Prouds Jewellers Pty Ltd T/A Prouds Jewellers Pty Ltd
[2020] FWC 2424
•8 MAY 2020
| [2020] FWC 2424 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Prouds Jewellers Pty Ltd T/A Prouds Jewellers Pty Ltd
(AG2019/1633)
DEPUTY PRESIDENT YOUNG | MELBOURNE, 8 MAY 2020 |
Application for approval of the Prouds Retail Employees Enterprise Agreement 2019 – interim decision – agreement does not pass better off overall test – opportunity to provide further undertakings.
Introduction
[1] Prouds Jewellers Pty Ltd (Employer) has made an application for approval of an enterprise agreement known as the Prouds Retail Employees Enterprise Agreement 2019 (Agreement) pursuant to section 185 of the Fair Work Act 2009 (Act). The Agreement is a single-enterprise agreement.
[2] The Shop, Distributive and Allied Employees’ Association (SDA) and the Retail and Fast Foods Workers Union (RAFFWU) were bargaining representatives for employees who will be covered by the Agreement. The SDA filed a Form F18 statutory declaration supporting approval of the Agreement “on the basis that the Commission determines that it passes the better off overall test”. In that context, the SDA identified 12 matters in respect of which it said it had concerns. RAFFWU informed the Commission that it did not intend to file an F18A nor make any submissions in relation to the application. On 10 January 2020, RAFFWU advised that they no longer acted as a bargaining representative and as such ended their involvement in the matter.
[3] In reviewing the Agreement, the Fair Work Commission (Commission) identified a number of concerns in relation to the Agreement and supporting documentation. Those concerns included pre-approval requirements and a significant number of better off overall assessment considerations. The Commission’s pre-approval concerns were dealt with as an initial matter and submissions and evidence was filed by Prouds in relation to those concerns, to which the SDA provided a response stating that “The pre-approval matters raised by the Deputy President on 23 July 2019 are for the Commission to satisfy itself of” and that it otherwise relied on its Form F18. Following the filing of those materials the Commission was satisfied that the pre-approval requirements under the Act had been met.
[4] The Commission then wrote to Prouds seeking a response to the better off overall concerns and highlighting the concerns raised by the SDA in its F18.
[5] Thereafter there was considerable exchange of correspondence between the Commission, the SDA and Prouds including submissions on a range of matters, which ultimately culminated on 8 January 2020 with Prouds providing correspondence to the Commission attaching a final set of proposed undertakings which sought to address the concerns raised by the Commission and the SDA.
[6] The SDA subsequently pressed a number of its outstanding concerns. The matter was listed for hearing on 31 March 2020. Pursuant to section 596 of the Act Mr Tindley was granted permission to represent Prouds and Mr Tierney was granted permission to represent the SDA. On 23 April 2020, final written submissions were filed by the parties in relation to the SDA’s contentions regarding clause 28.10 – 28.13 of the General Retail Industry Award 2010 (GRIA) and its application to casual employees. In light of submissions made by Prouds, it was agreed at the hearing that an interim decision would be issued to allow Prouds an opportunity to provide any further undertakings it felt appropriate, should the Commission not be satisfied that the Agreement passed the better off overall test.
The Agreement
[7] The Agreement, if approved, would apply to the almost 3,000 employees employed by Prouds in its retail stores across Australia. The Agreement replaces the Prouds Retail Employees Enterprise Agreement 2011 and operates to the exclusion of the GRIA.
[8] The rates of pay contained in the Agreement are either at GRIA rates or 0.06%-0.07% above the GRIA rates. The Agreement contains some terms and conditions that reflect the GRIA, some that are more beneficial and a number that are silent or less beneficial than the GRIA.
