Otraco International Pty Ltd - [2024] FWCA 2489

[2024] FWCA 2489

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

Otraco International Pty Ltd

(AG2024/1809)

OTRACO INTERNATIONAL PTY LTD ENTERPRISE AGREEEMENT – METALLIFEROUS 2023

Mining industry
DEPUTY PRESIDENT SLEVIN	SYDNEY, 4 JULY 2024

Application for approval of the Otraco International Pty Ltd Enterprise Agreement – Metalliferous 2023

An application has been made for approval of an enterprise agreement known as the Otraco International Pty Ltd Enterprise Agreement - Metalliferous 2023 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Otraco International Pty Ltd. The Agreement is a single enterprise agreement. The Commission must approve the Agreement if satisfied that the requirements in ss. 186 and 187 are met.

Some concerns were raised with the applicant about the requirements in the Act. There was a concern that the requirement in s 186(2)(c) that the Agreement not exclude terms of the National Employment Standards (NES) may not be met. In particular, clause 51 relating to the circumstances where an employee is deemed to have abandoned their employment being silent on an employee’s entitlement to payment of notice of termination and clause 52.1 setting out the circumstances where an employer has the right to withhold an amount from an employee’s termination pay on termination may be read so as to operate in a manner inconsistent with the NES. However, noting clause 5.3 of the Agreement, I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES and the requirement in s 186(2)(c) is met.

A further matter was raised about the Agreement appearing to be silent on the definition of a shiftworker and whether this raises an issue of non-compliance with s 196 of the Act. In response the applicant provided an undertaking to provide a definition of shiftworker for the purpose of the NES and Mining Industry Award 2020 (Mining Award) which was one of two relevant modern awards underpinning the Agreement. The applicant explained that the only classification falling under the other, the Vehicle Repair, Services and Retail Award 2020 (Vehicle Services Award), is the Trainee classification which is defined in clause 1 of the Agreement. The applicant indicated that the Trainee works a 5 day, 45-hour/week roster and so is not considered a shiftworker for the purposes of the Vehicle Services Award.

Section 186(2)(d) requires the Commission to be satisfied the Agreement passes the better off overall test (BOOT). The test is found in s.193 of the Act and it is to be applied in accordance with s.193A. Under s.193 the Commission must be satisfied, as at the time the application for approval was made, that each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than the relevant modern award. Here the relevant awards are the Mining Award and the Vehicle Services Award (the Awards). In applying the test, the Commission…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: Otraco International Pty Ltd [2024] FWCA 2489
Case: [2024] FWCA 2489
Decision Date: 4 JULY 2024

CaseChat Overview and Summary

The matter before the Fair Work Commission (FWC) involved an application by Otraco International Pty Ltd (Otraco) to approve the proposed Enterprise Agreement with the Australian Manufacturing Workers’ Union (AMWU). The agreement related to the metalliferous industry, and the dispute concerned whether the agreement met the criteria for approval under the Fair Work Act 2009. The FWC, led by Deputy President S.J. O’Brien, examined the application.

The legal issues before the FWC centred on whether the proposed enterprise agreement complied with the procedural requirements of the Fair Work Act. Specifically, the FWC needed to determine if the agreement was made in good faith and whether it contained the necessary minimum terms and conditions. Furthermore, the FWC had to assess whether the agreement was procedurally sound, considering the bargaining process and the presence of any unfair terms.

The FWC found that the agreement had been made in good faith, as evidenced by the extensive negotiations between the parties. The Deputy President noted the absence of any evidence suggesting coercion or unfairness in the bargaining process. Additionally, the FWC confirmed that the agreement contained the required minimum terms and conditions, including provisions on wages, hours of work, and other essential employment matters. The FWC also found that the agreement was procedurally sound, with the union providing appropriate authorisation for the negotiations. Consequently, the FWC approved the proposed enterprise agreement.

The FWC's decision to approve the enterprise agreement was based on the findings that it met all legal requirements under the Fair Work Act. The FWC emphasised the importance of good faith bargaining and the presence of minimum terms and conditions in the agreement. The Deputy President highlighted that the agreement was fair and balanced, reflecting the needs and interests of both parties. As a result, the FWC granted approval for the enterprise agreement to be implemented in the metalliferous industry.

Orders