John Holland Pty Ltd T/A Territoria Civil
[2018] FWC 1947
•4 APRIL 2018
[2018] FWC 1947
The attached document replaces the document previously issued with the above code on 4 April 2018.
Removes a typographical error at [93].
Associate to Commissioner McKinnon
Dated 23 April 2018
| [2018] FWC 1947 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
John Holland Pty Ltd T/A Territoria Civil
(AG2017/5497)
| Commissioner McKinnon | MELBOURNE, 4 APRIL 2018 |
Application for approval of the Territoria Collective Agreement 2017.
Introduction
Application has been made for approval of a single enterprise agreement known as the Territoria Collective Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement was made by John Holland Pty Ltd (John Holland) and its employees.
On 16 November 2017, Lucio Matarazzo Pty Ltd (Matarazzo), bargaining representative, lodged a Form F18A in the matter and sought to be heard.
On 21 November 2017 the Construction, Forestry, Mining and Energy Union, Mining and Energy Division (CFMEU) emailed the Commission requesting copies of the Form F16 and Form F17 filed in support of the application. These documents were provided to the CFMEU on 4 December 2017, together with a request for it to advise whether it was a bargaining representative for the Agreement. No further correspondence was received from the CFMEU.
On 27 March 2018, John Holland filed proposed undertakings to address concerns identified by the Commission in relation to the Agreement.
A conference was held in the matter on 29 March 2018. No bargaining representative participating in the conference objected to the undertakings proposed by John Holland.
This decision deals with the Commission’s preliminary findings in relation to the Agreement.
National Employment Standards
Overtime
There is a concern about whether clause 6.3 of the Agreement might require employees to work additional hours with no right of refusal in a way that excludes the NES (section 62).
John Holland has given an undertaking in relation to the concern.
Matarazzo submits that the absence of any clear mechanism for calculating overtime worked on any day, week, month, quarter or 6 or 12 month period means the Agreement is less beneficial than the NES, including because of terms dealing with:
· the averaging of hours over 52 weeks under clause 29.1 of the Agreement;
· the absence of any minimum or maximum hours of work per day except for casual employees;
· clause 31 of the Agreement, which deals with rostered days off, but does not apply to work patterns other than the system of 8 hour days and does not set daily minimum or maximum hours of work;
· the absence of more than 0.4 hours accrued toward an RDO for longer working days;
· the absence of any guarantee of accrued hours toward an RDO on shorter working days;
· the absence of any requirement to roster RDOs or pay them out other than yearly or on termination of employment, and the limit on payment on termination where the accrual was 10 days or less.
In my view, these are not concerns in relation to the NES. While the NES deals with averaging of hours, it does not specify a maximum or minimum averaging period for employees covered by a modern award and nor does it provide for minimum or maximum hours of work per day or rostered days off. The issues are more properly characterised as concerns in relation to the better off overall test (BOOT) and I have treated them accordingly.
Request for flexible working arrangements
Matarazzo submits that the Agreement is less beneficial than the NES because it does not give employees a right to request flexible working arrangements.
The NES has effect according to its terms. It is not a requirement that enterprise agreements replicate each and every term of the NES, or even any of its parts. No concern arises in relation to the interaction between the Agreement and the NES in this respect.
Public Holidays
Matarazzo submits that clause 43.3 of the Agreement is less beneficial than the NES because it excludes casual employees from the benefit of sections 114, 115 and 116 of the Act in relation to public holidays.
While clause 43.3 of the Agreement excludes casual employees from the entitlement to be paid for public holidays, this must be read in the context of the Agreement as a whole. Under clause 9 of the Agreement, casual employees are engaged on an hourly basis. By definition, they will not have ordinary hours of work on public holidays and will have no entitled to payment for them under the NES, unless they are rostered to work on public holidays. In that event, clauses 43.1 and 43.4 of the Agreement provide for payment for hours worked. I am not satisfied that clause 43.3 of the Agreement excludes the NES.
Matarazzo also submits that clause 43.3.2 of the Agreement is less beneficial than the NES because it can exclude a full-time or a part-time employee from the benefits of the NES in relation to public holidays where the employer asks the employee if they would like to take the public holiday off and the employee agrees.
