Prosegur Australia Pty Limited T/A Prosegur Australia Pty Limited

[2019] FWC 810

[2019] FWC 810

FAIR WORK COMMISSION

DECISION

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

Prosegur Australia Pty Limited T/A Prosegur Australia Pty Limited
(AG2018/3286)

DEPUTY PRESIDENT MASSON MELBOURNE, 12 FEBRUARY 2019

Application for approval of the Prosegur Australia Pty Limited, Hindmarsh, South Australia Alice Springs, Darwin, Northern Territory Cashroom Enterprise Bargaining Agreement 2018 to 2021.

[1] An application has been made for approval of the Prosegur Australia Pty Limited, Hindmarsh, South Australia Alice Springs, Darwin, Northern Territory Cashroom Enterprise Bargaining Agreement 2018 to 2021 (the Agreement). The application was made pursuant to s 185 of the Fair Work Act 2009 (the Act). It has been made by Prosegur Australia Pty Limited (the Applicant). The Agreement is a single enterprise agreement.

[2] A notice of employee representational rights was provided to employees on 21 April 2017 and the notice complied with the regulations. The Applicant states that employees were provided with access to the Agreement and information about the terms and the effects of the terms of the Agreement on 27 June 2018.

[3] The Applicant states that employees were notified of the time, place and method of voting via an email sent to all employees on 27 June 2018 and that voting occurred on 5 July 2018. A majority of those who voted approved the Agreement. 1

[4] The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test (BOOT) was the Clerks – Private Sector Award 2010. 2

[5] The statutory declaration noted that some provisions in the Agreement were more beneficial than the Award or were not conferred by the Award. Less beneficial terms were also identified.

[6] In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of concerns in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and BOOT assessment considerations. The Commission wrote to the Applicant on 7 November 2018 and identified a number of issues requiring a response.

[7] The following issues were raised with the Applicant in the Commission’s correspondence dated 7 November 2018:

1. While listed at clause 4.1 as a party to the Agreement the Transport Workers Union (TWU) has not provided a Form F18;

2. The Form F16 has not been signed by an employee representative;

3. Clause 19 which deals with abandonment of employment fails to comply with National Employment Standard (NES) notice of termination of employment requirements;

4. Clarity on the relevant modern award was sought having regard to the classifications and range of duties detailed in clause 19;

5. Rates of pay fell below the Award in some instances raising concerns as to whether the Agreement meets the BOOT;

6. The Agreement provides for a number of reductions in entitlements which do not appear to be offset by the pay rates in the Agreement raising concerns as to whether the Agreement meets the BOOT. The reduced entitlements include:

a. Clause 24.1 of the Agreement appears to provide for ordinary hours of work of 40 hours per week;

b. Clause 25.1 of the Agreement provides for the payment of overtime at ordinary time rates for hours worked beyond 38 and up to 45 hours per week on Monday-Friday;

c. The Agreement is silent on night shift penalties and provides for an afternoon shift penalty rate of 10%, which is less than the Award afternoon shift penalty rate of 15%;

d. Various allowances in the Agreement are less beneficial than the Award including; motor vehicle, responsibility and first aid allowances.

[8] Various correspondence was then exchanged between the Commission and the Applicant in relation to the above-referred concerns culminating in a series of Undertakings being proffered by the Applicant in correspondence dated 21 January 2019. Submissions were also made in relation to a number of matters raised by the Commission.

[9] On 25 January 2019, the Commission wrote to the Applicant advising that concerns were still held by the Commission that the Agreement was not capable of approval. Having regard to those concerns, the Applicant was advised that it may wish to consider withdrawing its application or alternatively it could seek to be heard. The Applicant advised that it sought to be heard.

The Hearing

[10] The matter was then listed for Hearing on Friday 8 February 2019. Prior to the hearing, the Commission wrote to the parties on 7 February 2019 and provided a BOOT analysis of various hours of work scenarios which highlighted that, in some instances, employees who would be covered by the Agreement would receive less remuneration under the Agreement than under the Award. The parties were requested to review the analysis and be in a position to address that material in the hearing before the Commission.

