MDE Pty Limited T/A MDE Pty Ltd
[2019] FWC 6200
•12 SEPTEMBER 2019
| [2019] FWC 6200 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
MDE Pty Limited T/A MDE Pty Ltd
(AG2019/1667)
COMMISSIONER BISSETT | MELBOURNE, 12 SEPTEMBER 2019 |
Application for approval of the MDE Pty Ltd Single Enterprise Agreement 2019.
[1] MDE Pty Limited (MDE) has made an application for approval of the MDE Pty Ltd Single Enterprise Agreement 2019 (Agreement) on 20 May 2019.
[2] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) filed a Form F18 statutory declaration of employee organisation on 24 May 2019. In that statutory declaration the CEPU indicated that it did not support the approval of the Agreement as it had concerns that the Agreement had not been genuinely agreed to. Due to an administrative oversight the Form F18 and the views of the CEPU in relation to the application was not brought to the attention of my chambers until 21 June 2019.
[3] The CEPU was invited to provide more detail as to whether it wished to be heard on the application. On 28 June 2019 the CEPU filed extensive submissions as to why the Agreement had not been genuinely agreed to, why the Notice of employee representational rights (NERR) failed to comply with the requirements of the Fair Work Act 2019 (FW Act) and why the Agreement failed to meet the better off overall test (BOOT).
[4] On 3 July 2019 The National Electrical Contractors Association (NECA), on behalf of the Applicant, filed submissions in reply. The application was listed for hearing on 21 August 2019.
Is the CEPU a bargaining representative?
[5] NECA submits that the CEPU is not a bargaining representative for the Agreement because, it says, any employee who may have been a member of the CEPU elected to be represented by another person (other than the union) in bargaining.
[6] The CEPU maintains that it was a bargaining representative as it “represents the industrial interests of its members employed by the Applicant”.
[7] In order to resolve this issue, the CEPU provided me with a list of its members. MDE provided me with a list of employees covered by the Agreement including those who have left employment since the time the Agreement was made.
[8] On the basis of the information provided, I am satisfied that there was at least one employee of MDE who was a member of the CEPU at the time the Agreement was made. That employee had not nominated another person as a bargaining representative such that the CEPU was a default bargaining representative at the time the Agreement was made.
[9] I am therefore satisfied that the CEPU should be heard.
WAS THE AGREEMENT GENUINELY AGREED TO?
The NERR
[10] The CEPU submits that MDE issued an invalid NERR to the employees to be covered by the Agreement in that:
• it failed to detail the scope of the Agreement;
• it failed to provide the full name of the Agreement;
• it was issued on company letterhead.
[11] The CEPU says that a departure from the Fair Work Regulations 2009 (Regulations) goes to invalidity 1 and in this case the NERR did depart from the requirements set down in the Regulations.
[12] The CEPU submits that the issue of the NERR on company letter is equivalent to the inclusion of additional content on the NERR such that it no longer complies with the requirements for strict compliance with the Regulations. 2
[13] With respect to the amendment to the FW Act which saw the insertion of s.188(2), the CEPU submits that intentional conduct must be distinguished from what might rightly be considered to be an error. In this case, the CEPU submits that MDE had NECA as its representative and NECA is experienced in such matters. Despite this MDE issued a non-compliant NERR. CEPU submits that there were opportunities for MDE to correct the error (by, for example, re-issuing the NERR) but it failed to do so. In these circumstances, the CEPU submits that the error cannot be seen as “trivial” or “technical.” Alternatively, the CEPU says the error was reckless. In this case it submits that, even if the Commission finds the error not to be intentional, it should be considered reckless and not capable of being seen as a minor error. In these circumstances the Commission cannot be satisfied that the error is of the type such that s.188(2) of the FW Act can be relied on to rectify the problem.
[14] NECA says that MDE issued a NERR which meets the requirements of the Regulations in that it gives the name of the employer, the name of the proposed agreement and the employees to be covered by the Agreement. It says that the NERR was issued on company letterhead does not invalidate it. 3
[15] NECA submits that there is no claim that employees were misled by the NERR and that the deficiencies identified by the CEPU are minor, procedural or technical errors that would not have disadvantaged employees. 4
[16] Further, NECA submits that there is no claim that the NERR was not provided to all employees.
