Qube Logistics (Vic) Pty Ltd

[2015] FWCA 3074

[2015] FWCA 3074

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Qube Logistics (Vic) Pty Ltd
(AG2015/876)

QUBE LOGISTICS (VIC) PTY LTD WORKPLACE AGREEMENT 2014

Road transport industry
COMMISSIONER GREGORY	MELBOURNE, 13 MAY 2015

Application for approval of the Qube Logistics (Vic) Pty Ltd Workplace Agreement 2014.

[1] An application has been made under s.185 of the Fair Work Act 2009 (the Act) for approval of the Qube Logistics (Vic) Pty Ltd Workplace Agreement 2014 (“the Agreement”). The Applicant is indicated in the Form F16 to be Qube Logistics (Vic) Pty Ltd (“Qube”), however, the application was actually lodged with the Commission by the Transport Workers Union of Australia Victorian/Tasmanian branch (“TWU”). This occurred after the application and the Employer’s Statutory Declaration were forwarded to the Union with a request to provide the Form F18 – Statutory Declaration of an Employee Organisation. The Union subsequently forwarded to the Commission the Form F16 Application, the Form F17 Employer’s Statutory Declaration, and its completed Form F18.

[2] The Form F18 provided by the TWU indicates it wants to be covered by the proposed Agreement. However, it also raises a number of issues to do with its content and the processes leading up to making the Agreement. Qube subsequently requested an urgent hearing to enable it to provide a response to these issues. The matter was accordingly set down for hearing on 27 April, and Qube provided its responses at that time. Those submissions were supported by witness evidence from Mr Shaun Harris, the General Manager of Qube Logistics. Qube also proposed to provide an undertaking in response to one of the issues raised by the TWU concerning the annual leave entitlements for employees at the Maryvale plant.

[3] At the conclusion of Qube’s submissions the TWU requested an adjournment in order to enable it to develop its position in response. The hearing was accordingly adjourned until 4 May. The TWU subsequently provided an outline of submissions prior to that hearing, indicating a number of the issues previously foreshadowed as concerns were now withdrawn. However, it also made submissions about a number of aspects of the Agreement it continues to have concerns about. Those matters are, in summary:

• the casual conversion provisions,



• the night shift arrangements,



• the proposals to do with change of roster,



• the wages to be paid to employees at the Maryvale site when an annual leave,



• the part-time employment provisions, and



• the proposed consultation and enterprise flexibility terms.

[4] The TWU also takes issue with whether it is appropriate for the Commission to exercise its discretion under s.183(3)(b), given that the application was not lodged with the Commission within 14 days of the Agreement being made.

[5] This decision accordingly deals with the matters the TWU continues to take issue with, and whether the remaining requirements of the Act that the Commission is required to have regard to have been satisfied.

[6] Mr G. Jolly was granted leave to appear on behalf of Qube. Mr M. Wirrick appeared for the TWU, together with Ms S. Manos, Mr H. Smith and Mr M. Suleyman.

The Submissions and Evidence

[7] Qube submits in broad terms that the “better off overall test” is a global test and is not to be applied as a line by line comparison between the proposed Agreement and the underlying Award. It is accordingly necessary to consider whether any less beneficial provisions in an agreement are outweighed by other more beneficial provisions. It submits in the case of considering any monetary conditions it “is a matter of arithmetic” 1. When non-monetary conditions are concerned, the Commission must “simply has to do its best and make that assessment.”2 It relies on the decisions in Solar Systems Pty Ltd3 and University of New South Wales (Professional Staff) Enterprise Agreement 20104, in particular, in support of these submissions.

[8] The TWU did not raise particular objections to these submissions, but did note in its written submission it “rejects most of the contents contained in the Company’s submissions.” 5

[9] Qube also submits that any application of the better off overall test in the present matter needs to have regard to the fact the wage rates in the proposed Agreement are at least 17 – 22% more than the comparable rates contained in what it describes as “the main award,” 6 being the Road Transport and Distribution Award 20107. It also submits the rates are between 12 – 14.7% above those contained in the Road Transport (Long Distance Operations) Award 20108, although it submits it does not currently employ drivers covered by this Award.

