Mk2 Recruitment Pty Ltd
[2015] FWC 6600
•24 SEPTEMBER 2015
| [2015] FWC 6600 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Mk2 Recruitment Pty Ltd
(AG2015/4980)
COMMISSIONER ROE | PERTH, 24 SEPTEMBER 2015 |
Application for approval of the Mk2 Recruitment Employee Agreement 2015.
[1] An application has been made for approval of an Enterprise Agreement known as the Mk2 Recruitment Employee Agreement 2015 (the Agreement). The application was made pursuant to Section 185 of the Fair Work Act 2009 (the Act). Section 185 is in Part 2–4 of the Act which provides for the making of Enterprise Agreements between an employer and their employees who are employed at the time the agreement is made and who will be covered by the agreement. The application has been made by Mk2 Recruitment Pty Ltd (the Applicant). The Agreement is a single-enterprise Agreement.
[2] The Agreement covers all on-hire employees engaged anywhere in Australia who would otherwise be covered by any of 15 listed modern awards. The Awards cover a wide range of industries and occupations including in manufacturing, construction, mining, electrical contracting, rail, road transport and distribution, telecommunications and clerical. The F17 Statutory Declaration states that the Agreement covers all employees of the employer other than senior executives. I am not satisfied that this statement is accurate as the employer employs some persons who are not “on-hire”. However, I am satisfied that the group selected for coverage is operationally and organisationally distinct from those employees who administer and market the business. I am satisfied that the business operates or intends to operate across Australia and that the modern awards which define the coverage represent the scope of work that the company offers services or intends to offer services. I am satisfied that the fairly chosen requirement is met.
[3] I am satisfied from the F17 Statutory Declaration that the requirements of the legislation in respect to the notice of representational rights, the access period and the notice of the time and place of voting have been followed. The application for approval was made within 14 days of the Agreement being made.
[4] The Applicant says that there are 81 employees covered by the Agreement and I accept that 60 employees voted of whom 56 employees voted to approve the Agreement.
[5] The Applicant says that the terms of the Agreement were detailed in plain language in an explanation document. There were no bargaining representatives and there was no negotiation. The employer drafted a proposed agreement and provided it to employees by email at the same time as the advice about voting for the agreement. Employees were “provided with a link that directed them to the Award page on the fwc.gov.au website that explained they could access their applicable Award there”.
[6] The Agreement incorporates all 15 listed modern awards. The Agreement applies where there is any inconsistency. Employees are prohibited from making any further claims but the employer may seek to vary the Agreement and may at its sole discretion seek to establish separate project specific employment agreements.
[7] The Agreement imposes a number of additional obligations and restrictions on employees which are not found in the Award. The Agreement excludes the casual conversion clauses in the various awards and pays a 1% additional casual loading after six months service. The Agreement provides for wages 5 cents per hour greater than the relevant award. The Agreement allows for any over award payments to be offset against any entitlements, terms, conditions, penalties and allowances which might otherwise apply to employees.
[8] The consultation, flexibility and disputes settlement clauses of the Agreement do not meet the requirements of the legislation. The disputes settlement clause provided that the employer chooses the independent mediator. The employer has offered an acceptable undertaking to overcome the deficiency in respect to the disputes settlement provision. The consultation term limits consultation about rosters and changes to hours of work to major changes and excludes changes to rosters and hours of work permitted by the Agreement. This is inconsistent with the Act. The model consultation and flexibility terms will apply if the Agreement is approved.
[9] Given the centrality of the Awards in the terms and conditions of employment under the Agreement I have some doubts as to whether or not the requirement that employees had access to a copy of the relevant Award has been met (Section 180(2)(b)). The employer submitted that those who work in labour hire are often familiar with the applicable awards for different work. However, I am not sure that each employee would know which Award or Awards were applicable to their employment particularly given that the coverage of the Awards overlap. In this circumstance providing a link to the Fair Work Commission web site may not ensure that employees have access to a copy of the materials. The employer outlined in some detail the efforts made to ensure that employees understood the Agreement and its impact. On a fine balance I accept that the requirements of Section 180(2) of the Act have been met.
