MSC Construction (Qld) Pty Ltd

[2017] FWCA 3489

[2017] FWCA 3489

FAIR WORK COMMISSION

DECISION

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

MSC Construction (Qld) Pty Ltd
(AG2017/656)

MSC CONSTRUCTION (QLD) PTY LTD ENTERPRISE AGREEMENT 2017

Building, metal and civil construction industries
COMMISSIONER WILSON	MELBOURNE, 30 JUNE 2017

Application for approval of the MSC Construction (Qld) Pty Ltd Enterprise Agreement 2017.

[1] An application has been made for approval of an enterprise agreement known as the MSC Construction (Qld) Pty Ltd Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by MSC Construction (Qld) Pty Ltd (MSC Construction). The Agreement is a single enterprise agreement.

[2] The material filed by MSC Construction at the time of making the application indicated that the Agreement would apply to five employees of the company and that all five had voted to approve the Agreement. The same material advised that only office administration employees of the company would not be covered by the Agreement, and that the reference instrument for the purposes of the better off overall test was the Building and Construction General On-Site Award (the Award).

[3] The Commission was also advised that the terms of the Agreement more beneficial to employees than equivalent terms in the reference instrument were the hourly rates of pay for employees. MSC Construction also advised that the terms less beneficial than the equivalent terms in the reference instrument were the overtime rates of pay for employees, with the Agreement providing for overtime payments to be made at the rate of time and a half for the first three hours, and double time thereafter, whereas the Award provides for overtime payments to be made at the rate of time and a half for the first two hours, and double time thereafter.

[4] After the making of the application, the Construction, Forestry, Mining and Energy Union (CFMEU) sought access to the documents that were filed at the time of the application and subsequently made submissions in opposition to the approval of the Agreement.

[5] The Commission’s initial consideration of the application identified a concern that the Agreement did not adequately deal with the matter of payments to shift-workers and sought that that be dealt with through an undertaking, which was provided. After being provided by the Commission with the relevant application documents, the CFMEU made written submissions to the Commission about the application, which were in turn provided to MSC Construction, along with a request for its response.

[6] The matters identified by the CFMEU as potential deficiencies in the Agreement included the following;

• Clause 6.7 – Return of Property

The CFMEU submitted that clause 6 of the Agreement allowed the employer to withhold monies based on the replacement cost of items in an employee’s possession at termination that are owned by the employer. However, under this clause the employer is able to unilaterally determine what monies are withheld, with the amount not necessarily limited to the replacement value of the items. The CFMEU submitted that this infringed sections 117 and 323 of the Act.

• Clause 8 – Hours of Work and Overtime

The CFMEU submitted that in relation to the Agreement’s provisions dealing with hours of work that;

● the provisions contained in clause 8 were of significant detriment to employees, particularly as there was no clear determination of the ordinary hours of work;

● that since the Agreement is silent on part-time employees, then apart from the reference in clause 13.4(a), if part-time were to be engaged, employees would not be entitled to the additional provisions under clause 13 of the Award;

● that the averaging of hours over a 4-week period was less beneficial;

● the Agreement provided for a different span of hours (5 AM – 5 PM; altered by up to one hour either end) which was potentially more detrimental to employees;

● overtime payment provisions were less beneficial than the Award;

● other Award-based hours and overtime provisions such as the right to Rostered Days Off and washing time have been removed.

• Clause 9 – Remuneration

The CFMEU submitted that the Agreement provided for employee consent to deduct amounts from remuneration and leave entitlements attributable to unauthorised absences, approved unpaid leave and ‘monies owed to the employer’. The CFMEU submitted that these provisions infringed ss.86 – 90 of the Act concerning annual leave and s.323 of the Act;

The CFMEU submitted that as the Agreement rates were inclusive of applicable allowances under the Award and that there were no provisions for increasing wage rates over the 4-year life of the Agreement, that the rates contained in clause 9 were likely to fall below the Award in the future.

• Clause 12 – Travel Allowance

The CFMEU submitted that there was no provision for increasing the allowance during the term of the Agreement; that employees travelling as passengers in excess of 65km only received a 30 minute payment at ordinary time; and the employer always providing transport appeared an implausible assertion.

• Clause 13 – Annual Leave

The CFMEU submitted that the Agreement did not contain all the safeguards of the Award regarding excessive leave accruals or the cashing out of annual leave.

