Performance with People Pty Ltd

[2017] FWCA 5147

[2017] FWCA 5147

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Performance with People Pty Ltd
(AG2017/1701)

GO2 PEOPLE AUSTRALIA PTY LTD ENTERPRISE AGREEMENT 2017

Building, metal and civil construction industries
COMMISSIONER MCKINNON	MELBOURNE, 4 OCTOBER 2017

Application for approval of the Go2 People Australia Pty Ltd Enterprise Agreement 2017.

[1] An application has been made for approval of a single enterprise agreement known as the Go2 People Australia Pty Ltd Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Performance with People Pty Ltd.

[2] On 8 June 2017 the Construction, Forestry, Mining and Energy Union (CFMEU), Construction and General Division, emailed the Commission requesting copies of the Form F16, Form F17 and Notice of Employee Representational Rights (NERR) filed in support of the application as well as any other documentation or details of directions or hearing dates in relation to the application. The CFMEU indicated that it sought to be heard. Copies of the Form F16, Form F17 and NERR were provided to the CFMEU on 9 June 2017.

[3] On 9 June 2017 and 11 August 2017 the Commission sought information from the CFMEU about whether it was a bargaining representative for the Agreement for the purposes of section 176 of the Act. On 14 June 2017 and 18 August 2017, the CFMEU confirmed it was not a bargaining representative in relation to the Agreement.

[4] On 28 August 2017 the CFMEU was advised by my chambers that as it was not a bargaining representative for the Agreement and did not have standing in relation to the application, and that only its submissions in relation to the application of the better off overall test (BOOT) would be considered. This decision was made on the basis that the CFMEU was likely to be in a position to assist the Commission in its consideration of the BOOT, having regard to its particular knowledge of the Building and Construction General On-Site Award 2010 (the Award).

Better Off Overall Test

[5] Section 193(1) of the Act provides as follows:

“193(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.”

[6] The Agreement incorporates the Award and the Agreement prevails to the extent of inconsistency.

[7] On 20 June 2017 and 7 September 2017, the CFMEU filed submissions in relation to the Agreement and the BOOT. The CFMEU expressed the view that the Agreement was “substantially less beneficial to employees than the Award”, contained a number of less beneficial provisions and did not pass the BOOT.

[8] The CFMEU identified particular concerns with the following terms of the Agreement:

● Clause 7, Special Project Assignments

● Clause 8, Fixed term/Project employment

● Clause 9, casual employment

● Clause 11, lawful directions

● Clause 12, Stand down

● Clause 15, employee obligations

● Clause 16, Rates of pay

● Clause 17, Superannuation

● Clause 6, No extra claims

[9] The applicant provided a response to the CFMEU’s concerns on 13 July 2017 and 31 August 2017. On 14 September 2017, the applicant proposed undertakings in relation to the Agreement.

[10] The CFMEU was given an opportunity to comment on the proposed undertakings and no comment was received by the Commission.

Clause 7, Special Project Assignments

[11] The CFMEU expressed concern about clause 7, which essentially provides for project-specific terms and conditions of employment that supplement the Agreement. The CFMEU identified that the clause could operate in a way that allowed the employer to vary the agreement by applying terms and conditions that were ‘not stated’ in the Agreement and were entirely uncertain.

[12] I agree that as currently drafted, clause 7 cannot be properly assessed against the BOOT because its terms are uncertain and depend on the existence of future contractual arrangements. The applicant has provided an undertaking to address the concern.

Clause 8, Fixed term/Project employment

[13] The CFMEU expressed concern that the Agreement provides for fixed term and project employment, while the Award does not, and that fixed term employees were not entitled to redundancy on termination of employment.

[14] The fact that the Agreement provides for a category of employment that is not dealt with in the Award does not, in my view, automatically result in there being a detriment to employees.

[15] Fixed term employees enter into the employment relationship knowing that it is only for a defined period. They are entitled to the same terms and conditions of employment under the Agreement as other full-time and part-time employees, except in relation to redundancy which I deal with separately. While it may not be expressly contemplated in the Award, fixed term employment is a relatively common feature of employment in Australia and is used to address a range of scenarios including employment for a particular project, or to cover a period of parental leave. I am not satisfied that provision for fixed term employment in the Agreement results in a detriment to employees, except to the extent that it removes an entitlement to redundancy pay.

[16] The issue of redundancy entitlements for fixed term employees was recently considered in Construction, Forestry, Mining and Energy Union v Levent Painting Pty Ltd 1 and Construction, Forestry, Mining and Energy Union v Concrete Constructions (WA) Pty Ltd2.

[17] In my view, the Agreement is currently less beneficial than the Award to the extent that fixed term employees are not entitled to redundancy. The applicant has provided an undertaking to address the concern.

Clause 9, casual employment

[18] The CFMEU expressed concern that the capacity for one hour’s notice of a shift, for performance or cancellation, was an "extreme” and “offensive flexibility”. It also suggested that the provision amounted to indirect discrimination for any employee with family or carers’ responsibilities and that the clause was a significant detriment in comparison to clauses 14 and Part 5 of the Award. In relation to Part 5 of the Award, the CFMEU submitted that it prevents roster changes on one hours’ notice including for casual employees.

[19] The applicant provided a response to the effect that the Award is silent on notice of shift times for casual employees.

