Movers and Shakers Business Relocations Pty Ltd - [2010] FWA 3439

[2010] FWA 3439

FAIR WORK AUSTRALIA

DECISION

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

Movers and Shakers Business Relocations Pty Ltd
(AG2010/461)

COMMISSIONER CAMBRIDGE

SYDNEY, 29 APRIL 2010

Application for approval of the Movers and Shakers Employees Collective Agreement 2010.

[1] An application has been made for approval of an enterprise agreement known as the Movers and Shakers Employees Collective Agreement 2010 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Rochfort Associates Pty Ltd (the Agent as applicant), on behalf of Movers and Shakers Business Relocations Pty Ltd (the Employer). The Agreement is a single-enterprise agreement.

[2] The application was lodged at Sydney on 24 February 2010. The application included a Statutory Declaration of Peter Rochfort made on behalf of the Employer and dated 24 February 2010, (the Declaration). The Declaration stated that the Agreement was made on 18 February 2010, thereby satisfying the 14 day lodgement time limit established by subsection 185 (3) of the Act.

[3] The application for approval was initially listed for Hearing on 19 March 2010 but at the request of the Agent as applicant that proceeding was cancelled and the matter was re-listed for Hearing on 29 March 2010. At the Hearing on 29 March Mr P Rochfort announced that he appeared on behalf of the “applicant company” and there were no other appearances.

[4] At the outset of the Hearing on 29 March, Fair Work Australia (FWA) indicated that there were a variety of issues relating to both the application for approval and the terms of the Agreement which required clarification. The proceedings involved identification of these issues and culminated with an invitation for the Agent as applicant to provide any further material or means by which the issues could be clarified.

[5] Subsequently FWA has been provided with correspondence dated 31 March 2010 from the Agent as applicant. This correspondence included further submissions and attached a “form of undertakings”.

[6] The consideration of this matter can be broadly categorised under two headings, (1) Application and Pre-Approval Process Issues, and (2) Agreement Content Issues.

Application and Pre-Approval Process Issues

[7] The application which was appropriately made by way of the prescribed Form F16 has created some unfortunate difficulties. The applicant was named as Rochfort Associates Pty Ltd, but the legal name of the employer to be covered by the Agreement was identified to be Movers and Shakers Business Relocations Pty Ltd. Although it would not be unusual for a representative to act on behalf of an employer seeking approval of an enterprise agreement, in this instance the Employer's Statutory Declaration provided by way of Form F17, was declared by Peter Rochfort, the person named as contact for the Agent as applicant.

[8] At the Hearing held on 29 March, FWA sought to clarify the position and role that Mr Rochfort had performed in respect to the matter generally and specifically as regards to the ballot of employees to be covered by the Agreement and the associated processes deposed to in the Declaration. Initially Mr Rochfort provided the following information to FWA:

“THE COMMISSIONER… The first point I suppose that I just need to raise, and have you in due course address, is that I think, Mr Rochfort, you made the employer's declaration, is that right?

MR ROCHFORT: Yes, sir.

THE COMMISSIONER: Do you work for the employer?

MR ROCHFORT: As on a contract basis, yes sir. I am, I suppose so to speak, their industrial officer and undertake all of the industrial relations responsibilities for the company. So I'm familiar with the company and its operations.

THE COMMISSIONER: So in terms of things like the conduct of the ballot and the provision of the various materials, were you directly involved in any of that?

MR ROCHFORT: Directly, Commissioner, yes.

THE COMMISSIONER: You were actually involved in that?

MR ROCHFORT: And prepared most of the documentation - well I had my office prepare most of the documentation.” 1

[9] Later during the Hearing Mr Rochfort provided the following responses in answer to questions from FWA:

“THE COMMISSIONER… Then I think we have had the ballot and the returning officer for the ballot, can you tell me a bit about that? Was this a postal ballot; did you conduct this?

MR ROCHFORT: I didn't conduct it, no.

THE COMMISSIONER: No.

MR ROCHFORT: It was conducted by - sorry, I'll just get the name.

