for the purpose of the better off overall test (BOOT) were the Aged Care Award 2010[4](the Aged Care Award) and the Nurses Award 2010[5](the Nurses Award).
The statutory declaration noted that some of the provisions in the proposed Agreement were more beneficial than the awards or were not conferred by the awards. Some less beneficial terms were also identified.
The Australian Nursing and Midwifery Federation, Tasmanian Branch (the ANMF) filed a statutory declaration on 21 May 2019, in which they supported approval and sought to be covered by the Agreement. In doing so, however, the ANMF identified a number of more and less beneficial terms in the Agreement that were not accurately identified in the Applicant’s Form F17 statutory declaration.
The Health Services Union, Tasmanian Branch (HSU) also filed a statutory declaration on 14 May 2019, in which they advised that while seeking to be covered by the Agreement, they did not support its approval due to various NES and BOOT concerns.
In reviewing the Agreement for approval, the Commission identified a number of concerns in relation to the pre-approvals of the Application process and the Agreement itself. These included National Employment Standards (NES) compliance and BOOT assessment considerations as follows;
Pre-approval matters;
a.Question 2.5 of the Form F17 advised that the employees were emailed a copy of the Agreement, and copies were left in the staff room and reception. A copy of the email sent to employees was requested to confirm that the requirements of s180(2) of the Act had been complied with.
b.It was noted that Question 3.5 and 3.3 of the Form F17 did not detail all the relevant less beneficial terms, and further information was sought on how section 180(5) of the Act had been complied with.
Submissions were sought on the above concerns.
National Employment Standard (NES);
a.Personal Leave – Clause 32(5)(b) provides that employees will within 12 hours before commencement of a day shift or 6 hours within commencement of an afternoon/night shift, inform the Employer about their inability to attend for duty due to personal illness. This appeared contrary to the NES.
b.Carers Leave – Clause 32(7) provides that the entitlement to use personal leave is subject to the employee being responsible for the care of the person concerned. This appeared contrary to the NES.
Undertakings and/or submissions were sought to address the above concerns.BOOT concerns;
a.Clause 19 of the Agreement allows part-time Aged Care employees to agree to work in excess of their rostered ordinary hours at the ordinary time rate of pay for up to 8 hours. The Aged Care Award in contrast provides that for part-time employees, all time worked in excess of rostered hours on any one day will be paid at the overtime rate. Commission modelling indicated that part-time employees rostered to work less than 8 ordinary hours and any amount of overtime may fall below the award rates of pay.
b.The Agreement does not provide starting and finishing times for part-time employees.
c.Clause 23(4) of the Agreement, while providing for Time off in lieu (TOIL) to be paid at the relevant overtime rate, does not specify that it will be paid out on termination at the relevant overtime rate as provided in both the awards.
d.Clause 31(6) of the Agreement does not include certain award provided safeguards when employees are directed to take excessive annual leave accruals.
e.Various award based allowances are either less than the relevant award or are not provided for in the Agreement. Allowances include vehicle, uniform, laundry and travel allowances.
f.Casual employees engaged under the Agreement do not appear to receive overtime penalties when engaged to work on a weekend, until they work in excess of 10 hours.
g.It was unclear if a casual nurse may be defined as a shift worker or a day worker for the purposes of weekend penalties and overtime.
The HSU also raised a number of NES and BOOT concerns on their Form F18 as outlined below.
a.Clause 32(5)(a)(iii) and clause 32(b)(i) requires employees to prove personal illness to the satisfaction of the Employer.
b.Clause 32(7)(b) provides that an employee taking carers leave must be responsible for the care or support of the immediate family or household member.
c.Clause 32(5)(b) of the Agreement provides that an employee must give notice in regards to personal leave 12 hours prior to commencement of a day shift or 6 hours before the commencement of an afternoon or night shift.
d.Clause 15.1 of the Agreement provides for a lower travel allowance than the relevant award.
e.Call-back provisions at clause 28(1) of the Agreement provide for a minimum payment of 3 hours, while the Aged Care Award provides for a minimum payment of 4 hours.
f.The Agreement provides less certainty than the awards in respect of rostered ordinary hours of work for part-time employees.
The HSU also advised in their Form F18 that they disagree with the Employer’s Form F17, as outlined below.
a.There are matters that are detrimental when compared to the NES such as; the notice of personal leave; having to prove personal illness to the satisfaction of the Employer; and that when taking carer’s leave the employee must be responsible for the care or support of the immediate family or household member.
b.There are numerous matters not outlined in the Form F17 that are more beneficial than the award such as TOIL; overtime penalty rates; Sunday penalty rate and notice period for redundancy.
c.There are also various matters that are included in the Agreement but not conferred in the awards such as make-up time; on-call arrangements; direction to take long service leave; and notice boards provided for.
d.Less beneficial terms were not identified on the Form F17 such as direction to take excessive annual leave; vehicle allowance; uniform allowance; part-time hours; TOIL being paid out upon termination and call-back minimum payment.
e.The Agreement also does not provide for a laundry allowance or a meal allowance where overtime is worked.
