Murrays Australia Limited T/A Murrays Australia

Case •

[2010] FWA 3644

•

7 MAY 2010

No judgment structure available for this case.

[2010] FWA 3644


FAIR WORK AUSTRALIA

DECISION

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

Murrays Australia Limited T/A Murrays Australia
(AG2010/7684)

COMMISSIONER LARKIN

SYDNEY, 7 MAY 2010

Application for approval of the Murrays Coaches (Canberra) Drivers Enterprise Agreement 2010 – s.180(2)(a)(ii) requirements – better off overall test – application refused.

[1] An application has been made for approval of an enterprise agreement known as the Murrays Coaches (Canberra) Drivers Enterprise Agreement 2010 (the agreement). The application has been made pursuant to s.185 of the Fair Work Act 2009 (the Act) on 31 March 2010. It has been made by Murrays Australia Limited T/A Murrays Australia. The agreement is a single-enterprise agreement and was made on 17 March 2010.

[2] The application for approval of the agreement was heard on 12 April 2010. Mr Lee, General Manager, appeared on behalf of the employer. A notice of listing had been distributed to the Transport Workers’ Union of Australia, Mr McCormack and Mr Rose as bargaining representatives on behalf of employees for the agreement. No appearances were entered by the bargaining representatives on behalf of the employees at the hearing. Transcript of proceedings was provided to the known bargaining representatives.

[3] During proceedings I put to Mr Lee a number of concerns I held in relation to particular provisions of the agreement having regard to the legislative requirements for approval. Those issues, in summary, were:

  • The dispute settling procedure in the agreement.


  • Hours of work.


  • Composite rate of pay.


  • Reasonable additional hours, overtime and penalty loadings.


  • Allowances.


  • Public holidays.


[4] Subsection 186(6) requires Fair Work Australia to be satisfied that the agreement includes terms that provide for a procedure that requires or allows Fair Work Australia or another independent person to settle disputes about matters arising under the agreement and in relation to the National Employment Standards (NES). Clause 24, Disputes Procedure, of the agreement, in its terms, appeared not to satisfy the requirements of ss.186(6).

[5] In relation to the better off overall test (BOOT), during proceedings on 12 April 2010 the issues of concern were put to Mr Lee. At the conclusion of the hearing Mr Lee was provided with an opportunity to file further submissions on the points raised.

[6] Mr Lee filed further submissions on 23 April 2010. Mr McCormack, one of the bargaining representatives, also filed a submission on 23 April 2010.

[7] The industry of the employer is passenger transport with the primary activity being coach charter and tour operations. The work performed by employees is coach driving. The agreement is to cover 36 employees, of whom 9 are part time employees and 18 casual employees, based at the employer’s Canberra depot. Twenty-one employees cast a valid vote of which 16 voted to approve the agreement. The nominal expiry date of the agreement is 36 months after the agreement commences operation.

[8] The relevant Modern Award for the purpose of the BOOT is the Passenger Vehicle Transportation Award 2010 (the PVT award). For the purpose of the transitional provisions contained within the PVT award the relevant transitional instrument is the Transport Workers (Passenger Vehicles) Award 2002, Part A (the TW award).

[9] Prior to considering the submission filed on behalf of the employer and the submission filed by one of the bargaining representatives I will compare the provisions of the agreement to that of the PVT award. For the purpose of wages, loadings and penalty rates the TW award will be considered in accordance with the transitional provisions contained within the PVT award.

Rates of Pay

[10] The agreement at clause 10 outlines the rates of pay, which are composite rates of pay, inclusive of all overtime, penalties and allowances. The agreement does provide for some allowances, however, there is no allowance for first aid or meal allowance when working overtime or medical examination allowance. 1 Mr Lee submitted, during proceedings on 12 April 2010, that as a matter of practice the employer did pay for medical examination expenses.2 I am prepared to accept the submission, however, the agreement does not reflect that practice.

[11] Clause 10, Rates of Pay, in the agreement provides:

    Full-time and Permanent Part-time

      Monday to Friday (Midnight Sunday to Midnight Friday)

      $22.00 per hour worked (inclusive of all overtime, penalties, allowances etc)

      Weekend (Midnight Friday to Midnight Sunday)

      $26.75 per hour worked (inclusive of all overtime, penalties, allowances etc)

    Casual employees

      Monday to Friday (Midnight Sunday to Midnight Friday)

      $26.40 per hour worked (inclusive of all overtime, penalties, allowances etc)

      Weekend (Midnight Friday to Midnight Sunday)

      $32.10 per hour worked (inclusive of all overtime, penalties, allowances etc)

[12] The agreement provides for a 2.25% increase on 1 February 2011 and 1 February 2012.

