Launceston City Council Enterprise Agreement 2010

[2011] FWA 65

[2011] FWA 65

FAIR WORK AUSTRALIA

INTERIM DECISION

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

Launceston City Council
(AG2010/19189)

COMMISSIONER SMITH MELBOURNE, 7 JANUARY 2011

Launceston City Council Enterprise Agreement 2010.

[1] This is an application pursuant to s.185 of the Fair Work Act 2009 (the Act) for the approval of an agreement entitled the Launceston City Council Enterprise Agreement 2010. The application is made by the Launceston City Council (LCC). The Australian Services Union (ASU) oppose the approval of the agreement.

[2] During proceedings in Launceston on 30 November 2010, Mr J Smallbone appeared for the ASU and Mr R Collinson, Solicitor, was granted permission to appear on behalf of the LCC. During proceedings a number of matters were raised by the ASU and with one exception they were dismissed as impediments to the certification of the agreement. The one matter related to clause 4.7 Local Area Work Agreements (LAWA’s). In addition, LAWA’s were also referred to in clause 4.2 Hours of Work.

[3] The concept of LAWA’s is not unknown in Local Government, although it is not widely used now. The essence of the clause is that the whole of the proposed agreement applies unless the LCC and the majority of employees in a particular work group or area agree to something different. It is said, in clause 4.7.1, that the “purpose of a LAWA is to enable the parties to agree to terms and conditions of employment that are suited to the particular operational needs of a work group or work area.” Importantly, clause 4.7.2 states that the LAWA will prevail over this Agreement to the extent of any inconsistency.

[4] As to the requirement for making the LAWA, the agreement provides, among other things, that the LAWA must not be less than the working conditions specified on the National Employment Standards (NES) and that it must be, on balance, no less favourable to employees than the terms of the main Agreement.

[5] Care has been taken to provide that current statutory provisions cannot be undermined. This is accepted. However the concern relates to whether or not such flexibility is consistent with the scheme of the Act as it now stands.

[6] LCC support the inclusion of the LAWA provisions but advise that it will give an undertaking not to apply them if such a provision prevents certification.

[7] My attention has been drawn to the concern expressed by Commissioner Roe when he was considering an application for approval of the Tasmanian Water and Sewerage Corporation ( South Region) Enterprise Agreement 2010—2013 [AG2010/15015]. In a letter to the parties the Commissioner was concerned that:

• An agreement should not be varied other than through an individual flexibility agreement or by way of a variation approved by FWA, and



• Variations should be directed towards employees being better off overall rather than not being disadvantaged. In this case the language used is “no less favourable”.

[8] In that matter undertakings were given which meant that the clause would not be accessed.

[9] In a considered submission, LCC pointed to modern awards where there were provisions for variations to conditions by majority agreement and it was submitted that this concept is similar. In addition, a distinction was drawn between the LAWA approach and the opting out clause which was considered by the Full Bench in Newland Coal Pty Ltd v. CFMEU [2010 FWAFB 7401].

[10] I agree that this matter is unlike the matter in Newland Coal where it was decided that an employee could opt out of the agreement. In this case there is no opting out simpliciter, rather the agreement purports to create the capacity to reach another agreement, the unknown terms of which would override the terms of the known agreement. It is put that reference to the statutory tests in the LAWA clause would mean that a person would not be treated less favourably than the agreement itself. It is submitted that the application of the clause becomes an enforcement issue rather than a certification concern.

[11] I share the concern of Commissioner Roe. The logic of the position advanced by LCC is that an agreement only need contain a dispute settlement provision; an individual flexibility agreement provision; a consultation term and a clause that stipulates that any subsequent (and unknown) agreement must comply with the mandatory requirements of the Act. This could be an agreement with 3 or 4 clauses but could purport to provide the capacity to regulate an entire workforce or any part of it, however chosen by the making of a subsequent and unknown agreement.

[12] This cannot be right. To begin, such an approach would avoid the possible/desirable operation of ss.173 and 174 of the Act when an employer sought to “bargain with a work group or area”. The rights those persons have are sought to be changed under the Agreement and it may be that representation is appropriate. In the present matter there are some safeguards given that the matter is first discussed with the consultative committee but that does not answer the principle which is seeking be established. How would such an agreement, which binds all persons, be voted upon and who would conduct the ballot? The approach would render nugatory the need to ever formally vary an agreement. I also note, as did Roe C, that the better off overall test is different from the test contained in the proposed agreement which only states that a term will be no less favourable.

[13] Other issues of note are that, unlike the flexibility agreement, a LAWA cannot be brought to an end if a person believes it no longer suits them. In addition, there is no supervision over whether or not the person in the work group or area was properly chosen.

[14] A major concern would be the legal effect of such an unknown instrument and whether or not it applies to the exclusion of both the agreement proper and any relevant modern award. In Newlands Coal the focus on opting out was that the agreement would no longer apply and the modern award would then both cover and apply to the relevant persons.

This is not the case here.

[15] I find that the concept of having a LAWA which purports to create and/or alter collective rights and obligations in an agreement which is only known to the employer and some employees is inconsistent with the scheme of the Act. The Parliament has recognised the right of individuals, subject to strict safeguards, to very terms of an agreement to meet individual needs but it has sought to balance rights and obligations when parties seek to collectively bargain.

[16] It follows that, in its present form, I would decline to approve the agreement presented. However, I would approve the agreement if the undertaking foreshadowed is given by the LCC.

COMMISSIONER

Appearances:

R Collinson, Solicitor on behalf of the Launceston City Council.

J Smallbone for the Australian Services Union.

Hearing details:

2010.

Launceston:

November, 30.

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