[17] NECA submits that the issue of the NERR on MDE letterhead and other errors claimed by the CEPU were unintentional. MDE, it says, acted on the advice of NECA who believed (incorrectly) that the use of letterhead was permissible. NECA says that it formed this belief as it had filed NERRs on company letterhead in the past and this had not been raised with it as an issue and was not raised as an issue in this matter by the Commission.
Consideration
[18] Section 174(1A) of the FW Act states:
(1A) The notice must:
a) contain the content prescribed by the regulations; and
b) not contain any other content; and
c) be in the form prescribed by the regulations.
[19] Regulation 2.05 states:
2.05 Notice of employee representational rights — prescribed form
For subsection 174(1A) of the Act, the notice of employee representational rights in Schedule 2.1 is prescribed.
[20] Schedule 2.1 of the regulations provides that the introductory paragraph of the NERR should provide as follows:
[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].
[21] The NERR issued by MDE was on company letterhead and contained the following opening paragraph:
MDE Group gives notice that it is bargaining in relation to an enterprise agreement (MDE Group single enterprise Agreement 2019) which is proposed to cover employees 4 years. (sic)
[22] Section 188 of the FW Act sets out the circumstances in which employees have genuinely agreed to an enterprise agreement:
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
[23] It is not in dispute that if the NERR does not comply with the requirements of the FW Act or Regulations, then the Agreement cannot have been genuinely agreed to and therefore cannot be approved by the Commission unless the provisions of s.188(2) of the FW Act apply.
[24] In this case, I am satisfied that a compliant NERR was not issued by MDE in that it was issued on company letterhead and it did not contain all of the prescribed content. Having determined this error, it is a question as to whether the errors were minor. procedural or technical errors such that they are amenable to the provisions of s.188(2).
[25] In the decision in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others 5(Huntsman)the Full Bench said:
[54] As a matter of grammatical construction, and from the context, it is plain that the adjective ‘minor’ qualifies both ‘procedural’ errors and ‘technical’ errors, such that one reads the expression as ‘minor procedural errors or minor technical errors’. There is certainly nothing in the extrinsic materials or in the context to suggest that the qualifying word ‘minor’ only applies to procedural errors, and does not qualify the expression ‘technical errors’. Nor does any logical basis for such a distinction present itself. Such a reading is also consistent with the context of s.188(2). It operates as an exception to requirements under s.188(1) that ‘have a protective purpose’ and reflects the object of Part 2-4 of the Act ‘to provide a simple, flexible and fair’ collective bargaining framework.
[55] We agree with ACCI’s submission that the word ‘minor’ is a limitation upon the type of errors contemplated by s.188(2)(a) and that what constitutes a ‘minor’ error calls for an evaluative judgment having regard to the underlying purpose of the relevant procedural or technical requirement which has not been complied with and the relevant circumstances.
[56] A failure to comply with a procedural requirement will constitute a ‘procedural error’ within the meaning of s.188(2)(a). A procedural requirement is one that requires an employer to follow a particular process or course of action e.g. providing employees with a NERR as soon as practicable, and not later than 14 days after the notification time (s.173(3)), or ensuring there are at least 7 clear days between notifying employees of the voting process and the commencement of that process (s.180(3)).
[57] A failure to comply with a technical requirement will constitute a ‘technical error’ within the meaning of s.188(2)(a). A technical requirement includes an obligation to comply strictly with the form and content of an instrument, such as the NERR.
[Endnotes omitted]
[26] In considering the requirements of s,188(2)(b) the Full Bench in Huntsman said:
[113] In assessing whether employees were not likely to have been disadvantaged by an error, it may be necessary to consider the particular circumstances of the employees concerned at the time the error occurred and the impact of the error on the subsequent course of bargaining (see also the Revised Explanatory Memorandum at [45], extracted at [[91]] above). This may include a consideration of what occurred following the error, such as considering any steps taken by the employer to address the adverse impact of the non- compliance.
