MSS Security Pty Ltd

[2013] FWC 5424

[2013] FWC 5424

FAIR WORK COMMISSION

DECISION

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

MSS Security Pty Ltd
(AG2013/6626)

MSS SECURITY (AUSTRALIAN CAPITAL TERRITORY) SECURITY OFFICERS' AGREEMENT 2013-2017

Security services
COMMISSIONER DEEGAN	CANBERRA, 6 AUGUST 2013

Application for approval of the MSS Security (Australian Capital Territory) Security Officers' Agreement 2013-2017.

[1] On 24 May 2013 MSS Security Pty Ltd (MSS) sought approval of the MSS Security (Australian Capital Territory) Security Officers’ Agreement 2013-2017 (the proposed Agreement). On 27 May 2013 United Voice (UV), a bargaining agent for the proposed Agreement, filed a Form F18 supporting the application for approval, and advising that the organisation wish to be covered by the proposed Agreement.

[2] On 31 May 2013, an employee of MSS sought to oppose the approval of the proposed Agreement.

[3] The matter was initially allocated to another member of the Commission and listed for hearing in Sydney on 18 June 2013. The matter was then reallocated and listed for hearing in Canberra on 7 June 2013.

[4] At the hearing on 7 June it was clear that there were factual differences in the claims made by MSS and UV on the one part, and the employee opposing the approval of the Agreement.

[5] The employee alleged that the proposed Agreement should not be approved as the requirements of s.185 of the Fair Work Act 2009 (the Act) had not been satisfied. Among the allegations made by the employee that are relevant to the question of approval of the proposed Agreement were claims that the voting process lacked integrity, the employees were not provided with sufficient information to be able to make a genuine decision as to approval, and that the proposed Agreement did not pass the Better Off Overall Test (BOOT).

[6] Directions were subsequently issued on 7 June for the filing of submissions and witness statements by the parties and the matter listed for hearing on 15 July. The employee was directed to file his documents first in order that MSS and UV could respond to the claims. Following the receipt of the employee’s document, UV sought a conference to determine whether the issues in dispute could be narrowed, because according to UV it appeared from those documents that the employee concerned may have been unclear as to the Act’s requirements for agreement making, particularly in relation to the need for a secret ballot for the approval process.

[7] The conference took place on 1 July 2013 and it was agreed that the integrity of the vote was no longer an issue. It became clear at that conference that there was some confusion about the situation that would apply if the proposed Agreement were not approved. It was the belief of the employee that if the Agreement were not approved the employees would revert to the terms of the relevant modern award, the Security Services Industry Award 2010 1. While this was the position that had been advanced during the negotiation process, the situation was that MSS employees are covered by an enterprise agreement, the Chubb Protective Services and Liquor, Hospitality and Miscellaneous Union, Australian Capital Territory Security Employees Certified Agreement 2004 (the Chubb Agreement), and would remain covered by that agreement if the proposed Agreement were not approved.

[8] MSS stated that while this was, in fact, the correct position, the bargaining had occurred on the basis of a clear understanding by MSS, and a clear statement by UV, that if the proposed Agreement were not approved UV would move immediately to terminate the Chubb Agreement.

[9] Following the conference, UV sought an additional two working days for UV and MSS to file their submissions and witness statements. The additional time was allowed and the documents were filed by MSS and UV on 9 July 2013.

[10] The hearing of the matter commenced on 15 July 2013. Evidence was adduced by MSS and UV from four and three witnesses respectively. The employee opposing approval then gave evidence and adduced evidence from two additional witnesses. At the conclusion of the MSS and UV evidence the employee was given leave to call a further two witnesses in rebuttal, given that MSS and UV had been granted additional time to lodge their documentation.

[11] The hearing resumed on 18 July when two further witnesses were called by the employee and then submissions were made by all parties.

[12] The amended directions sent to all parties on 4 July 2013, following the conference which had served to narrow the issues in dispute, indicated that the matters for determination at the hearing were whether the employees had genuinely agreed to the proposed Agreement and whether the proposed Agreement passed the BOOT.

[13] Chapter 2 Part 2-4 Division 4 of the Act - Approval of Enterprise Agreements sets out the matters which are to be taken into account and satisfied before a proposed enterprise agreement can be approved by the Fair Work Commission (the Commission).

[14] The Employer’s Declaration (Form F17) dealt with the requirements of the Act concerning approval. UV in its Form F18 stated that the matters set out in the employer’s Form F17 were correct. I accept the matters set out in the Employer’s Form F17 except where the veracity of those matters were challenged by the employee. This decision deals only with those matters.

[15] I am satisfied that the relevant employees were issued with a copy of the notice of representational rights in the terms required by the Act and in accordance with the timeframe set out by the Act. The evidence was that the last notice of representational rights was issued on 16 November 2010.

Whether the employees genuinely agreed to the proposed Agreement

[16] The Employer’s Declaration stated that the proposed Agreement was to cover approximately 330 employees and that 284 employees had voted in the approval ballot with 220 approving the proposed Agreement. The ballot commenced on 12 April and was completed on 13 May 2013, the day the Agreement was made.

Evidence of MSS

[17] Mr David Cheatham, General Manager ACT for MSS, filed a statement of evidence 2. He noted the following steps in the bargaining process:

• 16 November 2010 - Notice of Representational rights was issued



• 27 August 2012 - memo advising all staff that MSS had supported UV in the nomination, election and training of six bargaining representatives



• 24 September 2012 - nominations called for non-union bargaining representatives



• 23 October 2012 - internal newsletter to all staff advising on main points of the proposed Agreement



• 15 November 2012 - opinion poll for staff to advise what they believed was important to include in the proposed Agreement



• 4 December 2012 - SMS text to all staff reminding them of opinion poll



• Early December 2012 through to mid February 2013 - meetings of the bargaining committee



• 15 February 2013 - advice to all bargaining representatives that in-principle agreement had been reached between MSS and UV and they are now ready to proceed to final stages.



• 7 March 2013 - email to bargaining representatives with final draft of proposed Agreement for comment.



• 20 March 2013 - newsletter about Agreement issued through email and hardcopy



• 20 March 2013 - email advising of information session on 3 April for office staff and supervisors, senior guards and any other interested guards were to be invited to attend (inspectors to advise staff at all sites of meeting)



• Meeting date then changed to 4 April 2013



• 4 April 2013 - PowerPoint presentation delivered by Mr Cheatham to all attendees at the information session

[18] According to the evidence of Mr Cheatham, the PowerPoint presentation 3 dealt with the main provisions of the proposed Agreement and the consequences of a ‘yes’ vote and a ‘no’ vote. The presentation, including questions and answers, lasted about 90 minutes. Mr Cheatham expanded on the content of the presentation in his oral evidence noting that it also covered the history of the Chubb Agreement.

[19] Further information sessions did not go ahead as it was considered that staff would be more likely to be reached and feel comfortable asking questions in their own environments. Senior officers of MSS were given further training and tasked with visiting all sites. A schedule of visits was drawn up and all 45 sites were visited by a senior officer between 8 April and 3 May 2013 for the purpose of explaining the proposed Agreement. 4

[20] According to his evidence, on 17 April Mr Cheatham became aware that there was some confusion about the wages schedule attached to the proposed Agreement and arranged for a text message to be sent to all staff clarifying that the schedule rates would only be paid where higher contract fees were negotiated with clients.

