Kathleen Louise Brenton
[2022] FWCA 1390
•22 APRIL 2022
| [2022] FWCA 1390 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Kathleen Louise Brenton
(AG2021/9058)
Cairns Bus Charters Enterprise Bargaining Agreement 2014
| COMMISSIONER HUNT | BRISBANE, 22 APRIL 2022 |
Application for termination of the Cairns Bus Charters Enterprise Bargaining Agreement 2014
On 16 December 2021, Ms Kathleen Brenton made an application to the Fair Work Commission (the Commission) pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Cairns Bus Charters Enterprise Bargaining Agreement 2014 (the Agreement). The application was made using the Form F24B and was supported by a Form F24C declaration of Ms Brenton.
The Agreement covers M.F Perks & R.C Perks t/as Cairns Bus Charters (the Employer) and its employees for whom rates of pay and conditions of employment are provided in the Agreement. The Agreement passed its nominal expiry date on 1 May 2017.
At the time of making the application, Ms Brenton was an employee covered by the Agreement, meaning that she was able to make the application by virtue of s.225(b) of the Act.
If the Agreement is terminated, employees currently covered by the Agreement will transition to being covered by the Passenger Vehicle Transportation Award 2020 (the Award).
In the F24B, Ms Brenton asserted that every employee is worse off being covered by the Agreement than if the Award applied. She submitted that it would not be contrary to the public interest for the Agreement to be terminated.
On 20 December 2021, I directed the Employer to communicate in writing to each of the employees covered by the Agreement, inviting them to correspond by email with my chambers in the event they wished to provide their views as to the application.
The views of two employees were received by the Commission. On 22 December 2021, one employee wrote, “I do not wish to email anyone. Or comment on anything. Or agree to whatever Kathy is doing.” On 23 December 2021, the other employee said of the application, “I would like to throw her application out.”
On 12 January 2022, the Employer advised that it opposed termination of the Agreement and provided submissions. The Employer relevantly contended that:
(a) The Employer applies administrative increases to the loaded rates within the Agreement, compensating employees for the irregularity of their shift start and finish times, together with penalty rates;
(b) The Employer wished to engage with its advisor to discuss the rolling out of a replacement enterprise agreement, which would not alter to a significant degree the existing Agreement;
(c) The Employer would prefer not to have the Agreement terminated prior to the Employer and employees committing to a replacement agreement;
(d) Due COVID-19 impacts, major decisions should be delayed;
(e) Payroll processes would require time to apply the Award;
(f) Approximately 80 employees have been covered by the Agreement over the past seven years, and at no stage has any employee until now expressed any concerns regarding the Agreement; and
(g) The impact of COVID-19 has resulted in employees working more of their hours Monday to Friday, with employees benefiting from a loaded rate of pay.
On 13 January 2022, my Chambers wrote to the parties advising the following:
“The Commissioner advises that she is not inclined to essentially halt this application on the basis of the Respondent’s intention to, at some indefinite point in the future, consider renegotiation of an Agreement.
To progress the application, the Commissioner requires the Applicant to provide detailed analysis as to how the Applicant says employees are not better off under the Agreement than the Award. The Commissioner notes that the Better Off Overall Test (BOOT) is only used to consider whether the approve an enterprise agreement, however if the Applicant maintains that employees are no longer better off overall under the Agreement, it is a relevant consideration in the determination of whether to terminate the Agreement.
The Applicant might use an 8-week example. The Applicant is welcome to create example rosters of example employees, say, Employee A, Employee B, Employee C etc. The Applicant is invited to demonstrate what the example employees might earn under the Agreement as opposed to the Award using various different example shifts.
The Applicant is welcome to provide analysis of when working various shifts, how much an employee would be paid per the Agreement and the Award.
Given it is the Applicant’s application, the Applicant is invited to advise how long she requires to provide this analysis to the Commission.”
On 17 January 2022, in response to the above query, Ms Brenton advised she would require two weeks to provide her further submissions, accordingly, she was given leave until 31 January 2022 to submit further material.
On 19 January 2022, the Employer provided a submission, having examined Ms Brenton’s work schedule over a period of eight weeks and concluded that she received $152.11 greater under the Agreement than what she would have been paid pursuant to the Award.
On 31 January 2022, Ms Brenton provided further submissions, including detailed roster scenarios, comparing remuneration payable under the Agreement versus what would be payable under the Award. Ms Brenton’s analysis contended that there was a sizeable difference in the amounts payable, with employees being disadvantaged by several thousand dollars per annum, depending on the shifts worked by them.
The Employer was directed to file evidence and submissions which it did on 11 February 2022. The Employer relevantly submitted that Ms Brenton had utilised rosters worked by her when she was a contractor, prior to commencing employment with the Employer. It was stated that contractors tended to work weekends in greater frequency than employees. Accordingly, it was submitted that the hours used by Ms Brenton did not accurately reflect the hours worked by employees covered by the Agreement. The Employer contended that Ms Brenton was paid a modest amount greater under the Agreement than the Award.
