MJM Ventures Pty Ltd T/A Anchor Security

[2017] FWC 4570

[2017] FWC 4570

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

MJM Ventures Pty Ltd T/A Anchor Security
(AG2016/1437)

COMMISSIONER GREGORY MELBOURNE, 1 SEPTEMBER 2017

Application for approval of the Anchor Security Enterprise Agreement 2016.

[1] An application has been made for approval of an enterprise agreement known as the Anchor Security Enterprise Agreement 2016 (“the Agreement”). The application is made under s.185 of the Fair Work Act 2009 (the Act) by MJM Ventures Pty Ltd T/A Anchor Security (“Anchor Security”). It is a single enterprise Agreement.

[2] The application was originally made some time ago and it is unfortunate that it has taken so long for it to be dealt with. It is emphasised in this context that the Applicant is not at fault in terms of this delay.

[3] The Applicant was initially involved in a series of exchanges with the Commission after the application was lodged. The Applicant then forwarded correspondence which sought to respond to a number of the concerns raised with it by the Commission. It also proposed to increase the rates of pay originally set out in the Agreement and these new revised rates were detailed in the correspondence.

[4] The Commission subsequently forwarded further correspondence to the Applicant in September last year highlighting various ongoing concerns about the terms and conditions contained in the Agreement, and whether it was possible for the Agreement to satisfy the requirements of the “better off overall” test. While it was noted that the proposed Agreement contained an ordinary time rate of pay that was significantly higher than the comparable rates in the underlying Security Services Industry Award 2010 (“the Award”) 1, it was also noted that the Agreement did not contain the additional penalty rates of 21.6% that apply under the Award for work performed in the evenings, or the additional penalty rates of time and a half and double time that apply for ordinary time work performed on Saturday and Sunday. It was noted that this was despite the fact that the Employer’s Statutory Declaration indicated that there were no terms in the Agreement that were “less beneficial” when compared with the terms and conditions contained in the Award.

[5] The Commission’s correspondence continued to note that as a consequence it was difficult to conclude that employees could be “better off overall” under the terms of the Agreement when involved in evening work or work at the weekends when compared to the terms in the Award, and in some cases they would appear to be significantly worse off. It was also noted that there were other terms and conditions in the Agreement which appeared to be less beneficial than those contained in the Award. These included the part-time provisions and the entitlement to a casual loading which was less than that provided for in the Award. The Commission concluded by indicating that the Applicant might now want to consider discontinuing the application given the Commission’s concerns about whether the terms and conditions contained in the Agreement could satisfy the requirements of the “better off overall” test. However, it also indicated that the matter could also be listed for hearing to enable further submissions and evidence to be provided in support of the application.

[6] The Applicant subsequently provided further correspondence in response to the letter from the Commission. It included the following broad commitment. “In response to the Commissioner’s concern regarding potential and current employees not being a better-off overall under the Agreement, Anchor Security undertakes to not roster any Employee in such a manner that, when compared to that of the Award Instrument over our eight-week rostering cycle, would result in an Employee being worse-off.” 2 However, the correspondence did not specifically address the concerns that had been expressed about the Agreement not including any of the additional penalty rates that apply under the terms of the Award for work performed in the evenings after 6 p.m., or at any time during the weekend.

[7] The Commission subsequently wrote to the Applicant again more recently indicating that it continued to have concerns about whether the Agreement can satisfy the requirements of the “better off overall” test. It indicated that it continued to have particular concerns about the circumstances involving part-time employees and employees who might be working at the weekends, given that the terms and conditions contained in the Agreement do not provide for the penalty rate entitlements that apply under the Award for work performed at weekends. The Commission also indicated that the matter would be set down for hearing to enable any further submissions to be provided in support of the application.

[8] The hearing occurred on 30 August 2017 and Mr Bayani Mills, Anchor Security’s Operations Manager, appeared on its behalf. It was indicated that Anchor Security provides a variety of security services to a range of different clients. It primarily engages full-time employees but also engages casual employees from time to time. Employees can be required to work on any day of the week depending upon the requirements of its clients, and overtime entitlements apply in the case of hours that are worked in excess of 38 in any week.

[9] Clause 36 of the Agreement also indicates that “ordinary hours of work are consistent with clause 21 of the Award,” although that clause in the Award does not specifically provide for a span of hours in which ordinary hours can be worked at ordinary time, and conversely the hours of work when additional penalty rates apply. Those entitlements are instead set out in clause 22 of the Award.