• Clause 14 – Personal Leave

The CFMEU submitted that under clause 14.1 the employee must give, where practical, at least 2 hours’ notice of taking personal leave. However, if the employee was unable to give the required notice, the employee must call the employer as text and email messages were not accepted as sufficient notice. The CFMEU submitted that this was not reasonable and was an infringement upon the National Employment Standards.

• Clause 17 – Work Health and Safety

The CFMEU submitted that the employer’s obligation to ‘make every effort to ensure that all workplaces and equipment are in safe working order…’ was a lesser test than the employer was required to meet under section 19 of the Work Health and Safety Act2011(Qld).

• Clause 18 – Shut Down

The CFMEU submitted that the employer was able to shut down the business at an uncertain or indeterminate time and direct employees to take leave. Further it submitted that the situation was unclear when employees did not have paid leave to take during the shut down period.

• Clause 21 – Termination

The CFMEU submitted that the Agreement provides the right of the employer to deduct monies from the employee and asserted that this infringed upon s.117 of the Act.

• Clause 24 – Redundancy

The CFMEU submitted that whilst the Agreement incorporated clauses 17.1–17.4 of the Award, it did not incorporate the additional benefits of clauses 17.6-17.7 of the Award.

• Genuine Agreement

The CFMEU also submitted that the Agreement was not genuinely agreed to.

[7] The Applicant has provided three sets of written undertakings. The first was given on 30 March 2017 in response to the Commission’s initial concerns and dealt with the single subject matter of work on a night shift. The second undertaking, given on 24 May 2017, is an endeavour to deal with the matters raised by the CFMEU. The second undertaking was then replaced by a third undertaking, given on 31 May 2017, which came about when the Commission requested the first and second undertakings be combined.

[8] The third and final undertaking is in these terms;

“2. Night shift will be defined as any temporary shift that commences at or after 5:00pm and no night shift will start after 3am. Night Shift will be paid as per the overtime rates stated in clause 8.5 in the Agreement

3. In respect of Clause 6. 7 of the Agreement, MSC undertakes that it will treat Clause 6.7 as inoperative.

4. In respect of Clause 21.2 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing for the retention of monies only up to the replacement value of the items belonging to the employer and still in the employee's possession.

5. In respect of Clause 8 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing that any part-time employees to whom the Agreement applies will be engaged in accordance with Clauses 13.1-13.5 of the Building and Construction General On-Site Award 2010 (“the Award”).

6. In respect of Clause 12.2 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing that time spent on travel between the MSC Burleigh Depot (or any other MSC Depot) and a work site beyond a 65 kilometre radius will be paid time at

(a) ordinary hourly rates for employees travelling as passengers; and

(b) the current hourly rate (ordinary hourly rates within ordinary hours and applicable overtime rates outside ordinary hours) for an employee travelling as driver,

for a minimum of 30 minutes, up to the actual time travelled beyond that radius.

7. In respect of Clause 13.2 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing that the terms of Clauses 38.6-38.8 of the Award also apply to excessive annual leave accruals.

8. In respect of Clause 13.4 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing that its terms are subject to an additional paragraph (e) as follows:

“(e) The above provisions are subject to compliance with s.93(2)(a) of the Fair Work act 2017.”

9. In respect of Clause 14.1 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing that the second and third sentences were both subject to the words “unless direct voice communication by telephone is not practicable”.

10. In respect of Clause 17.2 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing that that clause included the sentence “Furthermore, the Employer acknowledges its obligations under section 19 of the Work Health and Safety Act 2011 (Qld).

11. In respect of Clause 18 of the Agreement, MSC undertakes that it will interpret and apply the provision as providing further that “The Employer must, at least 2 months prior to the date of commencement of the shut-down, give notice of the date of commencement of the shut-down period and the date of the first day of work after the conclusion of the shut-down period."”

12. In respect of Clause 24 of the Agreement, MSC undertakes that it will interpret and apply the provision as containing, after the words “Clauses 17.1-17.4” the words “and Clauses 17.6.and 17.7”.”

[9] The matter was the subject of a hearing before me on 16 June 2017, at which MSC Construction was represented by its Director, Mark Henry, and Maurice Swan from the Australian Industry Group. The CFMEU was represented by Michael Aird.

