Mulgoa Quarries Pty Limited
[2020] FWCA 1614
•27 MARCH 2020
| [2020] FWCA 1614 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Mulgoa Quarries Pty Limited
(AG2019/3985)
MULGOA QUARRIES PTY LIMITED QUARRY AND PLANT OPERATORS ENTERPRISE AGREEMENT 2019-2023
Building, metal and civil construction industries | |
COMMISSIONER WILSON | MELBOURNE, 27 MARCH 2020 |
Application for approval of the Mulgoa Quarries Pty Limited Quarry and Plant Operators Enterprise Agreement 2019-2023.
[1] An application has been made for approval of an enterprise agreement known as the Mulgoa Quarries Pty Limited Quarry and Plant Operators Enterprise Agreement 2019-2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Mulgoa Quarries Pty Limited. The Agreement is a single enterprise agreement.
[2] This decision takes into account submissions made by Ms E. Rooke of the Civil Contractors Federation of New South Wales on behalf of Mulgoa Quarries and Mr D. Syron on behalf of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).
[3] A decision detailing the chronology of the matter and considering whether the statutory approval tests had been met, was issued by me on 26 February 2020 (February Decision). 1 That decision included a comprehensive Better Off Overall Test (BOOT) assessment, as well as consideration of the other relevant requirements for approval of an enterprise agreement. In the February Decision, I found that the Agreement meets all legislative requirements except for the discriminatory term in Clause 32, and the exception that I was not satisfied the Agreement as it stood passed the BOOT.
[4] To remedy my outstanding concerns, I invited the Applicant to provide additional Undertakings dealing with the following matters:
• a discriminatory provision in Clause 32;
• the starting times of “New Entrant” employees (pertaining to Clause 13);
• the payment to be made if an employee does not have a meal break (Clause 35); and
• the reasonableness of a direction that annual leave be taken (Clause 22.8).
[5] The Applicant provided Undertakings on 28 February 2020 in response to my Directions in the February Decision. I was not satisfied that the proffered Undertakings remedied my concerns set out above. A further set of Undertakings was provided by the Applicant on 6 March 2020, again not framed in such a way as to remove the concerns I hold in relation to the discriminatory term and the BOOT. I offered a final opportunity on 17 March 2020 to the Applicant to provide Undertakings to remedy my concerns set out above.
[6] The fact that this process had to be employed in effect to drag satisfactory Undertakings out of a represented Applicant is entirely unsatisfactory and I am unlikely to give such lenience in future matters. What was required of the Applicant was quite clear and unambiguous in the February Decision. If it did not wish to have the Agreement approved with what I intimated, it should have said so. On 17 March 2020, the parties were advised of the following, and it was only after this correspondence that compliant Undertakings were provided:
“Commissioner Wilson has considered all relevant submissions and without the Undertakings as mentioned in his February decision he is disposed to refuse approval of the Agreement. That will not occur if the Applicant provides Undertakings as follows:
1. The current Undertaking 4 is withdrawn and replaced with the following:
“4. We undertake that for the purposes of clause 13, 17 and 18, an employee will not be required to work more than 5 hours without a meal break. Where the employee cannot take a meal break an employee will be paid at the rate of double time until a meal break is permitted or work finishes for the day or shift, whichever is the earlier.”
2. The current Undertaking 6 is withdrawn and replaced with the following, so as to conform with s.93(3) and remove a potential NES inconsistency:
“6. We undertake that, at clause 22.7, an employee may be directed to take annual leave where their leave balance exceeds 8 weeks (or 10 weeks for a shiftworker as defined by clause 22.3), but only if the requirement is reasonable.”
If final Undertakings or submissions are to be provided the Commissioner asks that they please be provided as soon as possible but not later than close of business Thursday 19 March 2020. If the requested Undertakings are not provided, Commissioner Wilson will dismiss the application.”
[7] The point of the process employed by the Fair Work Commission is to ensure the statutory tests have been met. An indication to a party that they have not, together with a request for further Undertakings should be taken for what it is – one final opportunity to ensure an problem is corrected.
[8] Undertakings in the terms requested by me in the February Decision were finally provided by the Applicant on 19 March 2020, in the following form:
“2. We undertake that the rates of pay outlined in Appendix A that apply from approval will apply at test time.