THE COMMISSIONER: This is the sort of thing that it might be more efficient if some of these issues are just noted, and maybe in due course we can get some of this stuff straightened out if we have to.” 2

[10] During the Hearing Mr Rochfort provided further information about the Employer’s operation and the processes relating to the making of the Agreement.Much of this information appeared to have been conveyed to Mr Rochfort as advice. The documentary material that has subsequently been provided to FWA by the Agent as applicant including the “form of undertakings” has been signed by “Peter Rochfort, Rochfort, Associates Pty Ltd, Authorised Representative”.

[11] As a result there appeared to be some uncertainty about; (a) whether some of the matters deposed to by Mr Rochfort in the Declaration were matters that were within the direct knowledge of the deponent as opposed to matters understood from advice or instructions, and (b) whether Mr Rochfort’s relationship with the Employer as opposed to the Agent as applicant, would permit him to properly make a Statutory Declaration on behalf of the Employer, as opposed to the Agent as applicant.

[12] Consequently a somewhat blurred position has emerged as between the Agent as applicant and the Employer involving Mr Rochfort appearing in proceedings on behalf of the “applicant company”, making the Employer’s Statutory Declaration, but apparently not being either an employee or officer of the Employer with direct knowledge of certain factual issues deposed to in the Declaration. Although some documentation described Mr Rochfort as “Authorised Representative” presumably as a representative of the Employer as opposed to the Agent as applicant, the nature and extent of any “authorization” and by whom it was given and with what capacity, remained unclear.

[13] Upon consideration this is an unacceptable position for any application for approval of an enterprise agreement to be made. The provisions of Division 4 – Approval of enterprise agreements within Part 2-4 of the Act are premised upon a factual matrix that must be established to the satisfaction of FWA. Any Statutory Declaration made as a basis upon which to construct this factual matrix should properly be deposed by a person with direct knowledge of the relevant facts and with a clear and binding relationship to the entity on whose behalf the declaration is made. In this regard I note that a recent revision of the Form S 17 has included a note to the following effect: This declaration must be made by an employee or officer of the employer.

[14] Although an opportunity was provided at both the Hearing and subsequent to that proceeding, to allow for clarification and or rectification of the apparent irregularity regarding the Declaration, the issue has unfortunately, only become more uncertain. Consequently I believe that the application for approval in its form and configuration particularly as regards the Declaration is fundamentally deficient and must therefore be rejected.

[15] There were two further procedural issues that must also be mentioned. Part 2-4 of the Act includes various procedural requirements that must be satisfied before FWA can approve of an enterprise agreement. One of these procedural requirements is specified by subsections 180 (5) and 180 (6) of the Act which state:

(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.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

[Emphasis added]

[16] The Declaration indicated that there were seven employees of non-english speaking background and five employees of less than 21 years of age. However at point 2.6 of the Declaration which specifically refers to subsection 180(5) of the Act, the following was recorded:

“An open forum discussions [sic] with all staff at all site [sic] were conducted prior to the voting process.”

[17] Consequently there was no evidence of any particular step taken by the Employer relevant to the circumstances and needs of either the employees from culturally and linguistically diverse backgrounds or the young employees. It may have been that employees were appropriately advised that notices and the Agreement and other associated documentation were accessible via some multi-linguistic translation services. Further it may have been that the young employees were invited to have a parent or other older person attend the workplace and /or provide any questions or concerns about the terms of the Agreement on behalf of the young employees.

[18] The difficulty for FWA is that the absence of any mention of anything done by the Employer that connects to the circumstances and needs of either the employees from culturally and linguistically diverse backgrounds, or the young employees, would create an evidentiary impediment to any compliance with subsection 180 (5) of the Act.

[19] The other procedural issue of concern arose from point 3.3 of the Declaration. Although the classifications in the Agreement are different from the classifications in the reference instrument, the Road Transport and Distribution Award 2010 (MA000038), the Declaration omitted any material at point 3.3. This issue was raised during the Hearing and the subsequent submissions from the Agent as applicant mentioned at point 7, a table attached and marked “A”. However there was no attachment marked “A” or otherwise provided. This is a fundamental omission but in view of the other deficiencies with the application there is no purpose served in any further pursuit of the material that should have been provided at point 3.3 of the Declaration.

Agreement Content Issues

[20] There were numerous provisions of the Agreement which were identified as providing for concern with respect to the better off overall test. In addition there were a number of provisions in the Agreement which appeared to be obsolete and or irrelevant terms that were “carried” into the document from previous industrial instruments or other prescriptions of one form or another. Unfortunately therefore the Agreement gave the appearance of a document that had not been created with sufficient care and attention so as to represent an industrial instrument worthy of approval.

