Lendlease Engineering Pty Limited

[2019] FWCA 5877

[2019] FWCA 5877

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreementLendlease Engineering Pty Limited

(AG2019/2295)

LENDLEASE ENGINEERING PTY LTD WESTERN SYDNEY AIRPORT CIVIL WORKS ENTERPRISE AGREEMENT 2019

Building, metal and civil construction industries
DEPUTY PRESIDENT CROSS	SYDNEY, 23 AUGUST 2019

Application for approval of the Lendlease Engineering Pty Ltd Western Sydney Airport Civil Works Enterprise Agreement 2019.

[1] An application has been made for the approval of a single-enterprise agreement known as the Lendlease Engineering Pty Ltd Western Sydney Airport Civil Works Enterprise Agreement 2019 (“the Agreement”). The application was made by Lendlease Engineering Pty Limited (“the Applicant”) pursuant to s.185 of the Fair Work Act 2009 (Cth) (“the Act”). The Agreement is a single-enterprise agreement. The relevant modern award is the Building and Construction General On-site Award 2010 (“the Award”).

[2] A previous agreement with substantially identical terms to the Agreement was the Lendlease Engineering Pty Ltd New South Wales Enterprise Agreement 2016 1, being the predecessor of the Agreement, which was approved by Commissioner Roe on 8 June, 2017.

[3] The Agreement was made on 21 June, 2019. The employee organisations who were bargaining representatives for the Agreement were the Australian Workers’ Union (“the AWU”) and the Construction, Forestry, Maritime, Mining and Energy Union (“the CFMMEU”). There were three other employee bargaining representatives.

[4] The Application was contained in the Form F16 completed by the Applicant, together with the Form F17 Statutory Declaration of Ms Natali Salim Nissan, dated 28 June, 2019.

[5] Only the AWU filed a Form F18 Statutory Declaration, from Alistair McLaren Sage, dated 12 July, 2019. That Declaration stated that the AWU did not “oppose approval of the Agreement provided the following matters are addressed. We consider these can be addressed by an undertaking.

1. Clause 26-Redundancy appears to adopt the standard definition of redundancy contained with the National Employment Standards (the NES). That definition is at odds with, and in most respects less beneficial than, the definition in the construction industry­ specific redundancy scheme provided in the reference instrument, the Building and Construction General On-site Award 2010 (the Award).This has implications for employee entitlements and may affect employee eligibility under, e.g., income protection or other insurance schemes according to which redundancy is a criteria for payment.

2. Clause 27-Abandonment of Employment appears to be inconsistent with Full Bench authority on the notice of termination requirements set by the NES. See Bienias v Ip/ex Pipelines Australia Pty Ltd [2017] FWCFB 38.

3. Clause 22-Annual Leave provides for payment at an employee's base rate of pay, rather than at the full rate of pay as set by cl 38.2(a) of the Award.

4. Clause 2-Flexible Work Arrangements contains fewer safeguards and facilitative provisions than the comparable model clause as contained in the Award (cl 37A).”

[6] The AWU in subsequent correspondence also raised an issue regarding Clause 35.3 of the Agreement regarding Relocation of Employees/Living Away from Home Allowance (“the LAHA”).

[7] While no Form F18 had been filed by the CFMMEU, it advanced issues regarding meal allowances and the LAHA.

[8] On 16 August, 2019, the Commission listed the Application for Hearing. At that Hearing, the outstanding issues between the parties were refined. The outstanding issues were the better off overall test (“BOOT”) issues arising from redundancy, the LAHA, and meal allowances.

(a) Redundancy

[9] To resolve the concerns regarding the redundancy definition, the Applicant has indicated that it is prepared to give an undertaking on the following terms:

“The Company undertakes to recognise the definition of redundancy in Clause 17.2 of the Award in cases of redundancy.”

[10] That undertaking addresses the concerns raised. It will be required as a term of approval.

(b) The LAHA

[11] Clause 35 of the Agreement provides that LAHA is only be payable to employees who have been directed to mobilise to the Western Sydney Airport Project. Entitlement is reliant on the direction to mobilise by the employer. Additionally, the entitlement is to $500.00 dollars a week or “such other higher amount as may be determined at the Company’s discretion, taking into account such matters as the attraction and retention of employees, local accommodation costs, etc.” The CFMMEU submitted that Clause 24.3(a)(i) of the Award also entitles an employee to $503.40, which is $3.40 higher than the Agreement, while the Applicant submitted that at the test time, the Award provided for an allowance of $494.94 per week.