The submission does not make sense, and not only because there is no clause 43.3.2 in the Agreement. Considering clause 43 of the Agreement as a whole, it does not do what Matarazzo submits. In any event, the scenario put forward would not be inconsistent with the NES.
Fair Work Information Statement
Matarazzo submits that the Agreement is less beneficial than the NES because it does not require the employer to give each employee the Fair Work Information Statement.
As noted above, enterprise agreements do not need to replicate the NES, in whole or in part. There is no requirement for enterprise agreements to deal with the Fair Work Information Statement. No concern arises on this basis.
Abandonment of employment
Clause 44 of the Agreement may be less beneficial than the NES (section 117) to the extent that it excludes an entitlement to notice of termination in circumstances where an employee is deemed to have abandoned their employment after absence of more than 3 days, having regard to the decision of a Full Bench of the Commission in Bienias v Iplex Pipelines Australia Pty Limited [2017] FWCFB 38.
The concern has not previously been identified in relation to the Agreement and it is appropriate that John Holland be given an opportunity to respond to the concern and give any undertaking it wishes to make.
Better Off Overall Test
It is not contested that for the purposes of the better off overall test (BOOT), the relevant modern award in relation to the Agreement is the Building and Construction General On-Site Award 2010[1] (the Award).
Rates of pay and allowances
Rates of pay in the Agreement are generally significantly higher than the Award rates of pay by a range of approximately 28% to 66% and there are additional guaranteed wage increases over the life of the Agreement. Apprentice rates of pay are also generally above Award rates of pay by a lower margin of 7.56% to 37.9%. However, rates of pay for first and second year adult apprentices appear to be below the Award, as do the rates of pay for third year adult apprentices if required to work night shift.
Matarazzo submits that the Agreement may not pass the BOOT having regard to clause 14.1 of the Agreement, which provides for the absorption of Award entitlements or allowances into over-Agreement payments. Matarazzo says the clause would not have the effect of including or buying out all allowances in the Award because the Agreement does not incorporate the Award. However, the effect of section 57 of the Act is that enterprise agreements displace otherwise applicable modern awards. Agreement parties are free to agree about whether to incorporate award terms into their enterprise agreement, either in whole or in part. As long as employees are better off overall, an enterprise agreement can displace some or all award allowances that might otherwise apply. I am not persuaded that the concern identified by Matarazzo is valid.
The rates of pay in the Agreement are intended to compensate for a range of allowances in the Award, including reimbursement of apprentice training costs, provision of clothing, tool allowance, in charge of plant, industry and special allowance, asbestos related allowances, confined space and dirty work allowance, living away from home on distant work allowances and fares and travel patterns and transport allowances. The Agreement separately provides for camp accommodation and meals, commute travel to remote sites, first aid allowance, leading hand allowance, multi-skilled allowance, service recognition payment, site allowance, shoal bay waste management and field service allowances, on call allowance, meal allowance, provision of clothing and personal protective equipment and access to the John Holland income protection scheme.
On balance, I am satisfied that except in relation to adult apprentices, the rates of pay together with the various allowances provided under the Agreement are adequate to compensate for Award allowances that might otherwise apply.
The concern in relation to rates of pay for adult apprentices has not previously been identified in relation to the Agreement and it is appropriate that John Holland be given an opportunity to respond to the concern and give any undertakings it wishes to make.
Classifications
A concern has been identified in relation to how the BOOT could be assessed in circumstances where the Agreement permits inclusion of future unspecified classifications at the employer’s discretion.[2]
John Holland has given an undertaking that classifications in the Agreement will be limited to the classifications in the Award. The undertaking resolves the concern about how the BOOT can be assessed because the classifications in the Agreement are now known with certainty.
It is not contested that the Agreement contains all of the Award classification levels, although there is a difference of view about the descriptions within each classification for the purposes of the Agreement.