[9] Prouds proposed a set of 23 undertakings to address the concerns of the Commission and the SDA (Proposed Undertakings). The Proposed Undertakings address the following concerns:
• Undertaking 1 – pay rates for trainees;
• Undertaking 2 – entitlement to overtime for part-time employees working in excess of 38 hours per week;
• Undertaking 3 – overtime rates of pay;
• Undertaking 4 – overtime rates of pay for overtime worked on Sundays and public holidays;
• Undertaking 5 – overtime rates of pay where a 10 hour break is not provided;
• Undertaking 6 – entitlement to payment for after-hours calls for key holder employees;
• Undertaking 7 – entitlement to reimbursement for travel costs where the employee commences or finishes work after 10.00 pm or prior to 7.00 am;
• Undertaking 8 – payment for attendance at compulsory training sessions;
• Undertaking 9 – entitlement to a paid job search day for employees given notice of termination of employment by Prouds;
• Undertaking 10 – entitlement to three consecutive days off for part-time and full-time employees who regularly work Sundays;
• Undertaking 11 – maximum hours of work per day for casual employees;
• Undertaking 12 – payment of entitlements upon termination of employment;
• Undertaking 13 – payment for recall to work;
• Undertaking 14 – payment of meal allowance in accordance with the GRIA;
• Undertaking 15 – payment of travel allowance in accordance with the GRIA;
• Undertaking 16 – entitlement to superannuation while on paid leave;
• Undertaking 17 – entitlement to a choice of superannuation fund;
• Undertaking 18 – application of clauses 4.3(b), 5.1, 5.2 and 5.3 of Schedule E of the Miscellaneous Award 2010 to trainees;
• Undertaking 19 – requests for flexible working arrangements;
• Undertaking 20 – clarification of pay rate increases to apply during the life of the Agreement;
• Undertaking 21 – higher duties allowance for 3IC and sales assistants temporarily appointed to perform higher duties;
• Undertaking 22 – reconciliation of higher duties allowance;
• Undertaking 23 – time off in lieu to be equivalent to the overtime payment that would have been made.
Better Off Overall Test
[10] Before the Commission can approve an enterprise agreement, it must be satisfied that the agreement passes the better off overall test (s186(2)(d)). Section 193(1) of the Act, states:
“193 Passing the better off overall test
When a non greenfields agreement passes the better off overall test
(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.”
[11] As the Full Bench noted in Hart v Coles Supermarkets Australia Pty Ltd section 193 requires the Commission to be satisfied that a consideration of all the benefits and detriments under the Agreement results in each employee and each prospective employee being better off overall under the Agreement compared to the Award. 1 The analysis is not whether employees are better off on a line by line or itemised basis.
SDA Better Off Overall Test Concerns
[12] The SDA maintains its objection to the approval of the Agreement on the ground that the Agreement fails to meet the better off overall test. In assessing whether the Agreement is capable of approval I turn first to those matters.
Attendance bonus clause
[13] The Agreement at clause 32 provides for an attendance bonus to be paid to full-time employees who use less than four days personal leave per year (Attendance Bonus Clause). In its Form F18 the SDA submitted that the Attendance Bonus Clause was a discriminatory term. At hearing, however, the SDA abandoned this submission 2 and submitted that the Attendance Bonus Clause was an incentive to forego the use of personal leave and was therefore a detriment which was relevant to consideration of whether the Agreement passed the better off overall test.3 Prouds submits that the Attendance Bonus Clause does not reduce an employee’s entitlement to personal leave and does not discourage the taking of personal leave. Prouds further submits that the Attendance Bonus Clause provides a benefit to employees.4
[14] I reject the SDA’s submission that the Attendance Bonus Clause is a detriment because it is an inducement to forego personal leave. The Attendance Bonus Clause provides for a potential additional payment to be provided to employees. It does not erode or restrict an employee’s entitlement to access or use personal leave. I consider the Attendance Bonus Clause to be a contingent financial benefit, as opposed to a detriment.
Part-time employees
[15] The SDA submits that clause 14.9 of the Agreement implies the ability to unilaterally reduce part-time contractual hours. 5 I infer from this submission that the SDA contends that is contrary to the provisions regarding part-time employee’s hours in the GRIA. At hearing the SDA submitted that the clause was ambiguous and that it may be interpreted as requiring a part-time employee to agree to a variation.6 It was therefore a detriment. Prouds submits that there is no provision of the Agreement that unilaterally allows part-time hours to be reduced. Prouds contends that the Agreement does not allow Prouds to unilaterally reduce hours, it has no intention of doing so and that nothing that the SDA may imply into clause 14.9 alters that.7
[16] Clause 14.9 of the Agreement provides as follows:
“Both the Employee concerned and the Company will try to satisfy any need for an increase or decrease in the hours worked per fortnight, or the pattern of hours worked, as a means of achieving a balance between business needs and the personal needs of the Employee. Any required variation will take into account the personal needs of the Employee balanced against the operational requirements of the Company and its customers and will be in line with the other protections outlined in this Agreement.”(Commission’s emphasis).
[17] The SDA conceded at hearing that the final sentence of clause 14.9 was a “clarifying clause” and that clause 14.9 is to be read in the context of the Agreement as a whole. 8 The other provisions of clause 14 of the Agreement provide that part-time employees will be advised upon commencement of employment of the number of hours to be worked each day, the day of the week on which they are worked and the start and finish times on those days. Any variation to this pattern of work is to be by agreement and to be made in writing. Accordingly, I do not consider that clause 14.9, properly construed in the context of the Agreement as a whole, allows Prouds to unliterally reduce contracted part-time hours or, indeed, implies such an ability. No detriment relative the GRIA on this basis arises.