[13] The employer declaration, Form F17 at 3.3, advised that drivers covered by the agreement would be classified under the PVT award as Grade 3 and under the TW award as Grade 4. In summary, the TW award reflects the following minimum payments for work performed Monday to Friday, 3 Saturday and Sunday4 for the Grade 4 classification.

    Grade 4

    Base wage

    Total wage (inc $48.20 supp pay)

    Hourly (38 hr week)

    Sat (1.5x)

    Sun (2x)

    Driver charter 25 passengers and over

    $557.30

    $605.50

    $15.93

    $23.90

    $31.87

    Driver single day tour 25 passengers and over

    $560.90

    $609.10

    $16.03

    $24.04

    $32.06

    Driver route service 25 passengers and over (and school bus attendant N.T.)

    $564.40

    $612.60

    $16.12

    $24.18

    $32.24

    Driver daily commuters

    $564.40

    $612.60

    $16.12

    $24.18

    $32.24

    Driver day return passenger

    $564.40

    $612.60

    $16.12

    $24.18

    $32.24

[14] The agreement’s composite rate of pay, for permanent employees working Monday to Friday is higher at $22.00 per hour than the TW award base rates ranging from $15.93 to $16.12 per hour. However, the $22.00 per hour rate under the agreement is inclusive of overtime, penalties and allowances, as previously stated. The agreement’s weekend rate, for permanent employees, at $26.75 per hour is also higher than the TW award rate for Saturday work, which ranges from $23.90 to $24.18 per hour. The TW award rate for work performed on a Sunday is higher, ranging from $31.87 to $32.24, than the agreement’s weekend rate, for permanent employees, of $26.75.

[15] The agreement’s composite rate of pay, as commented upon above, must be considered having regard to other provisions contained within the agreement to determine if an employee is better off overall under the terms of the agreement than that of the Modern Award.

Hours of Work

[16] The agreement, at clause 11 – Terms of Engagement, provides for 38 ordinary hours of work per pay week worked up to five days in that pay week with a minimum payment of four hours per shift for permanent and casual employees. The ordinary hours are to be worked Monday to Friday, however, the agreement specifies that:

    “(b) In the event the specified ordinary hours are not worked Monday to Friday, all hours worked on a Saturday, Sunday and Public Holiday in that order may be counted as ordinary hours until the specified ordinary hours are reached. In such cases all hours worked will continue to be paid in accordance with the hourly rates of pay set out in clause 10; and

    (c) all hours in excess of ordinary hours will be overtime.” 5

[17] The rostering arrangements are determined by the employer on the afternoon of the day preceding the rostered shift. Employees are required to contact their employer to obtain their rostered starting time. The agreement provides the employer with discretion to alter shift starting times provided the employee is given “as much notice as reasonably possible in the circumstances”. 6

[18] The agreement does not provide for minimum daily hours of work or averaging of hours over a particular work cycle. The agreement does not provide for any restriction on the hours of work an employee may be rostered. Mr Lee submitted, during proceedings on 12 April 2010, that “[t]he only restriction comes from the national driving hours – or heavy drivers fatigue regulations which limits the amount that a driver can work”. 7The only reference to driver fatigue regulations contained within the agreement is at subclause 13.1, Rest Breaks and Meal Breaks, and subclause 31.6, Drivers’ Duties.

[19] The PVT award provides the following provisions in relation to ordinary hours of work and rostering:

    21. Ordinary hours of work and rostering

    21.1 The ordinary hours of work will be an average of 38 hours per week and may be worked on any day of the week and in the following manner:

      (a) 38 hours on up to five days within a work cycle not exceeding seven consecutive days;

      (b) 76 hours on up to 10 days within a work cycle not exceeding 14 consecutive days;

      (c) 114 hours on up to 15 days within a work cycle not exceeding 21 consecutive days; or

      (d) 152 hours on up to 20 days within a work cycle not exceeding 28 consecutive days.

    21.2 The ordinary hours of work may be worked in the following ways:

      (a) providing for one accrued rostered day off (eight hours) and 19 days of work over a continuous four week period; provided that, by agreement between employer and employee, accrued rostered days off may be accumulated to a maximum of 10 such days over a 40 week period; or

      (b) payment for ordinary hours worked in accordance with the provisions of clause 21.1.