[10] As indicated already the Agreement does contain ordinary hourly rates of pay that are well in excess of those contained in the Award. However, those rates are less than the rates that apply for work performed after 6 p.m. on Monday – Friday, and significantly less than the rates of time and a half and double time that apply for ordinary time work performed on Saturday and Sunday. These additional penalty rate entitlements also apply to casual employees under the terms of the underlying Award. It also appears that the provisions in regard to part-time employees do not replicate those contained in the Award in that they do not require that part-time hours be fixed and consistent, and provide for additional overtime payments to be provided when hours are worked over and above those agreed upon.

[11] I have indicated previously that I am aware from dealings with businesses operating in the security industry that the industry is a very competitive one. In addition, the demands of the industry often require hours to be worked that are outside of the traditional “9 to 5 –Monday to Friday” spectrum. As a consequence many businesses in the industry look to develop enterprise agreements as a means of putting in place arrangements that might enable them to remain competitive and to have in place arrangements that are different from those that exist under the terms and conditions contained in the Award.

[12] The competitive nature of the industry is also impacted by the existence of some businesses that have little regard for their legal obligations in terms of the entitlements to be provided to their employees. These circumstances obviously make it very difficult for those businesses that are looking to maintain a competitive position in the industry, but are also endeavouring to comply with their employment obligations, which are ultimately underpinned by the terms and conditions contained in the Award. Anchor Security is obviously operating in this tight competitive market. However, in dealing with the present application I am required to leaving these considerations to one side and to have regard instead to the relevant statutory requirements.

[13] Section 186(1) of the Act requires that the Commission must approve an Agreement if it is satisfied that each of the various requirements in ss.186 and 187 are met. Section 186(2)(d) requires, in particular, that the Commission must be satisfied that the Agreement passes the “better off overall test.” The test is set out in s.193(1) in the following terms:

“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.” 3

[14] It is well established that the application of the test requires identification of terms in the proposed Agreement that are more beneficial, and those which are less beneficial, with an overall assessment then being made about whether the employees would be “better off overall” under the terms and conditions contained in the Agreement, compared to those in the underlying Award.

[15] The Full Bench decision in Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi Lo Pty Ltd T/A Coles and Bi Lo 4 also makes clear that the assessment must be carried out in a way that ensures each employee, and each prospective employee, would be “better off overall” under the Agreement. It is not sufficient for the Commission to simply be satisfied that a majority of the employees would be better off. The Full Bench made this clear in the following terms:

“However the application of the BOOT requires satisfaction, as at the test time, that each Award covered employee and each prospective employee would be better off overall under the Agreement.” 5

[16] As indicated, the Agreement does not contain any additional penalty rate entitlements for work performed in the evenings or at weekends. While it does provide for higher hourly rates for ordinary time work than those contained in the Award these are not sufficient to compensate an employee who works predominantly in the weekends or in the evenings. Certainly an employee working only at the weekends would clearly not be “better off overall” when compared to the entitlements provided for under the Award. I have also made reference previously to the part-time provisions in the Agreement which appear to be inferior to the entitlements contained in the Award. I am not satisfied in conclusion that each of the employees to be covered by the proposed Agreement can be said to be “better off overall” when the terms and conditions contained in the Agreement are compared with those contained in the Award. It follows, in conclusion, that I am not satisfied that the Agreement can be approved.

[17] Having come to this conclusion I have also given consideration to whether further undertakings could be sought from the Applicant in an endeavour to deal with these deficiencies. While the Applicant has not previously directly addressed the Commission’s concerns about the fact that the Agreement does not provide for any weekend or evening penalty entitlements, it did provide the broad proposal that it would not roster employees over an eight week rostering cycle in a way that would result in employees being worse off when compared to the Award entitlements. However, I am not satisfied that it is appropriate to accept an undertaking in these terms. It appears instead to be handing over the responsibility for ensuring compliance with the requirements of the “better off overall” test to the Applicant as part of some self-regulation mechanism, rather than the Commission itself ensuring that the requirements of the test are met.

[18] I have also given consideration to whether any further undertakings could be sought from the Applicant in an endeavour to deal with the deficiencies identified. However, I am satisfied that any such undertakings would involve changes that would represent an outcome that is significantly different from what was in contemplation by the parties when the Agreement was made and voted on. Therefore, I do not consider it appropriate in the circumstances to explore the possibility of obtaining further undertakings from the Applicant.

[19] As indicated, I am not satisfied in conclusion that the terms and conditions contained in the proposed Agreement satisfy the requirements of the “better off overall” test when compared to the terms and conditions contained in the underlying Security Services Industry Award 2010. The application is accordingly dismissed.

COMMISSIONER

Appearances:

B Mills on behalf of the Applicant.

Hearing details:

2017.

Melbourne (by telephone):

August 30.

 1   MA000016.

 2   Letter from Applicant to Fair Work Commission, dated 27 September 2016.

 3   Fair Work Act 2009 (Cth) s 193.

 4   [2016] FWCFB 2887.

 5 Ibid at [15].

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