Natural Resource Assessments T/A Nra Environment Consultants
[2024] FWCFB 136
•13 MARCH 2024
| [2024] FWCFB 136 Note: A copy of the zombie agreement to which this decision relates (AC324274) is available on our website.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional instruments
Natural Resource Assessments T/A Nra Environment Consultants
(AG2023/4313)
NATURAL RESOURCE ASSESSMENTS EMPLOYEE COLLECTIVE AGREEMENT 2009
| Scientific services | |
| DEPUTY PRESIDENT WRIGHT DEPUTY PRESIDENT ROBERTS DEPUTY PRESIDENT SLEVIN | SYDNEY, 13 MARCH 2024 |
Application to extend the default period for Natural Resource Assessments Employees' Collective Agreement 2009
Pursuant to subitem 20A(4) of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TransitionalAct), Natural Resource Assessments Pty (Applicant) has applied to extend the default period for the Natural Resource Assessments Employees’ Collective Agreement 2009 (Agreement).
The Agreement was approved by the former Workplace Authority on 25 June 2009 in accordance with the provisions of the Workplace Relations Act 1996. The Agreement is a ‘WR Act instrument’ within the meaning of item 2(2) of Sch 3 of the Transitional Act. It is a collective agreement-based transitional instrument to which Sch 3 applies.
Sch 3 provides for the automatic sunsetting of agreement-based transitional instruments by the end of the default period on 6 December 2023, subject to the capacity to apply to the Commission for an extension of that period for up to four years in prescribed circumstances. The agreements to which these provisions apply are known as “zombie agreements”. The main features of the provisions allowing for the extension of the default period for zombie agreements are described in detail in the Full Bench decision in Suncoast Scaffold Pty Ltd[1] (Suncoast). We refer to and rely upon what is said in that decision.
Under subitem 20A(6) of Sch 3, where an application is made under subitem 20A(4) for the default period to be extended, the Commission must extend the default period for a period of no more than four years if, under subitem (6)(a), either subitem (7), (8) or (9) applies and it is otherwise appropriate to do so, or, under subitem (6)(b), it is reasonable in the circumstances to do so. Subitem (7) is not relevant to the present circumstances as it only applies if, amongst other things, the application is made at or after the notification time for an agreement. There was no notification time in this case. Subitem (8) applies only if the application relates to an individual agreement-based transitional instrument and is not relevant here. Subitem (9) applies if it is likely that as at the time the application is made, the award covered employees, viewed as a group, would be better off overall if the agreement continued to apply than if the relevant modern award applied. The Applicant did not contend that subitem (9) applied.
Grounds for the Application
The application is advanced on the ground that the Applicant would like to continue using the Agreement but make “administrative changes” to bring it in line with current awards and the NES. The Applicant said that they want to extend the default period to allow time to make a new agreement, however at the time of the application, bargaining for a new agreement had not commenced. In the circumstances, we propose to deal with the application on the basis that it is said that subitem (6)(b) applies and it is reasonable in the circumstances to extend the default period.
The application is to extend the default period until 7 December 2025.
Background
The Applicant is an environmental consultancy firm that provides environmental services such as consulting, pre-clearance surveys, water and soil sampling and land rehabilitation monitoring on natural resource management projects. The Applicant currently has 16 employees covered by the Agreement. Those employees are employed on a full-time, part-time and casual basis. The full-time and part-time employees are currently employed on an annualised salary arrangement provided for in the Agreement.
The majority of employees would, in the absence of the Agreement, be covered by the Professional Employees Award 2020 (Professionals Award). The remainder would be covered by the Clerks – Private Sector Award 2020 (Clerks Award).
The Agreement applies to the exclusion of all awards and contains a number of inferior terms and conditions compared to the Awards. Wages paid under the Agreement are based on AFPC rates set out in Schedule 2 as adjusted from time to time. The rates include a 15% annualised salary loading paid in lieu of specified award entitlements, a 17.5% leave loading (for permanent employees) and an all-purpose district allowance of $1.05 per week. Those receiving the annualised salary loading do not receive allowances, penalty rates or overtime. They are also expected to work up to 180 hours per four-week cycle. Hours worked above this limit may be allowed to be taken as time off in lieu (TOIL). Those time off in lieu hours are accrued on an hour for hour basis and are not payable on termination. Under both awards, overtime hours accrued but not taken as time off must be paid at overtime rates at the employee's request. This is also the case for time accrued but not taken after six months, or on termination.
Under the Clerks Award, overtime is payable at 150% for the first two hours on Monday to Saturday and at 200% thereafter. There may be instances where full-time employees under the Agreement who would otherwise be covered by the Clerks Award and who work overtime hours would receive less than they would under the Award. The absence of applicable allowances and inferior TOIL provisions would compound this disadvantage.