    21.3 Ordinary hours, exclusive of meal breaks, must not exceed 10 hours on any one day.

    21.4 All known rostered duty, which may include broken shifts and days off, must be displayed at least seven days prior to the commencement of such duty. Changes to the roster, including alterations to days off, must be displayed at least 24 hours in advance and the employee must be notified. Any changes for which less than 24 hours’ notice has been given must be agreed to by the employee.

[20] The PVT award establishes a structure to the working of ordinary hours for employees, which restricts the daily hours of work to 10 hours on any one day. The above provision provides for the averaging of hours over particular work cycles up to the number of days specified. The PVT award provides that rosters are to be displayed at least seven days prior to the commencement of duties with a requirement that changes to that roster must be displayed at least twenty-four hours in advance and the employee notified. There is a requirement that the employee must agree if the change is to be notified less than twenty-four hours in advance.

[21] The terms of the agreement in relation to hours of work, in comparison to the PVT award, appear not to provide a situation where an employee would be better off overall if the employee were to be covered by the agreement.

Reasonable additional hours, overtime and penalty loadings

[22] The agreement at clause 3 sets out the definition of ordinary time earnings as the actual rate of pay received for ordinary hours of work and does not include overtime. Overtime is defined as all time worked by an employee as directed by an authorised officer of the employer, in excess of ordinary hours of work. The overtime provisions contained within the agreement are found at clause 14, which states: “The Employer may require an employee to work reasonable additional hours. Rates of pay for overtime hours are as per clause 10”.

[23] The rates of pay at clause 10 of the agreement are set out above. As previously stated, those rates are inclusive of all overtime and penaltypayments, which would apply under the Modern Award, the PVT award, and where relevant under the transitional instrument.

[24] The PVT award outlines the overtime and penalty rates at clause 23. In relation to overtime and ordinary hours worked on Saturday and Saturday, the PVT award reflects the same payment as provided for in the TW award. Relevant to the analysis are the following subclauses of the PVT award:

    23.1 Overtime rates must be paid for all time worked in excess of the hours in clause 21.1 or any hours in excess of the rostered ordinary hours on any day at the rate of time and a half for the first three hours and double time thereafter.

    23.2 Ordinary hours worked on a Saturday will be paid at the rate of time and a half and on a Sunday at the rate of double time. Where an employee is entitled to overtime rates on a Saturday or Sunday, the employee will be paid at the applicable overtime rate or the Saturday or Sunday penalty, whichever is the greater. Weekend penalty rates and overtime rates are not cumulative.

    …

    23.5 All employees who work before 6.00 am or after 7.00 pm must be paid an additional 15% of their base rate of pay for each hour worked. This additional penalty rate does not apply for any time worked where an employee has an entitlement to a higher rate, penalty or loading such as overtime, or rates for work on a public holiday, Saturday or Sunday.

[25] Subclause 23.5 above, in accordance with the transitional provisions at A.6 of the PVT award, would not apply. Therefore, the comparison must be made having regard to the TW award. Subclause 31.4 of the TW award provides:

    31.4 Shift allowances

    31.4.1 Monday to Friday

      For ordinary hours of shift Monday to Friday, shift workers will be paid the following extra percentages of their ordinary time rate:

    Shift

    Percentage

    Morning shift

    12 ½ %

    Afternoon shift

    15%

    Night shift

    20%

[26] The TW award defines the above shifts as follows:

    31.2 Definitions

    31.2.1 Morning shift means any shift starting at or after 6.00am and before 10.00am.

    31.2.2 Afternoon shift means any shift starting at or after 10.00am and before 8.00pm.

    31.2.3 Night shift means any shift starting at or after 8.00pm and before 6.00am.

[27] The agreement’s composite rate of pay, for permanent employees working Monday to Friday, is $22.00 per hour. The agreement’s composite weekend rate, for permanent employees is $26.75 per hour. These rates are to apply to all hours of work inclusive of any loading or penalty that would apply to an employee under the Modern Award.

Public Holidays

[28] There are two issues associated with the public holiday provisions contained within the agreement. Those issues are:

  • the payment for work performed on a public holiday,


  • the payment to permanent full time employees not rostered to work on a public holiday.


[29] At clause 20, the agreement provides for eight specified public holidays and any other day, or part day, declared in a State or Territory and any day or part day substituted in accordance with State or Territory law.