[21] It was also Mr Cheatham’s evidence at the hearing that copies of the proposed Agreement and the relevant modern award were provided by the office to any staff who requested copies. He stated that although he could not say that a copy of the Agreement was provided to everyone it was available to anyone that wanted a copy. 5

[22] According to his evidence, Mr Cheatham had advised staff that if the Agreement was not approved then staff would be covered by the modern award. He had given this advice as UV had made it clear that if the proposed Agreement were not approved, UV would terminate the Chubb Agreement.

[23] Mr Cheatham stated that voting commenced on 12 April and ceased on 13 May 2013. The voting process was largely handled by UV, although towards the end of the process MSS sent out text messages encouraging staff who had not voted to vote and also helped collect the remaining votes. It was his evidence that the vote was counted at the UV office in his presence and the presence of a number of scrutineers. The final result was 284 votes with 77% in favour and 22% against.

[24] Attached to Mr Cheatham’s statement were copies of the documents referred to in his statement, including the newsletters and the ‘all staff’ messages.

[25] In answer to a question from the UV representative, Mr Cheatham agreed that MSS was the first or second largest security company in the ACT.

[26] When cross-examined by the representative of the objectors, Mr Cheatham reiterated his reasons for informing staff that if the proposed Agreement was not approved they would revert to the modern award and also confirmed that most of the documents that were annexed to his statement were provided to all MSS staff. Some of the emails had more limited circulation.

[27] Mr Cheatham was questioned about the agreement negotiations and indicated that it was his belief that minutes were kept of the meetings.

[28] When asked about the information that was provided to the various sites Mr Cheatham was able to say with certainty that the sites had full access to the information. He agreed that it was incumbent on site supervisors to disseminate the information and stated that he would have been surprised if that had not happened. Further, he claimed to have been told that the information was disseminated. Mr Cheatham also confirmed his earlier evidence that while the proposed Agreement was made available at all the sites the modern award was available from the office for any employee who wanted one.

[29] According to Mr Cheatham, most MSS sites had photocopiers which the employees could use if they wished to make copies of the proposed Agreement.

[30] When asked about the confusion concerning the wages schedule attached to the proposed Agreement Mr Cheatham stated that it had been raised at only one site but a text message had been sent to all staff clarifying the issue. He was not sure if voting had commenced at that time.

[31] Mr Cheatham was cross-examined about the information he had given staff concerning what would occur if the proposed Agreement were not approved. He stated that he had advised staff that if the Agreement were not approved overtime would be cut. He stated that more employees would be recruited, as the company could not afford to pay overtime rates in the same way as they had been paying VOT (Voluntary Overtime) under the Chubb Agreement or OEP (Optional Extra Pay) under the proposed Agreement. He agreed, however, that if the same overtime shift were offered to a VOT employee and a non-VOT employee then the latter employee would be better off for that shift as it would be paid at up to 100% rather than 15%.

[32] It was Mr Cheatham’s evidence that the company margins were very low and he denied that the ACT branch of MSS had received an award for being very profitable. He agreed that MSS was part of a large international company.

[33] Mr Shane Reid, an employee of MSS since 1995, filed a statement of evidence 6. He had been a bargaining representative for the Chubb Agreement which currently covers MSS employees in the ACT. Although one of the original union bargaining representatives for the proposed Agreement he resigned from UV for personal reasons shortly after. He remained on the bargaining committee as an MSS representative. He continued to keep all the guards at the ATO fully informed about the bargaining process. Between 8 and 11 April, in his capacity as an employer bargaining representative, he attended many MSS sites to talk to the staff about the proposed Agreement, the existing agreement and the old and new awards. It was his evidence that he answered many questions. His statement listed the times and dates of his site visits. He visited the Verizon site at Bruce, where Ms Batt was employed, at 1200 hours on 11 April.

[34] It was Mr Reid’s evidence that at each site he introduced himself and explained the reason for his visit. He stated that many of the guards at the sites had read the information provided and were not clear on some points. Mr Reid stated that he had explained the details and options in the terms of the information already provided by MSS. At the hearing he noted that not a lot of staff had attended the information session due to the nature of shift work and family commitments. He recalled that his explanation generally referred to the proposed Agreement document as this is what most of the guards had read. It was his evidence that other than some people being confused about the different rates in the Schedule, the proposed Agreement was fairly plain.

[35] According to Mr Reid, at the sites he visited most people had a copy of the proposed Agreement, ‘or if they didn’t have one they had read it, or they had taken it home’ 7. If they had not seen it he gave them a copy and told them to look at it before he discussed it with them.8

[36] When asked whether the guards were better off under the proposed Agreement than the modern award, Mr Reid noted that the uniform allowance of about $500 per year was not provided under the modern award and that public holidays were not all paid if staff were not rostered. Under the current agreement these items were paid. In addition there was no option for extra overtime under the modern award. Mr Reid was aware that the loadings or overtime rates were different under the modern award.

[37] Mr David Myers, Business Manager, Client Services with MSS had been employed by MSS since 30 August 2010. He filed a statement of evidence 9. He stated that he had been asked by the General Manager to assist in getting the information about the proposed Agreement to all the security officers. For this purpose, he visited numerous sites according to a prepared schedule and also had many discussions with guards at ‘over a dozen’ other sites throughout the period from 4 April to 7 May 2013.

[38] It was the evidence of Mr Myers that he discussed with the guards the main provisions of the proposed Agreement and the differences between the proposed Agreement and their current agreement. He also told them that if the Agreement were not approved it would be likely that they will move to the modern award.

[39] It was Mr Myers’ evidence that on 5 April he sent the agreement out to all his supervisors and that Mr Duke, the other business manager, also sent a copy of the agreement to all his supervisors. Mr Myers also sent additional copies to some of the senior guards with email addresses. When he visited the sites and spoke about the proposed Agreement Mr Myers took the agreement with him.

[40] When asked by the UV representative whether the newsletter was a simplified comparison between the award and the proposed Agreement, Mr Myer replied that it was and that it gave a simple comparison between the proposed Agreement and the award. He used the newsletter as a reference when he was at the sites so that he did not miss anything. He stated that ‘the guys I spoke to, I actually asked them have they seen the agreement or do they know where they can get a copy of it, they said, "Yes." They had also all seen the newsletter with that’ 10. It was his evidence that he did not encounter anybody that had not received a copy of it. He also sent out the modern award to a couple of supervisors that had asked.

[41] Finally, it was Mr Myers’ evidence that he expected the union to terminate the Chubb Agreement if the proposed Agreement were not approved and, for that reason, had informed staff that they would revert to the modern award in that circumstance.

[42] Mr Terry McGlashan, Service Delivery and Payroll Coordinator with MSS, filed a witness statement 11. It was his evidence that he had had significant involvement in the proposed Agreement since he received the final version on 3 April 2013. He attended the information session on 4 April 2013. In his statement he outlined the discussions he had had with various employees about the proposed Agreement and the difference between it and the current agreement and the modern award.

[43] Mr McGlashan had prepared the schedule of site visits to enable Mr Low, Mr Reid, Mr Myers and Mr Cheatham to visit as many sites and speak to as many staff as possible.

[44] It was also the evidence of Mr McGlashan that he answered numerous phone calls from guards during the process and responded to their questions about the proposed Agreement and the modern award. It was also his role to advise of union visits to sites. When, on 2 May 2013, he received advice from the union that only 145 of the guards had voted, Mr McGlashan had sent out information to encourage employees to vote. A record was kept of all the guards who voted and efforts were made to persuade those who had failed to vote to do so.

