Katoomba Scenic Skyway Pty Limited
[2020] FWCA 3053
•11 JUNE 2020
| [2020] FWCA 3053 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Katoomba Scenic Skyway Pty Limited
(AG2019/3794)
THE DISCOVER ANOTHER WORLD ENTERPRISE AGREEMENT 2019
Amusement, events and recreation industry | |
DEPUTY PRESIDENT BULL | SYDNEY, 11 JUNE 2020 |
Application for approval of The Discover Another World Enterprise Agreement 2019. Issues concerning BOOT, opposed by SDA. Undertakings provided. Application to delay approval process.
[1] On 3 October 2019, an application (Form F16) was filed by Katoomba Scenic Skyway Pty Limited(the applicant) for the approval of an enterprise agreement known as The Discover Another World Enterprise Agreement 2019 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement as per s.172(2) of the Act.
[2] The applicant operates a private, family-owned tourist attraction (Scenic World) located in Katoomba in the Blue Mountains, New South Wales, about 100 kilometres west of Sydney. Scenic World is home to four attractions, the Scenic Railway, the Scenic Skyway, the Scenic Cableway and Scenic Walkway a 2.4 km elevated boardwalk through the rainforest in the valley below Scenic World.
[3] During the period of time this application has been before the Commission the applicant has been forced to close Scenic World for periods of time both due to the widespread bushfires in late 2019 and the more recent COVID-19 pandemic, and as discussed below requested that the approval application not be finally determined until after the business reopened which has not yet occurred.
Background
[4] The applicant filed with its application a Form F17 – Employer’s Statutory Declaration made by Anthea Hammon, Managing Director of the applicant. Ms Hammon stated that the relevant Modern Award for the purposes of the Better Off Overall Test (BOOT) is the Amusement Events and Recreation Award 2010 (the Award), 1 and listed the terms and conditions of the Agreement said to be more beneficial, and those less beneficial, than equivalent terms and conditions of the Award.
BOOT Issues
[5] It is accepted that the relevant comparator award for the purposes of applying the BOOT is the Award. On 21 October 2019, my Chambers wrote to the applicant raising a number of concerns with the Agreement vis a vis the BOOT. These concerns were in regard to the Agreement’s longer shift length maximums, 11 hours for non-food and beverage employees and 12 hours for food and beverage employees, Assistant Team Leaders (ALTs) being excluded from receipt of higher duties on the basis that the higher duties allowance is factored into their rate of pay; and the absence of a number of allowances from the Agreement that are contained in the Award.
[6] The Commission’s correspondence also asked the applicant to respond to the issues raised by the Shop, Distributive and Allied Employees’ Association (SDA) a bargaining representative for the Agreement. 2 The issues raised by the SDA are outlined below.
The SDA’s opposition
[7] On 10 October 2019, the SDA, being a bargaining representative for the Agreement, filed a Form F18 - Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement), in which the SDA advised that it did not support approval of the Agreement by the Commission. The SDA provided the following reasons as to why it did not support approval of the Agreement:
“1. The proposed Agreement does not pass the Better off Overall Test.
2. For employees outside the food and beverage section, the proposed agreement diminishes or remove s the following conditions that are in the current agreement:
(a) 25% loading for work after 6pm on weekdays (cl 6.2.1)
(b) 7 days’ notice of roster changes or 14 days if the employee disagrees with change (cl 6.4.3 and cl 6.4.5)
(c) Regular Sunday workers to have three day weekend once every four weeks (cl 6.4.6(e))
(d) Having regard for family responsibilities when establishing or changing rosters (cl 6.4.8)
(e) Rosters not subject to frequent variations (cl 6.4.9)
(f) Casual rosters set, as far as possible, one week in advance (cl 6.4.9)
(g) Meal breaks for five hours shifts (cl 6.5.1)
(h) Non-working day benefit for public holidays (cl 6.6.5)
(i) Travel allowances (cl 7.4)
(j) Additional travelling time expenses (cl 7.5)
(k) Restriction on cleaning of toilets (cl 8.2)
(l) Emergency services leave (now capped at 10 days).”
[8] The SDA in its Form F18 also advised the Commission that it disagreed with various statements made by Ms Hammon in the Form F17 including the following:
• The SDA disagreed with the applicant’s statement that the classification Customer Experience Representative (CER) 5 under the Agreement corresponds with the Grade 5 classification under the Award. The SDA stated that CER 5 corresponds with the Grade 7 classification under the Award.
• The SDA disagreed with the applicant’s statement that higher duties are more beneficial under the Agreement than the Award. The SDA stated that the higher duties term in the Agreement is less beneficial than the higher duties term in the Award. Both the higher duties clauses in the Award and the Agreement provide for payment at the higher classification rate for time worked in the higher role. However, the Award requires that where an employee works in a higher role for more than four hours on any day, they must be paid for the higher rate for all work on that day. No such provision exists in the Agreement. In addition, the Agreement excludes Assistant Team Leaders from higher duties.
• The SDA disagreed with the applicant identifying clause 32.2 of the Agreement as a more beneficial term than the Award in relation to overtime for more than 9 hours per day. The SDA stated that the terms in the Agreement relating to maximum shift lengths are less beneficial than the Award for permanent employees. For non-Food and Beverage (F&B) permanent employees, under clause 31 of the Agreement, the maximum shift length without payment of overtime is nine hours, however an employee may work up to 11 hours on one shift per week. For F&B permanent employees, under clause 33 of the Agreement, the maximum shift length is 12 hours. Under clause 21.2 of the Award the maximum shift length is eight hours. Under the Award an employee may work up to ten hours on one day only by mutual agreement between the employer and the majority of employees. The Award also allows work up to 12 hours but only by mutual agreement in writing between the employer and the individual employee. Under the Award, without the agreement of employees, overtime would be paid for shifts in excess of eight hours.
• The SDA stated that the Applicant had failed to list a number of terms of the Agreement that the SDA considers to be less beneficial than the Award regarding higher duties, maximum shift lengths for permanent employees, family and domestic violence leave, and requests for flexible work arrangements.
