DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

MOVE muscle, bone & joint health Ltd
(AG2016/6084)

COMMISSIONER ROE

MELBOURNE, 2 DECEMBER 2016

Application for approval of the MOVE muscle, bone and joint health Ltd Enterprise Agreement 2016 - 2020.

[1] On 27 September 2016 MOVE muscle, bone & joint health Ltd (‘MOVE’) lodged an application seeking approval of the MOVE muscle, bone and joint health LTD (‘MOVE’) Enterprise Agreement 2016 – 2020 (the Agreement. The Australian Nursing and Midwifery Federation were a bargaining representative for the Agreement and they sought to be covered by the Agreement and supported the statutory declaration of the employer in support of the Agreement.

[2] Because this matter has been largely determined on the basis of written material provided to me, I have summarised the approach I have taken to the issue of approval of the Agreement before setting out my concerns about the agreement itself.

Genuine Agreement

[3] The Form F17 provided on 20 October 2016 at question 2.5 indicated that the Employer believed they took all reasonable steps to notify employees of the time, place and method of the vote by the start of the seven day access period as they had advised employees by way of email on 14 September 2016 of these details.

[4] However, question 2.8 of the Form F17 indicated that the vote commenced on 13 September 2016 one day prior to employees being advised of the details of the vote.

[5] Given the discrepancy in this information, I contacted MOVE by way of email on 14 November 2016 to clarify my concerns on which date the vote commenced and on which date employees were notified as to the date. Other concerns regarding the ‘better off overall test’ were also raised at this time which will be addressed in due course.

[6] On 15 November 2016, the Applicant contacted the Commission via telephone to request an extension of time until 23 November 2016 to address the concerns raised due to timetabling issues. This extension was granted on 15 November 2016.

[7] On 22 November 2016 MOVE responded to the concerns raised stating ’13 September 2016’ was the correct date. The response did not clarify whether the vote commenced on the 13 September 2016 or that employees were notified of the time, place and method of the vote.

[8] As such on25 November 2016 the Applicant was again contacted advising that my concerns remained.

[9] On 28 November 2016 the applicant provided a copy of the memorandum sent to employees advising them that a vote would take place..

[10] The memorandum dated 6 September 2016 stated:

‘Dear Sarah-Jane

As you are all aware, the EBA has been in negotiations for some time now. I am pleased to 1386 announce that we have attached the completed Enterprise Agreement- 2016 for your consideration. Please find it attached.

You now have 7 days to read and understand the Agreement, after which you will be asked to vote to "approve" the Agreement. The Agreement is considered made when a majority of employees who cast a valid vote, vote in favour of it. This is not an opportunity to negotiate what you see in the EBA- it is just an opportunity to read it and prepare to vote on it.

If the majority of employees voting, vote in favour of the Agreement, it is considered "made" and will be lodged with the Fair Work Commission for approval. Once approved, the terms and conditions will apply to all staff covered by the Agreement.

If the majority of voting staff do no vote in favour of the Agreement, it is back to the negotiating table.

Voting is not compulsory. If you any questions about the voting process, please see Simon von Saldern.

When reading the Enterprise Agreement, you may also wish to consult the following documents:

• National Employment standards

• Social, Community, Home Care and Disability Services Industry Award 2010

fwc.qov.au/documents/documents/modernawards/award/maOOO 1 DO/default.htm

• Nurses Award 2010’

[11] Whilst this memorandum appears to establish that employees were advised of the vote itself before the access period, the memorandum does not establish that employees were advised explicitly as to the time, place and method of the vote. On the material provided to the Commission it does not appear that employees were notified of the details of the vote at all.

[12] Furthermore, the memorandum also stated that the Agreement was ‘completed’ and as such implied employees could not negotiate further with respect of the Agreement.

[13] Section 186(2)(a) of the FW Act states:

‘(2) The FWC must be satisfied that:

(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement;’

[14] Section 188 of the FW Act which defines genuine agreement states:

‘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.’