[45] Mr McGlashan’s evidence was that he had taken a number of calls from employees over the voting period and had also provided information to site supervisors at the sites he coordinated. He recalled providing Mr Holt with information on one occasion.

[46] According to Mr McGlashan, he had both soft and hard copies of the proposed Agreement document and could provide a hard copy if someone did not have access to email.

Evidence of United Voice

[47] UV supported the approval of the Agreement.

[48] Ms Christy Gallagher, the UV organiser who was involved in much of the agreement making process, filed a written statement of evidence 12. Ms Gallagher’s relevant evidence went to the training provided to union bargaining representatives and her provision of copies of the relevant modern award and the current agreement (the Chubb Agreement) to those bargaining representatives. It was also her evidence that at the conclusion of the bargaining process each of the representatives was provided with a copy of the draft agreement and a comparative document.

[49] According to Ms Gallagher, during the access period she visited almost every MSS work site and no staff indicated any problems with accessing the draft Agreement. She also carried spare copies for anyone who requested it.

[50] While visiting the Magistrates Court, Ms Gallagher discovered that there was some misunderstanding about the wages schedule attached to the Agreement. The witness raised her concerns with MSS who immediately sent a text message to all employees clarifying the issue.

[51] According to her evidence, Ms Gallagher was shown supporting documents for the Agreement which had been placed on the MSS intranet. She stated that the guards accessed their pay slips through the intranet site.

[52] Under cross-examination, Ms Gallagher agreed that at one point in the agreement making process she had been asked to provide a comparison document. She also stated that she was satisfied that the newsletter sent out by the company was representative of what was going on in the process.

[53] When asked whether the union’s view about the agreement would carry a considerable amount of influence and whether the employees should vote yes or no, Ms Gallagher stated that it was not a union view it was the view of the members they represented.

[54] Evidence in support of the approval of the Agreement was adduced by UV from Mr Willi Thomsen 13, a non-union employee delegate representative for 17 security guards employed by MSS at the Department of Defence. Mr Thomsen attended a full day training course conducted by MSS and was provided with copies of all relevant industrial instruments including the Chubb Agreement, the Security Employees (A.C.T.) Award 1998 and the modern award. It was his evidence that he copied all the documents and placed them in folders at all Defence sites for the reference of the guards.

[55] Mr Thomsen’s evidence also covered the negotiation process and the decision taken at the end of that process by all involved bargaining representatives to support the proposed Agreement.

[56] Mr Thomsen’s only concern with the process was that he was unaware that if the proposed Agreement was not approved then the current Agreement, containing the VOT provision, will remain in place. He believes this fact, had it been known, would have influenced the vote as he was not aware of one guard who wanted the old Agreement to continue. 14

[57] When asked by the MSS representative, Mr Thomsen confirmed that throughout the process of the negotiation he had ample access to information relating to the various documents, people you could contact on behalf of other staff and that he had directed those staff to the numbers and email addresses to contact if they had individual queries.

[58] According to Mr Thomsen, he communicated with either Ms Ryan at United Voice or Ms Travis at MSS. He maintained that at all times all of the questions that the employees asked him were properly answered by either one or both of them. He believed that at all times every effort was made to communicate fully with the workforce. There were no barriers put in place that prevented him from representing his members and he believed that they were heard loud and clear.

[59] It was also Mr Thomsen’s evidence that everyone in the negotiations was given all the right information that they needed to convey to employees and that the meetings were held very openly. The delegates were encouraged to contribute any feedback from the workforce as the process developed over a period of 18 months. According to Mr Thomsen, ‘it was very important for all the parties to make sure that the workforce was communicated with very thoroughly because it would need a rapid change of mind throughout their workforce to get a new agreement up and going’ 15. He also believed that the fact that the new agreement was so overwhelmingly supported indicated that that communication took place.16

[60] Ms Lyndal Ryan, ACT Branch Secretary of United Voice, also filed a witness statement 17 in support of the approval of the Agreement.

[61] Ms Ryan’s evidence was largely concerned with the provision of the proposed Agreement that provided for a schedule of higher wage rates in circumstances where MSS is able to negotiate such rates as part of the tender process. She noted the relative success of a similar process adopted in the Clean Start campaign promulgated by UV in the contract cleaning industry.

[62] Ms Ryan’s evidence also concerned benefits lost (which included the uniform allowance, waiting time for late wages and a substitute day off provision) when the Security Employees (A.C.T.) Award 1998 was replaced by the modern award, the Security Services Industry Award 2010. As the Chubb Agreement calls up the ACT award, MSS employees currently retain those benefits.

[63] Ms Ryan noted the difficulties that had been caused by the VOT system operating under the Chubb Agreement over previous years.

[64] When asked by Mr Holt what the union agenda for the proposed Agreement was Ms Ryan responded:

‘It's a fairly simple agenda, really; we knew the industry well enough, being a contracting industry, that there is a race to the bottom on wages and, in fact, wages are often in competition in tendering. It's very difficult to achieve high wage rates for one company and not achieve it for all because simply what happens is that companies undercut others that are not signatories to an agreement or a tool to give them higher rates of pay, so our agenda when campaigning the security industry has been to lift the base rates of pay so people weren't so dependent on overtime, which can often be taken away simply with the change of a roster. We wanted to give a living wage to security officers and we also wanted to deliver portable long-service leave for the industry because that's a way of actually - not just living the base wage but living the standard so that people actually do, who are working in a high turnover industry for 10 years, actually do get the benefit of long-service leave.’ 18

Evidence of the Objectors

[65] Initially evidence was given by three witnesses in support of the claim that MSS employees had not genuinely agreed to the proposed Agreement. All three employees filed witness statements, gave oral evidence and were cross-examined. A further two employees were called to give evidence at the resumption of the hearing on18 July.

[66] The case for the employees objecting to the approval was, essentially, that employees were not provided with copies of the relevant materials required by the Act or given sufficient information to make an informed decision about approving the proposed Agreement. Further, MSS did not take all reasonable steps to explain the terms of the proposed Agreement and the information that was provided was misleading and one-sided. It was alleged that the wages schedule attached to the proposed Agreement was misleading and that threats made by MSS about changes to rosters that would occur if the proposed Agreement were not approved, threatened the income security of the employees.

[67] It was the evidence of Mr Andrew Holt 19 that he had been employed as a security guard by MSS since 29 August 2012. Much of the evidence20 contained in his witness statement does not bear on the matter of the agreement approval, was unsubstantiated hearsay21, or addressed the matter of the vote which was resolved after the statement was filed. Relevantly Mr Holt claims that employees were told that they were likely to lose their laundry allowance and that the system of Voluntary Overtime (VOT) would be replaced with a system of Optional Extra Pay (OEP) which would be at an increased payment of 50% rather that 15%.22

[68] It was Mr Holt’s evidence that he was not impressed by the level of expertise of the company or union representatives who briefed him and other employees about the terms of the proposed Agreement. He did his own analysis of the Agreement as against the modern award and considered the award the better option. He considered that employees were put under duress to vote yes or risk loss of pay.

[69] Mr Holt was also concerned that the union representatives refused to brief him during the process as he was not a union member.