• The SDA referred to clause 27.4 of the Agreement, which allows the applicant to automatically withhold an amount of $200 from employees' termination pay if an employee fails to return their uniform and/or any other company property, and stated that no such provision exists in the Award.
• The SDA stated that the applicant had failed to list a number of entitlements omitted by the Agreement but conferred by the Award regarding voluntary employee superannuation contributions, and allowances with respect to tractor plant, accommodation, tool allowance, and cancellation allowances for casual employees who report for work and are not allowed to start.
Applicant’s initial response
[9] On 30 October 2019, the applicant provided a written response (dated 28 October) to the issues raised and attached a number of draft undertakings.
Higher duties
[10] The applicant stated that clause 14 of the Agreement provides for payment of a higher duties allowance where the employee is required to perform the higher role. In respect of Assistant Team Leaders (ATLs), it is known that they will perform higher duties for some of the period when the Team Leader is absent. Accordingly, their base wage has been increased to take into account the higher duties which will be performed in this way. The applicant provided calculations which it submitted demonstrated that ATLs are better off under the Agreement than the Award provisions.
Shift lengths
[11] The applicant submitted that the employees that voted to approve the Agreement, approved by a majority (86%) 3 working in excess of eight hours and up to 10 hours for food and beverage employees. This is consistent with the Award that allows at clause 21.2 for shift lengths to be extended to 10 hours by majority agreement. The Applicant submitted the greater shift lengths provide employees with flexibility to work a compressed or different working week and meet their personal needs for workplace flexibility.
[12] The Applicant submitted that in respect of shift lengths up to 10 hours, there are no BOOT issues that arise.
[13] In respect of shift lengths greater than 10 hours, the Award specifically provides that this may be agreed to on an individual basis as per clause 21.2(b) of the Award. The Applicant referred to its proposed draft undertaking in relation to seeking agreement from the individual employee to work shifts in excess of 10 hours (Undertaking 1).
[14] The Applicant addressed the terms said to be less beneficial than the enterprise agreement that currently covers employees being the Katoomba Scenic Skyway Enterprise Agreement 2015 (the 2015 Agreement). The Applicant stated that each of the changes to the Agreement from the 2015 Agreement were negotiated with bargaining representatives, including the SDA. The terms of the Agreement and the effect of the terms of the Agreement were explained to employees during the access period consistent with the obligations under the Act. Employees have overwhelmingly voted to approve the Agreement.
[15] The Applicant submitted that any changes from the 2015 Agreement are not a relevant consideration in determining the BOOT. The Applicant submitted that whilst there are differences from the 2015 Agreement which currently covers employees, the Agreement meets all the statutory requirements under the Act for approval, and the employees have genuinely agreed to the Agreement.
Allowances
[16] The applicant confirmed that the Agreement does not include the Tractor Plant, Accommodation, or Tool Allowances because there are no employees who are either:
• in charge of a tractor plant,
• required by Scenic World to live on the premises as a caretaker, or
• required to provide hand tools at their own expense.
[17] The applicant noted that it will provide an undertaking that these allowances will apply in the event that the allowance would be payable under the Award. 4
Casual engagement
[18] The applicant submitted that clause 19.1(c) of the Agreement provides that casual employees will be engaged for a minimum of three hours work in any one shift, unless otherwise agreed between the applicant and the casual employee. The applicant submitted that this meets the requirement of clause 15.9 of the Award from a better off overall consideration.
[19] Clause 15.9 of the Award states:
“15.9 A casual employee who reports for work and is not allowed to start will be paid for three hours at the minimum wage for the relevant classification.”
Family and domestic violence leave
[20] The applicant submitted that pursuant to clause 44 of the Agreement, employees will be entitled to up to five days paid Family and Domestic violence leave in accordance with the Scenic World Domestic and Family Violence Leave Policy (Policy). A copy of the Policy was distributed to employees during the access period and has been filed with the application for approval of the Agreement. The applicant submitted that the policy reflects the minimum entitlement in the National Employment Standards (NES), including that an employee on domestic or family violence leave will not break their continuity of service and that matters will be treated confidentially as far as possible.
Flexible work arrangements
[21] The applicant submitted that clause 52 of the Agreement provides that any requests for flexible work arrangements will be dealt with in accordance with the Award and the NES. The applicant submitted that this clause addresses any concerns about the process for requesting flexible work arrangements under clause 23A of the Award.
Uniform deductions
[22] The applicant stated that clause 27 of the Agreement was not an impermissible deduction regarding a failure to return uniforms. Rather, it was a delay of payment pending the return of the company uniform and property. The applicant submitted that return of the company uniform is a serious security issue given the nature of Scenic World’s establishment. It is essential that only current staff members have Scenic World uniforms and the purpose of the delay in payment is to incentivise an employee to promptly return the uniform. The applicant noted that under clause 27.4 of the Agreement that there is no deduction where the uniform is returned, regardless of the condition of return. Further, the amount of $200 does not represent the full value of the uniform provided to employees, which Scenic World estimates is valued at approximately $600 per employee.
[23] The applicant stated that s.186(4) of the Act provides that the Commission must be satisfied that the Agreement does not include any unlawful terms. An unlawful term is defined by s.194 of the Act to including discriminatory terms and objectionable terms. Discriminatory terms are defined by s.195 of the Act. The applicant submitted that clause 27 of the Agreement is not a discriminatory term. Objectionable terms are defined by clause 12 of the Act. The applicant submitted that clause 27 of the Agreement is not an objectionable term.
[24] The applicant submitted that an enterprise agreement may contain terms about deductions from wages for any purpose authorised by an employee who will be covered by the enterprise agreement (s.172(1)(c) of the Act). Clause 27 of the Agreement will not have effect if it offends s.326 - Certain Terms have No Effect of the Act. The applicant submitted that whether it offends s.326 of the Act (which is denied) does not, of itself, prevent the approval of the Agreement unless the deduction term amounts to an unlawful term or it does not meet the requirements of s.172 of the Act.
[25] The applicant submitted that clause 27 of the Agreement merely provides for a delay in payment (and not a deduction per se). It is reasonable in the circumstances particularly taking into account that the $200 is always payable to the employee upon return of the company property. The applicant submitted that the inclusion of clause 27 in the Agreement does not prevent approval of the Agreement. Rather, s.326 of the Act operates in the future to provide protection to the employee in the event that the delay in payment contemplated by clause 27 of the Agreement is held to be unreasonable. If it is unreasonable, clause 27 of the Agreement will have no effect.
