Naismith Group of Companies Pty Ltd
[2024] FWC 1248
•13 MAY 2024
| [2024] FWC 1248 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Naismith Group of Companies Pty Ltd
(AG2024/1117)
| Road transport industry | |
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 13 MAY 2024 |
Application for approval of the Naismith Truck Movers Transport Enterprise Agreement 2024 – application dismissed
Naismith Group of Companies Pty Ltd (company) has made an application under s 185 of the Fair Work Act 2009 (Act) for the approval of an enterprise agreement known as the Naismith Truck Movers Transport Enterprise Agreement 2024 (Agreement). Clause 2 of the Agreement states that it covers the company and all of its employees employed within the coverage of the Road Transport (Long Distance Operations) Award 2020 (Long Distance Award) and the Road Transport and Distribution Award 2020 (Distribution Award).
The Commission raised a number of concerns with the company about matters relevant to whether the Agreement passed the ‘better off overall test’ (BOOT), including in relation to rates of pay for employees undertaking long distance vehicle relocation work and overtime. The company provided written submissions to the Commission about the BOOT, as well as a ‘BOOT test report’ that had been prepared by a payroll advisory firm, and associated documents. On 8 May 2024, the company was asked to provide any undertakings or further submissions by 4.00pm on Friday 10 May 2024 and was advised that I proposed to determine the application on the papers unless a hearing was requested. The company advised the Commission that it did not propose to submit further materials and did not request a hearing.
Clause 4.2 of the Agreement states that, save for any express inconsistency with the Agreement, the terms of the Long Distance Award and the Distribution Award are incorporated into the Agreement. However, the Agreement alters the trigger for overtime in respect of employees covered by the Distribution Award.
The company’s written submissions acknowledge that, based on tests conducted by its payroll advisor, employees will not be better off under the Agreement than under the Distribution Award where they work more than 38 hours a week, and where they work between 8 and 10 hours a day. At such times, they would be paid overtime under the Award but not under the Agreement. I agree that employees will not be better off in these situations.
In its written submissions the company stated, in respect of the circumstances in which it acknowledged that employees would not be better off, that the Commission was required to conduct an overall analysis of the BOOT, and that given the numerous tests conducted by the payroll advisor that had identified working scenarios where employees were better off, the Commission should conclude that they were better off overall, and that the Agreement therefore passed the BOOT.
The BOOT entails an overall, not a line by line, assessment of whether each award covered employee and each reasonably foreseeable employee would be better off under an agreement than the relevant award. This is clear from s 193. Further, s 193A now confirms, for the avoidance of doubt, that the Commission must undertake a ‘global’ assessment of whether each employee would be better off under the agreement than the award, having regard to the terms of the agreement which would be more beneficial to the employee than those in the award, and those that would be less beneficial.
But this does not mean that an agreement will pass the BOOT if employees are better off overall under the agreement in most working situations. The overall, global assessment is applied to each award covered employee and to each reasonably foreseeable employee. If it is reasonably foreseeable that employees will work in ways contemplated by the agreement that will result in them not being better off overall, the agreement will fail the BOOT.
In the present case, having regard to the nature of the enterprise to which the Agreement relates, I consider that it is reasonably foreseeable that under the Agreement employees could commonly work beyond 38 hours a week, and between 8 and 10 hours a day, during which time they would be paid overtime under the Distribution Award but not under the Agreement. I have had regard to the earnings that employees would receive at other times and the other benefits under the Agreement. However, I am not satisfied that each award covered employee and each reasonably foreseeable employee for the Agreement would be better off overall under the Agreement.
According to the F17B declaration, no enterprise agreement currently applies to these employees. The approval of an agreement will displace the application to their employment of the award safety net. The Commission’s role in applying the BOOT is a protective one. Having considered all of the material that has been submitted in this matter I have not reached a state of satisfaction that the Agreement passes the BOOT. The requirement in s 186(2)(d) has not been met. The application is therefore dismissed.
DEPUTY PRESIDENT
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