Liviende Veranto

[2019] FWC 646

[2019] FWC 646

FAIR WORK COMMISSION

INTERIM DECISION

Fair Work Act 2009
s.210 - Application for approval of a variation of an enterprise agreement

Liviende Veranto
(AG2018/3439)

Social, community, home care and disability services
DEPUTY PRESIDENT MASSON	MELBOURNE, 4 FEBRUARY 2019

Application for variation of the Liviende Veranto Enterprise Agreement 2016.

[1] An application has been made for approval of a variation to the Liviende Veranto Enterprise Agreement 2016 (the Agreement). The application was made by Liviende Veranto trading as Li-Ve Veranto (the Applicant) pursuant to section 210 of the Fair Work Act 2009 (the Act).

[2] The application seeks to vary certain clauses of the Agreement.

[3] Employees were notified of the time, place and method of voting via an email distributed on 9 July 2018 and voting occurred on 18 July 2018. A majority of those who voted approved the Agreement variation. 1

[4] The Applicant filed a Form 23A – Statutory Declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test was the Social, Community, Home Care and Disability Services Industry Award 2010 2 (the Award). The Award is expressly displaced and is not incorporated into the Agreement.

[5] The statutory declaration noted that provisions in the Agreement were more beneficial than the Award or were not conferred by the Award. No less beneficial terms were identified.

[6] The Health Services Union, Tasmanian Branch (HSU), which is a bargaining representative for the Agreement, raised objections in their Form 23B – Statutory Declaration to a number of matters raised in the Applicant’s Form 23A – Statutory Declaration and sought to be heard in relation to those objections.

[7] In reviewing the application for approval of a variation to the Agreement, the Fair Work Commission (Commission) identified a number of issues in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standard (NES) and better off overall test (BOOT) assessment considerations. The Commission wrote to the Applicant on 3 December 2018 and identified the following issues requiring a response:

(1) An incorrect pre-reform Award was identified in the Form 23A;

(2) A copy of the varied Agreement was signed, contrary to the requirement that only the variation be signed;

(3) The low percentage of employees that participated in the ballot raised concerns regarding notification of the ballot details;

(4) Clarification on applicable pay rates in Schedule 1 was sought;

(5) A number of BOOT concerns were raised including:

a. Higher duties;

b. Time off in lieu (TOIL);

c. Various allowances were either below the Award or not provided for in the Agreement including: First Aid, Sleepover, On-call/telephone, Heat allowance and Uniform/laundry allowance;

d. Ceremonial leave;

e. Travel allowances;

f. 24 Hour care;

g. Excursion provisions.

(6) Various HSU objections were also highlighted to which a response from the Applicant was sought. Issues raised by the HSU in their Form 23B include:

a. The Agreement variation did not satisfy BOOT requirements;

b. Ordinary hours of work provisions in the Agreement were less beneficial than the Award which specified 8 hours and up to 10 hours by agreement;

c. Sleepover provisions in the Agreement enabled sleepover duration of up to 10 hours by agreement, which is less beneficial than the Award which caps sleepover duration to 8 hours;

d. The Agreement variation does not include Undertakings provided by the Applicant when the Agreement was initially approved on 13 July 2016.

[8] The Applicant was invited to provide submissions or to consider the provision of undertakings to address concerns raised by the Commission by 5 December 2018. After granting an extension of time to the Applicant for the provision of a response, and on receipt of submissions and proposed undertakings from the Applicant on 17 December 2018, the Commission was satisfied with respect to identified pre-approval issues, NES concerns and a number of BOOT issues. The Commission was not however satisfied that all classes of employees would be better off overall under the varied Agreement. In correspondence dated 4 January 2019, the Applicant was invited to withdraw the application, or alternatively, it could seek to be heard. In further correspondence to the Applicant on 10 January 2019, the Commission identified that its outstanding concerns were in relation to:

(1) Calculation of rates of pay;

(2) Sleepover provisions;

(3) Certain allowances – On-call, 24 hour care, accommodation and meals.

[9] The Applicant sought to be heard, as did the HSU, which pressed its objections in relation to various matters.

[10] The matter was listed for a conference before the Commission on 16 January 2018, at the conclusion of which, the HSU pressed its objections to various matters raised in the application and in respect of certain written undertakings provided by the Applicant. The parties were then directed to file further submissions and material on which they sought to rely. The parties consented to the matter then being determined on the papers.