The Commission wrote to the Applicant on 2 July 2019, and raised the issues of concern identified by both the Commission and the HSU and sought a response. The Applicant provided submissions and undertakings in correspondence to the Commission on 19 July and 6 August 2019. Although seeking an opportunity to be further heard if the Commission identified matters that would preclude the Agreement’s approval the Applicant advised that it was content for the application to be dealt with on the papers.
The HSU pressed a number of their concerns in submissions filed on 29 July and 7 August 2019 and also advised that it was content for the matter to be dealt with on the papers.
Statutory Provisions
Section 180 of the Act details the steps that must be taken by the employer to ensure that, prior to a ballot for an agreement, employees are properly informed as to the agreement and are notified as to the ballot process. The Commission must be satisfied as to the employer having taken all reasonable steps prior to the conduct of a ballot. The relevant provisions are:
‘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).
…………………………….
Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
…………………………’
Section 186(1) of the Act establishes a “basic rule” that where an application for approval of an enterprise agreement is made under s.185 (which prescribes the time in which such an application must be made and its content), the Commission must approve the agreement if the requirements in ss.186 and 187 of the Act are met. Sections 186 and 187 set out a range of approval requirements. Section 186(2) of the Act sets out approval requirements in relation to the safety net, and relevantly provides as follows:
‘186 When the FWC must approve an enterprise agreement—general requirements
………
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi‑enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.’
Section 193 prescribes what is necessary to pass the better off overall test. It relevantly provides:
‘193 Passing the better off overall test
When a non-greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.
…
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.’
I now turn to consider the issues raised by the Commission and HSU.
Pre-approval matters
Whether the Applicant complied with the requirements of s180(2)of the Act
In response to the Commission’s request the Applicant furnished a copy of the email sent to all employees on 27 March 2019 that included the following documents and material; voting details, summary of agreement terms and a copy of the Agreement. Having reviewed the email and attached material I am satisfied that the Applicant has complied with the requirements of s180(2) of the Act.
Whether the Applicant complied with the requirements of s180(5) of the Act
The Applicant submits that it had taken all reasonable steps to explain the terms and the effects of the terms to employees. It refers to the following relevant information. The Agreement is a replacement of an existing agreement and that the focus of the explanation of the terms of the Agreement was on changes to that existing agreement. Those changes were detailed in a ‘Key Updates Memo’ provided to employees on 27 March 2019 and during the information sessions held on 2, 3, 8 & 9 April 2019.
Having regard to the content of the ‘Key Updates Memo’ provided to employees on 27 March 2019, the fact that the Agreement is a replacement of an existing agreement and the information sessions conducted by the Applicant, I am satisfied that the Applicant has complied with the requirements of s180(5) of the Act.
NES matters
Carers leave - clause 32.7(b)
The concern raised by the Commission was that clause 32(7)(b), which provides for the entitlement to use personal leave for carers leave, was expressed more restrictively than the NES. The Applicant provided the following undertaking to address the concern raised;
‘Clause 32(7)(b) regarding carer’s leave conditions will be deleted and not apply under the Agreement.’
As a consequence of the undertaking proffered, clause 32(7)(b) will have no effect and the NES will apply. The undertaking consequently satisfies the Commission’s concern regarding the identified conflict between clause 32(7)(b) and the NES.
Personal leave - clause 32(5)(b)
The clause provides for the following personal leave notice requirements in the case of aged care employees;
‘An employee shall within 12 hours before the commencement of a day shift or 6 hours within commencement of an afternoon or night shift, inform the Employer of his/her inability to attend for duty, and, as far as practicable state the estimated duration of the absence.’
The Applicant concedes that the clause is inconsistent with the NES which provides for the giving of notice ‘as soon as practicable (which may be a time after the leave has started)’ at outlined at s107(2)(a) of the Act. It submits however that the clause needs to be read in conjunction with the NES precedence clause at clause 7 of the Agreement which provides as follows;
‘7. Relationship to NES
This Agreement contains terms that are also matters under the NES. It is not the intention of the parties to exclude the NES or any provision of the NES and it is acknowledged that such terms can only operate in the manner and to the extent prescribed by s. 55 of the Fair Work Act.’
The HSU objected to the Applicant’s reliance on the NES precedence clause on the basis that such reliance does not make clear that the employer will not seek to rely on clause 32(5)(b). They further submit that the Applicant seeks to retain the provision in the knowledge that employees are unlikely to consider clause 32(5)(b) having regard to the NES precedence clause as clause 7 of the Agreement.
Section 55(1) of the Act makes clear that a term of an Agreement ‘must not exclude the National Employment Standards or any provision of the National Employment Standards.’ If read in isolation clause 32(5)(b) would have the effect of excluding s107(2) of the Act by the imposition of more onerous notification obligations. However, that more onerous notification obligation has no effect by reason of the NES precedence clause at clause 7 of the Agreement whereby the parties have specifically agreed that provisions that ‘exclude’ or undermine the NES cannot operate so as to undermine the NES.
Having regard to the reasoning in Vice President Hatcher’s decision in Mondelez Australia Pty Ltd[6], I note that that clause 7 of the Agreement operates to remedy any deficiencies regarding entitlements otherwise provided for under the NES. This has particular effect with respect to the operation of clause 32(5)(b) which cannot operate so as to impose more onerous personal leave notice requirements than required under the NES. I am consequently satisfied that the clause does not contravene s55 of the Act and that the requirements of s186(2)(c) are met.
