Port Phillip Sea Pilots Plant Co Pty Ltd
[2023] FWCA 971
•2 MAY 2023
| [2023] FWCA 971 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Port Phillip Sea Pilots Plant Co Pty Ltd
(AG2023/783)
PORT PHILLIP SEA PILOTS QUEENSCLIFF LAUNCH CREW ENTERPRISE AGREEMENT 2023
| Maritime industry | |
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 2 MAY 2023 |
Application for approval of the Port Phillip Sea Pilots Queenscliff Launch Crew Enterprise Agreement 2023
Port Phillip Sea Pilots Plant Co Pty Ltd (company) has made an application pursuant to s 185 of the Fair Work Act 2009 (the Act) for approval of an enterprise agreement known as the Port Phillip Sea Pilots Queenscliff Launch Crew Enterprise Agreement 2023 (the Agreement).
The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), a bargaining representative for the Agreement which has a right to be heard, lodged a form F18 declaration in relation to the Agreement. In its declaration, the union stated that it did not support the Agreement’s approval by the Commission because it did not consider that it passed the ‘better off overall test’ (BOOT) measured against the Ports, Harbours, and Enclosed Water Vessels Award 2020 (Award), insofar as the Agreement would apply to casual employees. The union’s concern was that the aggregate casual rate of pay under the Agreement was not sufficient to compensate casual employees for the loss of the Award-based penalties that apply to work performed on Sundays and public holidays. The union further contended that casuals would not be better off overall under the Agreement because the Award provides for a minimum three-hour payment for casuals, whereas the Agreement does not.
In a written response to the F18, the company contended that, because of the substantial margin by which the ordinary casual rate of pay under the Agreement exceeded its Award counterpart, casuals would be better off overall under the Agreement, despite the matters that had been identified by the union. Nevertheless, the company offered to provide an undertaking that it would not engage casual employees to work for less than three hours on any shift and an undertaking that no casual employee would be required to work predominantly on Sundays or public holidays.
The CFMMEU pressed its concern that the Agreement did not pass the BOOT in respect of casual employees who worked on Sundays or public holidays. I listed the application for a telephone hearing on 17 April 2023 at which the parties spoke to their respective positions. The CFMMEU raised a further contention in opposition to the approval of the Agreement, namely that the group of employees to be covered by the Agreement had not been fairly chosen.
Following the hearing on 17 April 2023, the company submitted two written undertakings. The first stated that the company would not engage casual employees to work for less than three hours on any shift (the first undertaking). The second stated that the company would not engage a casual employee to work on a Sunday or a public holiday in any given week unless: the number of hours worked by the casual on each Sunday and public holiday in the week was no greater than the number of ordinary hours the casual is rostered to work on any day between Monday and Friday of that week that is not a public holiday (rostered weekday hours); or, the number of rostered weekday hours worked by the casual in the previous three months exceeded the number of Sunday and public holiday hours in the same period by no less than 126 hours (the second undertaking).
As required by s 190(4) of the Act, I sought the views of the bargaining representatives as to the proposed undertakings. Mr Jim Grinter advised the Commission that the employees he represented approved of the undertakings. The CFMMEU advised the Commission that it did not believe the second undertaking resolved its BOOT concern about casuals working Sundays and public holidays and asked that the application be listed for further hearing.
The company subsequently offered a revised second undertaking, whereby it undertook not to engage a casual to work on a Sunday or public holiday in any given week unless: (a) the company pays the casual the amount they would have received under the Award for working that day; or (b) the number of hours worked by the casual on each Sunday and public holiday in the week is no greater than the number of hours the casual is rostered to work between 7am and 7pm on any day of the week Monday to Friday that is not a public holiday (rostered weekday hours); or (c) the number of rostered weekday hours worked by the casual in the previous thirteen weeks exceeds the number of Sunday and public holiday hours worked in the same period by no less than 120 hours; or (d) company pays to the employee the amount, if any, by which the total earnings they would have received under the Award exceed the total amount earned by the employee under the Agreement in the previous 52 weeks.
At a further hearing on 1 May 2023, the CFMMEU pressed its objection to the approval of the Agreement. It maintained that the Agreement did not pass the BOOT in relation to casuals working Sundays and public holidays and contended that the company’s revised second undertaking did not offer adequate safeguards.
