Marano Enterprises (Miallo) Pty Ltd as trustee for the Marano Family Unit Trust T/A Marano's Fuel

[2018] FWC 3827

[2018] FWC 3827

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Marano Enterprises (Miallo) Pty Ltd as trustee for the Marano Family Unit Trust T/A Marano's Fuel

(AG2017/6203)

COMMISSIONER CAMBRIDGE SYDNEY, 29 JUNE 2018

Application for approval of the Marano Enterprise Bargaining Agreement 2017.

1. An application has been made for approval of an enterprise agreement known as the Marano Enterprise Bargaining Agreement 2017 (the Agreement). The application was made pursuant to s. 185 of the Fair Work Act 2009 (the Act). The application was made by Marano Enterprises (Miallo) Pty Ltd as trustee for the Marano Family Unit Trust trading as Marano’s Fuel (the employer). The Agreement is a single-enterprise agreement.

1. The application was lodged with the Fair Work Commission (the Commission) at Brisbane on 12 December 2017. On 27 April 2018, the application was referred to the Commission as currently constituted. The application included a Statutory Declaration of Luch Coiutti made on behalf of the employer and dated 11 December 2017 (the Declaration). The Declaration stated that the Agreement was made on 1 December 2017. Therefore the application was made within the 14 day lodgement time limit established by subsection 185 (3) of the Act.

1. The application for approval was listed for Hearing by telephone conference on 28 May 2018, at which time Ms T Fabiani from HR Dynamics appeared as representative of the employer, together with Mr L Coiutti and Ms J Blain from the employer.

1. During the proceedings held on 28 May, the Commission identified various issues relating to aspects of the application including the contents of certain terms contained in the Agreement, which were of concern to the Commission. The Commission identified various concerns in respect to terms contained in the Agreement which, when evaluated against the terms of the various relevant Modern Award reference instruments, appeared to fail to satisfy the Better Off Overall Test (BOOT) as required by s. 193 of the Act. The employer was invited to further consider the concerns which had been raised by the Commission and in due course, make comment or further submissions, and/or advance any proposed rectification of the identified concerns.

1. On 15 June 2018, HR Dynamics provided the Commission with further material in support of the application. The further material in support of the application included; written submissions in the form of a letter dated 15 June 2018; a Statutory Declaration of an employee who had signed the Agreement on behalf of other employees; proposed undertakings; and an executed signature page of the Agreement. The further material in support of the application sought to address most, but not all, of the concerns that were raised during the proceedings held on 28 May.  

1. The Commission has carefully considered the further material in support of the application. Certain aspects of the concerns raised by the Commission in the Hearing held on 28 May have been potentially addressed by the further material in support of the application. However, other concerns have not been satisfactorily addressed by either the further submissions made in support of the application or the proposed undertakings. These concerns primarily relate to the requirement for the Commission to be satisfied that the Agreement would pass the BOOT as required by subsection 186 (d) and s. 193 of the Act.

1. The written submissions provided in the form of a letter dated 15 June 2018, reveal fundamental concerns with the approach that the employer has adopted in its consideration of the application of the BOOT. The following extract from the text of the submissions is provided as an example which reflects a fundamentally erroneous consideration of the BOOT:

“We have reviewed the BOOT Analysis [sic] and note that all rates under the Agreement are higher than the award rates with the exception of the Mechanic and Casual Yard Person.”

1. Consequently, without any rectification of the lower rates that had been recognised as applicable for the Mechanic and Casual Yard Person, the fact that other rates in the Agreement may be higher than the award rates will not provide for satisfaction of the BOOT.

1. A further example of the unfortunate approach to the consideration of the BOOT is reflected from the following further extract from the submissions document:

“We are of the opinion that the Enterprise Bargaining Agreement and Undertakings allow Employees to receive pay rates that are equivalent to the Modern Award requirements that are applicable to the positions and operations of the Applicant and therefore the employees are not disadvantaged in terms of pay rates.”

1. The above extract from the submissions made on behalf of the employer is reflective of the erroneous approach whereby many of the loaded hourly rates contained in the Agreement have been determined so as to equate with, or be slightly above, an equivalent reference instrument rate. This approach does not provide for an outcome where the Commission could be satisfied that an employee receiving the loaded hourly rate would be better off overall as opposed to that employee receiving the equivalent modern award rate.

1. By way of a specific further example, one of the proposed undertakings recognised that the loaded hourly rate for a Gardener in the Agreement ($19.63) fell beneath the comparable modern award rate. Therefore an undertaking was proposed to increase the loaded hourly rate for the Gardener classification to $19.79. However, the relevant modern award rate of $19.53 when increased by 1.346% in recognition of the incorporation of annual leave loading of 17.5%, generates a comparative hourly rate of $19.79 (19.53+1.346%). Therefore, the undertaking to increase the Gardener classification rate would produce an outcome that provided an equivalent hourly rate with that of the comparable modern award rate.

1. The Agreement loaded hourly rates, when compared with the comparable reference instrument rates that are increased by 1.346% in recognition of the incorporation of an annual leave loading of 17.5%, are, in many instances equivalent, or only a matter of a few cents per hour above the reference instrument rates. Consequently, when other terms and conditions provided by the relevant reference instruments and which are not contained in the Agreement are contemplated, there is in many instances, but not all cases, no capacity for satisfaction of the BOOT.

1. The Commission has given consideration to providing the applicant with further Hearing and other opportunity as a means to further attempt to redress the various on-going concerns. However, upon reflection, the proposed undertakings or any subsequently developed permutation of these or other undertakings which could, on any objective contemplation, provide rectification of the concerns that have been identified, would result in substantial changes to the Agreement. 

1. Consequently, any objectively determined prognosis for the application would create a circumstance that offended subsection 190 (3) (b) of the Act. In such circumstances, and in the interests of efficiency and avoidance of additional costs to the applicant, as the application is not capable of satisfying the relevant requirements of ss. 186, 187, 190 and 193 of the Act, the application must be dismissed.

COMMISSIONER

Appearances:

Ms T Fabiani from HR Dynamics, with Mr L Coiutti and Ms J Blain appeared for the employer.

Hearing details:

2018.
Sydney:
May, 28.

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