Personal leave evidentiary requirements - clauses 32(5)(a)(iii) and 32(5)(b)(i)
Both of the relevant Agreement sub-clauses require that an employee must demonstrate to the ‘satisfaction of the Employer’ that they were unfit for work by reason of illness or injury. The HSU submits that such a requirement is more restrictive than s107(3) of the Act which by contrast relevantly provides as follows;
‘107 Notice and evidence requirements
……………
(4) An employee who has given his or her employer notice of the taking of leave under this Division must if required by the employer, give the employer evidence that would satisfy a reasonable person that;
……….’ (emphasis added)
The HSU submit that the Agreement substitutes the reasonable objective test of s107(2) of the NES with a purely subjective test of management satisfaction which may result in unreasonable management action.
I am not persuaded that the terms in the Agreement which the HSU have objected to are in conflict with the NES. That is because the relevant sub-clauses need to be read in the context of the entire clause within which they sit. In the case of both sub-clauses cited there are clarifying sub-clauses which make clear what the evidentiary requirements are that can be relied on by the employee. See for example in clause 32(5)(a) which applies to the evidentiary requirements for personal leave of nurses, where at the end of the clause it relevantly states as follows;
‘………………
Employees shall be allowed 3 single days of personal leave per fiscal year without certification or statutory declaration. Statutory declaration signed by a Justice of the Peace may be used in lieu of medical certification for access to personal leave.’
Further, sub-clauses 32(5)(b)(iii), (iv) and (v), which apply to aged care staff, similarly deal with the specific evidentiary requirements that employees may rely upon. That is, the provision of medical certification or a statutory declaration is required for absences in excess of three single days per fiscal year.
It is clearly contemplated in the NES at s107(5) of the Act that parties can include terms in an Agreement that deal with the kind of evidence that an employee must provide in order to access paid personal/carers leave. The Agreement includes such terms. When the relevant clauses are read as a whole it is clear that the parties determined to include provisions that clarified the evidentiary requirements that would satisfy the employer. In these circumstances I am not persuaded that there is a conflict between the Agreement and the NES as contended by the HSU.
Does the Agreement satisfy the BOOT?
TOIL provisions - clause 23(4)
Clause 23(4) of the Agreement provides for TOIL to be paid at the relevant overtime rate, but does not specify that it will be paid out on termination at the relevant overtime rate as provided in both relevant awards. In response to the concern raised the Applicant proffered the following undertaking;
‘Clause 23(4) is amended to include the following additional sub-clause;
(iv) If, on the termination of the Employee’s employment, time off for overtime worked by the employee to which clause 23(4) applies has not been taken, the employer must pay the Employee for the overtime at the overtime rate applicable to the overtime when worked.’
The undertaking provided essentially reflects the relevant provisions found within both the Nurses Award (clause 26.4(k)) and the Aged Care Award (clause 25.2(k)). I am consequently satisfied that the issue raised in relation to the TOIL provision is a neutral consideration in the BOOT assessment.
Excessive annual leave – clause 31(6)(b)
Clause 31(6) of the Agreement does not include certain safeguards in circumstances where employees are directed to take annual leave, safeguards which are provided for in the relevant awards. Specifically, the Agreement does not provide the award protection that where a direction is given by the employer to an employee to take excessive leave accrued; such leave must not be taken in leave periods of less than one week. Both the Nurses Award (clause 31.3(b)(ii)) and Aged Care Award (clause 28.7(b)(ii)) provide for such protection.
I accept the HSU submissions that the absence of the limitation on the minimum period of ‘excessive leave’ that an employee may be directed to take is a detriment relative to the Aged Care Award. I note however that other protections are present in the Agreement including the requirement that the employee is to be given a reasonable opportunity to submit a plan to reduce their excessive leave balance prior to any direction to take leave being given. Similar protections to the awards also exist in respect of the notice periods for directions to take excessive leave (not less than 8 weeks and not more than 12 months) and the minimum leave balance that must be maintained after such directions are given by the employer (6 weeks).
Having regard to the other protections that are present within clause 31(6) I intend to apply limited weight to the identified detriment to which I have referred to at [33]-[34] above in the conduct of the BOOT assessment.
Allowances
The Commission raised concerns that various allowances are either less than the relevant award or are not provided for in the Agreement. Allowances referred to by the Commission were the vehicle, uniform, laundry and travel allowances. In response to the concerns raised the Applicant submits as follows;
In respect of the vehicle allowance the Applicant concedes that clause 15(1) of the Agreement provides for mileage reimbursement in accordance with ATO rates (currently $0.68 cents per kilometre) which is lower than the $0.78 cents per kilometre provided for in both the Nurses Award (clause 16.5(a)) and the Aged Care Award (clause 15.7(a)). The Applicant submits that the clause has limited practical effect.
In respect of travel provisions, clause 15(1) of the Agreement provides that employees required to travel in the course of their duties are to be reimbursed for all reasonable travel provisions which are no less beneficial than the Nurses Award and Aged Care Award.