[70] Finally it was Mr Holt’s evidence that the proposed Agreement ‘was not freely handed out’ to employees and that he had to request a copy from his site supervisor. He was unable to keep the copy and was required to make a photocopy of it. He believed that having annexed to the proposed Agreement a wages schedule, which did not apply except in particular circumstances, was misleading.

[71] Overall Mr Holt did not feel adequately informed and felt marginalised and misled. His oral evidence was that initially he had been quite pleased with the presentation about the proposed Agreement given to him by Richard Lowe. 23

[72] He was concerned about the wage schedule attached to the proposed Agreement, particularly as in his view it was not material to the question of whether he should vote for the Agreement. He believed that schedule was referred to as site-specific negotiation with the clients and that the increase or proposed increase in it would be related to whether or not the company was able to negotiate some slight variations in fee structure or charge-out rates from clients. For that reason he effectively discounted that schedule as it was something that ‘might happen in the future but it wasn’t in place.’ 24

[73] When cross-examined, Mr Holt agreed that the proposed Agreement was to be read in conjunction with the modern award and if the agreement was silent on a matter then the modern award would apply. He did not understand however, how the Agreement could effectively say that the modern award applied but that aspects of it could be varied. 25

[74] When questioned about the information provided to him Mr Holt stated that he did not believe that Mr Lowe intentionally misled the guards. He was concerned however, that MSS had implied that if the employees went to the modern award, MSS would cut overtime and that extra staff would be brought in so that the guards’ incomes would be affected by a no vote. 26

[75] Although Mr Holt’s evidence was that he had seen the proposed Agreement, the modern award and the supporting documentation provided by MSS he was concerned that other guards did not have similar access. When asked which guards did not have access he stated that as far as he was aware only the site supervisor at the Department of Health and Ageing (DoHA) had copies of the modern award and the proposed Agreement. It was his evidence that the guards had access to the proposed Agreement but that he had to get the award off the internet.

[76] It was put to Mr Holt that Ms Ryan had handed a copy of the modern award to one guard at DoHA but Mr Holt was not aware that this had happened. He was unable to name any particular guard who had not had access to the proposed Agreement.

[77] Mr Jeremy Sullivan also filed a witness statement, objecting to the approval of the Agreement. Mr Sullivan has been employed part-time by MSS for 11 months and was a UV delegate on the negotiating committee. He claimed that ‘upon reflection (he believed) that the process followed in this enterprise negotiation failed to explore all the options available, and that delegates and members did not have access to sufficient information to make an informed decision.’ 27 Mr Sullivan felt that the requisite information was not available for a comparison to be done by employees and that ‘copies of both agreements should have been made available to the delegates & all the employees’28.

[78] At the hearing Mr Sullivan was asked whether he felt that the information provided to him was sufficient and responded that at the time he believed it was. He stated that it was true that the modern award was ‘available to anybody who surfs the internet’ 29 but alleged that a large number of guards would not have had it available and that it was not available at the sites at which he worked. He then stated that the modern award was widely available30 but that the Chubb award (sic) was unavailable and that that was the award under which they operated31. He reiterated that he had a copy of the modern award and a copy of the newsletter but claimed that he was not given them but found them on the desk at his place of employment.32

[79] Mr Sullivan also denied being given a copy of the proposed Agreement by the Level 1 at his worksite. He then claimed not to be concerned on his own behalf because he was a union representative but that he was talking about ‘our perception of how other guards who weren’t in that position, what information would have been available to them’ 33.

[80] It was also Mr Sullivan’s evidence that he had not seen a copy of the proposed Agreement towards the end of the negotiations. He withdrew that claim when it was pointed out to him that he received all the emails sent to the bargaining representatives and that the proposed Agreement was attached to one of those emails. 34

[81] According to the witness he had become dissatisfied with the process after the event because he realised that he did not see any documents available to the guards on those two sites. He conceded that he did not ask the guards at those sites whether they had seen any documents and agreed that he had seen the newsletter at the sites which contained contact numbers and advised staff that they need to review the documents.

[82] When it was put to him by the UV representative that the union bargaining considered new drafts of the agreement at negotiation meetings and would often caucus to discuss those drafts, Mr Sullivan recalled that process. He also agreed that nobody at either of the sites he mentioned had ever approached him and complained that they had not received a copy of the documents or asked him where they could get one. He also agreed that the information was generally available and there were ways in which guards could find it.

[83] Finally, Mr Sullivan stated that the crux of his submission was that he did not know if he was better off because the Chubb Agreement was not available to him.

[84] It was the evidence of Ms Melanie Batt 35 that she commenced employment with MSS on 11 March 2013. She claimed not to have been made aware that a new Agreement was being negotiated until approached by a guard, Shane Reid, at the site at which she was working (Verizon Data). According to Ms Batt, Mr Reid did not explain his role in the agreement process, did not give her any written information which she could ‘digest’ but gave her a ‘loosely based overview’ for a few minutes suggesting that the proposed Agreement was better than the award and that the majority of staff were in agreement.36 Ms Batt received further information at Scarborough House when rostered to work there but claimed that the only piece of written information she was given was ‘a scrappy piece of paper that listed the apparent differences between the award and the proposed agreement’37. Ms Batt stated that she was not provided with a copy of the proposed Agreement or the award.

[85] It was Ms Batt’s evidence that she was advised by a supervisor that if staff voted “no” to the proposed Agreement ‘shifts would be reduced from 12 hours to 8 hours, with extra staff bought in to complete the shift, and no overtime would be made available’ 38. Ms Batt ‘took this information to be a type of veiled threat to the security of both (her) and (her) colleagues’ future work hours’39.

[86] Ms Batt stated her dissatisfaction with the level of knowledge of one member of the bargaining committee with whom she had spoken. At the hearing she stated that she did not feel that she had the information to make an informed decision. When asked what information she would have liked to have seen she replied ‘The same as everyone else.’ 40 She stated that she would have liked to have had both documents available to her so as to make her own comparison. She had only seen generalised information. Ms Batt assumed that supervisors within each site would have made an active effort to go out and disseminate that information, especially to somebody that was new to the company.

[87] It was Ms Batt’s evidence that the modern award could be accessed on the internet and was freely available. She agreed that the ‘scrappy piece of paper’ referred to in her statement was the newsletter. She recalled Mr Reid visiting the Verizon site.

[88] Under cross-examination, Ms Batt agreed that her earlier claim that she became aware of the agreement making six weeks into her tenure was wrong and that it was about four weeks after she became employed. She also agreed that she knew a new agreement was being negotiated and that she would be able to vote on the agreement in the future. She did not recall receiving a text message indicating that the voting was open.

[89] Ms Batt was recalled for further cross-examination about mobile phone messages that she had received from MSS during the agreement making process. She was asked about her earlier evidence denying receipt of mobile phone messages concerning the proposed Agreement and the voting process. It was put to her that on 18 April at 14.53 she received a message that said:

The enterprise agreement, the hourly rates contained within the higher rates table, will only be paid if the client agrees to pay for them, will be achieved by MSS and union lobbying government agencies.

And another message on 23 April 2013 that said:

Dear all, voting for the new agreement has commenced and will continue over the next two weeks. For those who won't get a chance to cast a vote due to absence, you can vote via a postal vote. If you wish to vote in this matter, please contact Selena.

[90] Ms Batt denied receiving either text.