…
[115] Assessing whether the employees were not likely to have been disadvantaged by the error may also involve considering the subsequent conduct of the relevant employees. For example, if the error relates to the notification of the relevant employee of the time, place and method of voting prior to the start of the access period it would be relevant to consider the number of eligible employees who actually voted on the proposed agreement compared to those employees who were eligible to vote (the voter turnout). The purpose of the requirement in s.180(3) is to ensure that relevant employees are able to attend and participate in the voting process. The voter turnout is directly relevant to the purpose of the statutory requirement in respect of which there was a minor procedural error.
[116] The extent of voter turnout will be apparent on the face of the application for approval without the need for further investigation. In other instances the application of s.188(2) may require further investigation.
[27] In relation to the placement of the NERR on company letterhead, I am satisfied that this was an intentional act which unintentionally resulted in the NERR not complying with the requirements of the Regulations. NECA said that it provided this advice as it was not aware that this would cause non-compliance. In this respect MDE acted on advice it received that it could reasonably have assumed to be correct. NECA is, after all, an organisation relied on by employers to provide expert and current advice on workplace relations matters. That NECA was not up to date with the state of the law at the time it provided the advice is less than would be expected of it but MDE cannot be held to account for acting on advice it understood to be correct.
[28] In this respect, the placement of the NERR on MDE letterhead was clearly an intentional act but one that resulted in unintentional non-compliance of the type contemplated by the Full Bench in Huntsman at [73]. This is a technical error by MDE.
[29] In the circumstances of this case, I am satisfied that the error can be classified as a minor technical error.
[30] In respect of the submission of the CEPU that the notice did not include the employees to be covered by the Agreement, I am also satisfied that this was a minor technical error. The employees to whom the NERR was given were the employees to be covered by the Agreement. They were already covered by an Agreement and this was to be a replacement Agreement.
[31] For the reasons given, I do not consider the technical errors to be reckless such that they could be seen as not being minor in nature.
[32] A total of 13 employees exercised their rights under the NERR to appoint a bargaining representative indicative of an access to and understanding of the NERR. None of those appointing a bargaining representative was ineligible to do so 6 and none of those appointed as a bargaining representative was ineligible to be a bargaining representative.
[33] Further, I am satisfied that none of the employees covered by the Agreement was disadvantaged by these minor errors. I have reached this conclusion on the basis that all employees to be covered by the Agreement voted as to whether the Agreement should be made and of these, all voted to approve the Agreement. This suggests that all employees were aware of and engaged in the Agreement making process. Further, no evidence of disadvantage is before the Commission.
[34] I am therefore satisfied that the errors in the NERR are minor technical errors and, by virtue of s.188(2) the Agreement was genuinely agreed to in this respect.
Were the terms of the Agreement explained to employees?
[35] The CEPU submits that the Commission cannot be satisfied that the terms of the Agreement and the effect of those terms were explained to the relevant employees and that the explanation was given in a manner taking into account the circumstances and needs of the employees.
[36] The CEPU says that a mere statement that the Agreement had been explained to employees is not sufficient. 7
[37] The CEPU says that MDE failed to identify deficiencies in the Agreement that may disadvantage employees and failed, in the Form F17, to set out “significant and important terms which are less beneficial and may disadvantage employees. It has also failed to differentiate where the Agreement differs from the Award.” The CEPU says that MDE has:
• failed to identify less beneficial rates for 2nd year apprentices which are below the Award rate;
• failed to identify that the wage rates are loaded rates for the life of the Agreement and not subject to annual wage review;
• failed to identify that personal leave without evidence of injury or illness will be unauthorised leave;
• failed to identify some 23 less beneficial terms (which I do not list here).
[38] The CEPU submits that MDE has produced no evidence to support its claim that it held meetings of employees. It submits that the minutes of the meeting provided in its documentation does not in any way enable the Commission to be satisfied that the terms of the Agreement and the effect of those terms was explained to employees.