Noting that the Employer had only provided submissions and not evidence, I directed that the Employer provide any supporting evidence or witness statements to support its submissions by no later than 18 February 2022. I then directed that Ms Brenton file a submission in reply by 25 February 2022. I proposed that the matter be listed for hearing by video using Microsoft Teams on 1 March 2022.
On 18 February 2022, both parties confirmed their availability for a hearing of this application on 1 March 2022.
By 18 February 2022, the Respondent had not filed any further evidence or witness statement. On 22 February 2022, my Chambers wrote to the parties, relevantly advising:
“[…] On Tuesday, 15 February 2022, the parties were relevantly advised that: “If the Respondent wishes to file any supporting evidence or witness statements in support of its written submissions, it must do so by no later than 4:00PM (AEST) Friday, 18 February 2022.”
To date, Chambers has not received any witness statements in support of its submissions. The Commissioner will be assisted in accepting facts contended by the Respondent if they are supported by witness statements. The Commissioner will not hear large volumes of evidence in-chief from any witness. The evidence on which the Respondent wishes to rely must be substantially canvassed in signed, written statements.
The Respondent has until no later than 4:00PM (AEST) Thursday, 24 February 2022 to provide witness statements from any witnesses on whose evidence the Respondent intends to rely. The Respondent may wish to consider filing statements from Mr Perks or Mr Carrette, for example.”
On 24 February 2022, the Employer filed a statement of Mr Alan Carrette, Project Manager of the Employer. Mr Carrette’s evidence was focussed on what he considered to be Ms Brenton’s motive for bringing the application. Mr Carrette’s evidence went to matters not related to the consideration the Commission must have at s.226 of the Act and accordingly I have not had regard to any of Mr Carrette’s evidence as to Ms Brenton’s motive for bringing the application.
On 1 March 2022, prior to the hearing, I caused my Chambers to issue the following correspondence to the parties:
“The Commissioner will require the parties to give oral evidence during the hearing addressing the following particular matters. Please note that the Commissioner’s inquiry regarding the provisions in the Agreement as opposed to the Award is not limited to simply the Award rates or these matters below:
Item Agreement Award 1 2 hour minimum start 3 hour minimum start 2 Part-time hours not firmly established? Part-time hours and days set with overtime rates applying for hours worked in excess of agreed hours 3 Meal break within 6 hours Meal break within 5.5 hours 4 No annual leave loading Annual leave loading of 17.5% 5 Christmas Day @ 200% Christmas Day @250% 6 Dispute resolution – conciliation only Dispute resolution – potential for consent arbitration 7 No penalty rates for loaded rates Early work or late work penalties (before 6:00am or after 7:00pm) = 115%
Saturday = 150%
Sunday = 200%
Public holidays = 250%
8 If notice not given by an employee,
6.2.7 provides for withholding all monies held up to the value of notice not given.
Clause 30.1(d) only up to one week’s wages may be withheld. 9 Clause 6.5.11 allows for stand down without pay regardless of the reason. 10 Appendix (iii) Vehicle Damage – provides for insurance excess or other payments to be paid by employees if at fault
The Commissioner notes that in some recent matters before her, the parties have consented to termination of the agreement and have either settled between themselves on an appropriate date for the termination of the agreement to occur (to allow time to negotiate a new agreement or to prepare to pay pursuant to the relevant award), or have left it to the Commissioner to determine the appropriate date for termination of the agreement. The Commissioner provides to the parties the following recent decisions if they are of interest to the parties:
Application by Jackson[1] for termination of the Oh My Pty Ltd T/A Hervey Bay Security of 455 Boat Harbour Drive Hervey Bay QLD 4655 Collective Workplace Agreement
Application by Empire Holdings (QLD) Pty Ltd T/A Empire Hotel and Cloudland[2] for termination of the Empire and Family Employee Collective Agreement 2006-2011
The Commissioner advises that it will be necessary to hear evidence on the above matters and a relevant officer of the Respondent will be expected to give oral evidence during the hearing.”
The hearing then took place. Ms Brenton appeared for herself, supported by her son, Mr Darryl Brenton. The Employer was represented by Mr Corey Dyer of HR Dynamics. Mr Carrette and Mr Darrell Perks, General Manager gave evidence.
During the hearing the Employer explained that it hadn’t appreciated particular aspects of the Award until such time as my communication earlier that day had been reviewed. After some discussion, the Employer submitted that if the Commission were inclined to terminate the Agreement, a suitable date for the termination would be 1 June 2022. It then submitted that given there was likely to be an increase effective from the first full pay period on or after 1 July 2022 on account of the likely national wage increase, a suitable date would be 4 July 2022.
