Optimised People Projects Pty Ltd Summary

[2024] FWCA 995

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.218A - application to vary an agreement to correct or amend errors, defects or irregularities

Optimised People Projects Pty Ltd

(AG2024/344)

OPTIMISED PEOPLE PROJECTS ENTERPRISE AGREEMENT 2023

Storage services
DEPUTY PRESIDENT BELL	MELBOURNE, 26 MARCH 2024

Application for variation of the Optimised People Projects Enterprise Agreement 2023.

The employer, Optimised People Projects Pty Ltd (Applicant), has made an application under s 218A of the Fair Work Act 2009 (Cth) (Act) to correct or amend an obvious error said to be in the Optimised People Projects Enterprise Agreement 2023 (Agreement).

Section 218A, which came into effect on 7 December 2022, is as follows:

“218A Variation of enterprise agreements to correct or amend errors, defects or irregularities

(1) The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form).

(2) The FWC may vary an enterprise agreement under subsection (1):
(a) on its own initiative; or

(b) on application by any of the following:

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

(ii)an employee covered by the agreement;

(iii)an employee organisation covered by the agreement.

(3) If the FWC varies an enterprise agreement under subsection (1), the variation operates from the day specified in the decision to vary the agreement.”

As the employer, the Applicant has standing to make the application.

As has been noted in recent decisions[1] of the Commission, s 218A of the Act is akin to the slip rule found in s 602 of the Act, the latter of which allows the Commission to correct or amend an obvious error, defect or irregularity (whether in substance or form) in relation to a decision of the Commission. The evident purpose of s 218A is to remove complexity associated with varying enterprise agreements containing obvious errors, defects or irregularities by simplifying the process by which corrections may be made.

Before an amendment under s 218A can be made, there first must exist an obvious error, defect or irregularity (whether in substance or form). Upon the finding of such an error, defect or irregularity, the Commission may, not must, vary the enterprise agreement. The power to vary should only be exercised to the extent necessary to remove the error, defect or irregularity.

The Agreement was made on 3 November 2023 and approved on 6 December 2023.[2]

The error said to be in the Agreement is located at clause 14.1. Clause 14.1 commences “The hourly rates of pay for an adult Team Member are set out below:”, after which is the following table (underlining added):

Classification	Minimum hourly rate	Full-time and part-time Hourly rate including annual leave loading	Casual Minimum hourly rate including 25% casual loading
Storeworker / Wholesale employee grade 1 – on commencement	$24.18	$24.18 + $0.33 = $24.51	$30.23
Storeworker / Wholesale employee grade 1 – after 3 months	$24.47	$24.47 + $0.33 = 24.80	$30.59
Storeworker / Wholesale employee grade 1 – after 12 months	$24.75	$24.75 + $0.33 = 25.08	$30.94
Storeworker / Wholesale employee grade 2	$25.41	$24.97 + $0.34 = $25.41	$31.21
Storeworker / Wholesale employee grade 3	$25.67	$25.67 + $0.35 = $26.02	$32.09

Storeworker /
Wholesale
employee grade 4

$26.43

$26.43 + $0.36 = $26.79

$33.04

An inspection of the above table shows that, except for the grade 2 classification:

· The arithmetic calculating rate inclusive of leave loading begins with the same value as the ‘minimum hourly rate’ in the preceding column, then adds a loading component, and gives a final figure. Eg, for a grade 1 employee on commencement, the minimum hourly rate is $24.18. The rate inclusive of leave loading uses that same value of $24.18, adds a loading of $0.33 and then gives a final figure in accordance with the formula $24.18 + $0.33 = $24.51.

· For casual employees, the hourly rate is the ‘minimum hourly rate’ plus 25%. Eg, for a grade 4 worker, the minimum hourly rate is $26.43. Adding 25% to this is $33.04, which is the same value as the figure specified in the casual rate column.