Statutory framework

[11] In order for an application for a variation to the Agreement to be approved by the Commission, a number of statutory requirements must be met. Relevantly, for the purposes of the present matter, the Commission must be satisfied that the varied agreement satisfies the BOOT. By reason of the operation of section 211(4) of the Act, section 193 of the Act applies and relevantly provides as follows:

“193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

…….

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

[12] Sub-section 211(4) of the Act modifies the operation of section 193 in respect of applications for variation of an enterprise agreement in the following manner:

“211 When the FWC must approve a variation of an enterprise agreement

……………..

(4) [Effect of s 193]

Section 193 (which deals with passing the better off overall test) has effect as if:

(a) The words “that is not a greenfields agreement in subsection (1) were omitted; and

(b) subsection (3) were omitted; and

(c) the words “the agreement” in subsection (6) were omitted and the words “the variation of the enterprise agreement” were substituted; and

(d) the reference in subsection (6) to subsection 182(4) or section 185 were a reference to section 210

[13] It is not necessarily the case that, where an application for approval of a variation of an agreement does not satisfy all of the approval requirements in section 211, the application for must be dismissed. Section 212 allows for an application for approval of a variation of an agreement to be approved with undertakings. It provides:

“212  FWC may approve a variation of an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of a variation of an enterprise agreement has been made under section 210; and

(b) the FWC has a concern that the variation does not meet the requirements set out in section 211.

Approval of agreement with undertakings

(2) The FWC may approve the variation under section 211 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern.

Undertakings

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

(a) cause financial detriment to any affected employee for the variation; or

(b) result in substantial changes to the variation.

Signature requirements

(4)  An undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.

Applicant Undertakings

[14] Following the conference conducted by the Commission on 16 January 2019, the Applicant filed submissions and the following undertakings in response to matters raised by the Commission and HSU.

Clause 19.1 Ordinary Hours of Work

[15] With respect to clause 19.1 the following undertaking was provided;

“1. That Clause 19.1(a) (ii) of the agreement is replaced with the following

wording:

Up to 10 hours per shift by agreement”

Clause 29.2 Overtime – Full-time employees

[16] With respect to clause 29.2 the following undertaking was provided:

“2. That Clause 29.2(a) (ii) of the agreement is replaced with the following

wording:

For any hours in excess of 76 hours per fortnight, 8 hours per day or 10

hours per day where agreement is reached as per clause 19.1(a)(ii); or”

Clause 29.4 Time off in lieu of overtime

[17] With respect to clause 29.4 the following undertaking was provided:

“3. That Clause 29.4(a) of the agreement is replaced with the following wording:

Subject to agreement being reached between the Employer and Employee concerned, time off may be allowed in lieu of payment for overtime worked. The amount of time off shall be calculated on the basis of the appropriate overtime rate. All TOIL accumulated will be paid out on termination.”

Clause 46 Ceremonial Leave

[18] An undertaking was provided to insert a new clause 46 into the Agreement in the following terms:

“4. That the following Clause (46) Ceremonial Leave is inserted as a term of the

Agreement:

An Employee who is legitimately required by indigenous tradition to be

absent from work for Aboriginal or Torres Strait Islander ceremonial purposes

will be entitled to up to 10 working days unpaid leave in any one year, with

the approval of the Employer.”

Uniform requirements

[19] An undertaking was provided in relation to uniform requirements in the following terms:

“5. That Employees are not required to wear a uniform.”

Accommodation, transport and meals where required to travel

[20] An undertaking was provided in relation to travel requirements in the following terms:

“6. The Li-Ve will provide accommodation, transport and meals if an employee is

required to travel.”

On-call arrangements

[21] An undertaking was provided to insert a provision for on-call arrangements in the following terms:

“7. That the following clause is a term of the Agreement:

19.7 On Call

(a) An Employee who agrees to be on call (i.e. available for recall to duty) will be paid an allowance of $26.68 in respect to any 24 hour period or part thereof during the period from the time of finishing ordinary duty on Monday to the time of finishing ordinary duty on Friday.

(b) The allowance will be $53.36 in respect of any other 24 hour period or part thereof, or any public holiday or part thereof.”

Does the Agreement satisfy the BOOT?

Rates of Pay

[22] The Applicant filed submissions on 22 January 2019 and, as requested by the Commission, included a table of pay rates that operated at test time that clarified the effect of the sought variation to Clause 42 Wage Rates. The HSU had previously confirmed its understanding of the operation of Clause 42 Wage Rates during the conference conducted on 16 January 2019 and took no issue with the table of rates summary provided by the Applicant. The table of rates supplied verified that rates paid to employees were at least 1.3% above the relevant Award and pre-reform Award rates at test time.