[11] At the telephone hearing conducted on 8 February 2019, the Applicant was represented by Mr Gavin Lynch – National Workplace Relations Manager, who was accompanied by Mr James Skuse – Regional General Manager and Ms Karen Carnie – General Manager. The TWU was represented by Mr Justin Lewis.

[12] At the outset of the hearing I confirmed with the parties that having regard to the submissions and materials filed by the Applicant and the Undertakings proffered, I remained concerned in relation to three specific matters:

1. The Agreement overtime penalty provisions provide for ordinary time rates of pay for overtime worked beyond 38 hours and up to 45 hours on Monday-Friday and that base rates of pay are not high enough to compensate for the reduced overtime penalty rate.

2. The Undertakings proffered in relation to shift penalties failed to address the concerns raised.

3. The casual Cash Processor rate in the Agreement of $27.62 per hour appeared to be less than the comparable Award rate, that of a Level 2 Year 2 classification of $28.05. It was noted that the Applicant had used the Level 2 Year 1 rate in the Award of $27.55 for the purpose of its classification matching.

Overtime Provisions

[13] The focus of the hearing was directed primarily to the scenarios provided by the Commission to the parties in correspondence dated 7 February 2019. Scenarios canvassed included the following:

Scenario 1

A Probationary employee on an hourly rate of $20.21 under the Agreement rostered to work 7.6 hours per day Monday- Friday and required to work 1 hour overtime each day Monday-Friday would earn $869.03 per week. This is comprised of 38 ordinary hours x $20.21 ($767.98) + 5 hours overtime x $20.21 ($101.05).

By comparison, an employee engaged under the Award on a base rate of $20.12 would earn $915.46 per week. This is comprised of 38 ordinary hours x $20.12 ($764.56) + 5 hours overtime x $20.12 x time and a half ($159.90).

Under this scenario an employee engaged under the Agreement would earn less than under the Award.

Scenario 2

A Probationary employee on an hourly rate of $20.21 under the Agreement rostered to work 7.6 hours per day Monday- Friday and required to work 7 hours overtime on a Saturday from 8.00am to 3.00pm would earn $1010.50 per week. This comprised of 38 ordinary hours x $20.21 ($767.98) + 4 hours overtime at time and a half ($121.21) + 3 hours overtime at double time ($121.26).

By comparison, an employee engaged under the Award would earn $1026.12 per week. This is comprised of 38 ordinary hours x $20.12 ($764.56) + 3 hours overtime at time and a half ($60.36) + 5 hours overtime at double time ($201.20).

Under this scenario an employee engaged under the Agreement would earn less than under the Award.

Scenario 3

A Cash Processor engaged on an hourly rate under the Agreement of $23.03 rostered to work 7.6 hours per day Monday-Friday and required to work 1 hour overtime each day Monday-Friday would earn $989.86 per week. This is comprised of 38 ordinary hours x $223.03 ($874.76) + 5 overtime hours at ordinary time ($115.10).

By comparison, an employee engaged under the Award on a base rate of $22.44 would earn $1021.02 per week. This is comprised of 38 ordinary hours x $22.44 ($852.72) + 5 overtime hours at time and a half ($168.30).

Under this scenario an employee engaged under the Agreement would earn less than under the Award.

Scenario 4

A Cash Processor employed on an hourly rate of $23.02 under the Agreement rostered to work 7.6 hours per day Monday-Friday and required to work 7 hours overtime on a Saturday from 8.00am to 3.00pm would earn $1151.00 per week. This is comprised of 38 ordinary hours x $23.02 ($874.76) + 4 hours overtime at time and a half ($138.12) + 3 hours overtime at double time ($138.12).

By comparison, an employee engaged under the Award would earn $1144.44 per week. This is comprised of 38 ordinary hours x $22.44 ($852.72) + 2 hours overtime at time and a half ($67.32) + 5 hours overtime at double time ($224.40).

Under this scenario an employee engaged under the Agreement would earn less than under the Award.

