Leed Engineering and Construction Pty Ltd
[2024] FWCA 2548
•9 JULY 2024
| [2024] FWCA 2548 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Leed Engineering and Construction Pty Ltd
(AG2024/1805)
LEED ENGINEERING AND CONSTRUCTION PTY LTD ENTERPRISE AGREEMENT 2024 – 2027
| Building, metal and civil construction industries | |
| COMMISSIONER MATHESON | SYDNEY, 9 JULY 2024 |
Application for approval of the Leed Engineering and Construction Pty Ltd Enterprise Agreement 2024 – 2027.
An application has been made for approval of an enterprise agreement known as the Leed Engineering and Construction Pty Ltd Enterprise Agreement 2024 – 2027 (Agreement). The application was made by Leed Engineering and Construction Pty Ltd (Applicant) pursuant to s.185 of the Fair Work Act 2009 (Cth) (Act). The Agreement is a single enterprise agreement.
I observe that certain provisions of the Agreement may be inconsistent with the National Employment Standards (NES). However, noting clause 1.3.4 of the Agreement, I am satisfied that the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.
The Construction, Forestry and Maritime Employees Union (CFMEU) initially objected to the Agreement’s approval on the basis that the Agreement did not pass the better off overall test (BOOT) and the Applicant did not take all reasonable steps to provide access to the materials incorporated by reference in the agreement.
In relation to the latter concern, the Agreement makes reference to the Act, Fair Work Regulations 2009 (Cth) (Regulations) and NES. However in doing so, it is generally restating obligations that would otherwise apply to the Applicant or that arise from the Act and Regulations.[1] I do not consider that any general obligation to provide copies of the legislation arises in the context of this Agreement application in considering whether “all reasonable steps to ensure” compliance with the requirements in s.180(2) have been taken. I also note the Act and Regulations are publicly available documents and that the Agreement is a replacement of the Leed Engineering and Construction Pty Ltd Enterprise Agreement 2021- 2024 (2021 Agreement) which was in very similar terms. In explaining the terms and effect of the Agreement, an explanatory document has been provided to employees which includes links to the Act in circumstances where there are new provisions in the Agreement that reference the Act, being the provisions relating to casual employees.
The Agreement also makes reference to the Building and Construction General On-Site Award 2020 (Award). While clause 1.4.1 provides that the terms of the Award will not apply while the Agreement operates, specific reference is made to Award provisions in other parts of the Agreement including:
- clause 4.5.1 which provides that first year adult apprentices will be paid a base rate not less than the minimum amount prescribed by the Award, including any applicable tool, industry or special allowance. It also provides that they will be entitled to all other benefits as set out in the Agreement and in addition paid any applicable allowance provided under clause 21 of the Award;
- clause 5.3.5 which provides that where are employee works a shift that would be defined as afternoon shift under the Award and is not defined as a shift under clause 5.3.1 of the Agreement they will be paid a minimum shift loading of 15% for ordinary hours worked.
The Full Bench in CFMEU v AKN Pty Ltd[2] considered an agreement in which there had been partial incorporation of modern awards, found that these were publicly available on a range of websites and that this is sufficient for the material to be readily available to employees. Notwithstanding this, in the explanatory document provided to employees the Applicant provided a hyperlink to the Award and advised employees that if they were unable to access the hyperlink, or would otherwise like a hard copy of the Award, they were able to contact a nominated contact person who would arrange a copy for them.
In correspondence sent to the Commission on 18 June 2024, the Applicant indicated that it had engaged with the CFMEU who advised that its concerns about provision of incorporated documents arose because the hyperlinks on a copy of the redacted explanatory document provided by the Commission’s Registry did not work. The Applicant subsequently forwarded a copy of the explanation document to the CFMEU as filed (with only specific name reductions) and the CFMEU did not further agitate its concern or seek to be heard further in relation to this issue.