While the Agreement is silent on a laundry allowance, clause 16 of the Agreement provides for a uniform allowance of $7.97 per week which is greater than the combined uniform allowance of $6.24 per week and laundry allowance of $1.49 per week found in both the Nurses Award (at clause 16.2(b)) and the Aged Care Award (at clause 15.2(b)).
As previously stated the HSU raised a number of concerns in their Form F18 including; the absence of a laundry allowance; the absence of a meal allowance when overtime was worked and the lower mileage reimbursement rate for an employee’s use of their private motor vehicle for work. The HSU pressed their concern in submissions that the mileage reimbursement rate of $0.68 cents per kilometre was demonstrably lower than the rates of $0.78 cents per kilometre provided for under the awards and as such was a detriment relative to the awards. The HSU further submits that the Applicant has failed to adduce evidence that supports their submission that there is a limited incidence of employees being required to use their own vehicle.
I accept the HSU submission that the mileage reimbursement rate represents a detriment relative to the awards of $0.10 cents per kilometre and is a less beneficial entitlement for the purpose of the BOOT assessment. What weight should be accorded to this requires an assessment as to the incidence of the requirement for an employee to use their private vehicle for work purposes.
Ignoring other benefits and detriments under the Agreement versus the awards for the purpose of the BOOT assessment at this stage, it is relevant to consider that the margin of Agreement base rates of pay over the award rates of pay range between approximately 4%-8% in the case on non-nursing classifications and between 15% and 75% for nursing classifications. These margins represent between $30 per week at the lowest classification of Level 1 Admin Entry for a full-time permanent employee and in excess of $1000 per week at the level of Registered Nurse 5.1.
At the lowest classification referred to above a full time employee would, for BOOT assessment purposes, be required to drive their own vehicle in excess of 300 kilometres per week for work purposes to ‘erode’ the weekly margin between their base rate of pay and the award. Obviously, casual and part-time employees would be required to drive less kilometres per week on a proportionate basis depending on their hours of work to ‘erode’ the margin for BOOT purposes. In the case of a full time Enrolled Nurse Year 1, which has the lowest margin of nursing classifications above the relevant classification in the Nurses Award of 15%, the weekly rate differential between the Agreement and the Nurses Award for a full-time employee is approximately $132 per week. That differential would be eroded (for BOOT purposes) if such employee were required to drive their private vehicle for work purposes in excess of 1300 kilometres in a week.
Neither party sought to adduce evidence in support of their respective submissions in relation to the mileage reimbursement rate. Were the clause to have practical application it would require full time nursing staff to drive a minimum of some 1300 kilometres per week to offset, for BOOT assessment purposes, the higher agreement rate of pay versus the Nurses Award. In the case of non-nursing staff it would require full-time staff to drive a minimum of 300 kilometres per week to offset the benefit of higher base rates of pay in the Agreement versus the Aged Care Award. There is nothing before me that persuades me that I should determine for the purposes of the BOOT assessment that full-time non-nursing staff employees are routinely required to drive their own vehicles in excess of 300 kilometres per week for work purposes or 1300 kilometres in the case of full-time nursing staff.
Having regard to the above consideration I intend to attribute limited weight to the mileage reimbursement rate detriment in the conduct of the BOOT assessment.
I now turn to the travel provisions at clause 15(1) of the Agreement which provide as follows;
“………
(1) Employees required to travel in the course of their duties are to be reimbursed for all valid travelling expenses incurred and all reasonable out of pocket expenses.’
Both the Aged Care Award (at clause 15.7 ) and the Nurses Award (at clause 16.5) provide for reimbursement of ‘all reasonably incurred expenses’ for ‘fares, meals and accommodation’ in circumstances where the mode of transport, meals or accommodation is not provided by the employer. While the description of the entitlement is slightly different under the awards I discern no meaningful difference between the Agreement and award entitlements. Consequently, I am satisfied that the provisions in the Agreement are comparable to the award entitlements and as such are a neutral consideration in the conduct of the BOOT assessment.
Turning now to the uniform and laundry allowance I note that the Agreement, while providing for a uniform allowance of $7.97 per week, does not provide for a laundry allowance. The uniform allowance under the Agreement is however greater than the combined uniform and laundry allowance under the awards of $7.73 per week. In these circumstances I regard the uniform allowance under the Agreement as a nominal benefit of $0.24 cents per week under the Agreement when compared to the uniform and laundry allowances under the awards.
Finally in respect of allowances, I refer to the HSU’s contention in their Form F18 that the Agreement is silent on the entitlement to a meal allowance when an employee is required to work overtime. While not pressed in their submission, the statement in the Form F18 is plainly incorrect as is evident by reference to clause 26(7) of the Agreement which provides for a meal allowance of $13.72 in circumstances where an employee is required to work overtime beyond one hour. The Agreement meal allowance is slightly higher than the meal allowance of $11.98 found in both the Aged Care Award (at clause 15.4) and Nurses Award (at clause 16.3).