[39] NECA submits that:
• it has provided an undertaking to remedy the 2nd year apprentice issue;
• Schedule B of the Agreement clearly sets out the rates of pay and increases that will be applied over the life of the Agreement;
• the Agreement does allow employees to be on personal leave without furnishing proof (cl 7.3.2 and 7.3.3), specifies circumstances where proof is required (cl 7.3.2), and clarifies the circumstances where an employee may be absent from work without authorisation;
• responds to each of the matters detailed by the CEPU. It identifies conditions the CEPU claims are in the relevant Award but are not (e.g. site allowance, special allowance, accumulation of RDOs when on leave, start and/or finish on the job allowance); indicates Award conditions not relevant to the work of MDE (e.g. multi-storey allowance, first aid allowance, meal allowance, additional annual leave for shiftworker) such that the failure to mention them as a reduction from the Award is not relevant; and identifies Award entitlements included in the rate of pay, and specified as such (industry, tool and licensing allowance). NECA also identifies those matters that have been subject to proposed undertakings (minimum hours for work on weekends or public holidays, time in lieu issues, non-engagement of trainees); those covered if the Form F17 (training hours and minimum call out) and emphasises the application of the NES (cl 5.6) and conditions in the Agreement (travel time to distant work).
NECA agrees that the Agreement does not provide for casual conversion or domestic violence leave. 8
[40] NECA submits that the circumstances surrounding the MDE Agreement can be distinguished from those in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union 9 (One Key) in that the MDE Agreement was not made with a few employees with the intent that it would thereafter cover other employees; that the MDE Agreement was preceded by bargaining; and the employees covered by the MDE Agreement are covered by a single Award. This can be contrasted, it submits, to the circumstances in One Key.
[41] NECA further relies on the decision of Deputy President Gostencnik in BGC Contracting Pty Ltd 10 in which he observed that “[the] requirement to take all reasonable steps does not extend to all steps that are reasonably open in some literal or theoretical sense” being required to be taken.
[42] NECA submit that in determining if the terms of the Agreement have been explained, such that the requirements of s.180(5) have been met, it is reasonable for the Commission to consider the terms and conditions of employment governing employees that will be changed by the Agreement should it be made. An explanation of the changes from those terms is therefore sufficient. NECA distinguishes this process from the BOOT (see below) where the comparator is properly the relevant Award.
[43] Section 180(5) of the FW Act states:
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
[44] In National Tertiary Education Industry Union v University of New South Wales 11 the Full Bench of the Commission agreed that the obligation on an employer to explain the terms of the Agreement and the effect of those terms did not require an explanation of every clause of the agreement. The Commission at first instance and not disturbed on appeal, found that the steps that will constitute “all reasonable steps” will vary according to the circumstances of the employer and the complexity of the agreement.
[45] In this case, I have taken into account that the employees covered by the Agreement were already covered by the MDE Group Pty Limited Employee Collective Agreement 2009 and the content of the Agreement under consideration did not substantially vary in structure from the MDE Group Pty Limited Employee Collective Agreement 2009 which it is intended to replace. To the extent that the employer is required to inform employees of the effect of the Agreement I accept, in this case, that it is reasonable that the effect of the terms of the Agreement be explained against a “business as usual” scenario – that is the proposed Agreement be explained against current conditions.
[46] This is a different matter, of course, as to whether the Form F17 has been comprehensively completed by the employer and whether the Agreement passes the better off overall test.
[47] I am also satisfied that the explanation was appropriate taking into account the particular circumstances of the employees. The Form F17 statutory declaration stated that all employees speak and write English and none were under the age of 18. Whilst the CEPU raised the issue, it offered nothing to suggest this requirement was not complied with – rather it seems a template objection.
[48] To the extent that the CEPU suggest that the Form F17 has not been properly completed, I accept the submissions of NECA as to how each of those matters raised by the CEPU has been dealt with. Whilst I accept that the Form F17 did not identify casual conversion or domestic violence leave I do not consider this fatal to the application or my consideration in respect to s.180(5).