[14] In relation to the various scenarios, the Applicant confirmed that the calculation methodology applied by the Commission was correct and agreed that under each of the four scenarios detailed in paragraph [13], employees would earn less under the Agreement than if they were employed under the Award. However, they submit that the scenarios presented are unrealistic as Probationary employees are only engaged on a casual basis and that employees would not normally be required to work five hours overtime per week or work an overtime shift on the weekend.

[15] The Applicant referred to its internal analysis of hours of work in support of its submission that the Commission’s scenarios were unrealistic. No evidence was adduced by the Applicant as to what patterns of overtime and hours of work are actually worked. Nor was the Applicant able to detail the actual maximum number of overtime hours routinely worked by employees so as to enable a “realistic” BOOT assessment to be undertaken.

[16] Mr Lewis of the TWU submitted that hours of work of employees of the Applicant do fluctuate and it was not unrealistic to model overtime hours per the analysis prepared by the Commission.

[17] The Applicant was invited to consider the provision of Undertakings to address the BOOT concerns raised by the Commission in relation to overtime. While indicating a willingness to provide an Undertaking to the effect that it would only engage Probationary employees on a casual basis, thus alleviating the concerns raised under scenarios one and two, it declined to provide any further Undertakings.

Shift Penalties

[18] The Undertakings proffered by the Applicant in respect of shift arrangements on 21 January 2019 were to the following effect:

(i) “4. In relation to shift penalties – Prosegur does not currently operate an afternoon or night shift in any of the locations covered by the proposed agreement. Should Prosegur seek to introduce such shifts, Prosegur undertakes that clause 12 – Model Consultation term, would apply.”

(ii) “5. In relation to shift penalties, clause 24.8 – Prosegur provides an undertaking that in addition to clause 24.8, shift penalties for time worked between 08.00pm and 09.00pm will be paid at 15% of the applicable rate.”

[19] The Commission pointed out to the Applicant that Undertaking 4 failed to address the Commission’s particular concern that the Agreement was silent on certain shift penalty provisions under the Award, and that the Consultation clause that was referred to in the Undertaking merely deals with the process of consultation over the introduction of changes to hours of work, not the actual penalty rates to be applied to such altered hours.

[20] The Applicant submits that it does not currently require employees to work shift work, in response to which, it was invited to consider an undertaking to address the concern as to what penalty payments would apply in the event that employees were required to work afternoon or nightshifts. The Applicant declined to provide an Undertaking to address the particular concern.

[21] In relation to Undertaking 6, the Commission highlighted that the Award provides for a 15% shift penalty for all hours worked on afternoon shift, whereas the Agreement provides for a 10% penalty for all hours up to 8.00 pm and 15% for hours between 8.00 pm and 9.00 pm. The analysis provided by the Commission in its correspondence to the parties on 7 November 2019, revealed that employees required to work a 7.6 hour shift ending at 9.00 pm Monday-Friday would earn $967.98, whereas an employee engaged under Award conditions would earn $980.62.

[22] The Applicant was invited to consider the provision of an Undertaking to address the BOOT concerns raised by the Commission in relation to shift penalties but declined to do so.

Casual Cash Processor rate of pay

[23] The Applicant submits that the correct Award classification rate for that of a casual Level 2-Year 1 is $27.55 per hour, not that of the casual Level 2–Year 2 rate of $28.05 per hour. The TWU made no submissions on the appropriate Award rate.

Statutory Provisions

[24] Section 186 requires, amongst other things, that in order for an enterprise agreement, that not is a greenfields agreement to be approved, the Commission must be satisfied that the terms of the Agreement do not contravene s 55 of the Act and that the Agreement passes the Boot. Section 186 relevantly provides as follows:

“186 When the FWC must approve an enterprise agreement—general requirements

Basic rule

(1) If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.

Note:     The FWC may approve an enterprise agreement under this section with undertakings (see section 190).

Requirements relating to the safety net etc.

  (2)  The FWC must be satisfied that:

(a)  if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; an

(b) if the agreement is a multi-enterprise agreement:

(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and

(ii)  no person coerced, or threatened to coerce, any of the employers to make the agreement; and

(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and

(d)  the agreement passes the better off overall test.”