Casual employee hours of work
In response to concerns raised by the Commission regarding hours of work and appropriate penalties of casual employees referred to at [7] above, the Applicant submits that the Agreement is applied as follows with respect to hours of work, weekend penalties and overtime penalties applying to casuals;
·Casual employees may be engaged as either dayworkers or shift workers;
·If a casual employee is engaged as a dayworker, their ordinary hours of work may be rostered from Monday to Friday between 6.00am and 6.00pm, and as such any hours worked on the weekend would attract overtime penalty rates in accordance with clause 24 of the Agreement;
·If a casual employee is engaged as a shift worker they would be entitled to receive the relevant shift penalties in accordance with clause 30(9) of the Agreement for rostered ordinary hours on a weekend, such penalties to be applied to the casual employee’s loaded rate (inclusive of the 25% casual loading) in accordance with clause 14(f)(2) of the Agreement.
·If a casual employee engaged as a shift worker was required to work overtime hours on a weekend they would be entitled to receive the appropriate overtime penalty rate in accordance with clause 24 of the Agreement.
Having considered the submission of the Applicant I accept the construction that has been advanced and am satisfied that relevant overtime and weekend penalties apply to casual employees in circumstances where they are either rostered to work ordinary hours on a weekend shift (as a shift worker) or where they are required to work overtime on a weekend. I accept that there can be no circumstance where a casual employee required to work on a weekend receives less than the applicable weekend or overtime penalty under the awards. Consequently the BOOT concerns raised by the Commission regarding casual hours of work and penalty rates have been satisfactorily addressed by the Applicant.
Call back – clause 28
The HSU submit that the Agreement provisions dealing with recall to work overtime are deficient relative to the Aged Care Award in two key respects;
·While the Agreement provides for a minimum 4 hour payment for the first recall to work overtime after the completion of normal hours of work, any subsequent recall attracts a minimum 3 hour payment. This is to be contrasted with the Aged Care Award which provides for a minimum payment of 4 hours for the first and any subsequent recalls; and
·In circumstances where an employee is recalled to work for a second time and such recall occurs within the 4 hour period of payment for the first recall, than the second recall hours are combined with the first recall. The Aged Care Award provides for no such aggregation of recall hours and provides for a minimum payment of four hours for each recall.
The Agreement relevantly provides as follows in respect of recall to work overtime;
‘28 ON-CALL AARRANGEMENTS
Call Back
(1) An employee recalled to work overtime after finishing the normal day’s work, whether notified before or after leaving the workplace, is to be paid at the applicable overtime rate of pay as follows;
(a)For the first recall a minimum payment of four hours; and
(i)Where an employee is recalled to work a second time, and the recall is within the hours for which payment is already due under sub-clause (a) above, the time worked in the first and second recall will be combined for the purposes of calculating the payment due under subclause (a). Time travelling to the recall to duty shall be included for the purposes of calculating the total payment due under subclause (a).
(b)For any subsequent recall, subject to (a)(i), a minimum payment of three hours.
………………..’
Clause 25 of the Aged Care Award relevantly provides as follows in respect of recall to work overtime;
‘(d) Recall to work overtime
An employee recalled to work overtime after leaving the employer’s premises will be paid for a minimum of four hours’ work at the appropriate rate for each time so recalled. If the work required is completed in less than four hours, the employee will be released from duty.’
The Applicant sought to address the HSU’s contention regarding the recall provisions in the Agreement and simply stated that the first recall attracts a minimum of 4 hours payment while a second and subsequent recall attracts a minimum payment of 3 hours. That submission fails to engage with the HSU’s second complaint regarding the provision that the hours of a second recall are aggregated with the hours of the first recall in circumstances where the second recall occurs within the span of hours of payment of the first recall.
The Aged Care Award recall provisions are clear in my view and provide for a minimum payment of four hours regardless of the timing and incidence of recall following completion of ordinary hours of work. By way of example; if an employee covered by the Aged Care Award finished work at 4.00pm and was recalled to work at 10.00pm which required them to work for one hour following which they left the premises and were then recalled again at 12.00 midnight for a further period of one hours work, that employee would receive two recall payments of 4 hours for ‘each time so recalled’. Each recall stands alone and attracts a discrete minimum payment of 4 hours. As a consequence the employee in this example would attract payment of 8 hours at the appropriate overtime rates.
Applying the same hours scenario above to an employee covered by the Agreement and including travel time of 30 mins each way for each recall as required under clause 28(1)(a)(i), it is clear that the aggregated hours of the two recalls would extend from 9.30pm to 1.30am, that being a total of 4 hours. This would entitle the employee to a payment of 4 hours at the appropriate overtime rate under the Agreement. That is clearly less beneficial than the Aged Care Award.
To illustrate the above detriment further, in the case of an Aged Care employee level 7 engaged under the Aged Care Award on an hourly base rate of $25.17 the payment under the Aged Care Award would be as follows. Each recall, if worked in the period Monday to Friday would attract payment of 2 hours at time and a half and 2 hours at double time, i.e. 6 hours at $25.17 which equals $151.02. The total payment for the two recalls would then be $302.04. By comparison, an employee engaged under the Agreement as a Service employee L7 on a base rate of $25.92 per hour would receive a payment of 2 hours at time and a half and 2 hours at double time totalling 6 hours at $25.92 which equals $155.02.