CER 5 Classification Level
[26] The applicant stated that it does not agree with the SDA’s position that the Customer Experience Representative 5 (CER) classification under the Agreement equates to a Grade 7 classification in the Award. The applicant submitted that the CER 5 classification equates to a Grade 5 classification in the Award. The CER 5 classification in the Agreement only applies to Team Leaders which it submitted is consistent with the Grade 5 classification in the Award.
Superannuation
[27] The Applicant referred to the SDA’s concern regarding voluntary superannuation contributions and stated that under clause 12 of the Agreement, employees may choose to salary package including in relation to arrangements for superannuation. Clause 20.3 of the Award permits post-taxation contributions. This has always been permitted, even if it is less beneficial than clause 12 of the Agreement and the Applicant noted that it will provide an undertaking to this effect (Undertaking 2).
Undertakings
[28] In its 30 October 2019 response the applicant provided the following draft undertakings:
1. In relation to clause 54.3 of the Agreement, Scenic World undertakes that in the event of a change to the employees’ regular roster or ordinary hours of work, it will invite the employees to give their views about the impact of the change (including any impact in relation to an employee’s family or caring responsibilities).
2. Scenic World undertakes that in relation to shift lengths and the payment for overtime where work is undertaken in excess of the maximum shift length, it will:
a) For Non-F&B Employees, apply a maximum shift length of 9 hours except for one day of the week where the shift length may be up to 10 hours, or 11 hours where Scenic World and the individual employee agree in writing; and
b) For F&B Employees, apply a maximum shift length up 10 hours, or 12 hours where Scenic World and the individual employee agree in writing.
3. Scenic World undertakes that an employee may make voluntary superannuation contributions in accordance with clause 20.3 of the Amusement, Events and Recreation Award 2010 (Award).
4. Scenic World undertakes that the following allowances will be paid to employees in the event that the allowance would have been payable to the employee under the Award:
a) Tractor Allowance (clause 15.1 of the Award);
b) Accommodation Allowance (clause 15.3 of the Award); and
c) Tool Allowance (clause 15.8 of the Award).
Outstanding Issues Between the Parties
[29] On 1 November 2019, the SDA was invited to provide a response to the applicant’s proposed undertakings and the applicant’s written response to the concerns raised by the SDA. The parties were advised that in the event the SDA considered that its concerns were not resolved, the matter would be listed for hearing.
[30] On 8 November 2019, the SDA advised that the Applicant had not addressed some of the significant issues raised by the SDA and the Commission. In particular, the SDA raised concerns with the following:
• Higher duties for Assistant Team Leaders (cl. 14) - the SDA submitted that the proposed Agreement is vague on when higher duties would be payable to ATLs. The company’s calculations are based on assumptions that are not prescribed in the Agreement. It is foreseeable that there could be occasions where an ATL covers for a Team Leader for a period that is not an “extended absence” but which is more than the time accounted for by the company.
• Higher duties (cl. 14) - The SDA submitted the clause does not provide for employees to be paid for the higher rate for a whole shift where the higher duties work exceeds four hours.
• Change of rosters (cl. 20) - The SDA submitted the employer can change the roster with 3 days’ notice or where there is an emergency (7 days in the Award).
• Deduction of $200 for failure to return uniform (cl. 27.4) - The SDA submitted the clause is detrimental to employees and needs to be considered in terms of the BOOT, not just whether it is permissible under the Fair Work Act. There is no equivalent provision in the Award.
• Cancellation allowance - the SDA did not agree that the proposed Agreement has the same effect as the cancellation allowance in the Award.
[31] The SDA submitted that the above concerns had not been addressed by the applicant and, considering the rates of pay in the proposed Agreement were not significantly above the Award, these issues should be addressed by appropriate undertakings in order for the Agreement to pass the BOOT.
Scenic World response
[32] The applicant was provided with an opportunity to respond to the SDA’s further concerns and, on 15 November 2019, provided a written response and revised draft undertakings.
Casual cancellation allowance
[33] The applicant’s proposed undertakings remained the same as the draft undertakings previously submitted on 30 October 2019, except for an additional undertaking concerning the cancellation allowance for casual employees as follows:
“In relation to clause 19.1(c) of the Agreement, Scenic World undertakes that where a casual employee reports for work in accordance with the roster, and the employee cannot start work as there is no work available and there has been no prior discussion between the employee and Scenic World regarding this, the employee will be paid for the three hour minimum engagement period.”
(Undertaking 5)
CER 5 classification level
[34] The applicant’s written response otherwise maintained that the ATL role meets and exceeds the BOOT and referred to its 30 October 2019 analysis of how the ATLs’ wage has been calculated to take into account the times when this role may be required to perform higher duties as a Team Leader.
Higher Duties
[35] In respect of higher duties, the applicant submitted that clause 14 of the Agreement provides that employees will generally not be required to perform higher duties. However, where this does occur, employees will be paid higher duties for the actual time where they perform higher duties. Clause 18 of the Award provides that where an employee must perform higher duties for a period in excess of four hours on any one day, the employee must be paid at the higher rate for all work done. The applicant submitted that notwithstanding this term of the Agreement is not to the same level as the Award provision, the Agreement continues to pass the BOOT and provided two examples of how this conclusion was supported.
Roster Changes
[36] The applicant, in addressing the SDA’s concern regarding change of rosters, stated that it seeks extra flexibility in clause 20 of the Agreement to change rosters with three days’ notice or where there is an emergency. The applicant submitted that it intends to use this provision sparingly but considers the overall benefits that employees receive under the Agreement outweigh this detriment when compared with the Award. The Agreement was overwhelmingly agreed to.
[37] The applicant further submitted that it is also important to note that in establishing rosters, the applicant is required by clause 20.2 of the Agreement to take into account the needs and preferences of employees as well as its business. This is not limited to family responsibilities and is not a requirement or consideration provided by the Award. The applicant submitted that although the Agreement does not provide the same period of notice of change of roster as the Award, the Agreement still meets the BOOT, taking into account the financial and non-financial benefits provided under the Agreement.