Consideration
The CFMMEU’s first BOOT contention was that, without a minimum engagement period, casuals regularly engaged for periods shorter than three hours would not be better off overall under the Agreement than under the Award because they would earn less remuneration. On the other hand, they would work fewer hours. However, I accept that there is at least a basis for the Commission to have a ‘concern’ about this issue, for the purpose of accepting an undertaking under s 190. The first undertaking ensures that casuals will not be engaged for less than three hours on any shift. It meets my concern about this issue.
As to the CFMMEU’s contention that the Agreement does not pass the BOOT in relation to casual employees who work on Sundays and public holidays, it is clear that a casual employee who works a shift on a public holiday will receive less pay for that shift under the Agreement than would be the case under the Award. The same is true of a casual who works on a Sunday. Casual work on weekdays is paid at substantially higher rates under the Agreement than under the Award. The margin is smaller in respect of hours where overtime is payable under the Award, for any time worked outside of ordinary hours, which are between 6.00am and 6.00pm (see clauses 12 and 18 of the Award).
The BOOT does not require that in every individual working scenario, an employee must be better off under an agreement than under the applicable award. An enterprise agreement passes the BOOT if the Commission is satisfied that each award covered and prospective award covered employee for the agreement would be better off overall if the agreement applied to them than if the relevant modern award applied (s 193). The test entails a global rather than a line-by-line assessment.
The company operates alternating 12-hour shift rosters, seven days a week. There is an afternoon shift from 7.00am to 7.00pm and a night shift from 7.00pm to 7.00am. The company stated that it had only recently employed a casual deckhand, who was deployed to cover periods of unexpected absences. In my view, it is not unrealistic that casuals might work many Sundays or public holidays, or that, where casuals work weekday shifts, these could be night shifts, when the margin by which the agreement rate exceeds that of the award is smaller. A solution to the concern would be an undertaking that ensures that casuals work sufficient weekday hours within the Award span to more than offset any ‘detriment’ that might arise, for BOOT purposes, in respect of Sunday and public holiday work.
The company’s revised second undertaking meets my concern about whether the Agreement passes the BOOT in relation to casual employees working on Sundays and public holidays. The revised undertaking provides that casuals can only be rostered on a Sunday or public holiday in any week if one of the conditions in the undertaking is met. The first condition requires the casual to be paid the relevant award amount. Although this amount would equal the Award amount for that day, rather than exceed it, the casual is still better off overall because in other working scenarios the general casual rate of pay exceeds that of the Award. The second alternative condition requires that Sunday and public holiday hours not exceed the hours worked by the casual during the week (on non-holidays) between 7.00am and 7.00pm. This differs only slightly from the Award span of hours (6.00am to 6.00pm), evidently to align with the company’s rostering practices. Again, casuals who work on Sundays or public holidays subject to this condition will be comfortably better off under the Agreement than they would be under the Award, because of the much higher general rate of pay that casuals receive under the Agreement for hours within the Award span of hours. This is also the case with the condition in undertaking 2(c): a casual will not work a Sunday or public holiday in a week unless over the past 13 weeks there is a ‘buffer’ of 120 hours (essentially, ten shifts) of rostered weekday hours between 7.00am and 7.00pm, which are paid at a much higher rate than the Award.
As to the condition in undertaking 2(d), I noted at the hearing on 1 May 2023 that the relevant payment would see employees paid only the same amount as that to which they would have been entitled over a 52-week period under the Award. Because of the length of the period in respect of which the analysis would be conducted, it would be necessary in my view to ensure that the payment resulted in employees receiving more than would have been the case under the Award. The point of this element of the second revised undertaking is to afford the company the option of relying on payments previously made to casuals under the Agreement that are above the relevant Award levels as ‘credits’ towards any ‘shortfall’ that might otherwise arise from a casual being deployed to work on a Sunday or public holiday in a particular week. In each and every week in which the company might rely on it, the company would need to undertake the reconciliation contemplated by the clause and pay to the employee a sum that exceeds the amount (if any) by which their total earnings under the Award would have exceeded their earnings under the Agreement, over the past 52 weeks. The company later submitted a revised second undertaking in which condition (d) now states that a casual will not be rostered to work on a Sunday or public holiday in a week unless the total amount earned by the casual under the Agreement in the previous 52 weeks (including the current week) exceeds the total earnings that the employee would have received under the Award for the same period. The revised undertaking meets my concern about the BOOT. As required by s 190(4), I sought the views of the bargaining representatives about the revised undertaking. The CFMMEU had no further comments. Mr Grinter said that the employees that he represented supported the undertakings.
