King Family Trust T/A Kingco Engineering Pty Ltd

[2015] FWC 1726

[2015] FWC 1726

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

King Family Trust T/A Kingco Engineering Pty Ltd
(AG2015/1942)

Manufacturing and associated industries
COMMISSIONER RYAN	MELBOURNE, 16 MARCH 2015

Application for approval of the Kingco Engineering Pty Ltd Enterprise Agreement 2015.

[1] An application has been made by King Family Trust T/A Kingco Engineering Pty Ltd for approval of the Kingco Engineering Pty Ltd Enterprise Agreement 2015 (Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] Section 185 of the Act provides that:

“185 Bargaining representative must apply for the FWC’s approval of an enterprise agreement

Application for approval

(1) If an enterprise agreement is made, a bargaining representative for the agreement must apply to the FWC for approval of the agreement.

(1A) Despite subsection (1), if the agreement is a greenfields agreement, the application must be made by:

(a) an employer covered by the agreement; or

(b) a relevant employee organisation that is covered by the agreement.

Material to accompany the application

(2) The application must be accompanied by:

(a) a signed copy of the agreement; and

(b) any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) If the agreement is not a greenfields agreement, the application must be made:

(a) within 14 days after the agreement is made; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

(4) If the agreement is a greenfields agreement, the application must be made within 14 days after the agreement is made.

Signature requirements

(5) The regulations may prescribe requirements relating to the signing of enterprise agreements.” (underlining added)

[3] Regulation 2.06A of the Fair Work Regulations prescribes the requirements relating to the signing of enterprise agreements. Specifically, the Regulation 2.06A states:

“Division 4—Approval of enterprise agreements

2.06A Bargaining representative must apply for FWC approval of an enterprise agreement—requirements for signing agreement

(1) For subsection 185(5) of the Act, this regulation prescribes the requirements for the signing of an enterprise agreement.

(2) For paragraph 185(2)(a) of the Act, a copy of an enterprise agreement is a signed copy only if:

(a) it is signed by:

(i) the employer covered by the agreement; and

(ii) at least 1 representative of the employees covered by the agreement; and

(b) it includes:

(i) the full name and address of each person who signs the agreement; and

(ii) an explanation of the person’s authority to sign the agreement.

Note: Paragraph 185(2)(a) of the Act requires an application for approval of an enterprise agreement to be accompanied by a signed copy of the agreement.” (underlining added)

[4] The signed agreement attached to the application did not meet the requirements of s.185(2)(a) of the Act as it did not include an address of each of the employer and employee representatives who signed the agreement as required by Regulation 2.06A.

[5] As the requirements of s.185(2)(b) have not been complied with the application is not a valid application. The application is therefore dismissed.

Observations

[6] I make the following observations as to the contents of the Agreement. These observations are not part of the decision to dismiss the application in this matter but are made to assist the parties if they wish to make an enterprise agreement and seek to have it approved by the Commission.

Common Entitlements

[7] The only provisions related to part-time employees are contained within the definition of “part-time employee” in clause 4. The concern is that the key protections for part-time employees found in clause 13 of the Manufacturing and Associated Industries and Occupations Award 2010 (the Modern Award) are not present in the Agreement. This is a BOOT issue.

[8] Clause 13.3 permits the parties to have terms and conditions of employment which are significantly different from those in the Agreement. It is not clear that the significantly different terms and conditions of employment would be better than or worse than the terms of the Agreement and from the words of clause 13.3 it appears possible that the employer could propose terms and conditions of employment which are in fact less beneficial to the employee than the terms of the Modern Award. If the intention of the parties is to permit the parties to come to an arrangement where the terms and conditions of employment will be better than the agreement, the clause should specifically say that. If the intention of the parties is to permit them to come to an arrangement where terms and conditions of employment are less than the terms and conditions of the Agreement but better than the Modern Award, then at the very least the parties should ensure that any such arrangement could only have effect if processed as a variation to the Agreement in accordance with the Act.

[9] Clause 16.3 contains a notice period which is more onerous than that which is in the National Employment Standards (NES). Section 107 of the Act states:

“107 Notice and evidence requirements

Notice

(1) An employee must give his or her employer notice of the taking of leave under this Division by the employee.

(2) The notice:

(a) must be given to the employer as soon as practicable (which may be a time after the leave has started); and

(b) must advise the employer of the period, or expected period, of the leave.”

Evidence

(3) An employee who has given his or her employer notice of the taking of leave under this Division must, if required by the employer, give the employer evidence that would satisfy a reasonable person that:

(a) if it is paid personal/carer’s leave—the leave is taken for a reason specified in section 97; or

(b) if it is unpaid carer’s leave—the leave is taken for a permissible occasion in circumstances specified in subsection 103(1); or

(c) if it is compassionate leave—the leave is taken for a permissible occasion in circumstances specified in subsection 105(1).

Compliance

(4) An employee is not entitled to take leave under this Division unless the employee complies with this section.