Consider another example where the same employee was recalled to work at 8.00pm for a 2 hour period and again at 2.00am for a further 2 hour period of work. Under the Aged Care Award the employee would receive two 4 hour minimum recall payments totalling 8 hours at the appropriate overtime rate. Under the Agreement the employee would be entitled to 4 hours for the first recall and 3 hours for the second recall totalling 7 hours at the appropriate penalty rate. This example reinforces that the Agreement provisions dealing with recall to work overtime are less beneficial than the Aged Care Award, although the detriment in the second example is less than in the first example detailed.
Having regard to the low margin of some non-nursing staff classification rates in the Agreement versus the Aged Care Award of 4% there is a likelihood in my view that an employee covered by the Agreement may not be better off overall depending on the incidence of recall to work for overtime. I note that there are no submissions or material before me that goes to the incidence of recalls which makes it difficult to assess the likely or reasonably foreseeable detriment that may arise. Nonetheless, the provisions provide for a detriment which weighs against a finding that each employee and each prospective employee would be better off overall under the Agreement.
Part-time hours of work arrangements
The HSU submit that the Agreement provisions for part-time employees are less beneficial than the Aged Care Award by reason of the lack of certainty of hours of work for part-time employees engaged under the Agreement when compared to the Aged Care Award. This arises from the requirement under the Agreement that on commencement of employment the employer and part-time employee must agree on a span of hours of availability, days of availability and minimum contracted hours. The HSU further submit that these features are to be distinguished from the Aged Care Award which requires that on commencement of employment of a part-time employee, agreement is to be reached on the particular week days, starting and finishing times and actual number of hours to be worked by that employee.
The HSU further submit that under the Agreement, an agreement reached between the employer and a part-time employee on commencement of employment on the span of hours and days is only an agreement as to the employee’s availability. It provides no certainty as to the actual hours that may be rostered and can be subject to unilateral change from week to week, subject only to the rostered ordinary hours of work being at or in excess of the contracted minimum hours and within the span of agreed availability. This provides the employer with the power to roster the ordinary hours of work of a part-time employee in a manner which would otherwise require mutual agreement under the Aged Care Award, or in absence of such mutual agreement; the hours would be paid at overtime rates.
The Applicant variously submits in reply that;
·Changes to a part-time employee’s hours of work can only occur by agreement in accordance with clause 19(5)(b) & (e) of the Agreement;
·Clause 19(5)(d) provides further protection in that a part-time employee cannot be directed to work hours in excess of their rostered ordinary hours at ordinary rates of pay; and
·The Agreement and Aged Care Award both require mutual agreement to changes to ‘agreed hours’ and in the absence of mutual agreement additional hours worked are to be paid at overtime rates.
Clause 19 of the Agreement relevantly provides as follows in respect of part-time employment arrangements;
‘19 PART-TIME EMPLOYEES
(1) Engagement of part-time employees
(i)A part-time employee is an employee who is engaged to work less than full-time hours of an average of 38 hours per week (over a four week period) and has reasonably predictable hours of work.
(ii)A part-time employee will be rostered for a minimum of two hours on any shift.
…………………………….
Aged Care Employees
a.Before commencing employment, the Employer and Employee shall agree in writing on:
(i)The span of hours that the Employee may be rostered within a fortnight. This span of hours shall include which shifts the Employee may be rostered to work: and
(ii)The days of the week the Employee may be rostered to work within a fortnight; and
(iii)The agreed minimum number of contracted hours to be worked per fortnight.
(b) Notwithstanding the overtime provisions prescribed at the Overtime Clause of the Agreement, a part-time Employee may agree to work in excess of their rostered ordinary hours at the ordinary time rate of pay, provided that all time worked by a part-time Employee which exceeds 8 hours on a day or afternoon shift (unless the Employer and Employee have mutually agreed to an arrangement where the Employee works a 10 hour shift), or 10 hours on night shift, or 76 hours per fortnight, will be paid at the rate of time and a half for the first two hours and double time thereafter, except on Sundays when overtime will be paid for at the rate of double time, and on public holidays at the relevant public holiday penalty rates.
(d) No part-time Employee shall be directed to work in excess of their rostered ordinary hours at the ordinary rate of pay.
……………….’
The Aged Care Award relevantly provides for the following in respect of part-time employees;
‘10.3 Part-time employees
(a) A part-time employee is an employee who is engaged to work less than full-time hours of an average of 38 hours per week and has reasonably predictable hours of work.
(b) Before commencing employment, the employer and employee will agree in writing on a regular pattern of work including the number of hours to be worked each week, the days of the week the employee will work and the starting and finishing times each day.
(c) Any agreed variation to the hours of work will be in writing.
………………’
I am satisfied on a plain reading of the above Agreement and Aged Care Award provisions that there are significant differences in respect of part-time employees’ hours of work. The Aged Care Award terms require written agreement between an employer and a part-time employee on commencement of their employment on the actual week days, starting and finishing times and hours to be worked by that employee. This allows a part-time employee to plan their life with some certainty as to their actual hours of work each week. True it is that those hours may be changed but such change requires mutual agreement in writing. Absent such written agreement, any direction by the employer to the part-time employee to work different or increased hours would entitle such employee to overtime penalty payments.