As to the relevant calculations, the CFMMEU contended that superannuation payments provided by the company under the Agreement should not count in the assessment of the BOOT. The union is correct to say that the compulsory 10.5% employer superannuation contribution is not to be counted in the BOOT (or rather, it counts on both sides of the ledger, under the Award and the Agreement). However, additional superannuation amounts payable by an employer under an agreement must be considered when assessing the BOOT. In this case, the Agreement provides that employees receive 15% superannuation. The additional 4.5% is a monetary benefit accruing to employees under the Agreement that they do not receive under the terms of the Award. It must be factored into the assessment of the BOOT.
I am satisfied that, subject to the attached undertakings which I accept, the Agreement passes the BOOT in relation to casuals, and all other award covered and prospective award covered employees for the agreement. They will be better off overall if the Agreement applied to them than if the relevant award applied.
The CFMMEU contended during the first day of the hearing that the Commission could not be satisfied that the group of employees covered by the Agreement was fairly chosen, as required by s 186(3) of the Act. It submitted that the Agreement applied only to employees of the company employed at Queenscliff and that, contrary to the employer’s F17 declaration, these were not all of the employees of the company, as workers were employed at other company facilities operating in Port Philip and Western Port Bays, and there was no good reason why employees at other sites should not be covered by the Agreement. It pointed to clause 10.2 of the Agreement, which states that employees who are required to perform duties in Western Port Bay or Melbourne will continue to be paid the wage rates in the Agreement. The company submitted that the coverage of the Agreement was the same as that of the previous agreement, that it was geographically and operationally distinct and not unfair, and that clause 10.2 concerned temporary deployments away from Queenscliff and was intended to ensure employees kept their rate of pay if temporarily redeployed and did not fall back to the Award.
I am satisfied that the group of employees covered by the Agreement is fairly chosen. As required by s 186(3A), in reaching this conclusion I have taken into account whether the group is geographically, operationally or organisationally distinct. In my view, the group is operationally distinct, because it is comprised of employees employed in connection with launch vessels operated by the employer from its Queenscliff premises involved in the embarkation and disembarkation of marine pilots to and from vessels (see clause 10.4). The CFMMEU queried how this work was different from that undertaken by employees based in Williamstown and Western Port Bay. The company explained, and I accept, that there are special skills required of employees operating in the heads that separate Port Philip Bay from Bass Strait. The Queenscliff operation is in any event a separate operation and is operationally distinct for this reason. The group of employees is also geographically distinct. I see nothing unfair in the selection of the group of employees to be covered by the Agreement. Clause 10.2 does not point to a different conclusion. It concerns temporary redeployment during which employees’ rate of pay under the Agreement is maintained. Employees at the company’s other sites are not covered by an enterprise agreement. There is no indication that any of them wished to be included in this agreement, or that they considered the chosen group to be unfair.
The company advised the Commission that after lodging its application for approval of the Agreement it had discovered an irregularity in the voting process. The only casual employee employed by the company at the time of the vote started employment on the day before the commencement of the vote, and therefore during the ‘access period’ (see s 180(4)). The company omitted to provide this employee with a copy of the Agreement and did not ask the employee to vote on it. This was an error - see Appeal by Kmart Australia Limited [2019] FWCFB 7599 at [33]-[36]). However, in all the circumstances, I am satisfied that it was a minor procedural or technical error of the kind contemplated by s 188(2)(a), and that the employees covered by the agreement were not likely to have been disadvantaged by the error. I note that the vote of one employee could not have affected the outcome of the vote, as all nine employees who voted on the Agreement voted to approve it. The company also advised that the name of the proposed agreement in the notice of employee representational rights (NERR) differed from the name ultimately given to the final agreement, however I do not consider that this gives rise to any approval concern. The NERR concerns a proposed agreement. When the NERR is provided to employees, the name of the agreement is merely one that is proposed at that time.
I am satisfied that each of the requirements of ss 186, 187 and 188 as are relevant to this application for approval has been met. The CFMMEU has given notice under s 183 of the Act that it wants the Agreement to cover it. As required by 201(2), I note that the Agreement covers the CFMMEU. I also note, as required by s 201(3), that the undertakings that I have accepted, and which are attached, are taken to be terms of the Agreement. The Agreement was approved on 2 May 2023 and, in accordance with s 54, it will operate from 9 May 2023.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE519638 PR760821>
Hearing details
2023
Melbourne
17 April and 1 May
Appearances
B. Marshall and S. Silvestro for the company
W. Carr for the CFMMEU
Annexure A
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