On 9 March 2022, Ms Brenton’s employment was terminated at the initiative of the Employer.
Relevant Legislation
Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss.225, 226 and 227, the terms of which are as follows:
“225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
Consideration
Not contrary to the public interest (s.226(a))
I will first consider whether I am satisfied that termination of the Agreement is “not contrary to the public interest”.
In his decision to approve the termination of the McDonald’s Australia Enterprise Agreement 2013, Deputy President Colman observed that:[3]
“Section 226(a) does not require the Commission to be satisfied that the termination of an enterprise agreement is in the public interest. It sets a lower requirement. The Commission must be satisfied that it is not contrary to the public interest to terminate the agreement.” (emphasis is in the original)
The Agreement was made nearly eight years ago and has less beneficial terms and conditions to employees than those contained within the Award. I am satisfied it is not contrary to the public interest to terminate the Agreement.
Appropriate (s.226(b))
I must consider whether it is “appropriate” to terminate the Agreement, taking into account all the circumstances, including the views of the employees, each employer and each employee organisation covered by the Agreement, and the circumstances of those employees, employers and organisations, including the likely effect that the termination will have on each of them.
Ms Brenton is no longer an employee covered by the Agreement, although she was at the time of the hearing. I consider the relevant time for consideration of an employee’s views is at the time of making the decision, and not at the time of the hearing. Accordingly, I consider that I am, at the time of making the decision, precluded from considering the views of Ms Brenton.
Two employees have provided their views opposing termination of the Agreement. There are no employee organisations covered by the Agreement.
The circumstances of employees if the Agreement is terminated is that they will receive, overall, superior conditions contained within the Award. The table within [18] describes some of the most significant superior conditions within the Award; the most striking being the payment of penalty rates and a 3-hour minimum start when compared with a loaded rate and a 2-hour minimum start under the Agreement.
The Agreement contains loaded rates for permanent and casual employees at the time the Agreement came into operation. The loaded rates of pay appear to me to be higher than the Award base rates of pay. The Agreement then prescribes a 2.5% annual increase on 30 April 2015, 30 April 2016 and 30 April 2017. If any further increases to the loaded rate of pay have been granted by the Employer to employees covered by the Agreement, it has been due to the Employer’s good nature and not because of any obligation to do so within the Agreement.
It is not clear if employees who work only day shift, Monday to Friday will receive a lower rate of pay under the Award for such work if the Agreement is terminated, however I suspect that is the case. In coming to my decision, I have had regard to that possibility and the likely effect that might have on some employees when considering the overall superior wages and conditions within the Award when compared with the Agreement.
The likely effect on the Employer is that it will need to comply with the Award which will likely increase its wages costs when regard is had for the requirement to pay penalty rates on weekends, public holidays and outside of the span of ordinary hours. The Employer will need to become familiar with the Award and ensure compliance with it.
Taking into account the views of the persons (including the Employer but excluding Ms Brenton as she is no longer employed) referred to in s.226(b) that have been presented to the Commission, and the circumstances of those persons, as well as the effect that termination will have on each of them, I consider that it is appropriate to terminate the Agreement.
As I have concluded that it is not contrary to the public interest to terminate the agreement, and that it is appropriate to do so taking into account all the circumstances including those in s.226(b), the Act requires me to terminate the Agreement.
The operative date of the termination
Section 227 provides that, if an enterprise agreement is terminated under s.226, the termination ‘operates from the day specified in the decision to terminate the agreement.’
I accept it is a significant change for the Employer to accommodate in its business; to pay in accordance with the Award when it has applied the terms of the Agreement for approximately eight years. I accept that the administrative effect of termination of the Agreement is not insignificant.
Noting that the application has been before the Commission since December 2021, and the hearing of this matter was on 1 March 2022, I consider that the Employer has had a reasonable period of time to prepare itself for the likelihood of the Agreement being terminated. Having regard to all of the material before me, I consider it suitable for termination of the Agreement to take effect on 30 May 2022.
In coming to this decision, I have had regard to the amount of time I reasonably consider the Employer requires to make the necessary changes to pay in accordance with the Award and communicate the change to employees.
Conclusion
For the reasons given above, in consideration of s.226(a), I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.
For the reasons given above, in consideration of the material before me relevant to ss.226(b)(i) and (ii), I consider that it is appropriate to terminate the Agreement.
In accordance with s.226, I must terminate the Agreement. The application to terminate the Agreement is approved.
For the reasons given above, the termination will take effect from 30 May 2022.
COMMISSIONER
[1] [2021] FWCA 5833.
[2] [2022] FWCA 62.
[3] [2019] FWCA 8563 at [16].
Printed by authority of the Commonwealth Government Printer
<AE407959 PR740591>
0
3
1