Neilsens Transport Services Pty Ltd T/A Neilsens Transport Services Pty Ltd

[2022] FWCA 1869

[2022] FWCA 1869

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.225—Enterprise agreement

Neilsens Transport Services Pty Ltd T/A Neilsens Transport Services Pty Ltd

(AG2022/1276)

Neilsen’s Transport Pty Ltd, Concrete Agitator Drivers Enterprise Agreement 2009

Road transport industry
COMMISSIONER HUNT	BRISBANE, 17 JUNE 2022

Application for termination of the Neilsen’s Transport Pty Ltd Concrete Agitator Drivers Enterprise Agreement 2009

1. On 28 April 2022, Neilsens Transport Services Pty Ltd T/A Neilsens Transport Services Pty Ltd (the Employer) made an application pursuant to s.225 of the Fair Work Act 2009 (the Act) to terminate the Neilsen’s Transport Pty Ltd, Concrete Agitator Drivers Enterprise Agreement 2009 (the Agreement). The Agreement has passed its nominal expiry date of 16 December 2012.

1. The application was supported by a Form F24C statutory declaration of Mr Grant Stack, the General Manager, Transport, which declared, amongst other things, the Employer’s view that employee rights and entitlements will revert to the Road Transport and Distribution Award 2020 (Award) which contains generally comparable, and in some instances, more beneficial entitlements. Further, the Award has been reviewed and updated over the years to include greater flexibilities and protections for employees. Mr Stack declared that there are 14 employees covered by the Agreement, all of whom are employed on a full-time basis.

1. The Employer provided copies of correspondence sent to employees in February and March 2022, advising them that it intended to seek termination of the Agreement, and their conditions would be covered by the Award in the event the Agreement was terminated.

1. On 4 May 2022, I directed the Employer to communicate in writing to each of the employees covered by the Agreement, inviting them to correspond by email with my chambers in the event they wished to provide their views. On 10 May 2022, I received confirmation from the Employer that it had complied with the above direction. The employees covered by the Agreement were invited to provide any views relevant to the application.

Views of employees covered by the Agreement

1. I received views from two employees covered by the Agreement. The views, de-identified to protect the employees’ identity, are as follows:

“Employee 1 – views received 8 May 2022:

Thank you for the opportunity to express our concerns regarding the change in EBA.

Firstly, removal of RDO from the roster pose concerns with the increase in fatigue and risk of injury and or accident due to less available hours off. Therefore, fatigue management has been poorly considered.

There is no opportunity to have time in lieu, as opposed to paid overtime. I believe you should be given the opportunity to choose.

In regards to scrapping of meterage bonuses, the minimal wage increase of the hourly rate does not equal the benefits of the meterage bonus.

We are therefore disadvantaged due to the minimal increase in wage overall, with less consideration to work-life balance and fatigue management.

I thank you for your time and taking the above points into consideration.

I look forward to your response.

Employee 2 – views received 18 May 2022:

Dear Fair Work,

Thank you for the opportunity to submit my thoughts on the termination of the agreement of Neilsens Transport PTY AE872704 lodged 18/11/2009.

I have been employed as an AGGI driver with Neilsens Concrete for a period of […] years. During this time, I estimate my average working hours to be [just over 50 hours] per week.

In addition to the current pay rate, I receive an AGGI bonus of approximately $55 per week. It has always been my understanding the Neilsens family introduced this bonus in appreciation of the drivers, for their loyalty and the long and sometimes highly unusual spread of hours which may be required in this industry. It is my belief this bonus was never intended to be an incentive to break any laws regarding speed, or a failure to follow correct transport regulations regarding mandatory break times.

It is Neilsens policy to be available 12 hours per day Monday – Saturday, for any exception to this rule a request must be made in writing (Email) for permission to be granted by the plant manager. In the case of a Saturday request this must be received no later than the Thursday prior to the requested Saturday.

My place of employment is the Brendale Plant, this plant has an annual maintenance shut down period of two to three weeks where employees are required to take their accumulated holiday accrual. This leaves only the possibility of accessing the remaining one to two weeks holiday pay throughout the remainder of the year.

Looking at the new contract, the company is offering an increase of 78 cents per hour which represents a 2.91% increase on the existing agreement which currently is an hourly rate of $26.72. The company has stated on our acceptance of this offer by staff there will be no further increase to this hourly rate until the Industrial wage increase in 2023.

The company is proposing the current provision for RTO days and AGGI bonus both be scrapped, in addition to this they will not offer the CPI increase normally given to us in October 2022 which is estimated to be around 5.1%. When considering the company offer it appears this new agreement may see the employees disadvantaged, with no real increases to the hourly rate and in addition the employees will have all benefits e.g., RTO and AGGI bonus revoked.