[91] It was then put to Ms Batt that she was sent text messages by MSS on 28 April and 2 May concerning her availability for shifts and that she responded by text to the second message. She stated that it was possible that she remembered the latter text. She also stated that she may have received a further text on 6 May concerning voting for the enterprise agreement as it sounded familiar but that the others did not sound familiar, ‘But if it says it's there, it's there’ 41. Ms Batt was then asked whether she had asked for any information about the proposed Agreement when she requested someone from the office to collect her vote. She replied that she didn’t remember as it ‘was a while back now’.42

[92] The records from the MSS Text Messaging System were tendered without objection. 43

[93] When cross-examined by the UV representative about Mr Reid’s visit to her site to explain the proposed Agreement, Ms Batt stated that she had not asked any questions as there was nothing to ask questions about.

[94] Under further cross-examination by MSS, Ms Batt agreed that she had probably not arrived at the Department of Innovation site until the latter part of the voting process.

[95] When re-examined, Ms Batt reiterated that she had not been given copies of any information when employed at the Verizon site.

[96] The two additional witnesses called by the employee, Mr Joshua Mapstone and Mr Gerard Monaghan did not file statements of evidence. Their evidence was oral and subject to cross-examination.

[97] Mr Mapstone commenced employment with MSS as a Security Manager in January 2013 but has been in the security industry since 2002. He works at the Department of Innovation and has around 10 to 12 guards on that site including casuals. It was his evidence that a copy of the proposed Agreement and all the other relevant material was given to all the guards at his site. He stated that the copy of the award was held on site.

[98] According to Mr Mapstone he did not give Ms Batt a copy of the proposed Agreement when she worked at his site because he believed that at that time the voting had finished.

[99] Mr Mapstone’s evidence was that he informed the guards at his site to the best of his ability and from the information received from MSS but was ‘a little bit unsure on what the requirements were for the new agreement’ 44.

[100] It was also the evidence of Mr Mapstone that a few of the guards on his site had informed him that they were unable to vote. A number had also informed him that they did not believe they would be better off and would vote no. 45

[101] When cross-examined by MSS, Mr Mapstone agreed that at least one guard may have opted not to vote rather than having been unable to do so.

[102] The witness also stated that when he came out of the information session run by MSS he felt properly equipped to explain the terms of the Agreement to people but could not influence how a guard interprets what has been explained to him. He also referred any guards who asked him questions he felt unable to answer to the office, as he had been instructed.

[103] The final witness called by the objector was Mr Gerard Monaghan. Mr Monaghan had worked for MSS for nearly three years and was a site supervisor at AusAid. He had between 10 and 12 guards at that site. It was his evidence that all guards were given a copy of the proposed Agreement together with any information that had been forwarded to him. He believed that all the documentation referenced in the first (sic) agreement had been provided but did not believe that the guards were properly represented in the enterprise negotiation. He had been a member of the union when the new Agreement was proposed but resigned about three weeks later. He later suggested to the union organiser that a “cheat sheet” comparison be prepared by the union but was not provided with one.

[104] When asked how he felt about the process and the proposed Agreement, Mr Monaghan stated that it did not directly impact him as he was not working under that agreement but on a contract. He did not know if all the guards on his site were able to vote.

[105] Under cross-examination, Mr Monaghan agreed that the Agreement would be the underpinning document for his supervisor’s contract and that he had taken part in the vote on the proposed Agreement.

[106] It was also Mr Monaghan’s evidence that he attended the training session run by MSS about the agreement and had provided all the guards at his site with a copy of the proposed Agreement.

[107] Mr Monaghan was shown a copy of a document claimed to be a “cheat sheet” circulated by UV in November 2012. He did not recall seeing it. He was then asked to read the opening paragraph of the document.

This document has been prepared for the use of United Voice members. The following is a summary of the major provisions included in the MSS first offer draft agreement. A full copy of the draft is available from the United Voice representatives whose names and contacts and details are set out below. The representatives are security officers employed by MSS and will not be able to answer their phones whilst on shift other than breaks. So if you have questions, comments, or would like to meet up with your representative, please give them a call and leave them a message.

[108] When asked about the headings of the matters covered in the document, Mr Monaghan replied that they were ‘proposed change, optional extra pay, clearance allowances, cashing out annual leave, personal carer leave, personal carer leave rebate scheme, part-time employment flexibility, abandonment of employment, uniforms, laundry allowance, public holidays, shift penalties’ 46.

[109] When re-examined, the witness was asked whether he felt that through the process the union's involvement misled him or anyone that he was aware of. Mr Monaghan replied ‘Absolutely not’ 47.

[110] At the conclusion of Mr Monaghan’s evidence Ms Batt was recalled. She reiterated that she had been at the Department of Innovation site during the process of voting and leading up to it and had not been given a copy of the Agreement.

The Legislation

[111] The relevant provisions of the Act are as follows:

Subdivision A—Pre-approval steps and applications for the FWC’s approval

180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

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).

Terms of the agreement must be explained to employees etc.

(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;

(c) employees who did not have a bargaining representative for the agreement.

181 Employers may request employees to approve a proposed enterprise agreement

(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

188 When employees have genuinely agreed to an enterprise agreement

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.

Consideration

[112] I will deal with each of the requirements of ss.180 and 188. I will turn first to the question of the voting process.

[113] The vote for the proposed Agreement was conducted over a period of almost one month. UV delivered ballot papers to sites and collected the votes. Although the voting process was to commence on 12 April, it was the evidence of Ms Ryan that as at the time the text message concerning the wages schedule was sent to all staff on 19 April no votes had been cast. Progressively between 19 April and 13 May voting papers were delivered to employees and collected either by UV representatives or, in the latter stages of the vote, MSS employees.

[114] Initially the objectors raised some concerns about the voting process. These concerned the flimsiness of some of the envelopes provided for employees to conceal their ballots and a requirement that names were put on some of the envelopes. At the conference on 1 July 2013, UV and MSS representatives described in detail the process adopted in distributing and collecting the ballot and maintaining the confidentiality of the vote. The voting process was carried out to a large extent by the union, with company assistance towards the end of the voting period. The count conducted in the union offices in the presence of scrutineers comprising UV representatives, MSS management representatives and independent bargaining representatives. The ballot papers were retained by UV.

[115] At the conference the objectors agreed that they did not wish to pursue, at the hearing, the question of the integrity of the vote.

[116] Evidence at the hearing included the efforts made by MSS to encourage employees to take part in the ballot. In circumstances where 284 of a possible 330 employees voted, and in the absence of any evidence to the contrary, I am satisfied that all reasonable steps were taken to inform the employees of the arrangements for, and the timing of the vote.

[117] So far as the requirements of s.180(2) are concerned, it was the MSS claim that it had taken all reasonable steps to ensure that the employees had access to that material throughout the access period, in accordance with s.180(2)(b).

[118] Evidence called by MSS and UV supported the MSS claim. The evidence was that an information session about the proposed Agreement was held on 4 April 2013. This was attended generally by office staff and senior employees of MSS. While further information sessions had been planned, a decision was taken that the information was more likely to get to staff if it was taken to other staff at the workplace. A number of senior employees were tasked with attending each workplace and providing information about the proposed Agreement and the difference between it and the relevant modern award.