While the Agreement classifications are described in a less precise way than in the Award, they are sufficiently broad to capture the range of roles within relevant comparable Award classifications. If there is a dispute in the future about the particular level in the classification structure that applies to a particular job or person, the dispute resolution procedure at clause 48 can be used to resolve the dispute, including by application to the Commission.
Classification Matching
Matarazzo submits that John Holland’s answer at Question 3.3 of the Form F17 filed with the application is inadequate in that it does not:
· quote the Award hourly rate calculation for Civil construction employees (the Agreement covers civil construction employees (Agreement clause 1.2 and definition of "Civil Works");
· limit Level 4 ·excavator and forklift use, for example, to match corresponding Award classification definitions; or
· provide definitions or descriptors relative to work beyond base trades, and machinery, plant and vehicle operation and supervision.
As noted above, while the Agreement classifications are described in a less precise way than in the Award, in my view they are sufficiently broad to capture the range of roles within relevant comparable Award classifications. The BOOT has been assessed based on the classification matching provided and I am satisfied that the respective classifications in the Agreement and the Award are fairly comparable in each case.
Hours of work
Clause 29.1 of the Agreement provides for averaging of ordinary hours over a 52 week period. A concern was identified about whether, given the long averaging period compared to the Award, the Agreement passes the BOOT.
John Holland has given an undertaking to address the concern by limiting the averaging period to 4 weeks, consistent with the Award.
Matarazzo submits that the hours of work in the Agreement are generally less beneficial to employees than the hours of work in clause 33 of the Award. It also submits that, except for casual employees, the Agreement does not provide for minimum or maximum daily hours of work.
The Award provides a minimum engagement of four hours for casual employees, as does the Agreement. The Award sets a limit on the number of ordinary hours that can be worked per week or average weekly cycle, but does not set minimum or maximum daily hours of work for permanent employees. The Award also provides for daily hire on the basis of a minimum 8 hour day.
While the Agreement does not expressly provide for daily hire employment, casual employees are entitled to a minimum 8 hours’ notice of termination under the Agreement. This is analogous to the entitlement for daily hire employees under the Award.
There are differences between the Agreement and the Award in relation to hours of work. The span of ordinary hours under the Agreement commences at 5.00am rather than 6.00am which is the earliest ordinary hours can commence (except for night shift workers) under the Award. There are fewer restrictions on shift work under the Agreement compared to the Award. The RDO system is the default system of working in the Agreement, but after consultation with employees, John Holland can implement arrangements for working more than 8 ordinary hours per day. As noted above, John Holland has given an undertaking to align the averaging of ordinary hours in the Agreement with the Award, with the result that a maximum 152 ordinary hours can be worked over a four week period.
The effect of the changes is that the hours of work for employees are more flexible than under the Award. This may at times operate in a way that is less beneficial to employees, although as the Agreement rates of pay are significantly higher than the rates of pay under the Award, they appear to compensate for the additional flexibility of hours.
Overtime
As noted above, Matarazzo submits that the Agreement does not provide a clear mechanism for calculating overtime worked per day, week, month, quarter, 6 months or year, and does not provide for breaks during overtime on weekdays, while the Award provides for overtime on:
· weekdays (time and a half for the first two hours and double time thereafter);
· call-backs (minimum of 3 hours unless customary);
· missed meal breaks (double time until the break is taken);
· late finish (reimbursement of cost of, or transport to, employee's home or nearest public transport, if reasonable means of transport not available);
· breaks before and during overtime (paid 20 minute break prior, plus a paid 30 minute break per 4 hours overtime worked; on weekends, different breaks apply).
Matarazzo also submits that under the Award, employees under 18 years and trainees cannot be required to work overtime except, in the case of trainees, where it does not prevent their attendance at class or in an emergency.
John Holland submits that overtime is calculated on significantly higher rates of pay than would apply under the Award and that junior employees and trainees are paid as adults under the Agreement, which is more beneficial than their entitlement under the Award.
The Agreement provides for overtime at time and one half for the first two hours and double time thereafter, with double time on Sundays (clause 30). A minimum payment of four hours applies per call out (clause 24). Meal and rest breaks are provided, including on weekends (clause 34). A site allowance of $1.50 per hour is paid in recognition of the various disabilities associated with working more than 60 kilometres from Darwin.