[10] It is also noted Qube subsequently acknowledged some of the wage rates set out in its submissions were incorrect after these discrepancies were highlighted by the TWU. However, it submits this does not change the fact that the rates in the proposed Agreement are significantly higher than those contained in the underlying Awards, and this must be taken into account in any better off overall test assessment.

Casual conversion

[11] Qube submits the casual conversion provisions in the proposed Agreement are more beneficial on the one hand compared to those in the relevant Awards in that they allow a casual employee to seek conversion to permanent employment at any time, whereas the Awards require 12 months service before a request can be made. However, it acknowledges the Agreement is less beneficial in that a request made can simply be refused, whereas the Awards require reasonable grounds for refusal to be provided. However, Qube notes the Agreement does require it, in reviewing any application, to consider “such things as future business requirements, employee performance and attendance.” 9

[12] It also submits any detriment is more than balanced by other aspects of the Agreement including, in particular, the wage rates. It also submits it is relevant to note that when it has sought expressions of interest in the past from casual employees to convert to permanent employment very few have any interest in converting, presumably because this would involve a reduction in the hourly rate because of the loss of the casual loading.

[13] The TWU submits, in response, it continues to be concerned about this aspect of the Agreement. It emphasises the clause in the Agreement does not require Qube to take the positive step of making it known to employees that they have the option to convert, as the Award does. It also submits the issue of casual conversion is significant in the context of the approval of this Agreement because almost half of the employees who would be covered by it are employed on a casual basis.

Night shift span of hours

[14] Qube acknowledges the night shift span of hours is expressed differently in the Agreement as compared to the Award. The Agreement indicates it is a shift that commences after 4p.m. and before 4a.m., whereas the relevant Award provisions provide it is a shift that finishes after 12.20a.m., but before 8a.m. However, Qube submits that despite this difference it is unable to envisage any shift arrangement that would be a night shift under the Award, but not under the terms of the proposed Agreement.

[15] The written submission provided by the TWU indicate this aspect of the Agreement remains a concern, but it did not provide further submissions highlighting the nature of these concerns.

New Roster Arrangements – clause 17

[16] Sub clauses 17.1 and 17.2 of the proposed Agreement deal with how Qube may implement a new roster cycle. They provide for a 21 day notice period to be provided and indicate when such arrangements are in place they apply instead of sub clauses 16.1 and 16.4, which deal with hours of work and overtime entitlements when hours are worked outside the ordinary span of hours.

[17] The TWU objects to the inclusion of this clause on the basis it is, in effect, a flexibility term which unilaterally enables Qube to vary the terms and conditions contained in the Agreement. It also submits it extends beyond Clause 25 – “Start Times” in the underlying Award and enables Qube to have a “a blank cheque for future change.” 10

[18] Qube submits, in response, the clause is not a flexibility term within the meaning of s.203 of the Act, which describes a term enabling an individual employer and employee to agree on variations to the Agreement in accordance with the conditions contained in the legislation. It submits instead the clause is a facilitation provision, similar to those found in many awards and agreements, which provide the arrangements established by a particular clause in an agreement can be altered in the manner provided for. It also submits there are no issues impacting on the better off overall test because the clause in the Agreement continues to provide for a roster cycle that averages 38 hours per week, and contains a range of other conditions that must be satisfied, including that employees are no worse off overall as a result of any changes made. It also notes it makes specific provision for any disputes that might arise to be resolved by the Commission under the dispute settlement procedure contained in the Agreement.

Wages to be paid to employees of the Maryvale site when on annual leave.