[30] The agreement states that if an employee is not rostered to work on a public holiday they are not entitled to payment for that day. If an employee is rostered to work on a public holiday they are paid at the ordinary rate of pay set out in clause 10.

[31] If an employee is required to work on 25 December they are paid for all time worked at triple the base rate of pay. The base rate of pay is defined as the Monday to Friday rate set out in clause 10.

[32] If an employee is not required to work on 25 December they are entitled to be paid for 7.6 hours, in the case of a full time employee and 5 hours in the case of permanent part time employees.

[33] The PVT award refers to the NES for the provision of public holidays. The NES, at s.115, Division 10 of Part 2-2 of Chapter 2 of the Act provides for eight specified public holidays and any other day, or part day, declared by or under a law of a State or Territory as a public holiday. The NES is silent in relation to the payment to be received by an employee who performs work on a public holiday.

[34] The PVT award provides for a penalty payment for all hours worked on a public holiday of double time and a half. The TW award provides for double time for all public holidays, except for Good Friday and Christmas Day, which attract a penalty of double time and a half. In accordance with the transitional provisions at A.4 and A.5 of the PVT award the TW award, in relation to penalty payments for work performed on a public holiday, apply for the purpose of comparison.

[35] The penalty payments per hour for work performed on a public holiday under the TW award, on my calculations, are:

    Grade 4

    P/H except for Good Friday or Christmas Day (2x)

    Good Friday and Christmas Day (2.5x)

    Driver charter 25 passengers and over

    $31.87

    $39.84

    Driver single day tour 25 passengers and over

    $32.06

    $40.07

    Driver route service 25 passengers and over (and school bus attendant N.T.)

    $32.24

    $40.30

    Driver daily commuters

    $32.24

    $40.30

    Driver day return passenger

    $32.24

    $40.30

[36] In comparing the agreement with the relevant transitional instrument an employee who performs work on 25 December would receive a higher penalty payment under the agreement. If an employee performed work on any other public holiday they would be paid $22.00 or $26.75 per hour under the agreement. Under the relevant transitional instrument work performed on a public holiday would attract a penalty payment of $31.87 to $32.24 and for Good Friday a rate of $39.84 to $40.30.

[37] Clearly the agreement provides for a higher penalty payment for work performed on 25 December in comparison with the payment provided for by the relevant transitional instrument. Payment for other public holidays under the agreement, however, is substantially less than provided for under the relevant transitional instrument.

[38] The second issue, related to the agreement’s public holiday provision on payment to permanent full time employees not rostered to work on a public holiday, will be addressed later in this decision.

[39] As stated previously, the employer and one of the bargaining representatives lodged written submissions on 23 April 2010.

[40] Mr McCormack, one of the employee bargaining representatives, stated in his written submission that he was a long term permanent employee employed at the Canberra depot. Mr McCormack apologised for not attending the video hearing as he was not aware that he could attend.

[41] Mr McCormack concurred with Mr Lee’s submission made during the proceedings 12 April 2010, at PN109, that the employer negotiated with the drivers for six weeks annual leave rather than payment for public holidays. Mr McCormack stated:

    “In past EBAs it was negotiated that to allow Murrays to be more competive (sic) when quoting for jobs drivers would give up overtime and penalties for the flat Mon-Fri, Sat and Sun rates of pay and at the same time Public Holidays were swapped for an agreed extra 2 weeks annual leave and as compensation the 6 weeks lannual eave (sic) would be paid at the average wage earnt over the previous 6 months.”

[42] Mr McCormack submitted that in the past it was impossible for drivers to take annual leave due to the difference in pay from a normal working week compared to the standard Monday to Friday, 38 hour, payment they received while on leave. Mr McCormack stated that with the system of higher wages drivers were able to and happy to take leave as their wages would not drop excessively. Mr McCormack noted in his submission that it was usual to work a 6 day week “with days that maybe up to 15-16 hours long”.

[43] In closing, Mr McCormack submitted:

    “Overall the drivers I represented accepted this agreement as it was felt negotiations had reached an end and Murrays would not be offering anything different. Drivers accept that the pay increase of $3 per hour based on a Mon-Fri 38 hour week (approx $114 per week) is worthwhile.”

[44] In Mr Lee’s written submissions the employer had provided an undertaking in relation to the points raised during proceedings associated with the terms of the dispute settling provisions contained in the agreement.

[45] The employer’s submissions set out particular subsections of s.193 of the Act and stated that the PVT award, as the Modern Award, was the instrument for the purpose of the BOOT and that the TW award was only relevant for particular entitlements under the transitional provisions of the Modern Award. It was submitted that the Canberra based drivers would be better off overall if the agreement applied to those employees than if the Modern Award applied to those employees.