Conclusion
[49] In reaching my conclusion as to whether the Agreement was genuinely made, I have taken into account that, of the 33 employees covered by the Agreement, all voted and all voted to support the making of the Agreement. This is not the case of two or three employees making an Agreement of which they know little but of 33 employees nominating bargaining representatives, engaging in bargaining and all participating in the decision to make the Agreement.
[50] For these reasons, I am satisfied that the Agreement was genuinely agreed to by employees.
DOES THE AGREEMENT MEET THE BOOT?
[51] The CEPU highlighted a number of areas where it suggests the Agreement provides a lesser entitlement than the relevant Award. To the extent that it might be suggested that the BOOT is a line by line comparison I reject that approach. The requirement is however that the improvements and reductions, when compared to the Award, must be considered and an overall assessment made.
[52] As a result of matters raised by the Commission prior to the hearing MDE has proposed a number of undertakings that address some of the concerns raised by the CEPU which, unfortunately, were not acknowledged by the CEPU in its submissions.
Clause 3.4
[53] The CEPU says that clause 3.4 – which allows for deductions from wages – is broad in its application, is not a provision found in the Award and employees therefore are worse off in relation to it.
[54] NECA submits that the provision is in accordance with s.342(1)(b) of the FW Act which allows for deductions authorised by employees. Further, NECA submits that clause 3.4.1 only applies to course fees paid by the employer in the six months period prior to resignation or abandonment of employment.
[55] I am satisfied that, in making the Agreement, employees have agreed to a range of permissible deductions from wages in accordance with s.342 of the FW Act. Whilst such deductions are not matters contained in the Award, I do not consider that this creates an impediment to the approval of the Agreement.
Clause 5.2
[56] The CEPU submits that the living away from home allowance payment is at the discretion of the employer where the award mandates a payment.
[57] NECA submits that the discretion under the clause open to MDE is to pay $100 where no lodging is provided or $50 per day where lodging is provided and that the rates paid are in excess of that provided in the Award.
[58] I am not convinced that the payment of this allowance is discretionary under the Agreement. The election open to the employer under the clause is to pay a full allowance or, where it supplies board and lodging, a reduced allowance. At the test time the allowance appears to be in excess of that contained in the Award. I am not satisfied that employees are disadvantaged by this provision.
Clause 6.2
[59] The CEPU submits that the right of MDE to require an employee to take an accrued RDO on 24 hours’ notice (clause 6.2.4) is worse than the Award provision which requires four weeks’ notice (clause 24.8(b)). Further, the CEPU says the Agreement does not allow accrual of RDOs during any type of leave (clause 6.2.5) where the Award provides for accrual during all periods of leave (clause 24.8(e)(ii)).
[60] NECA submits that clause 24.8(b) of the Award applies to RDOs to be taken “during the work cycle” where clause 6.2.4 of the Agreement applies to banked RDOs. Further, it submits that the Award does not mandate the accrual of RDOs whilst on leave.
[61] I am not satisfied that the notice for taking RDOs under the Agreement is the same provision as that referenced by the CEPU under the Award. I am not therefore satisfied that there is any disadvantage to employees in this regard.
[62] It seems to me that clause 24.8(e) of the Award is in relation to how the calculation of weekly wage rates is undertaken in circumstances where RDOs are provided and, as such, is not about the accrual of RDOs. How this interacts with accrual issues is not clear. In these circumstances it is not clear (and no submissions were made) as to how the provisions contribute to some overall sense that employees are not better off overall under the Agreement.
[63] On this it would behove the CEPU to not just identify where the Agreement differs from the Award but, if it considers it leaves employees worse off (or not better off), provide some detail of how this might be the case such that it might assist the Commission in carrying out its task. Picking out differences is not difficult. Undertaking the analysis to determine the effect of the difference is more complex. On this matter the CEPU has not identified how the conditions it identified may adversely affect the better off overall test (noting it is not a line by line test). I am not therefore satisfied that there is any disadvantage to employees in this regard.
Clause 6.3
[64] The CEPU says that clause 6.3 does not prescribe any minimum engagement provisions for overtime whilst the award provides a minimum engagement on Saturday, Sunday, RDO or public holiday of four hours. Further it submits that it is not clear if overtime is paid for work in excess of 38 hours per week or for time worked outside the span of hours where the Award provides for overtime for work performed outside ordinary hours.