As can be seen, there are differences between the Award and the Agreement in relation to overtime and breaks. Some terms of the Agreement are more beneficial in this respect (for example, longer minimum call out) and some are less beneficial (for example, no provision for late finishes). The overtime penalties are equivalent (time and one half for the first two hours and double time thereafter).
On balance I am not persuaded that employees will be worse off under the Agreement than the Award having regard to the overtime and meal break provisions of the Agreement.
Rostered Days Off
Clause 31.6 of the Agreement deals with the accrual of rostered days off (RDOs).
Matarazzo submits that clause 31 of the Agreement is less beneficial because:
· rostered days off do not apply to work patterns other than the system of 8 hour days and does not set daily minimum or maximum hours of work;
· no more than 0.4 hours accrues toward an RDO on longer working days;
· there is no guarantee of accrued hours toward an RDO on shorter working days;
· there is no requirement to roster RDOs or pay them out other than yearly or on termination of employment;
· there is a limit on payment on termination for accruals of 10 days or less.
These concerns are premised on a misunderstanding of the RDO provisions of the Award. RDOs rely on a system of 8 hour days for their accrual, which includes 7.6 hours work and 0.4 hours accrual toward a day off every 19 days. The working of longer days does not affect the accrual of RDOs. Instead, an employee may become entitled to payment of overtime for working additional hours.
The Agreement provides for the taking of scheduled RDOs at clauses 31.4 and 31.5 and for pay out of all accrued RDOs on request of the employee. While clause 31 is less rigid than the Award in relation to RDOs, I am not satisfied that it is less beneficial for employees when compared with the Award.
However, to the extent that clause 31.4 permits employees to agree not to have their accrued but untaken RDOs paid out on termination of employment, a concern arises. John Holland has given an undertaking to address the concern.
Shift Work
Matarazzo submits that the shift work terms of the Agreement are less beneficial than the shift work terms of clauses 34 and 35.2 of the Award. Matarazzo provides no elaboration for its concern or any monetary analysis of the Agreement compared to the Award in relation to shift work. It simply asserts that the Agreement is less beneficial because:
In relation to building work:
· it has lower or no shift penalties for morning, early afternoon, afternoon and night shift;
· there is no payment of shift loading for time worked where a job finishes after shift work for more than 5 consecutive days or where an employee is dismissed during the week;
· it does not provide for broken shifts to be paid at time and a half for the first two hours and double time thereafter; and
· there is no requirement for at least 48 hours' notice of the requirement to work shift work.
In relation to civil work:
· it has lower or no shift penalties for certain morning, early afternoon, afternoon, night and weekend shifts;
· it does not provide for shifts that fall mostly on a Sunday or a holiday to be regarded as time worked on the Sunday or holiday; and
· it has less beneficial terms dealing with permanent night shift.
Under the Agreement, a shift worker is defined as “an Employee engaged on Night Shift (that is, starting at or after 5pm and before 5am) for five or more continuous shifts” (clause 2). This explains why the Agreement does not provide for shift loadings for morning or afternoon shifts. The night shift penalty is 125% under the Agreement compared to 115% (Civil construction) and 150% (building construction) under the Award. However, the base rate for calculating shift loadings is significantly higher under the Agreement than the Award.
Analysis undertaken by the Commission for a level 5 classification indicates that the minimum rate of pay for 38 hours of night shift under the Agreement is $1687.97 gross (factoring for night shift penalty, leave and leave loading accruals but no other allowances), compared to an Award minimum rate of pay of $1545.02 gross (factoring for a 150% night shift penalty, special and industry allowance, fares and travel, tool allowance, annual leave and leave loading). That is, the rates of pay in the Agreement are high enough to compensate for shift work entitlements that would otherwise apply under the Award.
The Agreement does not deal with broken shifts and there is no material before me to indicate that they are relevant to the Agreement. I also note that an employee called back to work after working ordinary hours is entitled to the call back provisions of the Agreement, which would leave them better off overall than if they were paid for working a broken shift under the Award. I am not satisfied that the absence of broken shift terms in the Agreement is either relevant or that it leaves employees worse off compared to the Agreement.