[21] The following provisions of the Agreement were identified as issues of concern with regard to the better off overall test or were provisions which appeared to have been incorporated into the document in error:

Clause 2 of the Agreement referred to “Those Employees of the Employer whose names and particulars are listed in the attached Schedule of Employees.” However there was no Schedule attached to the application or Agreement documents. The subsequent submissions provided by the Agent as applicant suggested that these words in clause 2 were “superfluous”.

Clause 6 of the Agreement did not define “the Company” although the terminology used throughout the Agreement seemed to variously interchange “the Company” and “the Employer”. The Agent as applicant proposed to rectify this issue by stating that the word “Employer” should have the same meaning as the word “Company”. This rectification was made in written submissions but not included in any undertakings.

Sub-clause 6.8 of the Agreement stated that serious and/or wilful misconduct shall include, inter alia; refusing to work as directed; carrying out duties in an unsafe manner; providing information about the Employer's business to a 3rd party without the written consent of a director of the Employer; abandonment of employment; failure to inform the Employer of a change in drivers licence status; failure to adhere to Employer policies and or procedures. The Agent as applicant provided an undertaking that; “The Employer/Company will not rely upon the provisions of Clause 6.8 to determine whether an act of [sic] omission by an Employee constitutes serious and/or wilful misconduct…”

Sub-clause 8.1 of the Agreement stated that, “The Employee’s classification shall be determined by the Employer, having regard to the Employee’s qualifications and experience.” Sub-clause 9.6 of the Agreement stated that “The Employer shall classify the Employee into a relevant classification at the Employer’s absolute discretion.” The Agent as applicant provided an undertaking that stated inter alia, “The Employer/Company … will determine each such classification also having regard to the work actually required by the Employer/Company to be performed by the Employee.” The Agent as applicant also gave an undertaking that addressed the absence of a Higher Duties clause in the Agreement.

Clause 11 of the Agreement stipulated that the hourly rates of pay were inclusive of all allowances, overtime or night work, and weekend work payments. In addition the rates were said to “…include a component for working on any of the gazetted public holidays as detailed in Clause 10 Rates of Pay.” HoweverClause 10 mentions only the Christmas day and Good Friday public holidays. More generally this issue of rate comparison could not be satisfactorily clarified particularly because of the omission of any comparative information as required at point 3.3 of the Declaration.

Sub-clauses 13.1 and 13.2 of the Agreement allow for the working of ordinary time over any span of time and at any time of the day or week. Once again in the absence of any comparative information including the incidence of work that would otherwise attract additional payments under the reference instrument, no satisfactory determination of the better off overall test can be made.

Sub-clause 13.3 of the Agreement stipulated that General Hand employees will not be paid travelling time to and from a relevant worksite. The Agent as applicant provided an undertaking that the Employer/Company “…will under no circumstances interpret the words to mean travelling time in a [sic] Employer/Company vehicle proceeding from the place of commencement of work by the Employee to another place where work is to be undertaken.” The practical impact of this undertaking is questionable given that Sub-clause 13.4 of the Agreement stated that it was the responsibility of the Employee to obtain transport to the worksite at his own cost, while sub-clause 13.5 of the Agreement stipulated that “Leading Hands and Drivers shall be paid for all time spent travelling between the Employer’s depot and the work site.”

Sub-clause 13.6 of the Agreement provided for the Employer's discretion to allow that a meal break may be delayed, apparently indefinitely.

Sub-clause 13.8 of the Agreement provided that the Employer may vary the Employee’s commencement time with a minimum of one hours notice. The Agent as applicant gave an undertaking that the Employer “… will only apply the one (1) hour notice provision to situations where it, first of all, gives the notice as immediately as possible after it itself receives notice of delay and, secondly, where it is reasonable notice given the circumstances of the Employee, for example, where the Employee has not already left his/her place of residence in order to attend for work.” Putting aside the impracticalities that are immediately evident from the undertaking, sub-clause 13.8 even when modified by the undertaking, manifestly fails the better off overall test when compared to the reference instrument which stipulates one week’s notice of variation of a regular starting time (sub-clause 25.1 of MA000038).

