Kurlben Pty Ltd

[2012] FWA 10402

[2012] FWA 10402

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Kurlben Pty Ltd
(AG2012/12656)

DEPUTY PRESIDENT BARTEL ADELAIDE, 11 DECEMBER 2012

Kurlben Pty Ltd Enterprise Agreement 2012-2016.

[1] An application for approval of an enterprise agreement known as the Kurlben Pty Ltd Enterprise Agreement 2012-2016 (the Agreement) has been made by Kurlben Pty Ltd (the employer). The application has been made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is an application for a single-enterprise agreement.

[2] On 26 November 2012 a Preliminary Findings statement (the Statement) was issued to the employer, in which several concerns were identified in relation to the assessment of the better off overall test and compliance with the National Employment Standards (NES). A hearing was held on 5 December 2012 and the employer subsequently provided certain undertakings. The employer has confirmed 1 that information contained in a document appended to the Agreement titled “Proof of Better Off Overall Rest” misrepresented the overtime rates of casuals under the Award and showed, incorrectly, that casual employees would be better off under the Agreement if working a 48 hour week (being the ordinary weekly hours of work under the Agreement).

[3] There are no provisions in the Agreement apart from the base wage rate that are more beneficial than the relevant modern award, the Building and Construction General On-Site Award 2010 (the Award).

[4] My preliminary views regarding the better off overall test as outlined in the Statement are:

The rates of pay for casuals who work a 48 hour week are less than the rates payable to casuals for a 48 hour week under the Award;

The rates of pay for employees who work in excess of 48 hours per week or on public holidays is less than that provided in the Award;

The adjustment of wages during the life of the Agreement does not guarantee that employees will receive the minimum payable under the Award; and

Casual employees do not receive long service leave, which is an entitlement under the Long Service Leave Act 1987 (SA) for those employees engaged in South Australia.

[5] The employer’s response to this issue is that the rates of pay for employees under the Agreement will be increased to a level where casuals working 48 hours per week will receive in excess of the rates payable under the Award. In addition the employer guarantees that “... the terms and conditions in this Agreement will exceed those provided by the relevant modern award.” There is a further undertaking that all employees in South Australia will accrue long service leave in accordance with the Long Service Leave Act 1987 (SA).

[6] The concerns regarding the NES as expressed in the Statement, related to the exclusion of the Long Service Leave Act 1987 (SA) (which is dealt with by the employer as above) and a breach of the reasonable hours provision of the NES including the right to refuse to work unreasonable additional hours.

[7] In this latter regard the employer proposes to insert a new provision that, “Employees may refuse any unreasonable hours after 38 per week as requested by the employer”.

[8] The employer’s commitment that“... the terms and conditions in this Agreement will exceed those provided by the relevant modern award” lacks clarity and could be interpreted as an undertaking that each and every term of the Agreement will exceed the equivalent term in the Award or a commitment that the terms of the Agreement will exceed those under the Award based on a ‘global’ view of terms and conditions.

[9] There is no commitment to monitor rates of pay to give effect to the undertaking. In addition the undertaking gives no certainty to employees as to the level or rationale for any wage increases during the life of the Agreement or the extent to which they will be better off overall.

[10] The requirements in relation to undertakings are set out in s.190 of the Act as follows:

“190 FWA may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under section 185; and

(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.

Undertakings

(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

FWA must seek views of bargaining representatives

(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.

Signature requirements

(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.”

[11] Having regard to the terms of the undertakings provided by the employer I am not satisfied that they properly address the concerns expressed; are capable of implementation in a manner which does not result in substantial changes to the Agreement; and/or are clear as to meaning. The basis for and regularity of increases under the Agreement, and the employees to whom increases, if any, are paid, remains at the discretion of the employer. This raises a question in my mind as to the genuine agreement of employees. Of more concern in this regard is that the employees cast their vote regarding approval of the Agreement based on terms which indicated that casual employees working 48 hours per week would be better off under the Agreement than under the Award, when in fact this was not the case.

[12] Section 188 of the Act provides that:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

[13] Section 188(c)requires a consideration of all relevant circumstances at the time FWA considers the application for approval in order to ascertain whether there are reasonable grounds for rejecting the genuineness of the agreement given by employees when they voted to approve it. 2

[14] In the circumstances of this application, including the misinformation contained in the Agreement, there are reasonable grounds for concluding that the Agreement has not been genuinely agreed by the employees. I decline to approve the Agreement on this basis.

DEPUTY PRESIDENT

Appearances:

Ms L Te Maro on behalf of the Applicant

Hearing details:

2012

Adelaide

5 December

 1   Correspondence from the employer dated 6 December 2012.

 2   Manfield Colair and CEPU Electrical Division Northern Territory Enterprise Agreement Gove Alumina Refinery and Mine Site - 2010/2012, [2011] FWAA 9129 at [22].

Printed by authority of the Commonwealth Government Printer

<Price code A, PR532202>