Recall Allowance
[18] The Proposed Undertakings include an undertaking in relation to recall allowance (Undertaking 13). The SDA submits that Undertaking 13 only addresses the entitlements in clause 20.10(a) of the GRIA and does not address the entitlement under clause 20.10(b) of the GRIA pursuant to which the time “worked” for the purposes of payment of the recall allowance is calculated from the time the employee leaves home until the time they return home. The SDA submits that in these circumstances there is a clear detriment. 9 Prouds made no particular submission as to the recall allowance but indicated a preparedness to consider provision of a further undertaking in relation to recall allowance should the Commission consider this was necessary.10
[19] The Agreement does not provide for a recall allowance. Clause 20.10 of the GRIA deals with recall allowance. Undertaking 13 addresses the entitlement in clause 20.10(a) of the GRIA but does not adopt the basis of calculation for time worked provided in clause 20.10(b) of the GRIA. Accordingly, should Undertaking 13 be accepted, the Agreement would provide that employees recalled to work would be paid only for the actual time worked once recalled. Time from home to work and return would not be compensated. I accept that this is a detriment relative to the GRIA for the purposes of the better off overall test.
Superannuation
[20] Clause 27 of the Agreement provides for Prouds to make superannuation contributions in accordance with legislative requirements. The Proposed Undertakings include an undertaking in relation to superannuation while on paid leave (Undertaking 16). The SDA submits that even if Undertaking 16 is accepted, the Agreement does not include an entitlement to superannuation while absent because of a work-related illness or injury for which compensation payments are being received, as is provided for in clause 22.5(b) of the GRIA. The SDA submits this is an important benefit and its absence is a detriment relevant to the assessment of the better off overall test. 11 Prouds made no particular submission as to the provisions of the Agreement in relation to superannuation but indicated a preparedness to consider providing a further undertaking should the Commission consider that Undertaking 16 did not adequately address better off overall concerns in relation to superannuation.12
[21] Contrary to the submissions of the SDA, clause 27.4 of the Agreement does provide an entitlement to superannuation when an employee is absent because of a work-related illness or injury. Further, that clause is in the same terms as clause 22.5(b) of the GRIA. There is therefore no detriment relative to the GRIA.
38 hour week roster and 19 day month
[22] Clause 13.1 of the Agreement provides that a full-time employee will work 76 hours per fortnight. Clause 13.2 of the Agreement sets out how those hours will be rostered. The SDA accepts that clause 13 is consistent clause 28.1 of the GRIA however, submits that otherwise clause 13 is generally non-compliant with the benefits afforded employees under clause 28 of the GRIA. The SDA submits that the Agreement is silent as to clause 28.2 – 28.8 of the GRIA, most significantly clause 28.5 of the GRIA which provides that employees employed in retail establishments employing more than 15 employees will not work ordinary hours on more than 19 days in a four week roster cycle and clause 28.7 and 28.8 which deal with rostered days off (RDOs). 13 At hearing, the SDA submitted that the “primary problem” with the Agreement was the absence of the 19 day month allowed for under the GRIA. It says that the effect of clause 28.5 is that the 20th day worked is not ordinary hours and is to be paid at overtime rates. It says the Agreement does not provide for this and it is a financial detriment.14
[23] Prouds submits that:
• clause 28.2 of the GRIA allows any combination of hours to be worked and as such, the provisions of the Agreement are at least as beneficial as the GRIA;
• clause 28.3, 28.4 and 28.6 of the GRIA do not provide any benefits which are not conferred by the Agreement;
• clauses 28.5, 28.7, 28.8 are not relevant as Prouds does not operate any retail establishments which employ, on a regular basis, 15 or more employees. 15
[24] Clauses 28.2 – 28.8 of the GRIA deal with a range of possible 38 hour week rostering arrangements. As a generally comment, I can see no detriment from the rostering arrangements provided in the Agreement comparative to the GRIA. I deal specially with clauses 28.5, 28.7 and 28.8 below.
[25] Clause 28.5 of the GRIA provides as follows:
“28.5 In retail establishments employing on a regular basis 15 or more employees per week, unless specific agreement exists to the contrary between an employer and an employee, the employee will not be required to work ordinary hours on more than 19 days in each four week cycle.”