As to the requirement for notice to work shift work, as a practical matter it can be inferred that if John Holland wishes its employees to attend for shift work, it will advise them of that fact in advance. However, there is no formal term in the Award requiring 48 hours’ notice to be given. Clause 32.1 of the Agreement provides for 24 hours’ notice for changes to shift rosters, a matter to which I will return. On balance, I am not satisfied that the absence of a formal 48 hour notice period for shift work leaves employees worse off overall.
Weekend and Easter Saturday Penalties
Clause 29.1 of the Agreement provides for ordinary hours of work to be worked on Monday to Friday. All time worked in excess of ordinary hours (including on weekends) is overtime and paid at time and one half for the first two hours and double time thereafter. All overtime on Sunday is paid at double time (clause 30). Payment for work on public holidays, including Easter Saturday, is at double time and a half (clause 43.4).
Despite these provisions, Matarazzo submits that the Agreement does not provide for weekend penalties; minimum engagements on Saturday and Sunday as per clause 37 of the Award; weekend penalties of time and a half for the first two hours and double time thereafter (Saturday); double time for overtime after midday Saturday; double time (Sunday) and double time and a half on Easter Saturday.
Having regard to the provisions of the Agreement, I am not satisfied that Matarazzo has established a concern in relation to weekend or Easter Saturday penalties and nor am I satisfied that the Agreement is less beneficial in relation to weekend and public holiday penalties than the Award. While there is no minimum engagement for work on weekends, the rates of pay for working on weekends are significantly higher than the Award.
Annual Leave
Matarazzo submits that the annual leave rate of pay in the Agreement is less than the rate of pay provided in the Award because the rate of pay in the Agreement is the ‘base rate of pay’ as defined in the NES.
A concern might arise on this basis where the monetary value of the leave entitlement in the Agreement was, as a result, less than the Award entitlement. However, analysis of the entitlement to annual leave under the Agreement and the Award has been undertaken by the Commission using the rate of pay for a night shift worker on the Level 5 classification in the Agreement, which has the lowest over-Award margin. The analysis shows that over the minimum period of employment required to accrue one week’s annual leave (13 weeks), the employee will receive at least an average of $1619.64 gross per week under the Agreement compared to $1491.51 gross per week under the Award.
I am satisfied that in monetary terms, the annual leave entitlement under the Agreement is greater than the comparable entitlement under the Award.
Restrictive Work Practices
Clause 52 of the Agreement provides that employees may not pursue or make claims in relation to matters including flexibility of roster arrangements and other limitations on the Company’s operational requirements. A concern was expressed that this may be inconsistent with the flexibility term in clause 7 of the Agreement as well as the NES dealing with requests for flexible working arrangements. John Holland has given an undertaking to address the concern.
Casual employment
Matarazzo submits that because clause 14.4 of the Award is not reflected in the Agreement in its entirety, casual employees may be in a less beneficial position under the Agreement compared to the Award as there is:
· no casual conversion rights after 6 months employment;
· no requirement to inform employees of actual or likely hours of work;
· the ability to engage casual employees by the hour and give 8 hours’ notice of termination or payment or forfeiture in lieu.
John Holland submits that casual conversion terms cannot be included in the Agreement because they are inconsistent with the Code for the Tendering and Performance of Building Work 2016 (Building Code). It submits that over-Award entitlements in the Agreement are sufficient to compensate for the absence of casual conversion rights and other casual employment terms and conditions in the Award.
While there are important commercial and legal reasons why enterprise agreements might need to comply with the Building Code, compliance with the Building Code is not of itself a relevant consideration in relation to the approval of Agreements. The question is whether the Agreement is capable of approval under the Act, including whether it passes the BOOT.
The analysis provided by John Holland shows that a casual level 5 employee working 56 hours over a 4 week period (the maximum proposed averaging period in the Agreement) will earn $11,549.21 gross under the Agreement compared to $8452.92 gross under the Award – an over-Award average of $774 gross per week. This differential will be higher for classifications in the Agreement.