Uniform Deduction
[38] The applicant, in addressing the SDA’s concern regarding the withholding of $200 for failure to return uniforms, acknowledged that there is no provision in the Award regarding a withholding of $200 until the employee returns the uniform. The applicant, however, submitted that clause 15.6(a) of the Award states:
“Where the uniform is supplied by the employer, it will remain the property of the employer and must be returned to the employer on the termination of the employee’s employment.”
[39] The applicant submitted that on this basis, it is entirely consistent with the Award for the applicant to require that employees return their uniform and other company property at the termination of their employment pursuant to clause 27.4 of the Agreement. The applicant reiterated that the withholding of this amount is not a deduction per se, however, it is a reasonable delay in the payment of $200 in circumstances where an employee has failed to return company property upon termination of their employment (consistent with the employee’s Award obligation).
[40] On 26 November 2019, the SDA advised that the applicant’s updated draft undertakings appear to satisfy the SDA’s concern in relation to the casual cancellation allowance. However, the SDA advised that it was still of the view that the other matters raised in its 8 November 2019 correspondence should be dealt with by undertakings in order for the Agreement to pass the BOOT.
Applicant’s request to delay agreement approval process
[41] It is understood that in early December 2019 the applicant’s business operations were closed for a period of time due to large scale bushfires in the Blue Mountains National Park, and in the vicinity of the applicant’s business.
[42] Following the reopening of the applicant’s business operations, the application was listed for an in-person conference on 18 December 2019. At the conference Mr Andrew Farr, Partner at PricewaterhouseCoopers sought, and was granted, permission to appear on behalf of the applicant in the proceedings pursuant to s.596(2)(a) of the Act (via video link from Melbourne) on the basis that his representation would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. Ms Monica Rose appeared for the SDA.
[43] The outstanding issues between the parties were unable to be resolved. On 20 December 2019, the SDA proposed undertakings it asserted the applicant could make in respect of higher duties for ATLs, higher duties generally, roster changes, and the withholding of monetary amounts for uniforms. In response, the applicant’s representative Mr Farr advised the Commission that he would confirm what further undertakings, if any, the applicant was prepared to give, and a draft of these undertakings would be provided to the Commission and the SDA.
[44] Following the Christmas and New Year period the Commission sought an update from the applicant. On 27 January 2020, the applicant confirmed it had put a separate position to the SDA and was awaiting their response and, following this response, the applicant would update the Commission. The Commission did not receive any response as previously indicated from the applicant.
[45] The Commission sought a further status update from the applicant on 24 March 2020.
[46] On 27 March 2020, Mr Farr advised that due to COVID-19 the applicant’s business was temporarily closed, and employees had been stood down. Mr Farr submitted that further consideration of undertakings was not possible until the business re-opened and the operating environment could be re-assessed at that time. The Applicant advised that it wished to update the Commission once the temporary closure had ended.
[47] On the same date, my Chambers responded to the applicant by email and noted that the application has been ongoing since October 2019. It was noted by the Commission that it has an obligation to deal with all matters, and in particular applications for approval of enterprise agreements, without delay as per s.171(b)(iii) and s.577(b) of the Act. Given that it was unknown when the applicant’s circumstances would change, the applicant was requested to advise whether it wished to continue with its application.
[48] On 20 April 2020, the applicant responded and advised that it wished to press its application for approval of the Agreement. The applicant noted it considered that the Agreement, together with the undertakings offered, ensure that each employee would be better off overall if the Agreement applied to them than if the Award applied, and that all other steps for the approval of the Agreement have been satisfied.
[49] The applicant reiterated that its Scenic World operations remained non-operational due to the COVID-19 crisis. The applicant stated that in the event the SDA maintains its opposition to approval of the Agreement over the period of notice for change of shift being 3 days in the Agreement when compared to 7 days under the Award, it requested that the application be listed for a conference when Scenic World re-opens. This conference could then be used for further programming of the application.
[50] On 28 April 2020, the SDA confirmed that its position remained unchanged and that it continued to oppose approval of the Agreement.
[51] On 12 May 2020, the matter was listed for a further conference to be held on 15 May 2020. The applicant was requested to provide an updated list of undertakings and was advised that any undertakings regarding allowances that are not applicable to their employees were not required, and that the Agreement’s consultation clause is not susceptible to an undertaking as per the Act.
[52] The SDA was otherwise requested to provide an outline of outstanding objections and any proposed further undertakings.
[53] On 12 May 2020, Mr Farr for the Applicant requested that the 15 May conference be re-listed to another date as he would be on annual leave. Mr Farr also noted that the business remains closed and employee representatives continue to be stood down and are unlikely to be available to attend the conference.
[54] The conference was relisted to 20 May 2020. On 13 May 2020, the applicant provided a copy of the undertakings it was prepared to provide to resolve the issues raised by the SDA.
[55] On 14 May 2020, the SDA provided a response in which it maintained that the Agreement does not pass the BOOT even with the proposed undertakings. The SDA stated that the ‘most concerning issues’ were:
• higher duties,
• change of rosters,
• uniform deduction and
• cancellation allowance.
[56] The SDA provided further suggested undertakings that in its view would rectify the issues it had raised.
[57] The conference proceeded by telephone on 20 May 2020. The outstanding issues between the parties were reduced to three issues being higher duties, change of rosters, and the deduction of $200 for failure to return uniforms and property.
[58] The parties confirmed that, pending the filing of written submissions, they were content for the matter to be dealt with on the papers. Directions issued following the conference for the parties to file concluding submissions and it was accepted that unless a party requested otherwise by COB 9 June 2020, the matter would be determined by the Commission on the written submissions filed.
Conclusion
BOOT
[59] Section 193 of the Act provides that in order to approve an agreement the Commission must be satisfied that the agreement passes the better off overall test (BOOT).
[60] Section 193(1) of the Act defines the BOOT in the following manner:
“193(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.”