[65] The CEPU says that clause 6.3.5 of the Agreement allows for time in lieu of overtime but the Agreement does not provide for payment of such accrued time on termination of employment.
[66] NECA submits that it has provided an undertaking in relation to minimum overtime on Saturday, Sunday, and public holidays and clause 6.3.3 provides that overtime is worked for time outside ordinary hours.
[67] I consider the undertaking given by MDE resolves the issue raised by the CEPU.
Clause 6.4
[68] The CEPU submits that clause 6.4 of the Agreement does not provide a benefit commensurate with the Award as the Award provides at clause 24.15 for all overtime for continuous shiftworkers to be paid at double time while the Agreement only provides for overtime for non-continuous shiftworkers.
[69] NECA provide no submissions on this matter.
[70] I am satisfied that the overtime provisions in clause 6.3 of the Agreement apply to all employees for work outside ordinary hours such that all overtime is at the rates specified in clause 6.3.3, including for those on continuous shiftwork. To the extent that MDE do employ continuous shiftworkers, they will be required to work for the first two hours of overtime at the rate of time and a half as opposed to the double time they would otherwise receive under the Award.
[71] An analysis of the overtime arrangement suggests that apprentices and trainees will be worse off if working continuous shiftwork and perform overtime of less than four hours on any one day. However, if overtime is only worked on one shift in the week this is balanced out by the higher rate of pay across the entire week.
[72] Given the failure of NECA to make any submissions on this point the Commission seeks further information as to the incidence of continuous shiftwork at MDE and the working of overtime by apprentices who may be working continuous shiftwork.
Clause 6.5
[73] The CEPU submits that the Agreement only provides a minimum engagement of three hours on recall where the Award provides for a minimum engagement of four hours.
[74] NECA agrees and says that this was identified in the Form F17.
[75] I have taken this into account in determining if employees are better off overall under the Agreement compared to the Award.
Clause 7.1
[76] The CEPU submits that the Agreement allows any employee to be directed to take accrued leave if the annual leave balance is in excess of 10 weeks where the equivalent Award provision specifies 10 weeks for shiftworkers.
[77] NECA submits that the 10 weeks accrual provision of the Award only applies to continuous shiftworkers and not shiftworkers generally.
[78] To the extent that the determination of paid leave is an issue, clause 5.6 of the Agreement confirms that an employee is entitled to at least the NES provision if the Agreement provides a lesser benefit. Otherwise I do accept that the Agreement provision may result in continuous shiftworkers not being better off on this matter.
[79] It is apparent that the intent of the provision in the Award is to enable a response to employees who have accumulated over two years of annual leave. The provision in the Agreement would appear to treat continuous shiftworkers differently to others in that 10 weeks of annual leave for a continuous shiftworker accrues in less than two years. Whilst I do not consider this fatal to the approval of the Agreement, it is highlighted as a potential workplace issue.
Clause 7.3
[80] The CEPU submits that the Agreement at clause 7.3.3 provides that a failure to furnish evidence in relation to personal/carer’s leave in certain circumstances will result in the employee being deemed to be absent without authorisation. It submits that this is a form of disciplinary action.
[81] NECA submits that there is no obligation on an employer to pay an employee who is on unauthorised absence.
[82] Should this provision as to the production of evidence be less than the NES, clause 5.6 of the Agreement would operate such that the NES would apply. As such, I do not consider the provision raises any detriment.
Clause 14
[83] The CEPU submits that the Agreement at clause 14.2 allows for payment for training required to be undertaken outside working hours to be at ordinary hours.
[84] NECA submits that this reduction in entitlements is acknowledged in the Form F17.
[85] I accept that this is a lesser condition of employment. There is no information before the Commission that would indicate how often this is likely to occur such that employees might not be better off overall. The framing of the clause as it stands is open ended.
[86] MDE might consider an undertaking in relation to this matter to limit the amount of after-hours training required to be undertaken by employees.