[10] Section 180(5) of the Act requires that all reasonable steps must be taken by the employer to explain the terms of the agreement and the effect of those terms. It is quite common for the Fair Work Commission to identify terms which it believes may disadvantage employees in circumstances where the employer has failed to identify these matters in the F17 Statutory Declaration and in the information provided to employees. Where these matters are minor it does not necessarily mean that Section 180(5) has not been complied with. The requirement is about “reasonable steps”. Where the matters are more significant the Fair Work Commission might not be satisfied that Section 180(5) has been met and as a consequence the requirement for genuine agreement in Section 188 may not be met and this will prevent the Agreement being approved. In the circumstances of this case I am satisfied, on a fine balance, that reasonable steps were taken to explain the terms of the agreement and the effect of those terms.
[11] The following matters in the Agreement disadvantage employees when compared to the Awards or some of the Awards:
1. Clause 8 introduces a type of employment not contained in the relevant awards. That type of employment is Maximum term employment. Maximum term employment would deny employees access to the benefits of fixed term, full time or part time employment. The employer submitted that maximum term employment was essentially fixed term employment. However, the Agreement states that it is “in addition to the categories of employment available under the relevant Award”. The Agreement says that there is no entitlement to redundancy or notice of termination in the case of termination at the end of the period of maximum term employment. The NES makes no mention of maximum term employment. This provision is not consistent with the NES.
2. Clause 10 requires the employees to follow lawful and reasonable directions from both the employer and also from the client and failure to do this may result in disciplinary action including termination of employment. This clause makes what may be a common law requirement an enforceable agreement term with possible penalties for non-compliance. Generally the consequence of non-compliance is disciplinary not enforcement. For this reason the clause is not a significant disadvantage but it is not immaterial.
3. Clause 12 provides that suspension without pay can be imposed at the discretion of the company whilst the company investigates alleged misconduct or poor performance. The clause includes an aspirational provision that the company undertakes to act with an appropriate level of urgency. The clause requires the employee to be available during the period of suspension. This is a significant and onerous provision when compared to both common law and the Awards. It is a significant disadvantage. The employer provided a proposed undertaking following the hearing of this matter which I accept would resolve this issue.
4. Clause 13 Safety and fitness at work includes an extensive list of obligations on employees which are not contained in the Awards. The clause makes what might be in employer policies an enforceable agreement term with possible penalties for non-compliance. It includes onerous and intrusive matters such as drug testing at any time and without cause, requirements to submit to independent medical testing, and requirements to notify the employer of any paid or unpaid work performed outside the employment with the company. Given that employment may commonly be casual and intermittent this is an onerous requirement.
5. Clause 15 Employee obligations includes an extensive list of matters which may be included in employment contracts but which by virtue of the clause become enforceable under the Agreement and subject to penalty for breach. Except for one matter, the clause is not a significant disadvantage but is not immaterial. The significant matter is the requirement to “familiarise themselves with and comply with the company’s policies and procedures as varied from time to time.” This requirement could potentially allow a variation to the Agreement to occur without meeting the requirements of the Act for variation. Further it makes a very wide scope of matters enforceable under the Agreement.
6. Clause 16(b) provides that employees are to be classified “based on skills required for the particular role and not skills or qualifications the Employee may possess.” Of course a tradesperson may agree to work on a particular job as a production worker and would then be paid as a production worker under the Award. The employer submits that an employee has the option to refuse such work. However, if a tradesperson is engaged to perform trades work and they have higher level qualifications the Manufacturing and Associated Industries and Occupations Award 2010 may require classification at a higher level than C10. It may be that it is not the intention of the employer to override or undercut the Award requirements but the provision as it is currently drafted allows for that outcome. This could significantly disadvantage employees.