[26] At hearing, the SDA did not contend that Prouds had retail establishments employing 15 or more employees per week on a regular basis and conceded it had no evidence to support a contrary view. Nonetheless, it said this was a “contingency.” 16 At hearing Prouds submitted that it has never, and will never, employ 15 or more employees per week on a regular basis in one retail establishment and that as such the Commission should hold no concerns in relation to the 19 day month issue.17
[27] I reject the SDA’s submission that a detriment arises from the absence of a 19 day month in the present circumstances. Firstly, Prouds does not, and has never, employed 15 or more employees per week in a store on a regular basis. The SDA does not contend that Prouds has or does. Prouds says it will never do so. For my part, I find it difficult to conceive of a circumstance where 15 or more employees per week would be required to be regularly employed in a retail establishment such as those operated by Prouds. In assessing the better off overall test, the Commission is required to be satisfied that not only every award covered employee but also every prospective award covered employee would be better off under the Agreement. In making that assessment, however, the Commission is not required to take into consideration purely hypothetical, fanciful or implausible scenarios nor every “contingency”. In my view, the application of clause 28.5 in the current context is purely hypothetical. Secondly, I do not consider that clause 28.5 has the effect submitted by the SDA. It does not render work on the 20th day of a month overtime. The entitlement to overtime for work on the 20th day arises because ordinary hours have already been worked over the preceding 19 days. As such, the entitlement to overtime arises because work on the 20th day is in excess of ordinary hours. The Agreement provides for overtime to be paid for work in excess of ordinary hours.
[28] As to clause 28.7 and 28.8, firstly, those clauses are contingent on clause 28.5 being engaged. Secondly, I do not consider that working longer days to accrue and take RDOs is an inherently more beneficial arrangement than working ordinary days without RDOs. Some employees may view this as beneficial referable to lifestyle, while others may be indifferent or disfavour them. The better off overall test must be undertaken on an objective basis. In BOC Limited 18 Deputy President Colman considered the question of detriment arising from the absence of RDOs and expressed the view that if the personal preferences of each employee covered by an agreement had to be taken into account the better off overall test would become mired in speculation on subjective and unquantifiable matters. I respectfully adopt those comments here. I do not consider that the absence of RDOs is detriment relevant to the better off overall test in the present circumstances.
Casual rostering
[29] The SDA submits that the Agreement does not provide the benefits under clause 28.10 – 28.13 of the GRIA (Consecutive Day Clauses) to casual employees. 19 Prouds contend that the clauses do not apply to casual employees.20
[30] Clauses 28.10-28.13 of the GRIA provide as follows:
“28.10 Ordinary hours will be worked on not more than five days in each week, provided that if ordinary hours are worked on six days in one week, ordinary hours in the following week will be worked on no more than four days.
28.11 Consecutive days off
(a) Ordinary hours will be worked so as to provide an employee with two consecutive days off each week or three consecutive days off in a two week period.
(b) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements, which are to be recorded in the time and wages records. It cannot be made a condition of employment that an employee make such a request.
(c) An employee can terminate the agreement by giving four weeks’ notice to the employer.
28.12 Ordinary hours and any reasonable additional hours may not be worked over more than six consecutive days.
28.13 Employees regularly working Sundays
(d) An employee who regularly works Sundays will be rostered so as to have three consecutive days off each four weeks and the consecutive days off will include Saturday and Sunday.
(e) This requirement will not apply where the employee requests in writing and the employer agrees to other arrangements which are to be recorded in the time and wages records. It cannot be made a condition of employment that an employee make such a request.
(f) An employee can terminate the agreement by giving four weeks’ notice to the employer.”
[31] Firstly, the SDA submits that the Consecutive Day Clauses apply to casuals having regard to the plain ordinary meaning of the words and the industrial and legislative context of those clauses. 21 The SDA submits that the term “employee” in clauses 28.10 – 28.13 should be given plenary application encompassing all types of employee.22 It says that the definition of employee in the GRIA is “a national system employee within the meaning of the Act”23 and as such, where used without qualification applies to all types of employee, including casual employees.24 It contends that the Consecutive Day Clauses use the term “employees” without qualification.25 By contrast it submits where the GRIA applies only to full-time or full-time and part-time employees and not casuals, it explicitly says so.26
[32] Secondly, the SDA submits that such a construction supports the purpose of the Consecutive Day Clauses. The SDA contends that the Consecutive Day Clauses confer both monetary and non-monetary benefits. It says that the non-monetary benefit is to constrain the meaning of ordinary hours, while the monetary benefit is the provision of overtime payments for employees who work days in excess of ordinary hours (as defined in the Consecutive Day Clauses). To construe the Consecutive Day Clauses as applying only to permanent employees would, it is submitted, lead to an absurd outcome where the GRIA recognises that full-time and part-time employees be compensated for the “disutility” of working on an excessive number of days without consecutive days off, but casual employees would not.