[46] It was submitted that employees were not disadvantaged by the absence of a daily limit to ordinary hours, due to the National Driving Hours Regulations, whereby “drivers may only perform work for up to a total of 12 hours in any 24 hour period. This places a significant limitation on the overall number of hours for which Murrays will engage an employee on a particular day”. 8 It was submitted that the average hours per pay week worked by drivers was 55 hours in the period from January 2010 to date, 54 hours during 2009 and 57 hours during 2008.

[47] There are three points to be made in relation to the above submission.

[48] First, the agreement does not provide for a limit on the daily working hours for drivers.

[49] Secondly, on the submission made by Mr McCormack, it is usual for drivers to work a 6 day week with daily hours worked up to approximately 15 to 16 hours.

[50] Finally, if the agreement is to incorporate the above regulations, were employees to be covered by the agreement provided with a copy of the regulations in accordance with the requirements of paragraph (a) of ss.180(2) of the Act? The employer’s declaration, Form F17, at 2.4 states: “Copies were posted (registered post) to all drivers and a copy made available in the drivers room at the Canberra Depot”.It is to be assumed, in my view, that the reference to copies is a reference to the agreement and not a reference to any other material incorporated by reference in the agreement.

[51] It was submitted that a change to the number of hours worked by drivers was not anticipated as the Canberra depot primarily operated scheduled services. These fixed routes, it was submitted, accounted for 60% of the work within the Canberra depot. It was submitted:

    “4.5 Whilst future work patterns may be subject to change, Murrays does not anticipate that any increased demand would result in employees working increased hours. This is because during periods of peak demand, Murrays subcontracts work to other local operators or utilise resources from outside its Canberra operations.

    4.6 Murrays has conducted a comparative analysis of the position of full-time employees under the Agreement as compared with the Modern Award (taking into account the difference in ordinary rates of pay, overtime rates and weekend penalty rates but not shift allowances). This analysis is based on actual patterns of hours worked by Murrays’ employees. To assist Fair Work Australia, the results of this analysis are set out in Attachment A to these submissions. This analysis highlights that employees will receive a higher level of income under the Agreement than under the Modern Award.”

[52] It may be the case that the employer does not anticipate any change to its operations or an increase in hours to be worked by the employees covered by the agreement. Further, the employer, as stated in the submission, may utilise subcontractors to cover periods of peak demands. The difficulty with the submission is that the agreement in its terms does not reflect the above submission.

[53] The agreement does not provide for minimum daily hours of work, while the PVT award restricts those hours to 10 hours on any one day. The PVT award provides a system of averaging ordinary hours of work, which the agreement does not provide for. There is no restriction on the hours of work that an employee may be rostered to work, with the exception that a minimum payment of four hours per shift is provided for in the agreement. The agreement states that ordinary hours can be worked Monday to Friday, Saturday, Sunday and public holidays and that all hours worked, including overtime, is paid at the composite rate of pay. Work performed on the 25 December is the exception.

[54] It was submitted that the agreement’s annual leave provisions should be recognised as a substantial additional benefit for employees when compared to the PVT award and the TW award in terms of the length of the leave provide for and the payment while on annual leave.

[55] The agreement at clause 17 provides to permanent employees a period of six weeks annual leave with payment for that leave calculated at the employee’s ordinary hours of work during the leave period. I accept that an employee, who is not a shiftworker, would be entitled to an additional two weeks annual leave if the agreement applied to them as opposed to the PVT award. If the employee is a shiftworker the benefit is an additional one week of annual leave. Further, I am prepared to accept the submission that the agreement’s higher rate of pay may compensate for the loss of the loading of 17.5%.

[56] It is difficult to accept the submission that the annual leave provisions contained within the agreement should be given significant weight as part of the better off overall assessment having regard to the employer’s submission during proceedings on 12 April 2010 and Mr McCormack’s written submissions on this point. Mr Lee submitted that: “In agreements prior to this one and in negotiations for this agreement, the employees were of the view that they would rather have extra annual leave than have the payments in respect of public holidays”. 9

[57] The agreement at subclause 20.8 provides for seven public holidays, leaving aside 25 December for the purpose of this analysis, and any other day, or part day, declared or prescribed. Operating on the basis that employees have agreed to forego payment for work performed on eight public holidays for the benefit of extra annual leave, the benefit to an employee who is not a shiftworker is an extra two days leave. A shiftworker on the other hand, who would be entitled to five weeks annual leave, would lose three days public holiday leave. I am not persuaded that the agreement’s annual leave provision is a significant benefit to employees covered by the agreement in the circumstances.