Consideration

[25] It is important to note at the outset that the relevant base rates of pay in the proposed Agreement when compared to the Award rates of pay are as follows:

Probationary - $20.21 under the Agreement vs $20.12 under the Award

Cash Processor - $23.02 under the Agreement vs $22.44 under the Award

[26] The margin of the Agreement base rates above the Award is between .5% -2.5%. It is against this background of thin margins between the Agreement base rates and Award base rates that the Commission’s concerns over the overtime and shift penalty provisions was raised.

[27] The overtime hours scenarios prepared by the Commission, the methodology of which the Applicant took no issue with, reveal that employees engaged under the Agreement required to work five hours overtime per week would receive less than if they were employed under the Award. The Respondent submits that the various scenarios prepared were unrealistic and did not reflect historical patterns of actual hours of work or likely hours of work.

[28] While it is clear that an employee working five hours overtime per week would receive less under the Agreement than under the Award, it is also relevant to understand the “tipping point” at which the number of overtime hours worked in a week results in an employee receiving less under the Agreement than under the Award. The following scenario is relevant:

A Cash Processor engaged on an hourly rate under the Agreement of $23.03 rostered to work 7.6 hours per day Monday-Friday and required to work 1 hour overtime 2 days per week would earn $920.80 per week. . This is comprised of 38 ordinary hours x $23.03($874.76) + 2 overtime hours x $23.03 at ordinary time ($46.04).

By comparison, an employee engaged under the Award on a base rate of $22.44 would earn $920.04 per week. This is comprised of 38 ordinary hours x $22.44 ($852.72) + 2 overtime hours x $22.44 at time and a half ($67.32).

[29] It is evident from the above scenario, that if an employee engaged as a Cash Processor under the Agreement worked more than two hours overtime per week, they would receive less than if they were employed under Award conditions.

[30] There was no evidence adduced by the Applicant as to the historical or likely hours of work and overtime levels. In these circumstances, I am not satisfied that employees being required to work in excess of as little as two hours of overtime per week is unrealistic.

[31] I am also satisfied that the afternoon shift provisions and proffered Undertaking do not address the concern that employees would receive less under the Agreement than they would be entitled to receive under the Award were they to work an afternoon shift.

[32] Having regard to the above, I am satisfied that the concerns held by the Commission with respect to overtime and shift penalties weigh against a finding that the Agreement satisfies the BOOT. The Applicant in its Form 17 identifies a range of provisions that it submits are more beneficial than the Award including:

(i) Wage rates in the Agreement are higher than weekly and hourly rates for permanent employees under the Award;

(ii) The Agreement provides for a “Responsibility Allowance”;

(iii) A Training allowance of $20.00 per day is payable to suitability qualified cash room employees for providing training to new or existing employees;

(iv) Blood donations are to be facilitated by rostering arrangements.

[33] I have already dealt with the issue of base rates of pay under the Agreement and do not accept that they are sufficient to offset less beneficial terms. As regards the Responsibility Allowance, Training Allowance and Blood Donation leave, these are incident based and will not necessarily be conferred to all employees. Consequently they are a neutral consideration in the conduct of the BOOT assessment.

[34] No material or submissions have been provided by the Applicant that address my concerns that employees are not better off overall under the Agreement when compared against the Award. As a consequence, I am unable to be satisfied that that the wage rates in the Agreement are sufficient to compensate for the various less beneficial provisions. Consequently, I cannot be satisfied as to the Agreement meeting the requirements of s 186(2)(d) of the Act.

Conclusion

[35] In order to approve the Agreement, the Commission must, as part of its consideration, be satisfied in respect of ss 186(2)(c) and 186(2)(d) under the Act. For the reasons detailed above, I am not satisfied in respect of those requirements. Consequently, the application for approval of the Agreement is dismissed. An order reflecting this decision will be separately issued.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1 Section 180 of the Fair Work Act 2009.

 2   MA000002.