[23] I am satisfied that at test time, the rates provided by the Agreement would, by reason of the variation application, result in rates of pay for employees being 1.3% above the relevant award rates. This weighs in favour of a finding that the Agreement satisfies the BOOT.

Undertakings 2, 3, 4, 5 & 6

[24] The HSU advised in their submissions received by the Commission on 24 January 2019, that they agreed with the undertakings 2, 3, 4, 5 and 6 provided by the Applicant.

[25] I have reviewed the relevant proposed undertakings and am satisfied that they address the particular concerns raised by the Commission and HSU in respect of:

•  Overtime provisions for full-time employees – Undertaking 2;

•  TOIL provisions – Undertaking 3;

•  Ceremonial Leave – Undertaking 4;

•  Uniforms – Undertaking 5;

•  Transport, accommodation and meals when required to travel – Undertaking 6.

[26] I regard these provisions and the proposed Undertakings as neutral considerations in the conduct of the BOOT assessment.

Clause 19.1 Ordinary Hours of Work (Undertaking 1)

[27] Clause 19.1 of the Agreement would, subject to Undertaking 1 provided by the Applicant, read as follows:

“19.1 Ordinary Hours of Work

(a) An average of 38 hours per week in a two week period;

(b) Up to 10 hours per shift by agreement.”

[28] The HSU contend that the Agreement provision, even with the Undertaking, remains less beneficial than the Award provision which provides as follows:

“25.1 Ordinary hours of work

(a) The ordinary hours of work will be 38 hours per week or an average of 38 hours per week and will be worked either:

(i) in a week of five days in shifts not exceeding eight hours each;

(ii) in a fortnight of 76 hours in 10 shifts not exceeding eight hours each; or

(iii) in a four week period of 152 hours to be worked as 19 shifts of eight hours each, subject to practicality.

(b) By agreement, the ordinary hours in clause 25.1(a) may be worked up to 10 hours per shift.”

[29] The HSU contend that the Award specifies a maximum of eight ordinary hours per shift and up to ten hours by agreement, whereas the Agreement does not place a limit of eight ordinary hours although it does state, subject to the Undertaking, that working up to ten hours would require agreement.

[30] I accept the HSU submission that the sub-clause does not specify that standard ordinary hours of work per day are eight hours per day. Read in isolation, I would hold concerns that the Agreement was less beneficial. It is however necessary to also have regard to Undertaking 2 provided by the Applicant, which makes clear that employees are entitled to overtime payment where they work in excess of eight hours per day or in excess of ten hours in circumstances where the parties agree to a ten hour shift pursuant to 19.1(a)(ii).

[31] I am satisfied that the effect of clauses 19.1(a)(ii) and 29.2(a)(ii) and Undertakings 1 and 2, when read together, is that the standard ordinary hours of work per day are eight hours and by agreement up to ten hours. I am not persuaded by the HSU that the Agreement would be less beneficial than the Award in these circumstances. Subject to acceptance of the Undertakings to which I have referred, I regard these provisions as neutral considerations in the conduct of the BOOT assessment.

Sleepover Provisions

[32] The HSU contend that the sleep-over provision in the Agreement is less beneficial than the Award. The Award provides at clause 25.7(c) for a sleepover for a continuous period of eight hours for which an allowance of 4.9% of the “standard rate” applies, which presently equates to $47.04 per sleep-over. By comparison the Agreement relevantly provides as follows:

“37.1(b) The duration of the Sleepover shift will be:

(i) If the Employee immediately prior to the commencement of this Agreement is employed on a Sleepover shift of a specific duration – that duration will continue to apply up to a maximum of ten (10) hours in duration; or

(ii) By agreement between an Employee and the Employer up to 9 hours in duration; and

(iii) If clauses 37.1(b) (i) and (ii) does not apply – 8 hours.”

[33] The allowance payable for sleepovers under the Agreement is, at test time, $74.03 per sleepover.

[34] The HSU contend that the sleepover provisions in the Agreement are less beneficial than the Award. This is because, as the Award limits sleepovers to eight hours, an employee engaged under the Award and required to do a ten hour sleepover, would be entitled to an additional two hours ordinary rate of pay on top of the sleepover allowance. This according to the HSU equates to a total of $97.88 ($47.04 plus 2 x $25.42 – Level 2.1 Support Worker rate). This compares with the payment of $74.03 for up to a ten hour sleepover under the Agreement.

[35] Both the Award and Agreement provide for the payment of overtime in circumstances where an employee is required to perform work during a sleepover.