[12] The Award provision, however, is not subject to employer direction or discretion, and is as follows:

“(a) This clause operates when an employee is employed on construction work at such a distance from the employee’s usual place of residence or any separately maintained residence that the employee cannot reasonably return to that place each night, provided that:

(i) the employee is not in receipt of relocation benefits;

(ii) the employee is maintaining a separate place of residence to which it is not reasonable to expect the employee to return each night; and

(iii) the employee has provided the details of their usual place of residence, or any separately maintained address to the employer.

(b) The employee is not entitled to payment under this clause if the employee has knowingly made a false statement regarding the details required in clause 24.2.”

[13] The Applicant readily concedes that for some employees the Agreement LAHA provision is a reduced benefit, but for other employees it is an improved benefit. The Applicant submits that, in all cases, after taking into account the significantly higher rates of pay in the Agreement, employees will be better off overall under the Agreement.

[14] The sheer magnitude of the monetary value of the LAHA is such that the circumstance of an employee losing the benefit under the Agreement that he/she would have received under the Award squarely raises the BOOT issue. Ordinary hours under the Agreement are 36 (Clause 41.1(b)), and the hourly rate for a Grade CW 1 is $30.06 per hour, resulting in weekly pay for ordinary hours of $1,082.16. An entitlement to a $500.00 LAHA is 46.2% of such a weekly wage. Even a CW 8 under the Agreement earning $40.52 an hour, and $1,458.72 a week, would have $500.00 a week as representing 34.28% of weekly ordinary wages. While wages are at a minimum 35% above the Award, an employee who would have received LAHA under the Award, but will not receive LAHA under the Agreement, will be worse off.

[15] In the circumstances, in order to approve the Agreement, I will require an appropriate undertaking that provides that employees who would be entitled to LAHA pursuant to the Award will have that entitlement preserved, including payment at the Award rate if that is higher than the Agreement.

(c) Meal Allowances

[16] Clause 37.1(a) of the Agreement provides:

“There will be a cessation of work and of working time for the purpose of a meal each day, of no less than 30 minutes, to be taken between the 5th and 7th hour from the commencement of work.”

[17] In comparison to Clause 35.1 of the Award, provides:

“(a) There must be a cessation of work and of working time, for the purpose of a meal on each day, of no less than 30 minutes, to be taken between noon and 1.00 pm, or as otherwise agreed between an employer and a majority of employees, provided that an employee must not be required to work more than five hours without a break for a meal.

(b) Where, because of the area or location of a project, the majority of on-site employees on the project request, and agreement is reached, the period of the meal break may be extended to not more than 45 minutes with a consequential adjustment to the daily time of finishing of work.”

[18] Additionally, Clause 37.2(c) of the Agreement provides:

“Thereafter, after each four (4) hours of continuous work (without deduction of pay), the Employee will be paid a crib time of 20 minutes duration.”

[19] Whereas clause 35.3(b) of the Award provides:

“(b) When an employee is required to work overtime after the usual finishing time of the day or shift for two hours or more, the employee must be allowed to take, without deduction of pay, a crib time of 20 minutes in duration immediately after such finishing time and thereafter, after each four hours of continuous work (also without deduction of pay),a crib time of 30 minutes in duration. In the event of an employee remaining at work after the usual finishing time without taking the crib time of 20 minutes and continuing at work for a period of two hours or more, the employee will be regarded as having worked 20 minutes more than the time worked and be paid accordingly.”

[20] The CFMMEU submitted that the Award clauses are non-monetary entitlements and are important in respect of ensuring the health and safety of employees covered by this Award. It referred to the decision of Commissioner Roe in Perth Access Scaffolding Pty Ltd 2.

[21] While it is correct to observe that, Commissioner Roe, in that decision, noted that prolonging meal breaks irrespective of a higher rate of pay can result in employees not being better off overall in comparison to the Award, there the rates of pay were between 2% and 3.5% above award rates, and the list of detriments were long. In the Agreement, however, the rates of pay are at a minimum 35% above the Award and there are far fewer detriments. The Agreement could not fail the boot test due to minor meal allowance detriments.

Conclusion

[22] The AWU and CFMMEU gave notice under s.183 of the Act that they wished to be covered by the Agreement. In accordance with s.201(2) of the Act, I note that the Agreement covers the AWU and CFMMEU.

[23] I am satisfied that, subject to the provision of the undertakings referred to in paragraphs [10] and [15] above, the relevant requirements of ss.186, 187, 188 and 190 of the Act concerning this Application for approval have been met.

[24] The Agreement is approved and, in accordance with s.54 of the Act, will operate from seven (7) days after the issuing of this approval decision. The nominal expiry date of the Agreement is23 August 2023.

DEPUTY PRESIDENT

 1   AE424283; PR593640.

 2  [2016] FWC 8042.

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