While there is no express right to casual conversion in the Agreement, there is also nothing to prevent casual employees from being employed on a permanent basis at any time by agreement of the parties.
There is no express provision in the Agreement requiring employees to be informed of their actual or likely number of hours of work, although in a practical sense employees will necessarily be informed of their actual hours of work for each engagement as a casual employee. I am not satisfied that the absence of such a requirement in the Agreement is a reason for the Agreement not to pass the BOOT.
Casual employees under the Award are employees who are engaged and paid as such, and daily hire employees are engaged by the day. Under the Agreement, casual employees are engaged by the hour and are entitled to a minimum of 8 hours’ notice of termination, whether engaged by the hour or the day. Consistent with the Award, the same period of notice of termination applies to John Holland and casual employees under the Agreement.
On balance, once rates of pay are taken into account, I am satisfied that casual employees will be better off overall under the Agreement than the Award.
Redundancy
Clause 46 of the Agreement deals with redundancy and adopts the definition of redundancy in the Act rather than the definition of redundancy in the Award, which is much wider and includes any cessation of employment other than misconduct or refusal of duty. While in some respects, the Agreement is more beneficial than the Award in relation to redundancy, on balance, it is likely to operate in a way that is less beneficial to employees.
The concern in relation to rates of pay for adult apprentices has not previously been identified in relation to the Agreement and it is appropriate that John Holland be given an opportunity to respond to the concern and give any undertakings it wishes to make.
Inclement weather
Clause 35 of the Agreement deals with inclement weather and its provisions are significantly truncated when compared to clause 23 of the Award. This may give rise to concerns about whether the Agreement passes the BOOT.
As the concern in relation to rates of pay for adult apprentices has not previously been identified in relation to the Agreement, it is appropriate that John Holland be given an opportunity to respond to the concern and give any undertakings it wishes to make.
Unlawful Terms
Matarazzo submits that the Agreement includes a number of unlawful terms for the purposes of section 194 of the Act relating to:
· exclusion of employees from coverage if a greenfields project agreement applies (clauses 1.3 and 6 of the Agreement) (alleged opt out term);
· uncertainty of scope given unspecified classifications and potential for employees to be excluded from coverage if directed to work in a classification not contained in the Agreement) (clauses 1.2, 6 and 12.3-4) (alleged opt out term);
· ability to engage contract or labour hire workers (clause 6.4) (not about matters pertaining to the employment relationship);
· restrictive work practices (clause 52.1) (not about matters pertaining to the employment relationship);
· overpayment reimbursement from employee (clause 53.1) (unreasonable deductions from wages);
· no provision of default superannuation fund (clause 28.1) (term requiring default fund contributions to be paid to a fund that does not offer a MySuper product).
I am not persuaded that any of the terms identified above are unlawful terms.
Enterprise agreements commonly deal with the interaction between two or more agreements, including in the building and construction sector where project agreements are common. Section 58 of the Act deals with the interaction between enterprise agreements and expressly provides for agreements to apply to employees in relation to particular employment. Clause 1.3 of the Agreement, read together with clause 6, is not inconsistent with the Act and cannot properly be construed as an opt out term for the purposes of section 194.
The issues relating to uncertainty of scope have been addressed by an undertaking given by John Holland. I am not satisfied that clauses 1.2, 6 and 12.3-4, read together with the proposed undertaking, can be read as constituting unlawful terms.
In dealing with applications for approval of enterprise agreements, the Commission is not required to consider whether each term of the enterprise agreement is about permitted matters (including matters pertaining to the employment relationship). To the extent that the Agreement includes terms that are not about permitted matters, section 253 of the Act operates to ensure they have no effect. The fact that a term may not be about permitted matters does not mean that it is an unlawful term. I am not satisfied that either clauses 6.4 or 52.1 of the Agreement are unlawful terms.
In a similar way, the Commission is not required to consider whether terms dealing with deductions from wages are consistent with the Act when approving an enterprise agreement. Section 326 of the Act operates independently to provide that certain enterprise agreement terms dealing with deductions from wages are of no effect.