[61] The negotiation of an enterprise agreement allows the employer and its employees to negotiate an agreement that best fits the business and employee needs of the enterprise. As the objects of Part 2-4 Enterprise Agreements of the Act state, there is a focus on providing a simple, flexible and fair process that enables collective bargaining at the enterprise level that delivers productivity benefits. On this basis, it is unremarkable that some terms and conditions of the Agreement will be different and potentially less beneficial to employees than that provided by the Award while other terms and conditions will provide a greater benefit to employees. Where this occurs, the Commission is required to be satisfied that each employee would be better off overall. This requires a global assessment to be conducted, rather than the identification of any single entitlement. As defined in the 5th edition of the Australian Concise Oxford Dictionary ‘overall’ means ‘taking everything into account’, ‘taken as a whole’.
[62] This approach was adopted by the Full Bench in Armacell Australia Pty and Others5 where the Full Bench stated:
“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement.”
[63] The High Court in ALDI Foods Pty Limited v SDA, 6 when referring to the BOOT, stated at [99]:
“Whether the Full Bench was satisfied that an employee was better off overall under the Agreement than under the award required an evaluative assessment after consideration of the provisions of the award and the Agreement that may have been more beneficial to employees and those that may have been less beneficial. This assessment is a matter of the kind which has been described in other contexts as:
“a question, not of principle or of positive findings of fact or law, but of proportion, of balance and relative emphasis, and of weighing different considerations. It involves an individual choice or discretion, as to which there may well be differences of opinion by different minds”. 7
[64] As such the application of the BOOT is an all-embracing and comprehensive test requiring the identification of the terms which are more beneficial and those which are less beneficial for an employee. An overall assessment as to whether an employee would be better off under the Agreement is then undertaken by the Commission.8
[65] The applicant filed its concluding written submissions on 28 May 2020 and attached a statement from its Head of HR - Toni Adler, together with further amended undertakings in the following form:
“1) In relation to shift lengths and the payment for overtime where work is undertaken in excess of the maximum shift length, it will:
(a) For Non-F&B Employees, apply a maximum shift length of 9 hours except for one day of the week where the shift length may be up to 10 hours, or 11 hours where Scenic World and the individual employee agree in writing; and
(b) For F&B Employees, apply a maximum shift length up 10 hours, or 12 hours where Scenic World and the individual employee agree in writing.
2) An employee may make voluntary superannuation contributions in accordance with clause 20.3 of the Amusement, Events and Recreation Award 2010 (Award).
3) In addition to the higher duties payable pursuant to clause 14 of the Agreement where an Assistant Team Leader performs the role of Team Leader when the Team Leader has an extended absence such as during parental leave or long service leave or in other extenuating circumstances, higher duties will be payable to an Assistant Team Leader where the Assistant Team Leader performs the role of Team Leader:
(a) Continuously for four or more weeks; or
(b) In excess of 30 days of ad-hoc higher duties in any calendar year.
Ad-hoc higher duties is higher duties performed where the ATL is directed to take on all the responsibilities of the Team Leader role on a particular day due to the unplanned absence of the Team Leader.
4) In relation to clause 19.1(c) of the Agreement, Scenic World undertakes that where a casual employee reports for work, and the employee cannot start work as there is no work available and there has been no prior discussion between the employee and Scenic World regarding this, the employee will be paid for the three hour minimum engagement period.
5) In relation to clause 27.4 of the Agreement, Scenic World undertakes to not withhold $200.00 to offset the costs of the uniform not being returned, in circumstances where the employee gives evidence satisfactory to Scenic World that the employee was not at fault.
6) In relation to the change of rosters within 3 days in clause 20.3 of the Agreement, this change will be done after consultation with the employee concerned and taking into account any parental or carer responsibilities.”
[66] As can be seen from the above the undertakings included addressing a casual employee attending for work and not being able to start work due to no work being available, change in roster, and an amendment of the previous higher duties undertaking.
Final BOOT position of SDA
[67] The SDA provided final written submissions on 3 June 2020, and stated that having regard to the undertakings proposed by the employer, the Agreement remains less beneficial than the Award in respect of:
• uniform deduction provisions at clause 27.3 of the Agreement,
• reduction in the required notice period for a change of roster; and
• not providing for employees to be paid higher duties for a whole shift where the higher duties work exceeds four hours.
[68] The SDA also raised in their final written response what they described as ‘minor’ BOOT issues concerning:
• Family and domestic violence leave;
• Requests for flexible work arrangements; and
• Tool allowance.
[69] On 9 June 2020 a further telephone conference was held by the Commission with the applicant and the SDA at which further clarification on the SDA’s objections were obtained from the SDA and responded to by the applicant including a further promised undertaking concerning higher duties.
[70] On 10 June 2020, the applicant filed its written response submissions and included a signed copy of its final updated undertakings.
BOOT Issues
Higher Duties
[71] The Award provides at clause 18 an employee’s higher duties entitlement which is prescribed as follows:
“An employee who is required to do work for which a higher rate is fixed than that provided for their ordinary duties must, if such work exceeds a total of four hours on any day, be paid at the higher rate for all work done on such day. In all other cases the employee must be paid the higher rate for the actual time worked.
[72] The higher duties entitlement in the Agreement is found at clause 14 and is in the following terms:
“Generally, employees are not required to perform higher duties. However, if you are rostered by Scenic World to take on all the responsibilities of a higher role, you will be paid higher duties for this period.
The obligation for an Assistant Team Leader to cover for a Team Leader when the Team Leader is absent on annual leave or short term personal/carer’s leave has already been built into the wage for an Assistant Team Leader through an increase of 2.7% at the commencement of this Agreement.
Higher duties will be payable to an Assistant Team leader when the Team Leader has an extended absence such as during parental leave or long service leave or in other circumstances.”
(My underline)
[73] The applicant submits that other than for ATLs, higher duties are payable when an employee performs the higher duties role. It is submitted that where an ATL is required to perform the duties of a Team Leader during an extended absence, the Agreement provides for a higher duties payment. In addition to this an undertaking (Undertaking 4) has been provided to provide that where ATLs are required to perform higher duties for four or more consecutive weeks they will be paid higher duties and where they perform ad hoc higher duties to cover short term absences of the Team Leader they will be paid higher duties where the period of higher duties exceeds 30 days in total in any calendar year. The applicant referred to the calculations previously provided 9 which demonstrated that an ATL was better off when performing up to 64 days10 of higher duties per annum. These calculations were not contested by the SDA.