[10] At the hearing both parties reiterated the matters set out in their earlier written submissions, with the CFMEU emphasising that the only formal evidence before the Commission was in the form of the Statutory Declaration filed by the employer at the time of making its application, in the Form F17.

[11] I accept the undertakings given, as set out above, as resolving the concerns I held about whether the Agreement met the better off overall test.

[12] Undertaking 2 satisfactorily addresses the Commission’s concern, identified on 29 March 2017, that the Agreement did not deal with night shift.

[13] The remaining undertakings address the following of the CFMEU’s objections;

• Undertakings 3 and 4 address the concerns expressed by the CFMEU about the Agreement’s clause 6.7, which deals with the return of company property, and clause 21.2, which deals with liability of an employee at the end of their employment for equipment remaining in the employee’s possession; the undertakings providing firstly that clause 6.7 will not operate and that clause 21.2 will be interpreted as providing for liability only up to the replacement value of equipment. In the context of the Agreement as would be modified by the operation of the undertakings, there is no inconsistency with s.117 or s.324. The undertaking is appropriate and does not significantly affect whether each employee will be better off overall if the Agreement is approved.



• Undertaking 5 addresses the CFMEU’s concern that the Agreement is silent on part-time employment and provides that part-time employment will be in accordance with certain provisions of the Award. In the context of an agreement applying to 5 employees, this is an appropriate undertaking. The undertaking is appropriate and assists in determining that each employee will be better off overall if the Agreement is approved.



• Undertaking 6 addresses the matter of travel allowance, dealt with by clause 12, with the undertaking for a scheme of payment in the event employees travel beyond a 65 km radius. I consider the undertaking addresses the CFMEU’s concern. To the extent that there is a continuing detriment to employees with the Agreement provision as modified by the undertaking, I consider that nonetheless the Agreement will leave each employee better off overall.



• Undertakings 7 and 8 address the matters of excess annual leave accruals and the cashing out of accrued annual leave, and do so by incorporating certain Award clauses as well as making reference to the Act. I consider the undertakings to appropriately address the concern identified by the CFMEU on these matters and assists in determining that each employee will be better off overall if the Agreement is approved.



• Undertaking 9 addresses the CFMEU concern that employees may be unduly limited in notifying personal leave absence and does so by providing that the Agreement term is to be read as being subject to an overriding expectation that message notification of absence is not preferred, “unless direct voice communication by telephone is not practicable”. The undertaking is appropriate and does not significantly affect whether each employee will be better off overall if the Agreement is approved.



• Undertaking 10 addresses a concern that the employer’s safety obligations to employees may not be subject to relevant State legislation. The undertaking is unnecessary in my view, but assists in clarifying the operation of the clause. It has no significant impact on a determination of whether each employee will be better off overall if the Agreement is approved.



• Undertaking 11 addresses a CFMEU concern that the Agreement insufficiently specifies the period of notice required for a shut-down. The undertaking resolves the concern and assists in determining that each employee will be better off overall if the Agreement is approved.



• Undertaking 12 addresses the CFMEU concern that the Agreement did not provide for all of the Award’s redundancy benefits, and does so by incorporating into the operation of clause 24 of the Agreement the provisions of clauses 17.6 – 17.7 of the Award. The undertaking is appropriate and assists in determining that each employee will be better off overall if the Agreement is approved.

[14] The CFMEU further emphasised that the Commission ought to have concerns about whether the employees to be covered by the Agreement had genuinely agreed because they had insufficient access to the proposed agreement. The CFMEU’s submission in that regard pointed to the inadequacy in which the proposed agreement had been made available to employees, particularly that a copy of the proposed agreement had been kept in the company’s office for viewing, and the terms of the Agreement were such that MSC Construction was unable to ensure the terms of the Agreement were understood by employees without the employer explaining its content to them if they had questions.

[15] In relation to the matter of employees having access to the Agreement, I am satisfied the employer complied with its obligations under the Act. There is no evidence before the Commission that would lead to a view that employees had their rights compromised because of the way that access to the proposed agreement was provided.

[16] I am satisfied that the third set of undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. A copy of those undertakings are attached to this decision.

[17] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[18] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 7 July 2017. The nominal expiry date of the Agreement is 29 June 2021.

COMMISSIONER

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