7. Clause 16(c) provides that “each assignment of an employee for different clients will constitute a discrete and separate period of employment”. In order to ensure that this is not an unlawful term which excludes or modifies the application of unfair dismissal rights it needs to be clear that this does not affect continuity of employment or unfair dismissal rights.
8. Clause 16(f) includes restrictions on payment of entitlements. It provides that an employee will not receive their statutory entitlements until they return company property and confidential information. This provision disadvantages employees when compared to Award provisions. Most Awards contain provisions such as: “On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day.” The employer provided a proposed undertaking following the hearing of this matter which I accept would resolve this issue.
9. Clause 17(c) Market arrangements allows for any over award payments to be offset against any entitlements, terms, conditions, penalties and allowances which might otherwise apply to employees. The provision effectively allows for the employer to vary the provisions of the relevant Awards at its discretion provided, in its opinion, the total payment to the employee is not less than the entitlement under the Agreement. The employer submitted that this allows it to apply the conditions of a collective agreement which may apply to the workers employed by a client when the on hire employee is working for that client. The agreement of the client may include some things which are better than the award and some which are worse. The agreement of the client, if it is not a transitional agreement reached prior to the Fair Work Act, will meet the BOOT. However, the agreement is enforceable and known whilst the arrangement proposed by the labour hire employer is not.
10. Clause 19(a)(i) requires annual leave to be taken at the direction of the employer. There is no qualification on this right. This is not consistent with the NES. The employer provided a proposed undertaking following the hearing of this matter which I accept would resolve this issue.
11. Clause 22 places significant restrictions on the use of social media. It prohibits the use of social media during working hours and it prevents any information in relation to the employer’s business from being published on social media. The provision effectively prevents employees from commenting or discussing their employment conditions or matters which occurred at work on social media. This is quite an onerous restriction given that the provision is an enforceable provision of the Agreement and may attract penalties. Of course some restrictions on the use of social media may be reasonable but these comprehensive restrictions disadvantage employees.
[12] I am not satisfied that 5 cents per hour is sufficient compensation for these matters.
[13] The employer submits that employees in the labour hire industry understand that their employment is generally precarious and want to work in the industry under these conditions. The employer submits that the employees prefer to receive the casual loading than employment security. The employer submits that employees like the ability to pick and choose the jobs they perform. The Award provides for casual conversion precisely to allow for the variation in employee requirements in the context of the imbalance in power that commonly exists for those in insecure employment.
[14] I am not satisfied that the additional 1% is sufficient compensation for the removal of the right to casual conversion in Awards. I accept the submission of the employer that there have been a number of agreements approved by the Fair Work Commission which contain this provision. The substitution of non-monetary entitlements for monetary entitlements is often a difficult matter to judge. Casual conversion offers employees the opportunity for job security and access to paid leave. Employees may value these matters differently. There will be differential issues for employees. For example, those with disability or with particular family circumstances will be likely to gain greater benefit from increased job security and access to paid leave. For the purpose of the BOOT it may not be appropriate to see all casual employees as a single class in this particular circumstance. I note that the F17 Statutory Declaration reveals that all current employees who will be covered by the Agreement are casuals. One of the employees is an Aboriginal or Torres Strait Islander. Job security is likely to be a particularly valuable consideration for employees of indigenous background.
[15] I provided the employer with the opportunity to make submissions about these matters either in the lead up to the hearing or at the hearing. I considered those submissions.
[16] Given the scope of the concerns in this matter and the limited number of matters contained in the Agreement apart from the Award incorporation, I am concerned that any undertakings which would overcome the concerns might represent a substantial change to the Agreement. However, I will provide the employer with seventy two hours to provide any further undertakings they may wish to offer. I will consider whether those undertakings result in the Agreement meeting the BOOT and also whether or not they result in a substantial change. I will then make a final decision without further proceedings.
COMMISSIONER
Appearances:
Ms T Moltoni appeared for the Applicant.
Hearing details:
2015
Perth
September 23
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