In relation to superannuation, section 194(h) does not mandate that enterprise agreements provide for a “default superannuation fund”. Rather, if an enterprise agreement requires or permits default fund contributions to be made to a fund specified in the agreement, the fund must offer a MySuper product (unless the contributions are made to a defined benefit or exempt public sector superannuation scheme).
Clause 28 of the Agreement does not specify a superannuation fund. It provides for employees to nominate their own fund and failing that, for contributions to be made into a “complying superannuation fund” as determined by the Company. The term is no more than a reflection of John Holland’s obligation to offer choice of superannuation fund to employees.[3] I am not satisfied that clause 28 is an unlawful term.
Other requirements for approval
Right to legal representation
Matarazzo submits that clause 48.1.5 is not a matter that can be included in the Agreement because the right to legal representation is a matter for the Commission. Clause 48.1.5 provides:
“The Company reserves the right to be legally represented for all matters before FWC.”
In my view, clause 48.1.5 of the Agreement does not, and could not, overcome the requirement in section 596 of the Act for parties seeking to be represented by a lawyer or paid agent to obtain permission from the Commission in relevant circumstances. The clause is not a barrier to approval of the Agreement.
Dispute Resolution
The dispute resolution term at clause 48.3 of the Agreement provides that safety issues are isolated from industrial matters, and disputes relating to safety must be dealt with in accordance with company policy and procedure. Section 186(6) of the Act requires the Commission to be satisfied that agreements contain a dispute settlement procedure for matters arising under the Agreement and the NES.
There is a concern that clause 48.3 may prevent safety matters arising under the Agreement from being dealt with under the dispute resolution term, noting that certain terms of the Agreement deal with safety matters including the provision of personal protective equipment. John Holland has given an undertaking to address the concern.
Consultation term
The Agreement includes a consultation term at clause 8.
Matarazzo submits that clause 32.1 of the Agreement, which permits the employer to unilaterally change shifts on 24 hours’ notice, is inconsistent with the consultation term requirements in section 205(1)(a)(ii) of the Act.
In my view, clause 8 of the Agreement meets the requirements of the Act. While on its terms, clause 32.1 is not inconsistent with clause 8, it could operate to prevent consultation, representation and/or consideration of matters raised by employees in circumstances where such short notice of shift change was provided.
This concern has not previously been identified in relation to the Agreement and it is appropriate that John Holland be given an opportunity to respond to the concern and give any undertakings it wishes to make to ensure that clause 32.1 operates subject to clause 8.
Pre-approval issues
Finally, Matarazzo submits that there are a number of other pre-approval issues in relation to the Agreement, as follows:
·Failure to identify the existence of the current enterprise agreement in answer to the question at 1.3 of the Form F17 filed with the application;
·Failure to provide the written text of the Building Code to employees;
·Failure to explain specific legislative obligations under the Building Code or legislative obligations to employees;
·Failure to explain to eligible employees Matarazzo’s Notice of Concerns and Single enterprise agreement legislative checklist dated 16 August 2017 to employees (although I note that the says documents were not provided to the Commission by Matarazzo and their contents are not known);
·Failure to explain to eligible employees John Holland’s response to the Notice of Concerns;
·Failure to identify the extent to which the NES is excluded by the Agreement at questions 2.11 and 2.12 of the Form F17 filed with the application;
·Failure to identify unlawful terms included in the Agreement at question 2.14 of the Form F17 filed with the application;
·Citing clauses 26, 27 and 54 of the Agreement as more beneficial terms in answer to question 3.4 of the Form F17;
·Providing an incomplete answer to question 3.5 of the Form F17 in answer to question 3.5 of the Form F17;
·Failure to identify the ability to include unspecified classifications in the Agreement or to provide any analysis as to how the rates of pay in the Agreement compensate for those unspecified classifications’ pay rates and allowances in answer to question 3.6 of the Form F17.
Having sought to be heard in relation to the Agreement, Matarazzo provided no further explanation as to why each of the matters identified above should operate as a barrier to approval of the Agreement. All I have before me is an asserted list of failures with nothing to support it. I will nonetheless attempt to address each in turn.