[36] The HSU submission proceeds on the basis that an employee can be required to undertake a ten hour sleepover under the Award. While an employee may be rostered to work immediately before or after a sleepover, they cannot be required to undertake a ten hour sleepover. The Award consequently makes no provision for a sleepover beyond eight hours, and accordingly, confers no benefit.

[37] I do not accept the HSU submission that employees employed under the Award would be entitled to two hours ordinary time payment if required to do a ten hour sleepover, simply because they cannot be required to undertake a ten hour sleepover. That may be contrasted with a circumstance where an employee may be required to work beyond the eight hour sleepover, in which case they would be entitled to overtime payment for such work. Treatment of that additional two hours “work” as overtime would be no different to an employee employed under the Agreement required to perform “work” in the final two hours of a ten hour sleepover. That is, they would be entitled to overtime payment for such “work”.

[38] The sleepover allowance is a unique condition and does not easily bare comparison with ordinary hours of work as the HSU have sought to establish. It is more akin to an on-call allowance, whereby an employee is required to “hold themselves in readiness” to return to work. There is of course a significant difference to an on-call arrangement in that an employee on a sleepover is required to “hold themselves in readiness” on a client’s premises which obviously manifests a greater disability. That greater disability is recognised in the Award in that an eight hour sleepover attracts an allowance of 4.9% of the “standard rate”, whereas an employee required to be on-call receives an allowance of 2.0% of the “standard rate” for each 24 hour period.

[39] The sleepover allowance under the Agreement of $74.03 is payable regardless of whether an employee is on an eight, nine or ten hour sleepover. For those employees that fall under 37(1) (b) (iii) of the Agreement and may only be required to undertake eight hour sleepovers, the sleepover allowance under the Agreement is clearly more beneficial than the Award. As regards to those employees that fall under sub-clauses 37.1(b)(a) and (b) of the Agreement, I am satisfied that the Award does not allow for or confer a benefit for a nine or ten hour sleepover for the purpose of the BOOT assessment. I note, however, that the Agreement recognises and compensates for the additional disability that arises from a nine or ten hour sleepover by way of a greater allowance when compared to the Award.

[40] I am satisfied in the circumstances that the sleepover provisions are to be treated as neutral considerations in the conduct of the BOOT assessment.

On-call arrangements – Undertaking 7

[41] The Commission raised with the Applicant in its initial correspondence that the Agreement made no provision for payment of on-call allowance in circumstances where the Award was not incorporated. The Applicant declined to provide an undertaking that employees would not be required to participate in on-call arrangements and proffered an undertaking providing for the insertion of a new clause that would allow employees to voluntarily participate in on-call arrangements for which they would receive an allowance.

[42] The HSU submit that the Undertaking, if accepted, would cause financial detriment to employees and constitute substantial change to the Agreement.

[43] I am not persuaded that when employees voted for the Agreement they would have understood that on-call arrangements were a feature of the Agreement, given the Agreement was silent on such provision and that the Award is not incorporated. It (the Undertaking) would consequently constitute a substantial change to the variation of the Agreement, in my view.

[44] Furthermore, the Undertaking would represent a detriment, in that under the Agreement, the Applicant could request an employee to remain on-call but, in the absence of an on-call allowance, would be obliged to pay appropriate penalty payments whilst the employee remained on-call. The introduction of an on-call allowance as proposed in the Undertaking, albeit on a voluntary basis, would result in an employee receiving less than would be the case were the Undertaking not accepted.

[45] I am unable to accept Undertaking 7 proposed by the Applicant as it would represent a substantial change and also cause financial detriment.

Conclusion on BOOT

[46] As I have found above, Undertaking 7 in relation to an On-call allowance would represent both a substantial change and a detriment to employees and cannot be accepted. I am, however, satisfied that the balance of the proposed Undertakings (Nos 1-6) will not cause financial detriment and will not result in substantial changes to the Agreement.

[47] I am further satisfied that the Agreement variation with Undertakings 1 to 6 meets the BOOT requirements.

Conclusion

[48] I am satisfied that subject to the Applicant withdrawing Undertaking 7 and providing revised and consolidated undertakings, the requirements of ss 210 and 211 of the Act, as are relevant to the application to vary the Agreement, are able to be met and that the variation application is capable of approval. The Applicant is consequently invited to provide revised and consolidated undertakings on or by 4.00 pm Wednesday, 6 February 2019, upon receipt of which the application may be formally determined.

DEPUTY PRESIDENT

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 1 Section 211(3) of the Act.

 2   MA000100.