Neilsens argument for the removal of RTO days surrounds scheduling difficulties suggesting a daily schedule is increasingly difficult to produce when RTO days are to be considered, bearing in mind as already stated, all requests for time off the roster must be received in writing and approved before a staff member may be removed from the roster numbers for any given day. Therefore, there should be no scheduling headaches surrounding RTO days. I feel these RTO days are essential to any driver on a 6-day 12-hour roster, considering they may be used to combat stress and fatigue outside of the holiday period December/January, in addition to attending any appointments you may have without disrupting the daily roster and the smooth running of the plant.

Thank you for your time.”

1. I understand that where Employee 1 refers to RDO it means rostered day off, and where Employee 2 refers to RTO it means rostered time off. 

Employer’s Response

1. The Employer was invited to provide a response to the employees’ views by 26 May 2022. The Employer disagreed with Employee 1’s views that the removal of the RDO would increase in fatigue and risk of injury. The Employer noted that RDOs are not and have never been a fatigue management tool. The Employer’s fatigue management protocol is in accordance with the Heavy Vehicle National Law (HVNL) and associated regulations, as administered by the National Heavy Vehicle Regulator (NHVR).

1. Employees are encouraged under its fatigue management protocols to inform the Employer if they are feeling fatigued or unwell. Employees have access to personal leave for this purpose, and the Employer has further adopted an “extremely flexible approach to early departure from shifts, half-day shifts and Saturday non-work for personal reasons”. The Employer stated that no employee is asked or expected to work every Saturday and those employees who do work overtime on a Saturday work on average 4 to 6 hours.

1. At the time of making the Form F24C Declaration, the Employer advised that the employee RTO balances were, on average, more than two weeks per employee, with many employees not accessing RTOs. The Respondent stated that a similar situation exists in relation to annual leave balances of employees, where each employee has on average 4.33 weeks of annual leave accrued. The Employer stated that the current fatigue management practices have not been affected by the fact that overall, employee annual leave and RTO balances remain healthy.

1. The Employer further refuted Employee 1’s views that there is no opportunity to have time in lieu, as opposed to paid overtime. The Employer stipulated that the Award provides the opportunity for an employee and employer to agree to the employee taking time off instead of payment for overtime. The Employer noted that employment contracts signed by employees do not remove access to this right under the Award. The Employer further disagreed with Employee 1’s view that the wage increase does not equal the benefits of the meterage bonus. The Employer stated that a comparison of employee productivity bonus earnings since the last wage increase (1 October 2021) and projected earnings with the increase to wages and overtime earnings was conducted by the company in March 2022 and was presented to employees. The Employer stated that the comparison demonstrates that all employee earnings are greater when earning a higher hourly rate and overtime in place of a productivity bonus and RTO accrual under the enterprise agreement. A copy of the spreadsheet, as of 19 April 2022, is extracted below:

Current Arrangement (a)
Current weekly wage (40 hours)	Average number of overtime hours worked each week (above 40 hours)	Average overtime paid each week ($)	Average weekly productivity bonus earnings	Total weekly earnings (including Avg weekly bonus and overtime)
Employee 1	$ 1,068.80	11.03	$ 515.76	$ 47.26	$ 1,631.82
Employee 2	$ 1,068.80	12.51	$ 584.97	$ 32.94	$ 1,686.71
Employee 3	$ 1,068.80	10.03	$ 469.00	$ 36.77	$ 1,574.57
Employee 4	$ 1,068.80	15.12	$ 707.01	$ 77.31	$ 1,853.12
Employee 5	$ 1,068.80	11.06	$ 517.17	$ 54.59	$ 1,640.56
Employee 6	$ 1,068.80	10.34	$ 483.50	$ 43.30	$ 1,595.60
Employee 7	$ 1,068.80	10.03	$ 469.00	$ 16.94	$ 1,554.74
Employee 8	$ 1,068.80	8.57	$ 400.73	$ 60.85	$ 1,530.38
Employee 9	$ 1,068.80	10.67	$ 498.93	$ 49.11	$ 1,616.84
Employee 10	$ 1,068.80	11.4	$ 533.06	$ 47.84	$ 1,649.70
Employee 11	$ 1,068.80	12.53	$ 585.90	$ 10.79	$ 1,665.49
Employee 12	$ 1,068.80	12.05	$ 563.46	$ 43.50	$ 1,675.76
Employee 13	$ 1,068.80	12.93	$ 604.61	$ 54.63	$ 1,728.04