By contrast the Agreement requires the employer to agree with the part-time employee on commencement of their employment on a ‘span of hours’ within a fortnight and the days that the employee is available. The ‘minimum contracted hours’ must also be agreed. The use of the term ‘minimum’ is significant in that it doesn’t specify the actual number of ordinary hours that may be rostered each week or fortnight.
It is clear that under the Agreement the actual ordinary hours that may be rostered each fortnight for a part-time employee can vary subject to the following conditions;
(i) A part-time employee’s rostered hours must be reasonably predictable (clause 19.1(i));
(ii) The rostered ordinary hours must be less than an average of 38 hours per week (clause 19(1)(i));
(iii) The rostered ordinary hours must be no less than 2 hours on any given shift or day (clause 19(1)(ii));
(iv) The rostered hours must fall within the span of hours agreed by the employee on commencement of employment or as subsequently agreed (clause 19(5)(a)(i));
(v) The rostered hours must fall on the days of the week agreed to by the employee on commencement or as subsequently agreed (clause 19(5)(ii)); and
(vi) The rostered hours can be no less than the minimum contracted hours per fortnight agreed to by the employee on commencement or as subsequently agreed (clause 19(5)(iii)).
The Agreement provides considerable flexibility for the employer to vary the rostered ordinary hours depending on the terms of agreement entered into by the employer and part-time employee on commencement of employment or as subsequently agreed. By way of simple example; if on commencement of employment a part-time employee agreed to minimum contracted hours of 16 hours per week to be worked on either a Monday, Tuesday or Wednesday between 8.00am and 4.00pm, it is clear that under the terms of the Agreement the employer has the flexibility to roster the ordinary hours within that span of agreed days and hours.
Continuing with the above example; the employee may be rostered to work 8 hours between 8.00am and 4.00pm on Monday and Tuesday in one week whereas in the following week they may be rostered to work between 8.00am and 4.00pm on Monday, Tuesday and Wednesday. The additional 8 hours rostered in the second week would not require mutual agreement and would not attract overtime penalties.
By contrast, a part-time employee covered by the Aged Care Award may agree on commencement of employment with their employer to work Monday and Tuesday of each week between 8.00am and 4.00pm totalling an agreed 16 hours per week. If directed by the employer to work on the Wednesday in addition to their agreed hours, the part-time employee would be entitled to overtime payment. Alternatively the employee may ‘agree’ to work such additional hours at the ordinary time rates of pay. The critical point here is that they must agree to the change in hours otherwise they would be entitled to overtime penalties if directed to work on the Wednesday.
It is clear that under the Agreement and depending on the minimum contracted hours and the span of available hours and days agreed to by a part-time employee on commencement of employment, the employer may derive even greater flexibility to alter the rostered ordinary hours of work on a fortnightly basis than in the example used above. Of course such changes to rostered ordinary hours would still be subject to the conditions detailed at [65] above.
The submissions by the Applicant that the protections for part-time employees under the Agreement are not less beneficial than the Aged Care Award must be rejected. There is a fundamental difference between the certainty of hours that are guaranteed for a part-time employee engaged under the Aged Care Award, versus the flexibility afforded to the employer to roster part-time employees’ ordinary hours within an agreed span of hours and days under the Agreement.
I am satisfied that there is potential for significant uncertainty as to when hours of work may be rostered within the agreed span of hours for part-time employees under the Agreement. A degree of flexibility of hours of work may suit some employees but may raise challenges for others in terms of study, family and caring responsibilities or other employment obligations for example. On balance, I regard the rostering of hours of work within an agreed span of hours under the Agreement as being significantly less beneficial than the certainty of part-time hours provided for under the relevant Aged Care Award provisions. That is because of the absence of protections that are provided in the Aged Care Award as to actual agreed weekly hours, the days on which those agreed hours are to be worked and the starting and finishing times on those days. Additionally there is real potential that part-time employees, who would otherwise be entitled to receive overtime payments under the Aged Care Award for varied hours, would only receive ordinary time payment under the Agreement providing that the hours were rostered within the part-time employee’s agreed span of hours and days.
Having reached this conclusion regarding the part-time hours of work provisions in Clause 19, it is necessary for me to assess the level of detriment of the clause. The HSU did not advance submissions or evidence going to the weight I should attach to the diminished lack of certainty of rostered hours of part-time employees under the Agreement. I nevertheless regard the part-time provisions under the Agreement as representing a significant detriment relative to the Aged Care Award, which weighs against a conclusion that all employees and prospective employees would be better off overall under the Agreement.
Other Agreement Provisions
Having reached the above conclusions regarding particular provisions within the Agreement including the part-time hours of work provisions at Clause 19 and the recall provisions at clause 28, it is necessary for me to weigh the detriment of those clauses with other provisions in the Agreement that may be more or less beneficial.
The Applicant identified within its F17 Statutory Declaration a number of provisions within the Agreement that are either less beneficial or different to the awards. The particular provisions referenced include:
(i) Higher duties and in charge allowances;
(ii) Annual leave provisions as they apply to nurses;
(iii) Rest breaks after overtime of 8 hours versus 10 hours under the awards;
(iv) Working through meal break penalties for both aged care and nursing staff; and
(v) Part-time employment provisions.