[15] Under the preapproval requirements in subsections 180(2), 180(3) & 180(4):

‘Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).’

[16] The Applicant was provided multiple opportunities to address my concerns that they took all reasonable steps to notify employees of the time, method and place of the vote by the start of the seven day access period. However, given that the memorandum did not provide the time, place and method of voting as required by the FW Act, I cannot be satisfied, in the absence of any other probative evidence that employees genuinely agreed to the Agreement.
[17] As such, I cannot approve the Agreement because the pre-approval requirements in Section 180 of the FW Act were not met.
Better off overall Test
[18] On 14 November when I expressed my preliminary findings, I also expressed concern that the Agreement may not meet the "better off overall test" and sought further information from the Applicant about how employees would be better off overall under the Agreement. I also invited submissions or undertakings to address these matters.
[19] Section 193(1) of the FWA states that

‘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.’

[20] Of particular concern to me was the fact that all rates of pay were significantly lower than the Nurses Award 2010 and the Social, Community, Home Care and Disability Services Award 2010 (‘the relevant Awards’) in breach of section 206 of the FW Act.
[21] Other entitlements which raised concerns for the better off overall test included:

● An expansion in the span of hours under the agreement;
● A reduction in penalty rates for work performed on public holidays;
● A reduction in penalty rates for overtime; and
● A reduction in allowances.

[22] Whilst the Form F17 stated at question 3.4 that several leave entitlements such as personal leave, gratis leave, parental leave, volunteer leave and service increment leave provided benefits that ensured employees were better off overall, I was not satisfied that the benefits provided adequately compensated employees for these reductions.
[23] The leave entitlements are conditional in nature so that where an employee does not have access to such leave, for example a casual employee or an employee who is not a volunteer or a parent, they are not better off under the Agreement. I find that the Agreement does not provide any other significant terms or conditions which advantage employees when compared to the relevant Awards. In fact, the matters which disadvantage employees are both numerous and substantial.
[24] I note that the Applicant was given adequate opportunity to rectify these concerns and provide explanations as to how employees were better off under the Agreement. On 23 November 2016 the Applicant provided undertakings which addressed most of the concerns raised. However, even taking into account the undertakings provided on 23 November 2016, I am not satisfied that employees would be ‘better off overall’ under the Agreement.
[25] The Applicant’s responses in the Form F17 regarding the better off overall test also raised concerns as to whether employees genuinely agreed to the Agreement.
[26] At question 3.5 of the Form F17 the Applicant indicated that they did not believe there were any terms in the Agreement that were less beneficial to employees than under the relevant Awards. This raised concerns that the Applicant may not have taken reasonable steps to explain the terms of the agreement, and the effect of those terms, to the relevant employees under section 180(5) of the FW Act.
[27] Whilst I accept that those making Agreements are not required to be experts on every detail of the Award, and that if those making an F17 statutory declaration fail to identify a particular advantage or disadvantage in an Agreement when compared to the relevant Awards this is not sufficient basis to conclude that employees were not properly informed. However, in this case the omissions are so obvious and so extensive that I cannot be satisfied, in the absence of probative evidence to the contrary, that employees were properly informed of the effect of the Agreement. I am not satisfied that the Agreement was genuinely agreed to for this reason.
[28] There is one final issue which I believe is a potential barrier to the approval of the Agreement. I am concerned that even if the Applicant had provided significant undertakings to ensure employees are better off under the Agreement, that given the substantial nature of the undertakings required, employees may not have genuinely agreed to the Agreement.
[29] In this particular case, notwithstanding my view that the “substantial change” test in respect to undertakings should be a high bar, I am satisfied that the Agreement, with the undertakings required, would bear little resemblance to the Agreement which was voted upon by employees. I am satisfied that it would not be consistent with the requirements of Section 190 for me to accept the undertakings because they would be likely to result in substantial changes to the Agreement. As a consequence the requirements of Section 186 and the BOOT are not met and I cannot approve the Agreement.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<Price code C, PR588002>