3. We undertake that the Building and Construction General On-site Award 2010 will be incorporated in the Agreement.
4. We undertake that for the purposes of clause 13, 17 and 18, an employee will not be required to work more than 5 hours without a meal break. Where the employee cannot take a meal break an employee will be paid at the rate of double time until a meal break is permitted or work finishes for the day or shift, whichever is the earlier.
5. We undertake that New Entrant employees start time's will be as determined from the Award.
6. We undertake that, at clause 22.7, an employee may be directed to take annual leave where their leave balance exceeds 8 weeks (or 10 weeks for a shiftworker as defined by clause 22.3), but only if the requirement is reasonable.
7. We undertake that at clause 32, all employees will be required to undertake medical examinations every three years.
8. We undertake that, at clause 38.2.4, were an employee would be entitled to a higher amount of severance pay under the Building and Construction General On-site Award 2010 than the amount accrued in the Employees ACIRT account, the Employer will top up the amount owed by the difference.”
[9] The CFMMEU advised on 23 March 2020 that they maintain their opposition to approval of the Agreement, expressing a concern only about the final version of Undertaking 6, set out above, with the Union arguing the Undertaking does not address its BOOT concerns. In particular, the Undertaking fails to address the protections afforded employees under Clause 38.7 of the Building and Construction on Site Award 2010 (The Award).
[10] Clauses 22.6, 22.7 and 22.8 of the Agreement and Undertaking 6 provide for the following scheme for an employer direction for the taking of annual leave, but not all of it:
“22.6. The Employer recognises the need for Employees to take rest and recreation during the year and encourages all fulltime and part-time Employees to take their annual leave in the year accrued.
22.7. Employees must keep their annual leave accrual below thirty (30) days. Employees in excess of thirty (30) days annual leave accrual, must have an approved plan agreed with the Employer to take their excess annual leave.
22.8. Where there is no approved plan in place, the Employer may direct the Employee to take excess annual leave.”
Undertaking 6 – “an employee may be directed to take annual leave where their leave balance exceeds 8 weeks (or 10 weeks for a shiftworker as defined by clause 22.3), but only if the requirement is reasonable.”
[11] The capacity thus given by the Agreement for the employer to give a direction on the subject of excessive leave is both contingent as well as conditional. First, Mulgoa Quarries recognises the need to encourage employees to take leave in the year it has accrued. Second, employees have an obligation to keep their annual leave accrual below 30 days; if that is not possible, they must – not “should”, not “may”, not “ideally” – have an approved plan agreed with Mulgoa Quarries to deal with excess annual leave. If those commitments by the people bound by the Agreement fail to achieve their clear objective, and the accrued annual leave is over the indicated threshold of the equivalent of two year’s accrued leave then Mulgoa Quarries may direct the taking of leave, but is not under an obligation to do so. If it does give a direction, the requirement must be objectively reasonable. The Dispute Resolution Procedure (Clause 12) is sufficiently broad as to allow a dispute to be brought to the Fair Work Commission about the reasonableness of any such direction.
[12] The contingent and conditional nature of the provision means any direction to take excessive annual leave is likely to be in a rare and isolated circumstance (although recognising there is no evidence before the Commission on the subject). Because of these factors I am not satisfied that the differences between the two instruments amount to anything more than incidental detriment. Cogent evidence on the situation of particular employees or past decision-making practices of the employer would likely be required for formation of the view that the provisions in question would leave employees actually worse off, rather than speculatively so. Such detriment as may flow from the different provisions in the Agreement when compared with the Award is likely non-financial and would apply only to those who are part-time or full-time employees. There is no evidence before me about the incidence of leave accruals or the length of service of part-time and full-time employees, or how the employer has made decisions in the past about the taking of leave.
[13] Having noted that such detriment as may flow from the provision is likely both incidental as well as non-financial, I note that the Agreement provides significant financial benefits and take that into account in forming my view about approval of the Agreement.
[14] Having considered these matters and relying on the analysis both in this decision and the February Decision, I am satisfied that the Agreement as amended by the most recent Undertakings provided by Mulgoa Quarries passes the Better Off Overall Test and may be approved.
[15] The Employer has provided written Undertakings. A copy of the Undertakings is attached in Annexure A. I am satisfied that the 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. The Undertakings are taken to be a term of the agreement.
[16] 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.
[17] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 3 April 2020. The nominal expiry date of the Agreement is 27 March 2024.
COMMISSIONER
Annexure A
1 [2020] FWC 1063.
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