Modern awards and enterprise agreements may include evidence requirements

(5) A modern award or enterprise agreement may include terms relating to the kind of evidence that an employee must provide in order to be entitled to paid personal/carer’s leave, unpaid carer’s leave or compassionate leave.

Note: Personal information given to an employer under this section may be regulated under the Privacy Act 1988.”

[10] The obligations on an employee to give notice to their employer in relation to personal/carer’s leave or compassionate leave are exhaustively set out in s.107(1).

[11] As is very clear from s.107(5) an enterprise agreement “may include terms relating to the kind of evidence that an employee must provide in order to be entitled to paid personal/carer’s leave, unpaid carer’s leave or compassionate leave”. However, s.107(5) does not permit an enterprise agreement to alter the notice requirements set by s.107(1).

[12] Where an enterprise agreement seeks to replace the operation of s.107(2) of the Act with a more onerous notice requirement such a term of an enterprise agreement would appear to contravene s.55 of the Act and an enterprise agreement with such a term could not be approved by the Commission given the operation of s.186(2)(c) of the Act.

[13] Clause 18.1 contains a provision requiring an employee to give 2 months’ notice of the intention to take long service leave. The employees’ entitlements to long service leave exist pursuant to the Long Service Leave Act 1992 (Vic) (LSL Act). The LSL Act contains the following provisions regarding when long service leave is to be taken:

“66. When leave is to be taken

(1) An employer and an employee who is entitled to long service leave under this Act may agree when the employee is to take the leave.

(2) In the absence of an agreement under subsection (1), the employer may direct the employee to take long service leave at a particular time by giving the employee at least 3 months' written notice.

(3) Subject to subsection (4), an employee who receives a notice from an employer under subsection (2) must take the leave as directed by the employer.

(4) The employee may apply to the Industrial Division of the Magistrates' Court for an order concerning the taking of long service leave—

(a) if the employee and the employer cannot agree under subsection (1); or
(b) if the employee receives a notice from the employer under subsection (2).

(5) In determining an application under subsection (4), the Court may take into account all of the relevant circumstances, including the needs of the employee and the needs of the employer's business.”

[14] The LSL Act does not mention that the granting of long service leave is dependent upon an employee giving 2 months’ notice.

[15] The effect of s.27(2) of the Fair Work Act 2009 is that where any of the terms of the Agreement in relation to long service leave are inconsistent with State long service leave legislation the latter prevails.

[16] Therefore this term of the Agreement has no legal effect and misrepresents employees’ rights in relation to accessing their long service leave entitlement.

[17] Clause 21.4 goes to notice requirements for termination. The clause refers to the notice requirements of the Modern Award. The Modern Award simply refers to the notice requirements in the NES. Is it intended that the Agreement pick up the notice provisions in the Modern Award plus the job search entitlement, or just the notice provisions.

Part A

[18] The Agreement provides that all employees will, as from the commencement of the Agreement, be paid only the equivalent of the current Award wage rate. The first increase in wage rates does not occur until 1 July 2015. As the Agreement only applies the Award rates, how is any employee Better Off Overall?

[19] Clauses 28.1 and 28.2 contain the provisions relating to higher duties. The provisions in the Agreement are far less favourable to the employee than the provisions of clause 24.2 of the Modern Award.

[20] Clause 29 defines the ordinary hours of work as between 5.00 am and 7.00 pm. The spread of hours in the Modern Award is 6.00 am to 6.00 pm. The provisions of the Agreement are less beneficial to an employee than are the provisions the Modern Award.

[21] Additionally, clause 30 would permit broad changes to hours of work which could result in employees being worse off than under the Modern Award.

[22] The Modern Award does allow for a change to the spread of ordinary hours by one hour either side of 6.00am and 6.00 pm but that is only where there is “agreement between the employer and the majority of employees concerned”, as compared to clause 30.2 which permits an alteration via the Consultative Committee consisting of only 2 employees.

[23] The combined effect of the provisions in clause 29 and 30.2 is that the employee would be worse off under these provisions of the Agreement as compared to the Modern Award. This is a BOOT issue.

[24] The dispute settlement procedure at 35.3 states:

“The parties may agree on the process to be utilised by the Fair Work Commission including mediation, conciliation and consent arbitration.” [underlining added]

[25] The concern I have is that this language is loose in that the process to be utilised by the Fair Work Commission is not clearly defined. If there is no agreement between the parties, then the FWC would not be permitted to do anything. The parties may wish to consider the language used in the model consultation term.

[26] Clause 32 deals with overtime and provides for either payment or time off in lieu (TOIL). Clause 40.1(d) of the Modern Award provides that an employee can elect to take TOIL in lieu of payment for overtime. The Agreement does not provide that TOIL is at the employee’s choice.

[27] Clause 36.2 states that the Agreement will continue until replaced by another agreement. This provision does not allow for the termination of an enterprise agreement pursuant to s.219 of the Act.

COMMISSIONER

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