The CFMEU initially raised a concern that the Agreement did not pass the BOOT because of the omission of the distant work payment (assessed by reference to a hypothetical employee residing in Hectorville and working in Tailem Bend):
- for a CW1 employee under the Agreement (matched to the CW1(a) classification under the Award) for whom such travel is required one out of five days;
- for a CW2, CW3 or CW4 employee under the Agreement (matched to the CW1(b), (c) and (d) classifications under the Award respectively) for whom such travel is required two out of five days;
- for a CW5 employee under the Agreement (matched to the CW2 classification under the Award) for whom such travel is required three out of five days;
- for a CW6 employee under the Agreement (matched to the CW3 classification under the Award) for whom such travel is required four out of five days;
- for a CW7 employee under the Agreement (matched to the CW4 classification under the Award) for whom such travel is required for five out of five days.
In relation to this concern the Applicant submitted that the overwhelming majority of the Applicant’s work involves living away from home which attracts a generous living away from home allowance under the Agreement which is almost double the amount prescribed by the Award. It submitted that the journeys modelled by the CFMEU are highly unlikely to occur in practice as they include 10 working hours, 2.5 hours of travel and 0.5 hour lunch break resulting in a 13 hour day. The Applicant submitted that modern fatigue management practices prevent long drives to and from work occurring regularly and it is far more probable that a drive of the nature contemplated by the CFMEU would only be at the start and end of the week. The Applicant submitted that while the real world application of the Agreement is likely to lead to employees being better off in all cases, it nevertheless provided an undertaking to address the CFMEU concern. By way of summary the undertakings provide that where certain lower level classifications are required to travel to a site more than 75km by road from the employee’s house and that journey does not involve receipt of a living away from home allowance the Applicant will undertake a ‘BOOT Calculation’ to ensure the employee’s total gross earnings for the pay period in which the event occurs is more than what the employee would have been entitled to under the Award.
The CFMEU also initially raised an objection that the Agreement did not pass the BOOT in respect of adult apprentices employed pursuant to clause 4.5.1 of the Agreement because the Agreement provides a higher threshold for the payment of crib time, notwithstanding the express provision for the payment of the Award overtime meal allowance to adult apprentices under clause 4.5.1.
In relation to this concern the Applicant noted that it did not currently employ apprentices and submitted that adult apprentices would be substantially better off overall due to entitlements in the Agreement dealing with living away from home, which constitutes the overwhelming majority of the Applicant’s work. Notwithstanding this, the Applicant provided undertakings to address the concerns raised by the CFMEU. In relation to adult apprentices, the undertakings require that the Applicant undertake a ‘BOOT Calculation’ to ensure the employee’s total gross earnings for a pay period is more than what the adult apprentice would have been entitled to under the Award.
The CFMEU did not raise any objections to the undertakings and did not wish to be heard further about the application.
A copy of the undertakings is attached at Annexure A of this decision (Undertakings). The views of each person I know is a bargaining representative for the Agreement were sought in relation to the Undertakings and no objections were raised. I am satisfied that the effect of accepting the Undertakings is not likely to:
(a)cause financial detriment to any employee covered by the Agreement; or
(b)result in substantial changes to the Agreement.
Pursuant to s.190(3) of the Act, I accept the Undertakings.
Pursuant to s.202(4) of the Act, the model flexibility term prescribed by the Regulations is taken to be a term of the Agreement.
Subject to the Undertakings, and on the basis of the materials before the Commission, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 of the Act as are relevant to the application for approval of the Agreement have been met.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 16 July 2024. The nominal expiry date of the Agreement is 1 July 2027.
COMMISSIONER
Annexure A
[1] See clauses 1.3.2, 1.3.4, 1.4.4, 1.7.1, 1.7.5, 1.8, 4.2.1, 4.3.1, 8, 8.4, 8.5, 8.6, 8.7, 8.8.1, 9.1.3, 9.3.
[2] [2020] FWCFB 3438.
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