Proposed Arrangement (b)
Proposed weekly wage (40 hours @ new rate + first 2 hours of overtime)	Average number of overtime hours worked each week (above 40 hours)	Average overtime paid each week ($)	Total earnings per week (in lieu of bonus & RTO accrual)	Employees better off  under proposed arrangement per week ($)
Employee 1	$ 1,141.25	11.03	$ 530.82	$ 1,672.07	$ 40.25
Employee 2	$ 1,141.25	12.51	$ 602.04	$ 1,743.29	$ 56.59
Employee 3	$ 1,141.25	10.03	$ 482.69	$ 1,623.94	$ 49.37
Employee 4	$ 1,141.25	15.12	$ 727.65	$ 1,868.90	$ 15.78
Employee 5	$ 1,141.25	11.06	$ 532.26	$ 1,673.51	$ 32.96
Employee 6	$ 1,141.25	10.34	$ 497.61	$ 1,638.86	$ 43.26
Employee 7	$ 1,141.25	10.03	$ 482.69	$ 1,623.94	$ 69.20
Employee 8	$ 1,141.25	8.57	$ 412.43	$ 1,553.68	$ 23.30
Employee 9	$ 1,141.25	10.67	$ 513.49	$ 1,654.74	$ 37.90
Employee 10	$ 1,141.25	11.4	$ 548.63	$ 1,689.88	$ 40.17
Employee 11	$ 1,141.25	12.53	$ 603.01	$ 1,744.26	$ 78.76
Employee 12	$ 1,141.25	12.05	$ 579.91	$ 1,721.16	$ 45.40
Employee 13	$ 1,141.25	12.93	$ 622.26	$ 1,763.51	$ 35.47

1. Along with the comparison table included explanatory notes, which stated as follows:

“Using the average weekly productivity bonus earnings and average number of overtime hours worked between 6 July 2021 and 19 April 2022, a comparison between the current arrangement under the enterprise agreement and proposed new arrangement has been prepared. The above tables demonstrate that employees will be financially better off under the proposed arrangement, as they will receive a higher hourly rate ($27.50), paid 30 minute meal breaks, and a guaranteed 2 hours of overtime each week (175% of the higher hourly rate).

Calculations do not factor in the payment of a meal allowance of $12.50 paid for each hour where an employee  exceeds 2 hours of overtime in a shift (Enterprise Agreement entitlement) or the equivalent Award provision ($16.85) that is payable per hour where an employee works  2 hours or more of overtime each shift. The Award entitlement is superior to the Enterprise Agreement entitlement.

Under both scenarios (a) and (b), employees are guaranteed a 40-hour working week, with overtime of 175% paid after 38 hours under scenario (b)”

1. The Employer also refuted Employee 2’s view, stating that the NHVR does not support any bonus system that is purely tonnage or metreage based. Under NHVL, the Employer’s primary duty is to identify the risks involved in all transport activities, assess and eliminate those risks, or if they cannot be completely eliminated, minimise them as much as possible. The Employer advised that the NHVL states that a company cannot take any actions that could influence to speed or breach the HVNL; this could include through terms in a contact, financial penalties or rewards, and any other words or actions that might cause or encourage an employee to "bend the rules”.

1. The Employer further stated that the productivity bonus system under the enterprise agreement is a financial reward that could cause or encourage employees to bend the rules regarding fatigue management. Below is an extract from HVNL that highlights the potential the Employer raises could be an issue:

“The HVNL imposes a positive duty on all CoR parties to ensure the safety of their transport activities (section 26C(1) of the HVNL). They must do this in at least two ways: by eliminating or minimising public risks; and by ensuring their conduct doesn’t cause or encourage a driver or another person, directly or indirectly, to breach the HVNL.

A CoR party’s duty is to ensure the safety of their transport activities ‘so far as is reasonably practicable’.

HVNL section 26C – Primary duty

(1)   Each party is the chain of responsibility for a heavy vehicle must ensure, so far as is reasonably practicable, the safety of the party’s transport activities relating to the vehicle.

(2)   Without limiting subsection (1), each party must, so far as is reasonably practicable—

(a)   Eliminate public risks and, to the extent it is not reasonably practicable to eliminate public risks, minimise the public risks; and

(b)   Ensure the party’s conduct does not directly or indirectly cause or encourage—

(i)the driver of the heavy vehicle to contravene this Law; or

(ii)the driver of the heavy vehicle to exceed a speed limit applying to the driver; or

(iii)another person, including another party in the chain of responsibility, to contravene this Law.

The primary duty is based on a positive duty to ensure safety. This means that a CoR party can be prosecuted for a HVNL breach if that party does not take proactive steps to perform its duty – even if no incident or accident arises.”

