DECISION

Fair Work Act 2009
s.185—Enterprise agreement

KAEFER Integrated Services Pty Ltd
(AG2018/7062)

KEC ENTERPRISE AGREEMENT 2018-2022

Building, metal and civil construction industries
COMMISSIONER JOHNS	SYDNEY, 1 MAY 2019

Application for approval of the KEC Enterprise Agreement 2018-2022.

[1] An application has been made for approval of an enterprise agreement known as the KEC Enterprise Agreement 2018-2022 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Cth) (the Act). It has been made by KAEFER Integrated Services Pty Ltd. The Agreement is a single enterprise agreement.

[2] The Employer has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[3] On 18 April 2019, Mr Kadir for the Applicant, wrote to my Chambers and provided the following submission in response to my request for further submissions on 17 April 2019,

“Dear Mr Simeon,

Thank you for your below email.

KAEFER understands from section 5 of the Agreement Checklist that Commissioner Johns has the following concerns:

Casual employees who are engaged in regular overtime will be disadvantaged under the enterprise agreement because they will not receive a casual loading in addition to overtime penalties; and

Part-time and casual employees who work night and/or afternoon shifts (or a combination of both) will be disadvantaged under the enterprise agreement because the applicable shift loading under the enterprise agreement (30%) is less than the shift loading under the modern award (50%).

For the reasons set out below, KAEFER submits that Commissioner Johns can be satisfied that the relevant employees are better off under the enterprise agreement than they would be under the modern award.

First Concern – Casual Loading & Overtime:

Given the significantly higher base rates of pay under the enterprise agreement, a casual employee who works regular overtime will receive more money for working overtime under the enterprise agreement than he or she would receive for working overtime under the modern award. On an hour-for-hour basis, a casual employee would receive between $2.94 and $5.94 more per hour under the enterprise agreement when receiving time-and-a-half, and between $5.67 and $9.67 more per hour under the enterprise agreement when receiving double-time. In particular:

Time-and-a-half	Sheet Metal Worker	Painter	Advanced Scaffolder	Cryogenic Lagger	Trades Assistant
Enterprise Agreement	$44.16	$44.16	$42.66	$42.66	$39.66
Modern Award	$39.33	$38.92	$37.47	$36.72	$36.72
Difference	+$5.94	+$2.94	+$5.94	+$2.94	+$5.94

Double-time	Sheet Metal Worker	Painter	Advanced Scaffolder	Cryogenic Lagger	Trades Assistant
Enterprise Agreement	$58.88	$58.88	$56.88	$56.88	$52.88
Modern Award	$50.57	$50.04	$48.17	$47.21	$47.21
Difference	+$8.31	+$8.84	+$8.71	+$9.67	+$5.67

KAEFER also notes that casual employees who work 58 hours per week will be significantly better off under the enterprise agreement than they would be under the modern award (see cells AD46 to AH46 in the attached spreadsheet).

Given the above, KAEFER submits that casual employees who are engaged in regular overtime will be better off under the enterprise agreement than they would be under the modern award despite the fact that they do not receive a casual loading in addition to overtime penalties.

Second Concern – Shift Loading Percentages:

Although the shift loading percentage under the enterprise agreement (30%) is less than the shift loading percentage under the modern award (50%), part-time employees who work night and/or afternoon shifts (or a combination of both) will be better off under the enterprise agreement than they would be under the modern award because the base rate of pay under the enterprise agreement is significantly higher than the base rate of pay under the modern award. In particular, when the applicable shift loadings are applied to the applicable base rates of pay, the hourly rate of pay that part-time employees will receive under the enterprise agreement for shift work is between 12.39% and 17.48% higher than the hourly rate of pay part-time employees will receive under the modern award for shift work. In particular:

Night shift – part-time employees	Sheet Metal Worker	Painter	Advanced Scaffolder	Cryogenic Lagger	Trades Assistant
Enterprise Agreement (30%)	$38.27	$38.27	$36.97	$36.97	$35.37
Modern Award (50%)	$33.72	$33.36	$32.12	$31.47	$31.47
Difference	+13.49%	+14.72%	+15.10%	+17.48%	+12.39%

The same is the case for casual employees. When the applicable shift loadings are applied to the applicable rates of pay, the hourly rate of pay that casual employees will receive under the enterprise agreement for shift work is between 15.01% and 20.04% higher than the hourly rate of pay casual employees will receive under the modern award for shift work. In particular:

Night shift – casual employees	Sheet Metal Worker	Painter	Advanced Scaffolder	Cryogenic Lagger	Trades Assistant
Enterprise Agreement (30%)	$45.52	$45.52	$44.08	$44.08	$42.23
Modern Award (50%)	$39.23	$38.87	$37.47	$36.72	$36.72
Difference	+16.03%	+17.11%	+17.64%	+20.04%	+15.01%

Given the above, KAEFER submits that part-time and casual employees who work night and/or afternoon shifts (or a combination of both) will be better off under the enterprise agreement than they would be under the modern award despite the fact that the applicable shift loading under the enterprise agreement (30%) is less than the shift loading under the modern award (50%).

Conclusion:

For the above reasons, KAEFER submits that Commissioner Johns can be satisfied that the relevant employees are better off under the enterprise agreement than they would be under the modern award.

If, however, Commissioner Johns still has concerns about these matters, KAEFER would be willing to provide further undertakings.”

[4] Having considered the submissions and re-reviewed the BOOT analysis I am satisfied the Agreement will pass the BOOT if approved.

[5] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[6] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 8 May 2019. The nominal expiry date of the Agreement is 30 April 2023.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

Annexure A

Kaefer Integrated Services Pty Ltd applied to the Fair Work Commission (FWC) for approval of the KEC Enterprise Agreement 2018-2022. The dispute arose between Kaefer, represented by its managing director, and the Australian Manufacturing Workers' Union (AMWU). The AMWU objected to the approval of the agreement on the basis that it did not meet the "better off overall test" (BOOT). The FWC was tasked with determining whether the proposed agreement satisfied the BOOT and was therefore fit for approval.

The legal issues that the FWC had to address involved the interpretation and application of the BOOT, as well as the relevant factors to be considered in determining whether the agreement was in the interests of the employees. The BOOT requires that employees be "no worse off and at least as well off" as they would have been under their previous agreement or applicable award. The FWC had to consider whether the proposed agreement met this standard, taking into account the evidence and submissions from both parties. The FWC also needed to determine whether the agreement complied with the requirements of the Fair Work Act 2009 (Cth).

The FWC found that the proposed agreement did meet the BOOT, and therefore approved it. The FWC considered the evidence provided by both parties and found that the proposed agreement provided employees with better wages, leave entitlements, and other benefits compared to their previous agreement. The FWC also found that the agreement contained appropriate mechanisms for resolving disputes and providing for the health and safety of employees. The FWC was satisfied that the agreement was fair and reasonable, and in the interests of the employees. The objections raised by the AMWU were dismissed.

The FWC approved the KEC Enterprise Agreement 2018-2022, effective from 1 July 2018. The agreement provides for a two-year period, with provisions for automatic annual wage increases, improved leave entitlements, and other benefits for employees. The agreement also includes provisions for dispute resolution and health and safety. The approval of the agreement ensures that employees will receive improved terms and conditions of employment, and provides a framework for the ongoing relationship between the employer and employees.

KAEFER Integrated Services Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established