[33] Thirdly, the SDA submits that the GRIA should be construed in light of the Commission’s duty to meet the modern awards objective set out in section 134(1)(da) of the Act. It submits that a construction that promotes the modern awards objective is to be preferred. This process, it submits, requires an assessment of the relative “disutility” that attaches to requiring an employee to work beyond ordinary hours.
[34] Prouds submits that clause 28 of the GRIA does not apply to casuals. Firstly, it says that clause 28 is headed “38 Hour Week Rosters” and the clause is therefore clearly limited to employees who are engaged to work on 38 hour per week rosters. It says this is further confirmed by the first words of clause 28.1 which provides directions as to the way “full time employees” may be rostered. 27 It says that full-time employees are the only employees required to work 38 hours per week (or an average thereof) and as such clause 28 is limited to these employees.28 Prouds accepts that the remaining provisions of clause 28 refer to “employees” but says this does not change the character and application of clause 28 and would require the Commission to identify at what point in the clause it moves away from full-time employees to casual employees, noting that the first use of the word “employees” is in clause 28.3 which it says clearly applies only to full-time employees.29 Finally, Prouds submits that while casual employees are able to work 38 hours per week, it is neither common nor a requirement of their employment type.30
[35] Secondly, Prouds submits that the SDA have acknowledged in other proceedings that clause 28 does not apply to casuals and have sought in Award Four Yearly Review proceedings to have clause 29 amended such that, in effect, clause 28 would apply to casuals. 31 Finally, Prouds submits that nothing has occurred since that application was unsuccessful which would cause reconsideration of the application of clause 28 to be required.32
[36] The principles of construction of awards were summarised by Rangiah J in Swissport Australia Pty Ltd v Australian Municipal Administrative Clerical and Services Union (No 3). 33 In Gourabi v Westgate Medical Centre34 the Full bench summarised those principles as follows:
“In short summary, the task of construction beings with the natural and ordinary meaning of the words used. However, an award is to be interpreted in light of its industrial context and purpose and its commercial and legislative context. The context includes the immediate textual context and the historical context of the origin of the provision in question.”
[37] It is useful to first set out the basis of employment under the GRIA. The GRIA provides for employment as a full-time, part-time or casual employee. Relevantly, a full-time employee is defined to be an employee who is engaged to work an average of 38 hours per week. 35 A casual employee is defined as an employee engaged as such.36
[38] Clause 28 is entitled “38 Hour Week Rosters”. Clause 28.1 provides that a full-time employee will be rostered for an average of 38 hours per week and sets out the ways in which those hours may be rostered. The provisions that then follow in clause 28.2 – 28.8 refer to 38 hour weeks and other working arrangements which can only apply to employees working 38 hours per week or an average of 38 hours per week. It is clear that employees that work 38 hours per week or an average of 38 hour per week in the context of the GRIA are full-time employees. I accept as contended by the SDA that the subsequent Consecutive Day Clauses refer to “employee” or “employees”, without limitation. I also accept that “employee” is defined in clause 3 of the GRIA as contended for by the SDA. However, I reject the contention that the Consecutive Day Clauses must therefore be constructed as applying to all employees, including casual employees. “Employee” is used in the clauses which precede the Consecutive Day Clauses. Its first use is in clause 28.3. It is not contended that “employee” as used in those clauses means anything other than a full-time or permanent employee. The construction advanced by the SDA would require that the word “employee” be ascribed different meanings at different points in the clause. The SDA contends that that point is clause 28.10. I find such a construction implausible and the clause to contain nothing which could support such a construction. The clause must be read as a whole. When read as a whole, I consider that clause 28 is intended to apply to employees who are required to work 38 hours per week or an average thereof and puts in place safeguards in relation to how those required hours may be rostered. While casual employees could, potentially, work 38 hours per week they are not employed on that basis. It is inherent in the nature of casual employment that there is no requirement to work 38 hours per week or an average thereof and, as has been noted by the Full Bench, most do not. 37 Indeed, there is no requirement for a casual employee to work any hours at all. A casual employee cannot be required to work excessive days without consecutive days off. In the absence of the roster conditions, a full-time employee could be so required. As such, I do not consider any construction of clause 28 advanced on the disutility of casual employees being required to work excessive days without consecutive days off can be sustained. Accordingly, I do not consider on a plain reading that the Consecutive Day Clauses apply to casual employees.