[19] The TWU has a continuing concern about the accrual of annual leave entitlements for these employees. However, it also notes the proposed undertaking Qube provided in its submissions and indicated its objection could be dealt with by an acceptable undertaking. 11

Part-time employment

[20] This issue centres on the fact the underlying Awards provide that part-time employees are to be provided with written confirmation of their hours of work, and when additional hours are worked they are then to be paid at overtime rates. However, the Agreement proposes that overtime entitlements only apply once a part-time employee has worked more than 38 hours in the week. However, Qube indicated in the proceedings on 3 May that a further undertaking would be provided in response to this concern. The TWU indicated in response it could be dealt with in this way providing the wording of the undertaking was acceptable.

The Consultation Clause – Clause 10

[21] The TWU submits Clause 10 – “Consultation Term” appears to fall short of what is required by the Act and the Regulations, and its preference is for the model clause to be inserted. Qube submits, in response, that the Act and Regulations do not impose a particular requirement for a consultation provision, and only provide for the model clause to be included when an agreement does not include a consultation provision in accordance with the Act. It also submits the clause in the proposed Agreement satisfies the requirements of the Act in that it requires consultation over major change; it provides for provision of relevant information; and requires consultation over changes to hours of work in accordance with the more recent amendments to the Act dealing with this issue.

The Flexibility Term – Clause 21

[22] The TWU submits it is unclear about the intent of the flexibility term in the Agreement, and whether it conflicts with s.203 of the Act. It also submits that instead of indicating an agreement entered into under the flexibility term requires the employees to be “better off overall,” the term in the Agreement refers to the employees being no worse off.

[23] Qube submits the clause does meet the requirements of the Act and the same provision is contained in the existing Agreement that covers the parties. However, it submits that in the event the Commission finds the clause does not meet the requirements of the Act, the model flexibility term can become a term of the Agreement in accordance with s.202(4) of the Act.

Consideration

[24] As indicated at the outset a number of the concerns originally foreshadowed by the TWU have been resolved during the proceedings. Undertakings proposed by Qube have also responded to other concerns. I now turn to consider the issues that continue to be highlighted by the TWU as ongoing concerns, as well as dealing with the remaining aspects of the Act that must be satisfied.

[25] I am satisfied at the outset that the submissions provided by Qube have set out the broad approach to be taken to the requirement of the better off overall test assessment. The TWU did not take issue with these submissions and I have adopted this approach in the determination of this matter. I now turn to consider each of these outstanding issues.

[26] Casual conversion – The submissions of the parties in regard to this issue have already been summarised and the differences with the underlying Award(s) identified. The term in the proposed Agreement, on balance, is likely of some detriment to casual employees, particularly because it does not impose the obligation on Qube to give written notice of the clause at the relevant point in time to a casual employee. Nor does it contain the requirement to not unreasonably refuse a request to convert. However, it is also noted that this is more of an “in principle” issue, than an actual one, given Qube’s submissions indicating casual employees rarely make requests to convert. I also consider that any detriment is offset by the higher wage rates in the proposed Agreement.

[27] Night shift span of hours – The Agreement does express this concept differently in that it refers to shifts commencing within certain hours, whereas the Award refers to shifts finishing between certain hours. However, I do not intend to dwell on this difference. Qube submits it has not been able to identify any shift arrangements under the terms of the proposed Agreement that would not be night shifts under the Award. No further examples were provided in any of the submissions of potential detriment occasioned by the proposed term in the Agreement. In conclusion, I am satisfied this provision does not raise any issues in the context of the better off overall test.

[28] New Roster Arrangements (Clause 17) – The submissions of the parties on this issue have again been set out, in summary, already. It is appropriate to set out the wording of the sub clauses in the Agreement in full. It states:

“17. NEW ROSTER ARRANGEMENTS

17.1 The Company may at any time, by giving at least 21 days’ notice to affected Employees (or a lesser period of notice by agreement), implement a new roster cycle of an average of 38 hours per week, averaged over such duration as determined by the Company (up to 52 weeks). That roster cycle will apply to the exclusion of clause 16.1.