[20] Clause 9 of the Agreement requires the employer to give one hour’s notice if there is any cancellation or change to shift start times, and requires employees to make every reasonable effort to notify the employer if they are unable to attend for a shift prior to the scheduled start time.

[21] I note that clause 14 and Part 5 of the Award apply as terms of the Agreement, except to the extent of inconsistency. I am unable to identify any provision in either clause 14 or Part 5 of the Award that has the effect that the CFMEU asserts. I find that the provision is not less beneficial to employees than the Award.

Clause 11, lawful directions

[22] The CFMEU objected to clause 11 of the Agreement because it was not an Award term and was ‘deleterious’ to employees. It pointed to the fact that non-compliance with a lawful direction could result in a civil penalty being applied. The CFMEU also drew the Commission’s attention to the decision in AKN Pty Ltd 3at paragraphs 47-48.

[23] The applicant in response pointed to the common law obligation on employees to comply with reasonable and lawful directions and noted that enterprise agreements can deal with matters on which the Award is silent.

[24] I do not consider the decision in AKN Pty Ltd to be relevant to the issue in question. I note that the applicant has provided undertakings to address concerns about the content of particular workplace policies and procedures, which will only be applied in a way that is consistent with the Act, the Agreement and the Award.

[25] On balance, I am not satisfied that clause 11 of the Agreement is less beneficial to employees when compared to the Award.

Clause 12, Stand down

[26] The CFMEU expressed concern about the stand down provisions of the Agreement as inherently uncertain because the applicant is a “labour hire employer”. In response, the applicant submitted that clause 12 does not more than reflect the terms of section 524 of the Act.

[27] Clause 12 differs in substance from section 524 of the Act to the extent that it also applies to circumstances of “force majeure”. Relevantly, the BOOT does not require comparison of the Agreement and the Act. I also observe that section 524 applies in the same way to all national system employers, including labour hire employers.

[28] I am not persuaded the stand down clause is an impediment to approval in relation to the BOOT. However, for abundance of caution the Applicant has provided an undertaking to address the concern.

Clause 15, employee obligations

[29] The CFMEU opposed clause 15 of the Agreement because it contains a raft of ‘employee obligations’ that are not contained in the Award and is deleterious to employees.

[30] The applicant responded in similar terms to clause 11, noting that enterprise agreements can deal with matters on which the Award is silent.

[31] I am not satisfied that the clause operates in a way that is detrimental to employees when compared to the Award.

Clause 16, Rates of pay

[32] The CFMEU said the Agreement failed the BOOT on ‘wage rates alone’, because it provides for wage rates that are 10 cents an hour above the Award. The CFMEU also pointed to the no extra claims clause, which I deal with below.

[33] There is no proportionality test in relation to the BOOT. That is, there is no requirement that employees are substantially better off, or even slightly better off under the Agreement than the Award. As long as they are better off, the Agreement will pass the BOOT. This is the case even if the only differential is that the Agreement rates are higher by an amount that is “enough for a large cup of coffee”.

[34] The Agreement provides that employees will be paid in accordance with the Award and in addition will receive 10 cents per hour. I am satisfied that the rates of pay in the Agreement are more beneficial to employees than the rates of pay in the Award (albeit only just).

Clause 17, Superannuation

[35] The CFMEU argued that the superannuation clause in the Agreement was less beneficial because it does not nominate the range of default funds provided in the Award. However, it provided no detail about the value to employees of particular funds or any submissions identifying the precise nature of the detriment said to arise.

[36] In any event, the applicant provided an undertaking in response to the concern raised. The CFMEU argued the undertaking was “inadequate” and sought that the undertaking require the applicant to use a default fund under clause 32.4 of the Award if an employee did not nominate their own fund.

[37] On my reading of the proposed undertaking, that is its effect. On the materials before me, I am not prepared to find that the Agreement is less beneficial to employees in relation to superannuation. However, out of an abundance of caution, I am prepared to accept the undertaking offered by the applicant in this respect.

Clause 6, No extra claims

[38] Finally, the CFMEU objected to clause 6 of the Agreement dealing with ‘no extra claims’, which it said was “patently detrimental to employees”. It referred to the decision in Toyota Motor Corporation Australia Ltd v Marmara 4(Marmara) in support of its proposition that the clause is invalid because it provides unilateral rights to the employer to implement its policies without reference to the Agreement’s disputes procedure.

[39] In relation to policies, clause 6 of the Agreement confirms that the Agreement does not prevent changes to policies that are not part of the Agreement, and clarifies that the Agreement’s disputes procedure does not apply to those policies. It is no more than a statement that the Agreement does not apply to matters it does not regulate.

[40] In my view, clause 6 does not operate in a way that leaves employees worse off overall under the Agreement than they would be under the Award.

Undertakings

[41] As noted above, the Applicant has offered to provide written undertakings in relation to the Agreement. The undertakings are set out in Annexure A.

[42] I am satisfied that the undertakings in Annexure A will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[43] Subject to the undertakings referred to above, on balance I am satisfied that the agreement passes the BOOT and that each of the additional requirements in ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[44] The Agreement is approved and, in accordance with section 54 of the Act, will operate from 11 October 2017. The nominal expiry date of the Agreement is 3 October 2021.

COMMISSIONER

Annexure A

 1   [2017] FWCFB 3911

 2   [2017] FWCFB 3912

 3   [2015] FWCFB 1833

 4 [2013] FCA 1351

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