[74] As stated above, at the 9 June 2020 telephone conference the applicant undertook to provide a further undertaking in respect of higher duties which was accepted by the SDA to resolve its outstanding concerns on this matter. The additional written undertaking was provided on 10 June 2020, together with the previous undertakings provided and states that employees will not be required to undertake higher duties for part of a shift (Undertaking 3).
Rostering
[75] The applicant accepts that the Agreement allows for rosters to be altered on the provision of three days’ notice, whereas the Award provides for seven days’ notice. This is a matter that the Commission must take into account when assessing the BOOT. The applicant states that this provision will be used sparingly 11 but has also provided an undertaking (Undertaking 7) to ensure that where there is a requirement to alter rosters within three days this will not occur until after consultation with the employee concerned, and taking into account any parental or carer responsibilities which is said to be distinct from the Award requirement to consult and consider an employee’s views.12
[76] It was submitted that the reduction in notice for change of roster to three days was required to enable the applicant to operate with greater flexibility and to be able to respond to unpredictable demand due to the nature of the business. A significant number of visitors arrive in tour groups and school groups ranging from 10 to 1,000. Rosters are drafted to meet anticipated visitor numbers, but tour companies can cancel at short notice.
[77] Being located in a high-altitude location can result in extreme weather, and environmental events, such as bush fires. The applicant monitors past weather patterns and any unusual weather predictions to anticipate variations in visitor numbers and revenue. All this requires flexibility in rostering to be able to respond to variable conditions and fluctuations in visitor numbers.
[78] Ms Adler’s statement asserts that casual employment is the dominant form of employment as it allows the business to expand and contract in response to visitor numbers and extreme weather conditions.
[79] Scenic World’s intention prior to the COVID-19 imposed shutdown was to review its core staffing requirements and potentially reduce its casual workforce in order to facilitate the engagement of more permanent employees. The reduction in notice from 7 days to 3 days will, in the applicant’s view, create the necessary flexibility for this to occur. 13
Uniform deduction
[80] Clause 27.4 of the Agreement is in the following terms:
“The amount of $200 will be automatically withheld from your termination pay to cover the cost of the uniform etc. (sic) if you fail to return your uniform and/or any other Scenic World property prior to your termination payment being made. Any amount withheld will be repaid to you upon return of all Scenic World property.”
[81] Whether this clause is contrary to the s.324 Permitted Deductions of the Act is, for the reasons provided by the Full Bench of the Commission in Newlands Coal Pty Ltd v CFMEU 14, not a matter that need concern the approval considerations of the Commission.
[82] As the SDA submits, the effect of clause 27.4 is not found in the Award and on this basis the Commission accepts that it can be considered a less beneficial term than the Award. It is noted that a similar provision regarding a potential $200 deduction currently exists in the existing 2015 Agreement at clause 5.5.6 and it does not appear that any issue with the clause as currently exists was raised at the time of its approval. The SDA filed an F18 in support of the approval of the 2015 Agreement. The Award at clause 15.6 provides that an employer-supplied uniform remains the property of the employer and must be returned upon termination of the employment contract.
[83] As noted above, in the applicant’s 28 May 2020 correspondence the applicant has provided an undertaking associated with the uniform deduction clause not to withhold the $200 in circumstances where the employee provides satisfactory evidence that they were not at fault in failing to return the uniform (Undertaking 6). The applicant also submits that due to the requirement at clause 5.3 of the Agreement no deduction can be made from any NES employee entitlement.
[84] Ms Adler’s statement attested to full-time and part-time employee being provided with a full complement of work clothes. This includes multiple jackets, shirts, trousers, or skirts. Work clothes include summer and winter items, a polo short sleeve and long sleeve shirt, business shirt, T shirt, vest, hoodie, jacket, merino zip, merino cardigan, shorts, two pairs of long pants or skirt and dress, beanie, scarf and cap.
[85] Ms Adler’s statement valued the clothing for full or part-time employees at $464.15 for males and $555.04 for females. 15
[86] Ms Adler stated that in respect of casual employees they are provided a reduced number of items depending on whether they are engaged in summer or winter. The summer uniform is valued at $225.85 for males and $243.75 for females. The winter uniform is $306.10 for both male and female casual employees.
[87] Ms Adler stated that the $200 deduction associated with the non-return of uniforms is intended to incentivise the return of uniforms, as opposed to covering the actual cost.
[88] Some of the clothing items are monogramed but other items like the cargo pants and skirts are not branded and, in Ms Adler’s view, have broader appeal post-employment. The retention of uniforms represents a security and work health and safety risk. Scenic World operates on an open plan basis and visitors can enter the building from multiple entry points. As a consequence, it is quite easy for former employees in uniform to gain entry and mix with customers. Without providing any detail Ms Adler referred to one serious work health and safety incident involving a former employee which highlighted the risk to the safety of both customers and employees.
[89] In respect of this issue, Ms Adler concluded by stating that it was possible for former employees in uniform to convince external parties that they are representatives of Scenic World, and as such the deduction amount of $30.00 suggested by the SDA would not incentivise the return of uniforms or assist with managing these security risks.
[90] The Commission was referred to the Full bench decision in Retail and Fast Food Workers Union Incorporated v Hungry Jack's Australia Pty Ltd t/a Hungry Jack's 16, where a similar clause relating to a withholding of $30 from the termination pay was accepted with the undertaking similar to that now provided by the applicant.
[91] It is noted that clause 27.4 of the Agreement only operates at the end of an employee’s employment and, subject to the return of an employee’s uniform/property or satisfactory evidence that the employee is not at fault where the uniform is not returned, will have no impact on an employee. While a similar provision exists in the 2015 Agreement, no evidence was produced by any party as to how it had functioned since the commencement of that agreement.
[92] I accept that the uniform deduction clause does not exist in the Award and prima facie constitutes a potential one off detriment to any employee who does not return their uniform (other than in circumstances where there is evidence the employee is not at fault) and forfeits an amount of $200 (presuming that such an amount is available to be deducted from monies outstanding that do not include NES entitlements). As such, it is a consideration to be taken into account in assessing the BOOT.