Sub-clause 15.1 of the Agreement attempted to establish a general employee authorisation to permit the Employer to deduct from Employee’s wages a variety of unspecified amounts “for the purposes of recovering” inter alia; a deposit for an item of uniform; cost of any private telephone calls; insurance excesses in relation to damages to a Company motor vehicle; and motor vehicle parking fines and infringements. These arrangements were said to be permissible in accordance with subsection 324 (1) (b) of the Act. It would seem that section 326 of the Act might operate to exclude some of the proposed deductions. Although I note item 2.12 of the Fair Work Regulations 2009 provides examples of deductions that are said to be reasonable. The Agent as applicant gave an undertaking that the Employer/Company would quantify the amount of any proposed deduction and obtain an authorisation from the employee prior to making any “identified or agreed deduction” [emphasis added]. This undertaking appears to leave open the prospect that a deduction from wages for recovery for the Employer could be made on other than an agreed basis and therefore contrasts sharply with the Payment of Wages provisions (clause 20) of the reference instrument (MA 000038).

Sub-clause 16.2 of the Agreement removed any employee choice of superannuation fund. The Agent as applicant gave an undertaking in the following terms: “With respect to clause 16.2 of the Agreement, the Employer/Company undertakes to recognise any nomination by an Employee of an alternative fund for purposes of receiving the Employer/Company compulsory superannuation payments, subject to the Employer/Company's right to not accept such nomination.”

Sub-clause 17.5 of the Agreement stipulated that; “In the event that the Employee undertakes to work interstate, the Employee shall not be entitled for [sic] any payment for time spent travelling between their residence and the location of the interstate work.” The Agent as applicant gave an undertaking that the Employer/Company “…will not seek to apply this provision in an instance where an Employee travels to a remote (including inter-state) destination in order to perform a single job, but shall only apply the Clause to a situation where an Employee seeks to permanently transfer to another Employer/Company work location.” The undertaking is difficult to comprehend and appears to be at odds with the logical operation of sub-clause 17.5.

Sub-clause 20.5.3.1. of the Agreement required an Employee to provide a medical certificate in order to obtain payment for sick leave in certain circumstances. This stipulated evidence requirement may be available by virtue of subsection 107 (5) of the Act but is a more stringent requirement when compared to the reference instrument (MA000038).

Sub-Clause 23.3 of the Agreement contained terminology that provided some potential confusion about the rates of pay that are to apply for work on Public Holidays. By using the expression “in addition shall be paid at time and one half of the employee's ordinary time rate” provides potential for calculation of a rate of payment less than double time and one half which is what was actually applicable. Similarly, the terminology “… the additional rate shall be at double time of the Employee's ordinary time rate…” is a convoluted alternative to describe treble time and would provide significant potential for a miscalculated payment at only double time.

Sub-clause 24.4 of the Agreement authorised the Employer to deduct any monies owed by the Employee to the Employer at the time of termination of employment from the employee's final termination payment. This provision is significantly different to the comparative provision in the reference instrument, clause 20.

Clause 25 of the Agreement made outdated reference to “the Commission”.

Sub-clause 26.1 of the Agreement required that Employees shall at all times wear the uniform supplied by the Employer. However under sub-clause 26.5 “A deposit of $30.00 will be obtained for each shirt, $40.00 for each pair of pants and $10.00 for each cap supplied by the Employer.” In respect to these provisions, which are not found in the reference instrument, the Agent as applicant provided the following undertaking: “The Employer/Company undertakes that it will, in applying the provisions of Sub-Clause 25.5 [sic] of the Agreement, agree with the Employee on the method of payment of the stated deposit sums. In the event that the agreed method of payment is by way of deduction(s) from wages payable to the Employee, the Employer/Company undertakes to obtain a requisite authority providing for a deduction(s) to be made.”

Sub-clause 27.1.6 of the Agreement stipulated that “All insurance excesses, traffic fines and infringement notices are the responsibility of the Employee.” The Agent as applicant made a submission in the following terms: “With respect to Sub-Clause 27.1.6, the provisions with respect of insurance excesses is covered by Undertaking Clause 6” Even if the submission of the Agent as applicant could somehow adopt an undertaking, presumably the responsibility in respect of traffic fines and infringement notices was deliberately omitted from the undertaking.