[58] The employer submitted that the agreement provided for the payment of any overtime at the flat hourly rate that applied to ordinary hours. It was submitted that the agreement’s rate of pay was higher than the base hourly rate provided for under the transitional provisions in the PVT award. Further, the agreement’s hourly rate for weekend work was higher than the overtime rate required to be paid under the PVT award for the first three hours of overtime worked on Saturdays.

[59] The submission acknowledged that the PVT award provided for a higher rate for the first three hours of overtime worked on week days than the agreement’s Monday to Friday hourly rate. Depending upon the amount of overtime worked on a Saturday, the PVT award’s overtime rate may be higher than the agreement’s weekend hourly rate. It was also acknowledged that the PVT award provided for a higher payment for overtime worked on a Sunday when compared with the agreement’s weekend hourly rate. It was submitted:

    “However, Murrays submits that these disadvantages are outweighed by the substantially higher hourly rate for ordinary hours worked on Monday to Friday (inclusive), and the higher rates of pay that employees will receive for the first three hours of overtime worked on Saturdays if the Agreement is approved.”

[60] The submission would be more persuasive if the agreement included terms, which provided for limits to the amount of overtime that the employer required an employee to work. The submission acknowledged the areas of disadvantage to employees in relation to overtime, however, reliance was placed on the higher hourly rate for ordinary hours worked on Monday to Friday and the first three hours of overtime worked on a Saturday.

[61] The agreement provides, for permanent employees, the rate of $22.00 per hour for work performed Monday to Friday and $26.75 per hour for weekend work as the flat hourly rate of pay. The payment for overtime under the PVT award, having regard to the transitional provisions, provides that the first three hours of overtime worked is paid at a rate of $23.90 to $24.18 per hour, depending upon an employee’s classification. Under the transitional provisions of the PVT award, the overtime rate of pay at double time ranges from $31.87 to $32.24, depending upon the classification. Without the benefit of any limitation on the amount of overtime required to be worked by an employee I cannot be satisfied that employees would be better off overall if the agreement applied to them rather than the PVT award.

[62] In relation to penalty rates for worked performed on Saturday, Sunday and public holidays, it was submitted that the agreement provided for a flat hourly rate for all hours worked and did not provide for the payment of penalty rates. It was acknowledged that the PVT award provided for the payment of time and a half for ordinary hours worked on a Saturday, double time for ordinary hours worked on a Sunday and double time and a half for all hours worked on a public holiday.

[63] It was submitted that the agreement’s flat hourly rate for weekend work was higher than the Saturday penalty rate provided for under the PVT award. It was submitted that the agreement provided for a lower hourly rate for work performed on a Sunday or public holiday with the exception of the 25 December, which under the agreement was paid at triple time.

[64] The employer submitted that the impact of the above was outweighed by other benefits provided to employees under the agreement. Those benefits were:

  • The payment of triple time for an employee required to work on 25 December.


  • The PVT award, subclause 21.5, provides for waiting time paid at the rate of 50% of the ordinary rate of pay, plus applicable penalties or loadings, for a single day charter where the shift is divided into two working periods. The operational practice of the employer for day charters was not to split the shift and drivers undertaking such charter work were paid their full hourly rate for any “waiting time” and “Accordingly, the Agreement provides employees with a more beneficial outcome than the Modern Award”. 10


  • Minimum hours under the agreement are more beneficial to casual employees as they are paid a minimum of four hours per shift where the PVT award provides for a minimum of three hours per shift.


[65] I accept the submission that an employee who performs work on the 25 December receives a higher penalty payment at triple time than the payment provided under the PVT award. Further, I accept that a casual employee receives the benefit of a minimum payment of four hours per shift. I do have some difficulty with the submission in relation to waiting time. On my perusal of the agreement there does not appear to be a waiting time clause and I could not find any reference to what occurs under the agreement in such circumstances. It may be the employer’s practice to pay an employee their full hourly rate for any waiting time, however, it appears to me that that practice is not reflected in the agreement.

[66] The employer’s submission next addressed the public holiday provisions of the agreement in relation to the issues raised during proceedings on 12 April 2010. Previously in this decision I outlined the issues associated with the agreement’s treatment of the payment for work on a public holiday and payment to employees not rostered to work on a public holiday.