1. The Employer further stated that employees are not expected to work every weekend. Employees must indicate in the payroll portal their availability for Saturday work two days prior on the Thursday, so the Employer can cover for meterage on that Saturday. The Employer advised that the spread of hours differs at each location. For example, the Windsor Plant can only operate from 6.00am to 4.30pm with the plant to close at 5.00pm weekdays, with limited hours of operation permitted on a Saturday. The Employer advised that its payroll records indicate that the average hours worked by employees who perform work on Saturdays is 4 to 6 hours.

1. The Employer noted that whilst there is an annual shutdown period each year over the Christmas and New Year period, employees are given the opportunity to return from leave part way through the shutdown (first week of January) to work at a different plant, and they usually only access around four days of annual leave during the entire closedown period. Some employees choose not to return to work as they enjoy the Christmas period. The Employer stated that it is common practice for employees to be informed in early November of the impending annual shutdown period. At this time employees are also asked to enter their requests for leave in the payroll portal so management can accommodate those employee drivers who wish to return early partway through the annual shutdown period and those who would like to take leave for the entire shutdown period.

1. The Employer refuted that it informed employees at any time that acceptance of the offer would result in no further increases to this hourly rate until the industrial wage increase in 2023. The Employer stated that it is well aware of its obligation to ensure that employee base rates of pay do not fall below the relevant award minimum wage. The Employer also particularised that the employees are not worse off without the existence of the bonus or access to RTOs. The Employer noted that the Award contains a provision for the arrangement of ordinary working hours to include accumulation of RTOs.

1. The Employer also submitted that employees do not work a 6-day, 12-hour roster. Whilst employees are expected to be available to work on Saturdays, no employee is asked or expected to work every Saturday. Employees who do not work overtime on a Saturday work on average 4 to 6 hours. Employees can indicate their availability to work Saturdays via the payroll leave portal. The Company provides employees with flexibility in their finish times during the week, so they may finish shifts earlier. The Employer’s fatigue management protocols ensure the risk of employee fatigue is managed, and employees have access to personal leave entitlements if they are unwell. The Employer argued that accrued RTO entitlements are not a fatigue management tool.

Termination of an enterprise agreement after its nominal expiry date

1. Subdivision D of Division 7 of Part 2-4 of the Act provides for the termination of an enterprise agreement after its nominal expiry date. This subdivision consists of ss.225, 226 and 227, the terms of which are as follows:

“225      Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a)       one or more of the employers covered by the agreement;

(b)       an employee covered by the agreement;

(c)       an employee organisation covered by the agreement.

226     When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a)       the FWC is satisfied that it is not contrary to the public interest to do so; and

(b)       the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i)           the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii)          the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

Consideration

1. Based on the material contained in the statutory declaration of Mr Stack, the Employer response, and in consideration of s.226(a) of the Act, I am satisfied that the termination of the Agreement is not contrary to the public interest. There is nothing before me which raises public interest considerations which might militate against the termination of the Agreement.

1. As earlier noted, there are 14 employees covered by the Agreement. Two employees covered by the Agreement expressed views opposing termination of the Agreement. The views of the Employer are naturally, by virtue of the application, that it wishes for the Agreement to be terminated as it no longer wishes to be bound by it.

1. I have had regard to the comparison summary provided by the Employer to employees covered by the Agreement on 25 February 2022, detailing the differences between employees’ wages and conditions under the Agreement and the Award, and what would apply if the Agreement were terminated. I am satisfied employees will be in a better position if the Agreement is terminated.  It is of course, not necessary to conduct a better off overall test in the Commission’s consideration of this application.

1. I have had regard to the employees’ views regarding rostered time off.  I am satisfied that the Award provides opportunities for time off in lieu instead of the payment of overtime if that is what is decided between the Employer and individual employees at the operational level. 

1. The Agreement nominally expired more than nine years ago and understandably, has not been able to keep up with changes to the Award.  I note the Agreement provides for a minimum of 125% for ordinary time worked on a Saturday and 150% for ordinary time worked on a Sunday.  The Award penalty rates are 150% and 200% respectively. 

1. Having taken into account the circumstances of the employees and the likely effect that the termination will have on the employees, together with the Employer’s desire to terminate the Agreement, and despite the views of two employees covered by the Agreement, I consider that it is appropriate to terminate the Agreement.

1. In accordance with s.226 of the At, I must terminate the Agreement. The application to terminate the Agreement is approved.

1. The termination will take effect from Monday, 20 June 2022.

COMMISSIONER

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<AE872704  PR742409>