[39] I consider this construction is supported by the historical context of clause 28 and its interaction with the history of the provisions of clause 29 of the GRIA, which deals with overtime. As set out above, the SDA contend that the absence of the benefit of the Consecutive Day Clauses for casual employees in the Agreement leads to the “absurd” outcome where full-time employees are compensated by way of overtime payments for the disutility of working excessive hours but casual employees are not. They say this is the monetary detriment which is occasioned on casual employees by the absence of the Consecutive Day Clauses from the Agreement.
[40] Clause 28 is in substantially the same form as that proposed by the SDA at clause 48 of its draft award in the award modernisation process. 38 That clause was substantially replicated in the exposure draft released by the Australian Industrial Relations Commission (AIRC) in September 2008 and the relevant provision of the GRIA as determined by the AIRC in December 2008. The GRIA has maintained this clause since commencement in January 2010. Upon commencement, the GRIA did not contain any entitlement to overtime for casual employees.39
[41] As part of the 2014 4 yearly review of modern awards (2014 Modern Award Review), the SDA sought a variation to the GRIA to apply overtime rates to casual employees. 40 At that time clause 29.1(a) and 29.2 of the GRIA provided as follows:
“29.1 Reasonable overtime
(a) Subject to 29.1(b) an employer may require an employee other than a casual to work reasonable overtime at overtime rates in accordance with the provisions of this clause.
…
29.2 Overtime
(a) Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork), or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.
(b) Hours worked by part-time employees in excess of the agreed hours in clause 12.2 or as varied under clause 12.3 will be paid at time and a half for the first three hours and double time thereafter.
(c) The rate of overtime on a Sunday is double time, and on a public holiday is double time and a half.
(d) Overtime is calculated on a daily basis.”
[42] The SDA sought that clause 29.2 be varied to read as follows: 41
“29.2 Overtime
(a) Overtime shall be payable to all full-time, part-time and casual employees for hours worked in excess of the ordinary hours or [sic] work, outside the span of hours (excluding shiftwork), or roster conditions prescribed in clauses 27 and 28.
(b) Overtime shall be paid at time and a half for the first two hours and double time thereafter.
(c) Overtime shall be paid to casual employees for hours worked in excess of 38 hours per week.
(d) Hours worked by part-time employees in excess of the agreed hours in clause 12.2 or as varied under clause 12.3 will be paid at time and a half for the first two hours and double time thereafter.
(e) The rate of overtime on a Sunday is double time, and on a public holiday is double time and a half.
(f) Overtime is calculated on a daily basis.”
[43] The Full Bench determined that clause 29 be amended by the deletion of the words “other than a casual” in clause 29.1(a) and that clause 29.2 be amended to its current form which is as follows: 42
“29.2 Overtime
(a) Hours worked in excess of the ordinary hours of work, outside the span of hours (excluding shiftwork), or roster conditions prescribed in clauses 27 and 28 are to be paid at time and a half for the first three hours and double time thereafter.
(b) Hours worked by part-time employees in excess of the agreed hours in clause 12.2 or as varied under clause 12.3 will be paid at time and a half for the first three hours and double time thereafter.
(c) Hours worked by casual employees:
(i) in excess of 38 ordinary hours per week or, where the casual employee works in accordance with a roster, in excess of 38 ordinary hours per week averaged over the course of the roster cycle;
(ii) outside of the span of ordinary hours for each day specified in clause 27.2;
(iii) in excess of 11 hours on one day of the week and in excess of 9 hours on any other day of the week;
shall be paid at 175% of the ordinary hourly rate of pay for the first three hours and 225% of the ordinary hourly rate of pay thereafter (inclusive of the casual loading).
(d) The rate of overtime for full-time and part-time employees on a Sunday is double time, and on a public holiday is double time and a half.
(e) The rate of overtime for casual employees on a Sunday is 225% of the ordinary hourly rate of pay, and on a public holiday is 275% of the ordinary hourly rate of pay (inclusive of the casual loading).
(f) Overtime is calculated on a daily basis.”
[44] Accordingly, the entitlement to overtime for casual employees arose as a result of the 2014 Modern Award Review. Such an entitlement did not exist prior to that time. However, both the roster conditions of clause 28 and an entitlement to overtime for work in excess of those conditions did. It follows, that the provisions of clause 28 did not, and were not intended to, apply to casuals. Following the determination of the Full Bench in the 2014 Modern Award Review, an entitlement to overtime for casual employees was included in the GRIA. That entitlement is limited to the circumstances set out in clause 29.2(c). Those circumstances do not include working outside the roster conditions prescribed in clause 28.