Family and Domestic Violence Leave
[93] Although less significant the SDA identified the Family and Domestic Violence leave clause as inferior to the Award term in that it does not provide for continuous service or require matters be kept confidential. It is also noted the preamble in section 7 of the Agreement states that the employer’s policies do not form part of the Agreement.
[94] The Agreement at clause 44 refers to the applicant’s Domestic & Family Violence Leave Policy which was attached to the approval application. The Policy appears to address the issues raised by the SDA at 6.10 and 6.15. In addition, the Policy provides for up to five days’ paid leave, plus an additional five unpaid days’ leave. The Policy is stated to apply to all employees including casuals, whereas Section 7 of the Agreement indicates the Policy does not cover casual employees. The Award does not provide for any paid days but rather unpaid days of leave but does have application to casual employees.
[95] On raising this issue with the applicant’s representative, a further undertaking (Undertaking 8) has been provided stating that the clause has application to casual employees.
Requests for flexible work arrangements
[96] The SDA states that the Agreement’s request for flexible work arrangements clause is inferior to the Award clause by only referring to the NES and not providing the process for dealing with such requests as contained in the Award. At the 9 June 2020 telephone conference, it was accepted by the SDA the clause 52 Requests for Flexible work arrangements of the Agreement requires any requests to be dealt with in accordance with the Award and the NES, which resolves the SDA concern.
Tool allowance
[97] The SDA submitted that the Agreement does not contain the Award’s Tool Allowance for employees required to provide hand tools at their own expense. This issue was satisfactorily dealt with by the applicant in its correspondence of 28 October 2019, wherein the applicant advised that a number of Award allowances including the Tool Allowance had no application to their employees. This issue was further clarified to the satisfaction of the SDA at the 9 June telephone conference.
[98] The BOOT must by applied against the relevant award, and as such the terms and conditions of the Agreement said by the SDA in its F18 at question (5) to be less than the 2015 Agreement are not relevant to the BOOT assessment.
[99] It is submitted by the applicant that each and every employee is better off overall under the terms of the Agreement. In addition to the wages in the Agreement that are over and above the wage rates set out in the Award, there are other financial and non-financial benefits under the Agreement that when weighed together mean that each and every employee is better off overall under the Agreement. These benefits are listed in the applicant’s submissions of 28 May and are stated to include, but are not limited to:
“a) A paid tea break of 15 minutes in each four hours, and a second paid tea break of 15 minutes where the shift is 9 hours or greater (or 8 hours is the employee is a ride operator). This is the equivalent of an additional of $5.61 per shift of paid time for a CER2 who works a shift under 9 hours, or $11.23 where the second tea break is payable.
For a part time CER2 employee working 3 shifts per week where only one tea break is payable, this is an additional $807.84 of paid time annually (over 48 weeks) under the Agreement when compared to the Award.
3 shifts x $5.61 x 48 weeks (excluding annual leave) = $807.84
b) Clause 20.2 of the Agreement requires the employer to take into account the needs of the employee and their rostering preferences when establishing the roster. There is no equivalent obligation upon the employer set out in the Award.
c) Clause 44.2 of the Agreement provides for paid family and domestic violence leave of up to 5 days plus additional unpaid leave of a further 5 days. The Award does not provide for any paid family and domestic violence leave.
d) Clause 46 provides for up to 10 days paid leave where there is a state of emergency and the employee requires leave for State Emergency Service or NSW Rural Fire Service activities. The Award does not provide for any paid emergency services leave.”
[100] While the above-listed matters may be more beneficial than the Award terms it is noted that currently the preponderance of employees are engaged as casuals and not all of the above-listed benefits are of material benefit to casuals. Under the Agreement casuals are not entitled to the benefits of the Emergency and community service leave provisions at clause 46 of the Agreement. The SDA also points out that the meal break provisions can be considered inferior to the Award in respect of casuals.
Wage rates and wage increases
[101] The Agreement’s wage rates are set out below and all classifications provide for a rate higher than the Award.
Modern Award Classification | Agreement Classification | Modern Award Rate | Agreement Rate | Percentage Difference |
Introductory | Training | $19.49 | $20.81 | 6.77% |
Grade 1 | General Duties | $20.06 | $20.81 | 3.74% |
Grade 2 | CER1 | $20.82 | $21.91 | 5.24% |
Grade 3 | CER2 | $21.54 | $22.45 | 4.22% |
Grade 4 | CER3 | $22.70 | $23.00 | 1.32% |
Grade 4 | CER4 | $22.70 | $24.37 | 7.36% |
Grade 5 | CER5 | $23.41 | $25.74 | 9.95% |
[102] At sub clause 9.2 of clause 9 Annual pay increases, the Agreement provides for a further 2.5% wage increase for all employees with effect from the first pay period on or after 1 July 2020 and a further 2.25 % wage increase with effect from the first pay period on or after 1 July 2021.
[103] The SDA submits that the Agreement’s Customer Experience Representative Level 5 is more appropriately aligned with a Grade 7 Classification in the Award and not Grade 5 as submitted by the applicant. However, it is acknowledged that whether the appropriate comparator is Grade 5 or Grade 7, the Agreement rates are higher than the Award rates.
[104] The applicant submits that the CER Level 5 only applies to Team Leaders which is consistent with the Grade 5 Award classification being an employee who is required to supervise staff. A Grade 7 Award classification requires an employee to perform tasks not required of the applicant’s Team Leaders. They are not part of management who supervise team leaders and who are not covered by the Agreement. Team Leaders do not have any financial/operating reporting responsibilities, do not have a role in training and development and, are not required to have studied or worked in an area to develop a specialised skill in a particular profession, technical or service field above trade level or its equivalent.
[105] The SDA did not elaborate on its reasons for contending that the CER Level 5 classification was equivalent to a Grade 7 Award classification. On what has been put before the Commission by the applicant regarding the role of the CER Level 5, I accept that the appropriate BOOT comparator is, as the applicant submits, the Grade 5 Award classification.