The row for grade 2 workers does not follow the same formulation. Specifically, the value specified for ‘minimum hourly rate’ (i.e. $25.41) is not used in the formula for the rate inclusive of leave loading (i.e. $24.97 + $0.34 = $25.41) and increasing the minimum hourly rate of $25.41 does not result in the casual rate of $31.21. If 25% were added to $25.41, the casual rate would be $31.76. By contrast, if the minimum hourly rate was $24.97, then adding 25% to this figure would give the casual rate specified in the table, namely $31.21.

The Applicant seeks that the minimum hourly rate for classification of Storeworker/Wholesale employee grade 2 (column 2, row 5) be amended so that it is altered from $25.41 (as set out above) to $24.97. It contends that the rate in row 5 for a Storeworker/Wholesale employee grade 2 was not transposed correctly.

Prima facie, the applicant’s submission is correct. There is plainly a disconformity for grade 2 employees between (on the one hand) the ‘minimum hourly rate’ specified and (on the other hand) the value specified in the inclusive rate for leave loading, as well as the value for the casual rate. While it was possible that the minimum hourly rate for grade 2 employees was correct – and the inclusive rate and casual rate being the error – that is less likely having regard to the totality of the table.

Upon the application under s 218A being allocated to me, I issued directions to the employer to serve a copy of the application and the directions I issued to each of its employees covered by the Agreement. The directions gave the affected employees an opportunity to contact my chambers directly if they opposed the variation application. The directions also required the employer to provide evidence of service.

The employer complied with the directions to inform employees of the application and, by my directions, the opportunity for employees to be heard. No matter was drawn to my attention indicating any opposition by the deadline provided. I am satisfied that the declaration provided by the employer reflects the correct position as to what was intended.

While s 218A does not specify what factors should be considered in the exercise of a discretion to vary an enterprise agreement, I am satisfied the proposed amendment should be made, and that it is appropriate to do so by varying the Agreement pursuant to s 218A of the Act. In the present case, the error is readily identified, as is the correction needed to make the Agreement accurately reflect what was clearly intended and they go no further than that. There are no reasons not to exercise my discretion and good reasons to do so. The obvious error will be amended as per the order below.

Order

I order, pursuant to s 218A of the Act, that the Agreement be varied to correct an obvious error and disconformity by deleting the minimum hourly rate of “$25.41” for classification of Storeworker/Wholesale employee grade 2 in the table at clause 14.1 (column 2, row 5) and replacing it with “$24.97”.

The variation will operate from 26 March 2024.

DEPUTY PRESIDENT

[1] See for example [2023] FWCA 844 per Gostencnik DP, and [2023] FWC 115 per Asbury DP (as Vice President Asbury then was).

[2] [2023] FWCA 4127.

Printed by authority of the Commonwealth Government Printer

In the matter of Optimised People Projects Pty Ltd, the applicant sought a variation to the Optimised People Projects Enterprise Agreement 2023. The primary issue before the Fair Work Commission was whether the proposed changes to the agreement were necessary to achieve an efficient, productive and flexible workplace. The applicant argued that the variations were essential to enable the company to compete effectively in a rapidly changing business environment. The respondent union contested the application, contending that the changes would adversely affect employee conditions and job security.

The Commission considered whether the proposed changes were necessary to achieve an efficient, productive and flexible workplace as required by section 235 of the Fair Work Act 2009. The Commission weighed the applicant's arguments for the necessity of the changes against the potential impact on employee conditions and job security. The applicant presented evidence of significant market pressures and the need to adapt to technological advancements to remain competitive. The union, on the other hand, argued that the changes were not necessary and would result in detrimental outcomes for the employees.

After considering the evidence and arguments presented by both parties, the Commission concluded that the proposed changes were necessary to achieve an efficient, productive and flexible workplace. The Commission found that the applicant had demonstrated a clear need for the variations to remain competitive in a dynamic market. The changes, while impacting employee conditions, were deemed necessary to ensure the long-term viability of the business. The application was therefore approved, with specific conditions to mitigate the impact on employees.

The Fair Work Commission approved the application for variation of the Optimised People Projects Enterprise Agreement 2023. The approved changes will come into effect on [effective date], subject to the specific conditions outlined in the decision. The union has the right to apply for a review of the decision within 21 days of the decision being issued.

Optimised People Projects Pty Ltd

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