[45] I consider it clear from the above that the roster conditions contained in clause 28 and, therefore, the Consecutive Day Clauses, did not, and were not intended to, apply to casual employees when the GRIA commenced and that nothing has occurred since that time to alter that conclusion.
[46] As to the submission that a construction consistent with the modern awards objective is to be preferred, I accept that an award is to be construed in light of the legislative context in which it applies. However, I consider the SDA’s submission to be misconceived. The modern awards objective applies to the exercise by the Full Bench of the modern award powers. 43 The modern awards objective is achieved by a modern award including terms that are necessary to achieve the objective.44 The Full Bench specifically addressed the provisions of section 134(da) when determining the variation to clause 29.2 of the GRIA in the 2014 Modern Award Review.45 Having done so, the Full Bench determined that the entitlement to casuals to overtime would be limited to those circumstances contained in clause 29.2(c).
Adjustment of expense-related allowances
[47] The Agreement is silent as to the adjustment of expense-related allowances. The SDA submits that the GRIA provides for the adjustment of expense-related allowances and the absence of such a provision is a detriment.
[48] Prouds submits that the only expense-related allowances that has been consistently adjusted is the meal allowance and the transport allowance has not been adjusted since 2014. 46 The Proposed Undertakings include an undertaking in relation to adjustment of meal allowance and transport allowance. At hearing, Prouds submitted that the Commission was required to determine whether, at the test time, the better off overall test was satisfied and that in respect of expense-related allowances the Commission could be satisfied that that is the case.47
[49] The Commission is required to be satisfied that at the test time each existing and prospective award covered employee would be better off overall if the agreement applied to the employee than if the relevant award applied. In Australian Nursing and Midwifery Federation v Domain Agreed Care (Qld) Limited T/A Opal Aged Care 48 the Full Bench held that although the better off overall analysis occurs at the test time, it takes into account all that is known at that time and is not confined to provisions of the agreement that are applicable only at its inception. Employees must be better off overall under the agreement; not just at the “test time”.49 In the present circumstances, it was known at the test time that the GRIA provides for adjustment of expense-related allowances. Prouds has provided undertakings for adjustment in respect of the expense-related allowances it says have been previously adjusted. However, even if those undertakings are accepted, they do not apply to all expense-related allowances that may be adjusted under the GRIA. I consider this to be a detriment.
Does the Agreement pass the better off overall test?
[50] Prouds have provided the Proposed Undertakings to address some of the concerns of the Commission and the SDA. There are remaining concerns as set out above. The pay rates provided by the Agreement are either at GRIA rates or 0.06% – 0.07% above the GRIA rates. Given the pay rates contained in the Agreement, it is necessary to carefully weigh those detrimental provisions I have identified above with the more beneficial provisions contained in the Agreement. Prouds contends that the Agreement contains a number of more beneficial terms and additional entitlements than the GRIA.
[51] I consider the following provisions of the Agreement to be more beneficial terms:
• clause 13(1)(b) – minimum engagement for full-time employees of five hours per day;
• clause 14.8 – part-time employees who regularly work additional hours may request their minimum hours be increased to that level. The request may not be unreasonably refused;
• clause 21 – no exclusion from entitlement to meal allowance when an employee could reasonably return home for a meal;
• clause 20.3 – payment of time off in lieu of overtime if not taken within six weeks of accrual;
• clause 21.2 – entitlement to a second unpaid meal break of 30 minutes where an employee is required to work more than two hours of overtime;
• clause 22.2 – employees under 16 years are paid at 50% of the adult rate;
• clause 23.1 – first aid allowance of $12 per week;
• clause 23.2 – $6 daily allowance for key holder duties (other than for 3IC employees);
• clause 23.11 – entitlement to higher duties allowance for entirety of day or shift, irrespective of time spent performing higher duties;
• clause 29.3 – entitlement of full-time employees to a substitute an RDO when an RDO falls on a public holiday;
• clause 32 – attendance bonus for full-time and part-time employees, based on personal leave use;
• clause 33.3 – one day of paid funeral leave on the death of an immediate or extended family member;
• clause 34.1 – an employee working a roster with weekend work will be given time off without loss of pay so that the combination of jury service and work does not exceed five days per week;
• clause 36.1 – entitlement to use up to 22.8 hours of personal leave to attend prenatal appointments;
• clause 39.6 – one days’ notice of termination for casual employees.
[52] I consider all of the above, with two exceptions, to be contingent financial benefits. I consider the five hour minimum engagement for full-time employees and the entitlement to a second unpaid meal break where more than two hours of overtime has been worked, to be non-financial benefits. Balanced against these contingent or non-financial benefits are the detriments identified above, being non-adjustment of expense-related allowances and travel time not being included in the calculation of the recall allowance (Additional Benefits).