Clause 15
[87] The CEPU submits that there is no equivalent provision in the Award to clause 15.12 of the Agreement which requires that an employee involved in an at fault motor vehicle accident is responsible for payment of an insurance excess of up to $500.
[88] NECA submits that the CEPU is more likely referring to clause 3.4 of the Agreement and that this is identified as a less beneficial term in the Form F17.
[89] I have dealt with this matter above. I do not consider it creates an impediment to the approval of the Agreement.
Clause 17
[90] The CEPU says this clause allows for the engagement of trainees but there are no rates of pay for trainees in the Agreement (though they perhaps intended to refer to clause 15).
[91] NECA says that MDE has provided an undertaking that it does not and will not employ trainees.
[92] Contrary to the views expressed by both parties MDE has proposed no such undertaking but, in any event, Table 2 in Schedule B states that they are the rates of pay for “Apprentice Employee (under 21 years of age) (Indentured, Trainee and School based)”. Table 3 which applies to Adult apprentices has a similar provision.
[93] In this regard I am satisfied that the Agreement does provide rates of pay for “trainees”. Given the statement of NECA however, the Commission requires an undertaking that the only trainees employed under the Agreement will be those encompassed by Apprentice Employee and Adult Apprentice Employee classifications in Schedule B of the Agreement.
Schedule B – rates of pay
[94] CEPU submits that the rates of pay in Table 2 include a range of allowances. The CEPU suggest that this will result in a 2nd year apprentice receiving less than they otherwise would under the Award. The CEPU submits that employees under the Award are entitled to an industry allowance, tool allowance and electricians license allowance in addition to the base rate of pay and meal allowances, towers allowance, first aid allowance, start & finish on the job and travel time allowance.
[95] The CEPU also submits that the text above the table suggests the rates specified are inclusive of the casual loading.
[96] For these reasons the CEPU submits that a “Grade 2” (sic) apprentice and a casual employee will be worse off. In its oral submission, the CEPU confirmed that these were the only two groups it considered, on a monetary basis, would not be better off overall. However, it does submit that the issues it has identified with the rates of pay are compounded by the loss of other allowances and entitlements.
[97] NECA submits that the analysis of the CEPU tries to double count allowances by comparing the rates in the Agreement to the all purpose rate in the Award (which is inclusive of industry allowance, tool allowance and electricians license allowance) but then suggest that these allowances should be added to the Award rates shown for comparative purposes.
[98] NECA also submits that fares and travel allowance provided in the Agreement at clause 5.3 is the same as the “start and finish on the job allowance” in the Award.
[99] NECA says that the Form F17 identified meal allowance, multi-storey allowance and first aid allowance as being less beneficial under the Agreement. Further, NECA submits that some allowances in the Award are not applicable to the work it performs.
[100] MDE has provided an undertaking in relation to the rate of pay for a 2nd year apprentice (to lift it to $16.76 per hour). NECA indicated in hearing that MDE is prepared to give an undertaking to make clear that a casual employee is entitled to the casual loading in addition to the rate of pay in Schedule B and in accordance with clause 4.1 of the Agreement.
[101] Given the undertakings proposed by MDE I am satisfied that, with those undertakings, the rates of pay alone are not a cause of concern. Further, I am satisfied that the non-payment of meal, first aid and multi-storey allowance is not such to result in employees being not better off overall under the Agreement.
Other matters
[102] The CEPU submits that the Agreement fails to provide for casual conversion, minimum engagement for casual employees; job search entitlements on redundancy and leave to deal with family and domestic violence. The Agreement does not provide for any of these.
[103] NECA make no additional submissions on these matters.
[104] It is clear that there is no casual conversion provision of the Agreement, it does not provide for minimum engagement of casual employees and it does not contain the right to access the one day job search entitlement on redundancy. I have dealt with domestic violence leave above.
[105] Of these issues, I consider the minimum engagement of casual employees to be problematic and would accept an undertaking to rectify the deficiency.