[67] The employer’s submission referred to the PVT award and s.116 of the Act, with particular attention to the note contained within the section. It was submitted that the NES and the PVT award only required payment to an employee in respect to a public holiday where the employee has ordinary hours of work on the public holiday. It was submitted that, although the TW award at subclause 38.1.7 expressly provided that: “Any employee whose normal day off duty falls on any holiday prescribed in this clause shall be paid an additional day’s pay at ordinary time rates”,there was no equivalent provision in the Modern Award. It was submitted that employees covered by the agreement did not have set rosters and the days on which employees are required to work are determined on a day to day basis, consistent with clause 11.5 of the agreement. In closing on this point, it was submitted:

    “10.9 Accordingly, Murrays submits that the issue of public holidays should not be attributed any significance for the purposes of the better off overall assessment because:

      (a) its employees do not have ordinary hours of work on a public holiday unless they are rostered to work on a public holiday;

      (b) clause 20.2 of the Agreement is consistent with section 116 of the Act and clause 27 of the Modern Award; and

      (c) in respect of public holidays, an employee will be no worse off under the Agreement as compared with the Modern Award.

    10.10 During the hearing, Murrays' attention was drawn to the public holidays test case decision of the Australian Industrial Relations Commission (AIRC) handed down on 20 March 1995 (Print number L9178).

    10.11 Murrays submits that the test case concerned an application for the variation of various awards which were in operation at the time the AIRC handed down its decision, including the Old Award. Murrays further submits that the test case decision, and the principles endorsed in that decision, have been superseded by the new safety net for employees created through the enactment of the National Employment Standards and the award modernisation process.”

[68] As stated previously in this decision, if a permanent employee is required to work on a public holiday, with the exception of the 25 December, they are paid the flat hourly rate, which is $22.00 or $26.74 per hour. The PVT award, having regard to the transitional provisions, would provide for the payment of between $31.87 to $40.30 per hour. I am not satisfied that an employee would be better off overall in relation to the payment for work performed on a public holiday under the agreement.

[69] I accept that the PVT award does not include provisions associated with public holidays, except in relation to the penalty to apply, and relies upon the NES for those provisions. I do not, however, accept that clause 20.2 of the agreement is consistent with s.116 of the Act.

[70] In relation to payment for absence on public holidays, the NES, at s.116 of the Act, provides:

    “If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day.

      Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.”

[71] The Explanatory Memorandum for the Fair Work Bill 2008, at Item 461 states: “An employee is not entitled to any payment for absence on a public holiday if they would not ordinarily have worked on that day.” An illustrative example is provided that reads:

    “Erika usually works overtime in addition to her ordinary hours of work on Tuesdays, receiving penalty rates for the overtime hours under a modern award. Erika is absent on the public holiday on Tuesday, 26 January 2010. Erika is entitled to her base rate of pay for her ordinary hours. She is not entitled to payment for the overtime hours she would have worked had it not been a public holiday.

    Erika’s colleague Toby is a part-time employee who is rostered to work Wednesday to Friday only. As Toby’s ordinary hours of work do not include Tuesdays, Toby is not entitled to payment for the public holiday on 26 January 2010.

    Another employee, Holger is on unpaid parental leave for the first half of 2010. Holger would not be entitled to payment for the public holiday on 26 January 2010.”

[72] The agreement covers coach drivers. The employees, or at least some of them, 11 are shift workers who do not regularly work a five day, Monday to Friday, week. Under the agreement a permanent full time employee not rostered on a public holiday, with the exception of 25 December, is not paid for the day or provided with another day in substitution, albeit the agreement does provide for six weeks annual leave, which I will comment upon later.

[73] When one considers the terms of s.116 of the Act, the note provided at the end of the section and the Explanatory Memorandum, it is clear in my opinion, that payment for a public holiday, in the case of an absence on the public holiday, is not paid to an employee who does not have ordinary hours of work on the public holiday, for example a casual or a part-time employee whose part-time hours do not include the day on which the public holiday occurs.