Sub-clause 29.1 of the Agreement required that “The Employee must make him/her self aware of and comply with the policies and procedures of the Employer, as varied from time to time, as a condition of ongoing employment…” In respect to this issue the Agent as applicant made a submission that “…the Commission's [sic] concern is covered by the Employer/Company’s undertaking in Clause 3 of the Undertakings.”

Clause 31 of the Agreement appeared to operate to establish that all employment contracts established under the terms of the Agreement were made uberrimae fidei. The Agent as applicant gave an undertaking in respect to this issue.

Clause 32 of the Agreement attempted to impose a restraint on Employees performing certain conduct in a period of 12 months after termination of employment with the Employer. Sub-clause 32.3 appeared to compel the Employer to take action against any Employee for damages if it be found that the Employee breached the provisions of clause 32. The Agent as applicant made a submission that “…the Employer/Company would take (such) action against the Employee for damages as it is advised is available and practical to take...” The Agent as applicant further submitted that the submission in respect of this issue “…be adopted as a documented expression of intent as to the application of the Clause, particularly insofar as it addresses the concern of the Commission [sic] to not commit the Employer/Company to a course of action which may not be appropriate under the particular circumstances.” I am unfamiliar with the concept of a documented expression of intent as would apply to an enterprise agreement.

Clause 34 of the Agreement was confirmed to include ‘faulty wording”. Sub-clause 34.3 of the Agreement appeared to suggest that it may operate to the exclusion of relevant workers compensation legislation. This issue was not addressed by the Agent as applicant.

Sub-clause 36.1.1 of the Agreement contained obsolete reference to the Workplace Relations Act 1996.

Sub-clause 37.2 of the Agreement stated “Any arbitrated Safety Net Adjustments or increases awarded by the Australian Fair Pay Commission or any successor body shall not be paid in addition to the wage increases contained in the Agreement.” It should be noted that there are no wage increases contained elsewhere in the Agreement. However sub-clause 10.1 of the Agreement does state that “The rates of pay contained in Clause 10.1 shall be varied by an amount determined by, and to coincide with any decision of the Australian Fair Pay Commission (or anybody replacing the AFPC).” The direct contradiction between sub-clauses 37.2 and 10.1 of the Agreement was acknowledged by the Agent as applicant who submitted that “…Sub-Clause 10.1 should prevail in relation to the application of decisions of the National Minimum Wage Bench…” There was no undertaking provided by the Agent as applicant that may have attempted to comprehensively settle the internal tension within the Agreement on the question of wage increases during the life of the Agreement.

Conclusions

[22] A review of the deficiencies that have been identified in respect to the application documentation, the pre-approval process issues, and the Agreement content issues, has established manifest impediment to any approval of the Agreement. The undertakings that were provided by the Agent as applicant do not satisfy the requirements of s.190 of the Act. In particular undertakings made by a representative and not signed by the employer would not satisfy Regulation 2.07 of the Fair Work Regulations 2009. Consequently subsection 190(5) of the Act has not been satisfied.

[23] In any event, even if the undertakings were considered to have been made in accordance with subsection 190(5) of the Act, they would result in substantial changes to the Agreement and would thereby be invalidated by subsection 190 (3) (b) of the Act.

[24] Further, a preliminary examination of the terms of the Agreement when compared to the reference instrument established significant difficulties for the Agreement to pass the better off overall test as required by subsection 186 (2) (d) of the Act. Following a more detailed examination of the Agreement and the reference instrument, the Agreement fails to pass the better off overall test as contemplated by s.193 of the Act. Therefore the Agreement does not satisfy the requirements of ss. 186 and 187 of the Act.

Consequently, for the reasons as stated above, the application has not been made in accordance with the Act. The undertakings provided by the Agent as applicant can not be accepted by FWA. The undertakings, if they could be accepted, would result in substantial changes to the Agreement, and the Agreement, even if it was modified by the undertakings, would not pass the better off overall test. Therefore the approval sought pursuant to s.185 is refused. Accordingly the application must be dismissed.

COMMISSIONER

1 Transcript of proceedings (29/03/10) @ pn 5-12.

2 Transcript of proceedings (29/03/10) @ pn 37-41.

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