[119] Witnesses for MSS and UV stated that copies of the proposed Agreement were made available to staff at each worksite. Copies of the modern award were also available at many of the worksites. The newsletter distributed to all workplaces gave staff information concerning the numbers to contact for further information. It was the evidence of the UV representative 48 that she visited many of the worksites and no employee had told her that they had experienced any problems accessing the documents. The evidence of Mr Thomsen was that employees at the worksites at Defence had full access to the proposed Agreement and the modern award. So far as the evidence called for the objectors was concerned:

• Mr Holt had access to both the proposed Agreement and the modern award but did not believe other guards would have accessed it as readily as he had;



• Mr Sullivan initially denied having access to the proposed Agreement and the modern award but changed his mind after further questioning (his main concern was the lack of access to the current industrial instrument, the Chubb Agreement)



• Mr Batt indicated that the modern award was widely available but claimed not to have seen a copy of the proposed Agreement at her worksite;



• Mr Mapstone stated that the proposed Agreement and the modern award were available at the worksites supervised by him;



• Mr Monaghan stated that the modern award and the proposed Agreement were distributed by him to work sites for which he had supervisory responsibility.

[120] In relation to Ms Batt, I accept her evidence that she did not see a copy of the proposed Agreement at her worksite. Ms Batt had worked for MSS for just over two weeks when the access period commenced. She was working at a worksite with only one or two guards in her first few weeks. She did recall seeing the newsletter explaining the differences between the proposed Agreement and the modern award and being visited by Mr Reid who had been tasked with explaining the terms of the Agreement. Ms Batt did not ask Mr Reid for a copy of the Agreement or ask any questions about it or the process. It was her evidence that she was quite shy. While Ms Batt may not have seen a copy of the proposed Agreement at her workplace this is not evidence that no copy was provided. I have no doubt that had she told Mr Reid she had not seen a copy of the proposed Agreement he would have ensured that one was provided.

[121] In this respect I note that it was Ms Batt’s evidence that all the information she had seen about the proposed Agreement was on a “scrappy piece of paper”. The evidence was that the document was the newsletter, which gave a simple comparison between the proposed Agreement and the modern award. I am satisfied that the newsletter set out fairly and succinctly a comparison between the two documents. Ms Batt also gave evidence that she did not receive text messages from MSS clarifying the effect of the wages schedule in the Agreement or urging employees to vote. Evidence called by MSS about those, and other text messages, sent to Ms Batt’s mobile phone by MSS in the relevant period, has satisfied me that Ms Batt was sent the disputed messages.

[122] Towards the end of the voting period, Ms Batt moved to a worksite supervised by Mr Mapstone. While it was Mr Mapstone’s evidence that he had given all staff under his supervision access to the relevant documents as instructed by MSS, he did not provide the documents to Ms Batt as he believed that she did not come under his supervision until the end of the voting process. I accept Mr Mapstone’s evidence in this regard and note that Ms Batt’s memory of the dates surrounding events concerning the agreement making process was imperfect.

[123] Given the evidence of MSS and UV witnesses and the preponderance of the evidence called for by the objectors, I am satisfied that MSS took all reasonable steps to ensure that employees had access to the relevant documents during the access period. Given the delay in the commencement of the actual ballot it is clear that the majority of the employees who voted had over three weeks in which to access the relevant documents and obtain information about the proposed Agreement.

[124] In my view it was not necessary, as was claimed for the objectors, for MSS to mail to each employee a copy of the proposed Agreement and the relevant award. I am satisfied that the process adopted by MSS was adopted for the purpose of ensuring that the information reached as many employees as possible and that those employees understood the terms of the documentation.

[125] Similarly, I am satisfied that the terms of the proposed Agreement were explained to the employees. Although the objectors claimed that this was not so, the overwhelming evidence was that every worksite was visited by a senior employee of MSS to explain those terms. The newsletter gave a clear comparison of the differences between the terms of the proposed Agreement and the modern award. The modern award underpins the proposed Agreement. Those Agreement provisions which are different to the award provisions were clearly set out in the newsletter which was distributed to all employees at their worksites. The MSS witnesses indicated that they based their explanations of the terms of the Agreement on the chart in the newsletter and the information provided by Mr Cheatham at the information evening on 4 April.

[126] No evidence was led by the objectors to suggest that there were benefits under the modern award which were not provided by the proposed Agreement but not set out in the newsletter. Although asked to do so on a number of occasions, the objectors were unable to identify any information provided by MSS that was misleading in the explanation of the terms of the Agreement.

[127] The major concern for a number of the witnesses called by the objectors was not the explanation provided about the differences between the award and the agreement but about the terms of the current industrial instrument covering MSS employees, and the information provided by MSS that if the proposed Agreement were not approved the employees would revert to the modern award.

[128] MSS conceded that this information had been given to employees as it was their understanding that were the Agreement not approved then UV would move immediately to terminate the current agreement, with the result that the employees would then be covered by the modern award. UV agreed that this was the union’s position and that it had been communicated clearly to MSS.

[129] It is clear that it was not until the conference of the parties on 1 July that the objectors realised that the current industrial agreement will continue to cover MSS employees until it is replaced by another agreement or until it is terminated by the Commission. What is not clear is how the objectors thought the confusion about this position affected the vote as it was the position of all parties, including the objectors, that the current agreement is less beneficial than both the modern award and the proposed Agreement. In such circumstances it would appear that knowledge of the true position may have increased the “yes” vote for the proposed Agreement but is unlikely to have increased the “no” vote.

[130] Only one aspect of the proposed Agreement terms seems to have caused some confusion. The Agreement provides for award wages to be paid to employees but also includes a wages schedule which provides for higher wages to be paid on sites where the employer has negotiated a higher contract price for the contract. The evidence was that there was some confusion about the wages schedule in one worksite and that when this matter was raised, MSS immediately sent a text message to all employees explaining the circumstances in which the schedule of higher wages would be paid. The objectors did not lead any evidence to suggest that any employee was confused about the operation of the wages schedule. The newsletter that was sent to all sites clearly stated that the higher wages would be paid only if the client agreed to pay the additional cost.

[131] I am satisfied that all reasonable steps were taken to explain the terms of the proposed Agreement to the employees in a manner that was appropriate to each employee’s particular circumstances and needs. The requirements of s.180(5) and (6) are satisfied.

[132] In accordance with s.188 of the Act, the proposed Agreement has been genuinely agreed to by the employees it is to cover, as:

• I am satisfied that MSS has complied with subsections 180(2), (3) and (5);



• the last notice of representational rights was provided to employees more than 21 days before employees were requested to approve the agreement;



• a majority of the employees who voted, voted to approve the proposed Agreement in accordance with s.182(1); and



• there are no other reasonable grounds to believe that the agreement was not genuinely agreed to by the employees.

[133] Nothing put by the objectors has raised any concern that the proposed Agreement was not genuinely agreed to by the employees. Although the objectors raised concerns that MSS had informed employees that a move to the modern award terms might necessitate a change to current rosters, which will result in employees not working as much overtime, I do not consider that this information affected the employees’ agreement. I see nothing wrong with an employer indicating that if higher wages or penalty rates are to apply then overtime will be restricted. It is not unknown, or unreasonable, for employers to advise staff seeking wage rises that if costs are raised some jobs may be lost. I consider the information provided to the employees by MSS in the same category. It was also appropriate for MSS to advise employees that if 12 hour shifts were to be retained it would be necessary for the agreement to be approved as the company would not have the same ability to roster 12 hour shifts under the award terms. Failure to advise staff of these matters would have been akin to withholding information pertinent to their decision.