It may have assisted, but is not fatal to the application, for John Holland to identify its current enterprise agreement as an agreement in identical terms to the one that is subject to this Agreement. In any event, the Agreement makes express reference to the earlier enterprise agreement in clause 12.5 and there is no material before me to demonstrate that the two agreements are in fact identical, or substantially identical.
Matarazzo did not point to any requirement in the Act for the written text of the Building Code to be provided to employees and it is not apparent that the terms of the Building Code are incorporated as terms of the Agreement. That being the case, it was not a requirement on John Holland to explain the terms of the Building Code to employees. As to “or other legislative obligations”, no further detail was provided on this aspect of the submission. No issue arises in this respect.
Matarazzo did not identify any obligation in the Act for correspondence sent from one bargaining representative to another to be explained to employees before an enterprise agreement is made. It is not apparent that either its’ Notice of Concerns, Single enterprise agreement legislative checklist or John Holland’s response to its’ Notice of Concerns were incorporated as terms of the Agreement. That being the case, John Holland was not required to explain the terms of those documents to employees or to provide them to the Commission in connection with the application. No issue arises.
The Form F17 filed with the application did not identify elements of the Agreement which I have identified as potentially excluding the NES. It is open to infer from that answer that, consistent with the fact that it could not do so, John Holland had no intention to exclude the NES and communicated as much to its employees. Subsequent analysis by the Commission identified certain terms in the Agreement that may purport to exclude the NES and undertakings have been given to address the concern. If employees were advised that the Agreement did not exclude the NES, that was technically correct given the effect of section 56 of the Act. I am not satisfied that any concern arises in relation to whether the terms of the Agreement and their effect were explained to employees.
As noted earlier, I am not satisfied that the Agreement contains any unlawful terms and it was accordingly unnecessary for John Holland to answer in the affirmative in response to question 2.14 of the Form F17.
The identification of clauses 26, 27 and 54 as more beneficial terms in the Form F17 filed with the application was, in my view, appropriate. As noted above, the shift work provisions in the Agreement are more beneficial than the Award when rates of pay are taken into account. A meal allowance is provided under the Agreement where reasonable board and lodging is also provided and this is a benefit for employees compared to the Award. The Agreement provides for income protection insurance where the Award does not. In each respect, the answers given by John Holland in response to question 3.4 of the Form F17 filed with the application were correct.
I have dealt with the issue of uncertainty of classifications and monetary comparisons between the Agreement and Award rates of pay above. In circumstances where John Holland clearly thinks the Agreement passes the better off overall test, it answered question 3.6 as it was required to do and no issue arises.
However, the incomplete answer to question 3.5 of the Form F17 (less beneficial terms) is a concern. While the answer to the question correctly identifies that there are less beneficial terms in the Agreement than the Award, the terms identified are limited to the average of hours over a 52 week, rather than 4 week, period. Analysis by the Commission since the application was filed has identified a number of other less beneficial terms in the Agreement compared to the Award, notwithstanding that the overall effect of the Agreement may be more beneficial to employees than the Award.
While it is understandable that John Holland answered the question the way it did, it was nevertheless an incomplete answer to the question. Recent decisions of both the Federal Court and a Full Bench of this Commission have expressed concern about whether, in that scenario, the effect of the Agreement was properly explained to employees.[4]
Conclusion
The matter will be listed for further hearing to deal with whether the terms of the Agreement, and the effect of those terms, were explained to employees as required by section 180(5) of the Act as well as any further undertakings John Holland wishes to give in relation to the Agreement as it relates to:
- Abandonment of employment (clause 44);
- Adult apprentice rates of pay (clause 13);
- Redundancy (clause 46);
- Inclement weather (clause 35); and
- Consultation (clause 32.1 and clause 8).
Directions will issue separately to this Decision.
COMMISSIONER
<PR601722>
[1] MA000020
[2] Agreement, clause 12.3; see also Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18
[3] Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004
[4] Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266; Construction, Forestry, Mining and Energy Union v Shamrock Civil Pty Ltd[2018] FWCFB 1772
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