The Applicant also identified within its F17 Statutory Declaration a number of provisions within the Agreement that were either more beneficial than or not conferred by the awards including:
(i)Rates of pay, which on the Commissions analysis, range between 4%-8% above the Aged Care Award and 15%-75% above the Nurses Award;
(ii)Certain allowances;
(iii)Shift allowances for nurses and aged care staff;
(iv)Meal break provisions;
(v)Personal/carers leave;
(vi)Compassionate leave;
(vii) Blood donors and emergency services leave;
(vii)Family and domestic violence leave;
(viii)Annual leave cashing out arrangements;
(ix)Redundancy entitlements;
(x)Shift handover arrangements;
(xi)Review of contracted hours by part-time employees;
(xii)Advanced Diploma of Nursing certificate allowance;
(xiii)Overtime provisions applying to casuals;
(xiv)Parental leave;
(xv)3 days study leave for full-time employees;
(xvi)Disciplinary procedure;
(xvii)Salary and postgraduate qualification allowances for nursing staff;
(xviii)Influenza vaccination allowances; and
(xix)On-call arrangements.
The HSU took issue with the accuracy of the Applicants Form F17, as did the ANMF in their Form F18, both unions raising a range of items they say were not identified as either more or less beneficial than the awards. To the extent that those items are relevant to the conduct of the BOOT I have taken them into account.
Summary on BOOT
It will be seen from the statutory provisions provided above that an enterprise agreement will be found to have passed the BOOT if the Commission is satisfied, that at the test time, each award covered employee and each prospective award covered employee employed under the Agreement would be better off overall if the Agreement applied to the employee rather than if the award applied to the employee.
The application of the BOOT is not applied as a line by line test. Rather, it is a global consideration of the provisions in the Agreement compared to the award, taking into account those provisions that are less beneficial and weighing them against those provisions that are more beneficial.
In conducting its assessment of the Agreement, it is open to the Commission to accept undertakings given pursuant to s 190 of the Act. That is, if the Commission is satisfied that the undertaking or undertakings provided are not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.
The Applicant has provided undertakings to address some concerns raised by the Commission and by the HSU with respect to clauses 23(4) and 32(7) of the Agreement. As outlined above there are however remaining concerns held by the Commission including with respect to the recall provisions at clause 28 and the part-time employment provisions at clause 19.
I accept that there are a range of more beneficial provisions under the Agreement including higher salaries. As identified above there also are a number of provisions that weigh against a finding that employees would be better off overall under the Agreement including the call-back provisions, the part-time provisions, the excessive annual leave direction provisions and the mileage reimbursement rate.
As earlier stated, I attach limited weight to the excessive annual leave direction provisions and mileage reimbursement rate detriments. I also consider that the call-back provisions when weighed against the range of more beneficial provisions in the Agreement are not a sufficient detriment to conclude that employees would not be better off overall. In reaching this conclusion I have had particular regard to the higher salaries and the range of more generous leave provisions.
Turning to consider the impact of the part-time provisions I am satisfied that in respect of the nursing classifications the more beneficial provisions I have referred to above more than offset the detrimental part-time provisions. This conclusion is in large measure due to the significant margin of nurses rates under the Agreement, being at least 15% above the comparable classifications in the Nurses Award. I am consequently satisfied that nursing staff would be better off overall under the Agreement when compared to the Nurses Award.
The conclusion I have reached above regarding conduct of the BOOT does not however extend to include part-time aged care staff, who by reason of the Agreement provisions experience detriments that are not sufficiently compensated by the 4% salary margin over the comparable classification rates under the Aged Care Award. Nor are the other benefits under the Agreement sufficient to compensate for those detriments in my view.
Simply put, a part-time aged care employee can be rostered under the Agreement to work hours in excess of their minimum contracted hours at ordinary time rates of pay. This can, depending on the additional ordinary hours rostered above the minimum contracted hours, represent a significant financial detriment relative to the Aged Care Award. If otherwise covered by the Aged Care Award, part-time employees would be entitled to overtime penalty payments if directed to work beyond their agreed part-time hours of work. There is also a lifestyle detriment based on the likelihood of a greater lack of certainty of rostered hours from week to week.
Having regard to the above I am not satisfied that part-time aged care staff would be better off overall if the Agreement applied to their employment rather than if the Aged Care Award applied to them. In these circumstances the statutory requirements necessary for approval of the Agreement have not been met.
Conclusion
I am satisfied on a preliminary basis that, save for the specific BOOT concern I have identified in respect of part-time aged care staff, the other statutory requirements necessary for approval of the Agreement are met and that the Agreement is capable of approval. Furthermore, the undertakings proffered in respect of clauses 23(4) and 32(7) of the Agreement will not cause financial detriment and will not result in substantial changes to the Agreement.
The Applicant will be afforded an opportunity to address the part-time employment provision concern that I have identified above and is invited to provide an undertaking on or by 4.00pm on Tuesday 3 September 2019 following which the HSU and ANMF will be provided a further 2 days within which to comment. Should the Applicant decline to provide an undertaking to address the remaining concern I will proceed to determine the matter on the material before me.
DEPUTY PRESIDENT
[1] Section 173 of the Act.
[2] Section 174 of the Act.
[3] Section 180 of the Act .
[4] MA000018.
[5] MA000034
[6] [2018] FWC 2140
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