[134] I note in this regard that it was the evidence of Mr Reid that the terms of the current agreement, relating to overtime worked at less than award rates, was the outcome of employees’ unhappiness with MSS rostering that restricted the availability of overtime to permanent employees in favour of giving the shifts to casual employees, who are entitled to lower penalties. Permanent employees wanted the option of working the additional shifts at the same rate as the casuals. According to Mr Reid, the employees who voted for the current agreement resented the hours being given to casuals who worked them as a second job while the permanent employees could not earn a sufficient wage during ordinary hours. In the circumstances, I am not satisfied that by informing employees that overtime would be restricted if it was to be paid at the higher award rate, MSS in any way misled the employees or coerced them to vote in a particular way.

[135] The proposed Agreement was genuinely agreed to by the employees of MSS.

The Better Off Overall Test

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.

190 FWC may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under section 185; and

(b) the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2) The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern

Undertakings

(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

FWC must seek views of bargaining representatives

(4) The FWC must not accept an undertaking under subsection (3) unless the FWC has sought the views of each person who the FWC knows is a bargaining representative for the agreement.

Signature requirements

(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.

191 Effect of undertakings

(1) If:

(a) the FWC approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers a single employer;

the undertaking is taken to be a term of the agreement, as the agreement applies to the employer.

(2) If:

(a) the FWC approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers 2 or more employers;

the undertaking is taken to be a term of the agreement, as the agreement applies to each employer that gave the undertaking.

[136] The proposed Agreement provides for the payment of wages at award rates or at higher than award rates in circumstances where the employer has managed to negotiate a contract that provides for the additional payment. I have not taken the higher rates provided by the wages schedule into account for the purpose of the BOOT, as it is contingent upon other matters.

[137] In most respects the modern award applies under the proposed Agreement. There are some additional matters provided for that are not contained in the modern award, such as cashing out of annual leave and a rebate scheme for personal/carers leave. These matters are benefits only to those employees who wish to access them or meet the requirements to access them.

[138] The major differences between the proposed Agreement and the modern award are that the Agreement provides for 12 hour shifts, whereas the award, restricts the availability of such shifts, and that the proposed Agreement provides for a system of Optional Extra Pay (OEP). OEP allows an employee to work additional hours voluntarily up to 24 hours each fortnight for a payment of time and one half for each such hour worked.

[139] Under the current agreement employees of MSS have a similar system which is unrestricted by a maximum number of hours and attracts a penalty of 15%.

[140] The UV position was that ideally it would prefer the employees received the full award rates for all overtime worked but recognised that many of its members currently worked additional overtime hours at lower rates, and relied on the additional wages that these hours brought them. UV was pleased to have managed to raise the penalty for voluntary overtime to 50%.

[141] MSS also recognised that the rate for voluntary overtime would be less than the award rate in some circumstances. It was submitted that the proposed Agreement included other benefits (cashing out annual leave, personal leave rebate, opportunity for the introduction of a higher wages schedule in certain circumstances) and that full award overtime rates would be paid for other than in circumstances of OEP, which is entirely voluntary and capped at 24 hours per pay fortnight.

[142] There is no doubt that the proposed Agreement is significantly better than the current agreement under which MSS employees work in the ACT. The BOOT however, is not conducted by a comparison with the current agreement but a comparison with the terms of the relevant modern award. In applying the BOOT, I am unable to take into account the manner in which MSS might roster its employees to avoid payment of higher penalty rates under the modern award or the way in which rosters might change, to the detriment of some employees, if MSS is unable to continue to roster 12 hour shifts. A recent Full Bench dealing with the question of Individual Flexibility Agreements in modern awards has considered the question of the BOOT and the ability of agreements to provide for ‘preferred hours’ at ordinary rates.

Relevant to the matter before me, the Full Bench stated:

[126] Preferred hours arrangements were considered by a Full Bench of the Commission in Re Bupa Care Services Pty Ltd (the Bupa decision). 49 The Bupa decision dealt with a number of appeals in respect of decisions refusing to approve the Bupa Care Services, ANF and HSU Enterprise Agreement 2009 and a number of retail industry agreements. Each of the enterprise agreements was made prior to 1 January 2010 and as a consequence the ‘no disadvantage test’ (the NDT) in Item 10 of Schedule 7 of the Transitional Provisions Act applied. The ‘preferred hours arrangements’ in the agreements in question were of the type described by Cameron in the extract above.

[127] The Full Bench in the Bupa decision cited with approval the decision of the majority in Re MSA Security Officers Certified Agreement 2003 (MSA Security). 50 In MSA Security the majority rejected a clause enabling an employee to work overtime at ordinary rates by agreement with the employer on the basis that the comparison under the NDT was between the terms and conditions of employment in the relevant agreement and the relevant award. The possibility that the employer would provide an employee with additional work hours was irrelevant because the applicable award made no distinction between voluntary working hours and hours directed by the employer.

[128] In the Bupa decision, the Full Bench characterised the NDT in these terms:

“the ‘no-disadvantage test’ does not involve an analysis of matters other than the terms and conditions of the enterprise agreement against those in any relevant reference instrument. The effect the terms and conditions may have on the actions of an employer or employee is not relevant to the ‘no disadvantage test’.” 51

[129] The agreements in question failed the NDT because the preferred hours clause represented at least one term or condition of employment that was less beneficial than the awards that applied to the employees.

[130] However, as observed in Black Crow Organics, 52the effect of the Bupa decision is not that an agreement which provides for hours which would otherwise be payable at overtime rates, to be paid at ordinary rates, because an employee voluntarily works those hours at a particular time, will automatically fail the NDT:

“There is nothing in that decision to indicate any change to the longstanding approach with respect to the application of the no-disadvantage test. Essentially, that approach is that the no-disadvantage test is applied on a global, rather than a line by line basis. Thus an agreement provision which considered alone may be less beneficial to an employee when compared with an equivalent provision in a relevant reference instrument, will not result in the agreement failing the no-disadvantage test, if there are other more beneficial provisions in the agreement, which on balance, offset the less beneficial provision. For example, an agreement which provides for employees to be paid a flat hourly rate for all hours worked, may not disadvantage those employees if the flat hourly rate is higher than the base rate in the relevant reference instrument. The payment of a loaded rate for all hours worked is an advantage that may offset the disadvantage associated with the entitlement of the employee under a reference instrument to be paid overtime rates for some hours worked. It may also be relevant for the purposes of the no-disadvantage test that a flat hourly rate feeds into leave entitlements under an agreement, so that those entitlements are paid in a way that is more beneficial than the terms of the relevant reference instrument.

The decision in Bupa does make it clear however, that the application of the no-disadvantage test does not involve an analysis of matters other than the terms and conditions of the enterprise agreement, against those in any relevant reference instrument, and the effect that the terms and conditions may have on the actions of the employer or employees, is not relevant. Thus it is not relevant to the application of the no-disadvantage test that the employee may prefer to work at particular times. It is also not relevant that if the employer would be required to pay overtime rates for particular hours, the employer would not have scheduled work to be done during those hours, or that the employer would have allocated the hours among additional employees, so that no employees would have been entitled to overtime payments.” 53

[131] The NDT applied to all agreements made between 1 July 2009 and 31 December 2009. 54 This was the period between the repeal of Work Choices and the commencement of the remaining elements of the FW Act (i.e. minimum wages, NES and modern awards).