Conclusion
[106] In Australian Nursing and Midwifery Federation v Domain Aged Care (QLD) Pty Ltd T/A Opal Aged Care 12 the Full Bench observed that:
[27] Section 193 provides than an enterprise agreement passes the better off overall test if the Commission is satisfied, as at the test time, that each award covered employee and each prospective award covered employee would be better off overall if the agreement applied to the employee than if the relevant award applied to the employee. Although the test time is the date the application was lodged, the Commission is required to conduct an overall comparison, for each existing and prospective employee, of agreement and award conditions. This necessarily requires a consideration of the rates of pay under the agreement and the award that apply to existing and prospective award covered employees assessed ‘as at the test time’. A ‘point-in-time test’ is necessary because the award benchmark may change over the nominal life of the agreement, although its base rate of pay would always be the relevant minimum because of s 206. To our mind, this is the anchoring work of the ‘test-time’. The BOOT analysis occurs at this time, taking account of all that is known at this time, including all of the terms of the agreement that will apply over its nominal life. In our view, the ‘test- time’ does not confine the BOOT analysis to provisions of an agreement that are applicable only at its inception; employees must be better off overall under the agreement, not just better off at ‘test-time’.
[107] I have had regard to this consideration of the Full Bench in reaching my decision with respect to the matter and in my analysis above.
[108] Some issues have been identified with the Agreement both by the Commission and by the CEPU. Without the provision of undertakings, I am not satisfied that the Agreement will pass the BOOT. In saying this I am cognisant of the rates of pay in the Agreement which, save for apprentice rates of pay which are up to 5.4% above the Award rate, are between 10 and 70% above the Award. It is important however that all employees be better off overall.
[109] I should indicate that I do not consider some allowances not included in the Agreement as identified by the CEPU as impacting on the better off overall test. The CEPU have not suggested that the advice of MDE in the Form F17 that some allowances effect few employees and/or only come into play on rare occasions is incorrect.
[110] In addition to those draft undertakings already provided, the Commission seeks an undertaking:
• to deal with the confusion created between Schedule B and clause 4.1 with respect to the casual loading;
• with respect to out of hours training;
• with respect to minimum engagement of casual employees;
• with respect to trainees.
[111] The Commissioner also seeks a response from MDE in relation to the matters raised at paragraph [72].
[112] The out of hours training and minimum engagement for casual employees are the only matters on which the Commission is not generally aware of the proposed undertakings. In order to finalise the approval of the Agreement the undertakings will need to be provided. For this reason, a final decision as to the approval of the Agreement or otherwise cannot yet be made.
[113] In determining if the Agreement does result in employees being better off over all I will take into account the improvements on Award conditions available to employees under the Agreement. These include the improved rates of pay and improved allowances as specified in the Form F17.
WOULD THE UNDERTAKINGS CAUSE FINANCIAL DETRIMENT TO EMPLOYEES OR RESULT IN SUBSTANTIAL CHANGES TO THE AGREEMENT?
[114] The CEPU suggest that the undertakings proposed (noting that more are sought) are such that, if accepted by the Commission, would substantially change the Agreement. For these reasons the CEPU says the undertakings cannot be accepted.
[115] With respect to the proposed undertakings I am aware of I do not consider this to be the case. The undertakings have increased some rates of pay and provided some improvements in conditions. These are not radical changes to the Agreement such that I could be satisfied they result in substantial changes.
DISPOSITION
[116] On receipt of the final proposed undertakings and additional information sought from MDE, the CEPU will have 48 hours to comment. Approval of the Agreement will be further considered at that point and a final decision issued.
COMMISSIONER
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1 Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU)[2014] FWCFB 2042, at [46].
2 DP World Brisbane Pty Ltd [2016] FWC 385.
3 ALDI Foods Pty Limited as General Partner of ALDI Stores v Shop, Distributive and Allied Employees Association [2019] FCAFC 35.
4 See Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others [2019] FWCFB 318, at [60].
5 Ibid.
6 A list of employees covered by the Agreement was provided by MDE.
7 One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 at [112].
8 NECA should note that this is, in fact, part of the NES.
9 Above at 7.
10 [2018] FWC 1466 at [43].
11 [2011] FWAFB 5163.
12 [2019] FWCFB 1716.
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