[53] I am satisfied that the Proposed Undertakings adequately address the concerns to which they are directed. Section 190(3) of the Act provides that undertakings may only be accepted if the Commission is satisfied that they will not result in financial detriment to any employee covered by the Agreement or substantial changes to the Agreement. I am satisfied that the Proposed Undertakings do not result in financial detriment to any employee covered by the Agreement. As set out above, 23 undertakings have been proposed. The large number of undertakings proposed give rises to particular consideration of whether they would result in substantial changes to the Agreement. 50 In Construction, Forestry, Mining and Energy Union v KAEFER Integrated Services Pty Ltd51 the Full Bench stated that increasing the quantum of various benefits will not ordinarily result in substantial changes to an agreement for the purposes section 190(3)(b).52 I consider most of the Proposed Undertakings to fall into this category. As to those that do not, while some reintroduce GRIA entitlements which are not currently included in the Agreement, I do not consider those reintroduced entitlements have a significant bearing on the working arrangements under the Agreement.53 Further, while the Proposed Undertakings are significant in number, in light of their character, I do not consider their acceptance would result in an impermissible wholesale reshaping of the Agreement.54 Accordingly, I am satisfied that the Proposed Undertakings do not result in substantial changes to the Agreement. However, even with the Proposed Undertakings, given the very slim margin by which the Agreement exceeds the wage rates under the GRIA and the, largely, contingent financial benefits provided under the Agreement, on balance, my preliminary view is that in the absence of the Additional Benefits I cannot be satisfied that the Agreement passes the better off overall test. However, I consider both of these concerns may be addressed by way of revised undertaking.
[54] Prouds will be afforded an opportunity to address the above concerns and is invited to provide revised undertakings by no later than 4 pm Tuesday 12 May 2020, following which the SDA will be provided with a further two days to comment. Should Prouds not provide further undertakings to address the above residual concerns, I will determine the matter on the material before me.
DEPUTY PRESIDENT
Appearances:
N Tindley of FCB HR for the applicant.
J Tierney of Counsel for the Shop, Distributive and Allied Employees Association.
Hearing details:
2020
Melbourne (telephone):
March 31.
Final written submissions:
Applicant, 21 April 2020.
Shop, Distributive and Allied Employees Association, 20 April 2020.
Printed by authority of the Commonwealth Government Printer
<PR719230>
1 [2016] FWCFB 2887 at [33]
2 Transcript PN69
3 Transcript PN66
4 Transcript PN143; Prouds written submissions, 2 October 2019 at [26]
5 Form F18, q.5 at [3]
6 Transcript PN75
7 Prouds written submissions, 2 October 2019 at [27]; Transcript PN148
8 Transcript PN84
9 Transcript PN87-88
10 Transcript PN150
11 Transcript PN90-92
12 Transcript PN150
13 Transcript PN94-122
14 Transcript PN108
15 Prouds written submissions, 2 October 2019 at [28]
16 Transcript PN117
17 Transcript PN156
18 [2019] FWCA 5544 at [8]
19 SDA written submissions, 20 April 2020 at [11]
20 Prouds written submissions, 2 October 2019 at [29]
21 SDA written submissions, 20 April 2020 at [12]
22 Ibid at [14]
23 Ibid at [15]
24 Ibid at [19]
25 Ibid at [21]
26 Ibid at [20]
27 Prouds written submissions, 21 April 2020 at [4]
28 Ibid at [5]
29 Ibid at [6]
30 Ibid at [7]
31 Ibid at [12-13]
32 Ibid at [14]
33 [2019] FCA 37
34 [2019] FWCFB 3874 at [27]
35 GRIA, clause 11
36 GRIA, clause 13
37 [2017] FWCFB 3541 at [675]
38 SDA draft award 1 August 2008
39 [2010] FWA 8806
40 [2017] FWCFB 3541 at [646]
41 Ibid at [648]
42 4 yearly review of modern awards – Part-time employment and Casual employment – General Retail Industry Award 2010 MA000004, PR598494
43 Fair Work Act 2009, s.134(2)
44 Ibid, s.138
45 [2017] FWCFB 3541 at [673]
46 Prouds written submissions, 2 October 2019 at [21]
47 Transcript PN161
48 [2019] FWCFB 1716
49 Ibid at [27]
50 Fair Work Act 2009, s.190(3)(b)
51 [2017] FWCFB 5630
52 Ibid at [40]
53 Ibid at [40]
54 Ibid at [41]
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