[132] Under the NDT the Commission had to be satisfied that the ‘agreement does not, or would not result, on balance, in a reduction in the overall terms and conditions of employment of the employees who are covered by the agreement under any reference instrument relating to one or more employees’. 55

[133] Agreements made on or after 1 January 2010 must pass the ‘better off overall test’ (the BOOT). Under the BOOT the Commission must be satisfied that each employee ‘would be better off overall if the agreement applied to the employee than if the relevant award applied to the employee’.

[134] While the BOOT is expressed in different terms to the NDT, each involves a global assessment. In Armacell Australia Pty Ltd a Full Bench of the Commission described the BOOT in these terms:

“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial to an employee, terms that are less beneficial and an overall assessment of whether an employee would be better off under the agreement.” 56

[135] While the Bupa decision involved the application of the NDT the same approach has been taken to the BOOT in a number of first instance decisions. For example, in Jellifish!! Pty Ltd where the Commission said:

“An enterprise agreement that provides for hours that would otherwise be paid at overtime rates if the employee was covered by a modern award, to be paid at a base or ordinary rate that is less than the overtime rate under the modern award, contains a provision that is less beneficial than the modern award. In order for that agreement to pass the BOOT, it is necessary for the Tribunal to be satisfied, that at the test time, the Agreement contains provisions that are more beneficial than equivalent terms in the modern award or are not conferred by the modern award, that offset those provisions that are less beneficial, so that on balance, employees are better off overall if the agreement applied to them than they would be if the modern award applied.

Thus an agreement that provides for a loaded hourly rate payable for all hours worked, may result in employees being better off overall notwithstanding that they are working some hours that would be paid at overtime rates if they were covered by a modern award. This is because the loaded rate is payable for all hours worked and not just those payable at overtime rates. There may also be a cut off point where employees work so many hours that the loaded rate ceases to result in employees being better off overall than they would be if the award applied.” 57

[136] It follows from the foregoing that on the basis of the current authorities a purported IFA which contains a preferred hours arrangement would not, of itself, result in the individual employee being better off overall. The IFA would need to contain a corresponding benefit that outweighs the detriment of the preferred hours arrangement in order to meet the requirements of the BOOT. 58

[143] In light of this, and other Full Bench decisions. I am unable to find that the proposed Agreement in its current terms passes the BOOT as an employee working overtime hours that attract double time under the award would be paid at time and a half under the proposed agreement. I cannot be satisfied that the employees would be better off overall being covered by the proposed Agreement than they would be if the modern award applied to them. There would not be sufficient benefits generally applying under the proposed Agreement to offset the lower overtime rate. In circumstances where the Schedule with higher wage rates applied this may well be different. However, as previously indicated, I am unable to take this into consideration as the application of this Schedule is contingent on other factors.

[144] I am prepared to give consideration to any undertakings that MSS might be prepared to make about the operation of the OEP scheme in order to be able to approve the proposed Agreement. I note that suggestions were made during the hearing that no OEP hours would be allocated on a Sunday (when double time would be payable for all overtime hours worked).

[145] It may be that MSS can put forward some undertakings which will allow rostering flexibility but still enable the proposed Agreement to pass the BOOT. I am concerned for the large number of employees who voted for the Agreement in a desire to retain their current rosters and overtime hours. I recognise that a refusal to approve the Agreement will, in the short term at least, mean that employees will continue to work in accordance with the current agreement. In the long term it is likely that a reversion to the modern award terms may significantly affect the rosters, and hence the regular pay of many long-term permanent employees.

Public Interest

[146] Section 189 of the Act provides as follows:

189 FWC may approve an enterprise agreement that does not pass better off overall test—public interest test

Application of this section

(1) This section applies if:

(a) the FWC is not required to approve an enterprise agreement under section 186; and

(b) the only reason for this is that the FWC is not satisfied that the agreement passes the better off overall test.

Approval of agreement if not contrary to the public interest

(2) The FWC may approve the agreement under this section if the FWC is satisfied that, because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest.

Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

(3) An example of a case in which the FWC may be satisfied of the matter referred to in subsection (2) is where the agreement is part of a reasonable strategy to deal with a short-term crisis in, and to assist in the revival of, the enterprise of an employer covered by the agreement.

Nominal expiry date

(4) The nominal expiry date of an enterprise agreement approved by the FWC under this section is the earlier of the following:

(a) the date specified in the agreement as the nominal expiry date of the agreement;

(b) 2 years after the day on which the FWC approved the agreement.

[147] If MSS is not able to provide undertakings such that the proposed Agreement can be approved then, should a request be made, I will be prepared to hear submissions under s.189 of the Act.

[148] MSS is directed to advise in writing by 13 August 2013 the terms of any undertakings it may wish to make.

COMMISSIONER

Appearances:

Ms M. Travis, for the Applicant.

Mr S. Russell-Uren and Ms L. Ryan, for United Voice.

Mr A. Holt, for the Objectors.

Hearing details:

2013.

Canberra:

June 7

July 15, 18.

 1   MA000016.

 2   Exhibit MSS1.

 3   Ibid, Annexure 10.

 4   Above n 2, at Paragraph 22.

 5   Transcript PN543.

 6   Exhibit MSS2.

 7   Transcript PN737.

 8   Ibid.

 9   Exhibit MSS3.

 10   Transcript PN797.

 11   Exhibit MSS4.

 12   Exhibit UV1.

 13   Exhibit UV2.

 14   Ibid, at Paragraph 10.

 15   Transcript PN1000.

 16   Ibid.

 17   Exhibit UV3.

 18   Transcript PN1055.

 19   Exhibit H1.

 20   Ibid, at Paragraphs 2-5, 7,9.

 21   Above n 19, at Paragraph 8, 11.

 22   Above n 19, at Paragraph 5.

 23   Transcript PN1247.

 24   Transcript PN 1274.

 25   Transcript PN1284.

 26   Transcript PN1304.

 27   Exhibit H2 at Paragraph 4.

 28   Ibid, at Paragraph 6.

 29   Transcript PN1462.

 30   Transcript PN1471.

 31   Transcript PN1472.

 32   Transcript PN1479.

 33   Transcript PN1517.

 34   Transcript PN1538.

 35   Exhibit H3.

 36   Ibid, at Paragraph 2.

 37   Above n 35, at Paragraph 3.

 38   Above n 35, at Paragraph 5.

 39   Above n 35, at Paragraph 5.

 40   Transcript PN1686.

 41   Transcript PN2071.

 42   Transcript PN2074.

 43   Exhibit MSS5.

 44   Transcript PN 1887.

 45   Transcript PN1895.

 46   Transcript PN2005.

 47   Transcript PN2028.

 48   Exhibit UV1 at Paragraph 14.

 49   [2010] FWAFB 2762.

 50   AIRCFB, PR93765 per Watson SDP, Blain DP and Lewin C, 15 September 2003.

 51   [2010] FWAFB 2762 at 25.

 52   [2010] FWAA 5060.

 53   [2010] FWAA 5060 at 21-22.

 54   Transitional Provisions Act, Schedule 7, Part 2, Item 2(1).

 55   Ibid at Item 4(1).

 56   [2010] FWAFB 9985 at paragraph 41. Also see Topend Consulting Pty Ltd [2010] FWA 6442 and Solar Systems Pty Ltd[2012] FWAFB 6397.

 57   [2012] FWA 9640 at paragraph 54-55.

 58   [2013] FWCFB 2170 [126]-[136].

Printed by authority of the Commonwealth Government Printer

<Price code G, PR539869>