[74] Permanent full time employees, or at least some of them, covered by this agreement do work non standard hours. It would appear that the NES provisions do not specifically address the treatment of public holidays for employees who do not work standard hours of work. I am not persuaded by the submission that the Full Bench decision of the Australian Industrial Relations Commission (AIRC) in relation to public holidays 12 has been superseded by the new safety net in relation to the treatment of public holidays for permanent full time employees who work non standard hours of work. The TW award, or to be clear its predecessor, was an award before that Full Bench. That Full Bench decision was adopted and relied upon by other Full Benches of the AIRC. I will select only one of those Full Bench decisions, Vice President Ross, Senior Deputy President MacBean and Commissioner Lawson, in The Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998.13The Full Bench stated:

    “The Fourth Decision, 20 March 1995 (Print L9178)

    21. This decision dealt with the position of employees who did not work “standard” hours, that is:

      “…full-time workers who do not regularly work a five-day, Monday-Friday week. Such workers include persons who work regularly on Saturday or Sunday, workers with variable rosters, continuous shift workers and employees who work for nine days per fortnight or 19 days in each four weeks. This list is not intended to be exhaustive.”

    22. The key elements of the decision are set out below.

    23. First, full time workers who do not regularly work a five day, Monday to Friday week - including persons who regularly work on a Saturday or Sunday, those with variable rosters and employees who work for nine days per fortnight or 19 days in each four week cycle - should be assured of the benefit of prescribed holidays. They should not forfeit that benefit because a prescribed holiday falls on a non-working day. If a prescribed holiday falls on a day when the employee would not be working in any event the appropriate compensation is:

      • an alternative day off; or

      • an addition of one day to annual leave; or

      • an additional day's wages.”

[75] I have previously in this decision outlined the submissions in relation to the entitlement under the agreement to six weeks of annual leave. In the case of a shiftworker, the five additional days taken as annual leave may compensate an employee for the loss of five public holidays, however, the annual leave provisions do not compensate for the remainder of the public holiday entitlements.

[76] I am not persuaded that the NES is to be interpreted to remove from a full time permanent employee an entitlement to a public holiday. In my view, s.116 of the Act is taken to apply to a full time permanent employee who does not work standard hours of work, Monday to Friday.

[77] I am not satisfied that the public holidays provisions of the agreement pass the better off overall test.

[78] In relation to the allowances provided for under the agreement in comparison to the PVT award, it was submitted that some allowances were not relevant to the employer’s operation. Uniforms were provided for under clause 26 of the agreement, the first aid, log book/work diary, fares and travelling time allowances were taken into account when setting the hourly rate of pay provided under the agreement and as a matter of practice the employer met the full cost of any medical examination required. It was submitted that the employer would be willing to provide an undertaking in relation to medical examinations if required.

[79] An agreement, in my view, may satisfy the BOOT if a rate of pay, having regard to other provisions contained within the agreement, provides that an employee would be better off overall under that agreement. However, I am not satisfied, having regard to other provisions of the agreement and also the lack of any protective mechanism for employees covered by the agreement, that this agreement is such an agreement.

[80] I have considered the terms of the agreement, the terms of the Modern Award, the NES and the oral and written submissions provided. For the above reasons I am not satisfied that the agreement passes the better off overall test as required by paragraph (d) of ss.186(2) of the Act. Further, I am not satisfied on the material before me that the pre-approval requirements of ss.180(2)(a)(ii) have been met.

[81] Section 190 provides that Fair Work Australia may approve an agreement with undertakings. During proceedings on 12 April 2010 I put to the employer my concerns in relation to the agreement and my prima facie view that the agreement, on the basis of the issues I had outlined, may not satisfy the requirement that employees would be better off overall under the agreement than they would be under the relevant award. The employer was provided with an opportunity to consider the issues I had raised and put further material to me in light of those concerns. The employer has put its position in relation to those concerns in the submissions referred to in this decision. I have considered providing the employer with a further opportunity to consider any undertaking it may choose to provide, however, having regard to the number of issues raised and the substance of the provisions addressed in this decision it is my view that the undertakings required to meet the better overall test would result in substantial changes to the agreement.

[82] I decline to approve the agreement and the application is refused.

COMMISSIONER

Appearances:

Mr D Lee, on behalf of the applicant.

Hearing details:

Sydney and Canberra via video link.

2010:

April, 12

Final written submissions:

2010:

April, 23.

 1   PVT award at clause 15.

 2   PN147.

 3   TW Award at clause 17.

 4   TW Award at clause 32.

 5   Agreement at subclause 11.4.

 6   Ibid at subclause 11.5.

 7   PN72.

 8   Written submission at 4.2.

 9   PN109.

 10   Written submissions at 8.2.

 11   PN62.

 12   Print L9178, 20 March 1995 (Hancock SDP, MacBean SDP, O’Shea C).

 13   Print R3183, 22 March 1999.



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