Clause 4.2 of the Agreement provides that part-time employees will work an average of 38 ordinary hours per week between Monday and Saturday averaged over a 4 week period (152 hours). The agreement is silent on part-time safeguards provided at clause 10 of the Clerks Award. These include the employer and employee, at the time of engagement, agreeing in writing to the number of hours to be worked each day, the days of the week on which the employee will work and the starting and finishing times each day. The Agreement is silent on part-time employees being paid overtime for working in excess of the agreed hours as mutually arranged as per Clause 10.6 of the Clerks Award.
Clause 4.2(g) of the Agreement allows for the employer to increase or decrease a part- time employee’s hours of work in order to meet unexpected fluctuations in business activity. Clause 10.3 of the Clerks Award provides that any changes to the number of hours worked each day and the times at which the employee will start and finish work each day must also be agreed in writing. Clause 10.4 of the Clerks Award provides that the days of the week on which an employee will work may only be changed by the employer by giving 7 days’ notice of the change. The Agreement does provide a more beneficial minimum engagement period of 4 hours for part-time employees. The Clerks Award provides a minimum engagement of 3 hours at clause 10.7. The Professionals Award does not provide a minimum engagement for part-time employees.
The Agreement provides a less beneficial casual loading of 23% compared to 25% provided at clause 11 of both awards, although as a matter of practice, a loading of 25% is being paid. The Agreement is silent on a minimum engagement for casual employees. Clause 11 of the Clerks Award provides a minimum engagement of 3 hours and clause 11 of the Professionals Award provisions a minimum engagement of 2 hours. The Agreement is silent on casual employees being paid overtime penalties on a cumulative basis with the casual loading as per clause 11.2 of the Clerks Award. The Agreement is silent on casual employees being paid the casual loading on all hours worked as per clause 11.1 and Schedule B.3.1 of the Clerks Award.
The Agreement is silent on nearly all award allowances but does provide a meal allowance of $10 after an employee is directed to work more than 10 hour per day. This amount is inferior to that provided for in the Clerks Award. The Agreement does provide a Division and District Allowance of $1.05 per week which is for all purposes.
We also note that notwithstanding clause 1.13.1 of the Agreement which provides that the Agreement and the National Employment Standards (NES) combine to form the minimum conditions of employment for employees covered by the Agreement, there are a number of provisions in the Agreement that appear to be inconsistent with the provisions of the NES. These include clauses 2.2.2 and 2.6.3 dealing with notice for probationary employees, clause 5.1.3 dealing with accrual of annual leave and clauses 5.2.3 and 5.2.4(a) dealing with accrual of and notice for the taking of personal leave. The Applicant said that as a matter of practice, the accrual of annual leave and personal leave was calculated on a per day basis regardless of the period of continuous service.
The Applicant referred to and provided a copy of a document titled NRA Employee Guidelines (Guidelines). These Guidelines deal with various employment-related matters. It is expressed to be a subordinate document which is not part of the Agreement and which cannot be altered without the written approval of a Director of the Applicant. The Applicant relied on the Guidelines to supplement the terms of the Agreement, for example in relation to the implementation of TOIL arrangements.
In Suncoast Scaffold Pty Ltd, the Full Bench described the ‘reasonable’ criterion in item 20A(6)(b) of Sch 3 to the Transitional Act in this way:
[17] Subitem (6)(b) of item 20A constitutes an independent pathway to the grant of an extension. The ‘reasonable’ criterion in the subitem should, in our view, be applied in accordance with the ordinary meaning of the word –that is, ‘agreeable to reason or sound judgment’. Reasonableness must be assessed by reference to the ‘circumstances’ of the case, that is, the relevant matters and conditions accompanying the case. Again, a broad evaluative judgment is required to be made.
Full Benches of the Commission have said a number of times that the purpose of the sunsetting arrangements introduced into the Transitional Act is that zombie agreements are to be replaced by contemporary instruments made under the Fair Work Act 2009 (FW Act). The present Agreement contains numerous inferior and outdated provisions. The Applicant has recognised the desirability of bringing its industrial arrangements into line with contemporary standards and has indicated that it intends to enter into a new agreement for that purpose. In a number of instances, such as in the case of the casual loading percentage, the terms of the Agreement no longer reflect what is happening in practice.
We also note that the Applicant has said that to the extent that the Agreement does contain provisions that are superior to the Awards, those arrangements will continue if the default period is not extended.
The default period cannot be extended simply because one party to the zombie agreement wants that agreement to continue. We must be positively satisfied that an extension is reasonable in the circumstances. Having regard to the matters identified above, we are not satisfied that it is “reasonable in the circumstances” to extend the default period in accordance with subitem 20A(6)(b) of Sch 3.
As our decision is to refuse to extend the default period under subitem 20A(6) of Sch 3 and our decision is made after the sunset date in the Transitional Act, subitem 20A(11) provides that we must extend the default period to the day of this decision or specify a day that is not more than 14 days after the day of this decision. We have decided that to enable the parties to make the necessary administrative arrangements to give effect to the sunsetting of the Agreement the default period is extended to 27 March 2024.
DEPUTY PRESIDENT
[1] [2023] FWCFB 105.
Printed by authority of the Commonwealth Government Printer
<AC324274 PR772317>
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