[106] From the above, it can be ascertained that the CER 3 Level is only marginally above the Award rate, however as of 1 July 2020 all wage rates will be increased by a further 2.5%.
Undertakings
[107] Where the Commission has a concern that an agreement does not meet the requirements set out in s.186 and s.187 of the Act, which includes that the agreement does not pass the BOOT, s.190 of the Act provides an employer with the opportunity to provide a written undertaking acceptable to the Commission aimed at meeting those concerns (see Re BUPA Care Services).17
[108] In Re McDonald’s Australia Enterprise Agreement 200918 the Full Bench held that the role of the Commission includes facilitating enterprise agreements:
“[13] The appellants emphasised the facilitative aspects of these objectives. We agree that these objectives place the primary role for making enterprise agreements on the parties to those agreements and their representatives and that the role of Fair Work Australia (FWA) [as it was then known] includes facilitating the making of enterprise agreements. In general we believe that the requirements for approval should be considered in a practical, non-technical manner and that reasonable efforts should be made to clarify matters with the parties and consider undertakings to clarify or remedy concerns to the extent that these may be available under s.190 of the Act.”19
[109] I am satisfied that the undertakings provided by the applicant do not result in substantial change to the Agreement as per s.190(3)(b) of the Act or cause financial detriment to any employee covered by the Agreement as per s.190(3)(a) of the Act. The views of the bargaining representatives have been sought; only one response was received which urged the Commission to approve the Agreement. 20
[110] Taking into account the higher rates of pay under the Agreement and the undertakings provided by the applicant, and having considered the terms of the Agreement that provide a lesser benefit than the Award, I am satisfied that the Agreement results in employees being better off overall under the Agreement.
[111] I am further satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.
Consultation Term
[112] The Agreement’s consultation term is not in accordance with s.205(1) of the Act which requires that where there is a change to the employees’ regular roster or ordinary hours of work, the mandatory consultation term must require the employer to invite employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities); and to consider any views given by the employees about the impact of the change. Such a term was contained at clause 6.4.11 of the 2015 Agreement.
[113] The applicant initially provided an undertaking to address this issue. Undertakings can be accepted where the Commission has concerns regarding ss.186 and 187 of the Act, however the consultation requirements at s.205 of the Act cannot be remedied by undertakings. Accordingly, pursuant to s.205(2) of the Act, the model consultation term at Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the Agreement. A copy of the model term is attached at the end of the Agreement. It is noted that Undertaking (6) which was provided on another basis would appear to overlap in part with the consultation obligations under the model consultation clause.
[114] The SDA, being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) of the Act, I note that the Agreement covers the SDA.
[115] I otherwise note that the applicant stated in its application that the version of the Agreement that was approved by the employees contained two errors where clause references in clauses 38.3 and clause 39.9 of the Agreement were not correctly updated. The applicant filed a revised version of the Agreement with these two references updated to state that the reference was to clause 36. The applicant provided submissions on 28 October 2019 seeking amendment under s.602 of Act being the power of the Commission to correct an obvious error in a decision of the Commission.
[116] The decision of the Commission is the decision to approve the Agreement, the attached Agreement is the product of the parties having been voted on by the employees covered by the Agreement. I am not satisfied that s.602 of the Act provides an authority to amend an agreement once made between the parties, particularly as the Act provides avenues to amend agreements. The Full Bench decision of Construction, Forestry, Maritime, Mining and Energy Union v Mechanical Maintenance Solutions Pty Ltd 21 at [33] expressed the view that there was some doubt whether the power to “correct or amend documents relating to a matter before the Commission confers on the Commission a general discretion to amend the text of an enterprise agreement, particularly given that there are separate powers to vary enterprise agreements in prescribed circumstances in s 217 and 218.”.gfbggggg
[117] For the benefit of the parties this decision alerts readers of the Agreement to the errors identified and the correct references. It is further noted that the reference to Section 5 at 19.2(e) of the Agreement would appear to incorrect and should read Section 7.
[118] Pursuant to s.201(3) of the Act, the undertakings provided by the applicant in regard to issues raised by the Commission and the SDA signed and dated 10 June 2020 are taken to be terms of the Agreement.
[119] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 7 days from the date of approval. The nominal expiry date of the Agreement is three years from the date on which the Agreement comes into operation.
[120] A copy of the undertakings is attached at the end of the Agreement.
DEPUTY PRESIDENT
1 MA000080
2 At a conference before the Commission held on 18 December 2019 it was stated that the SDA represented 3 employees
3 63 of the 73 employees who voted, voted in favour of the Agreement
4 This was not required by the Commission
5 [2010] FWAFB 9985 at [41]
6 [2017] HCA 53; (2017) 262 CLR 593
7 British Fame (Owners) v Macgregor (Owners) [1943] AC 197 at 201, cited with approval in Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492 at 493-494; [1985] HCA 34; 59 ALR 529 at 532; [1985] HCA 34
8 See also AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833; National Tertiary Education Union v University of New South Wales[2011] FWAFB 5163; Solar Systems Pty Ltd [2012] FWAFB 6397
9 30 October 2019
10 Written submissions of 28 May 2020 at [13]. The previous reference to 56 days in correspondence of 15 November 2019 at [1] was clarified by telephone to be an error
11 Correspondence of 15 November 2019
12 Submissions of 10 June 2020 at [20]
13 Ms Adler’s statement at [13]. Written submissions of 28 May 2020 at [22]
14 [2010] FWAFB 7401 at [33] – [37]
15 This is less than the approximate $600 value per employee cited in the employer’s written submissions dated 28 October 2019
16 [2020] FWCFB 1693
17BUPA Care Services v P & A Securities Pty Ltd as trustee for the D’Agostino Family Trust T/as Michel’s Patisserie Murwillumbah and others[2010] FWAFB 2762 at (49)
18 [2010] FWAFB 4602
19 Re McDonald’s Australia Enterprise Agreement 2009[2010] FWAFB 4602 at [13]
20 Emails of 1 June and 10 June 2020 to all bargaining representatives from applicant’s representative attaching draft undertakings and advising that any concerns should be sent to the Commission’s chambers
21 [2020] FWCFB 1918
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