17.2 If the Company implements a new roster cycle in accordance with this clause, the Company will notify affected Employees of the ordinary span of hours, rates of pay (which may be inclusive of rostered overtime, shift loadings, weekend, public holiday rates etc) and overtime.The Company will determine the rates of pay and overtime for the new roster with the objective of ensuring proper compensation for the new roster, which is broadly consistent with the terms and conditions of the Agreement, means employees are overall no worse off and has proper regard to any change in the span of hours, public holiday rates and overtime rates. These arrangements will apply in place of clause 16.1 to 16.4 and Part B and the relevant provisions in Parts C and D. Any dispute over rates of pay and overtime may be resolved by the FWC under clause 20 but this will not delay the implementation of the new roster while the FWC is resolving the issue.” 12

[29] The TWU submits the clause is similar to a flexibility term and should not be accepted because it enables Qube to unilaterally depart from what has been agreed. However, I am not satisfied that clause 17 should be described in this way.

[30] Section 202(1) of the Act describes a flexibility term as one that enables an employee and her/his employer to agree to an arrangement varying the effect of the agreement in order to meet their genuine needs. There are then a range of requirements that must be met in regard to any such agreement. In short, it is a mechanism that enables the employer and the employee to depart from what the agreement provides for, and to adopt something different that is not otherwise specified in the agreement. This is a different concept and approach from what clause 17 enables. Clause 17 it is not confined to an arrangement involving the employer and an individual employee. Secondly, it is not about moving from what the agreement provides for to something different as agreed to by the employer and the employee. It instead represents a term in the Agreement setting out how a move from one roster cycle to a different roster cycle is to occur, and what is required in such cases. In this context it is acknowledged that the clause does not state what the new roster cycle is to be, but this is little different from an award/agreement clause which requires start times to be fixed, but then sets out how those start times may be varied.

[31] It is also possible to identify other clauses found in other agreements which operate in a similar way. For example, an agreement might state that employees are to be based at a particular site or location. However, it might then continue to state what is to apply if the employer subsequently requires those employees to be relocated elsewhere.

[32] The TWU also raises concerns about the impact of the clause in regard to the better off overall test assessment, particularly as it acts to override sub clause 16.4, which provides for penalty rates to be provided for hours worked on Monday – Friday outside of the ordinary span of hours. This is a legitimate and understandable concern. However, it is noted that sub clause 17.2 indicates that one of the outcomes from any change of roster is that “employees are overall no worse off and has proper regard to any change in the span of hours, public holiday and overtime rates.”

[33] In this context the submissions provided on behalf of Qube are also noted. It stated:

“The real question for the Commission, we would suggest, is whether or not clause 17 offends the better off overall test, and we would say that it does not, for the following reasons.  Firstly, clause 17 simply provides for the introduction of new rosters.  It provides that the rosters can’t involve an average of more than 38 hours a week.  It provides that the rates of pay have to be consistent with the terms and conditions of the agreement, that the employees are overall no worse off, measured against the agreement, and has proper regard to any change in span of hours, public holiday rates and overtime rates.  So, in other words, there is a protection built into the clause to ensure that employees are no worse off than under the agreement and, of course, by definition, are better off than under the award.  Then to further assure all this, the company has built in a capacity for the Commission to resolve any disputes over the introduction of the new rosters and the rates of pay.” 13

[34] It continued to indicate in response to a question from the Commission:

“I think I would express it slightly differently than that, Commissioner.  It ensures that they would be no worse off than they would be had the arrangements been implemented, in accordance with the provisions of 16.1 through to 16.4” 14

[35] Consultation Term (Clause 10) – The Agreement contains a consultation clause which is different from the model clause contained in the regulations as a consequence of s.205. However, as Qube submits an agreement is not required to replicate the model clause and must only comply with what s.205 requires. In summary, it requires that the employer consult with employees about “a major workplace change that is likely to have a significant effect on the employees” and “a change to their regular roster or ordinary hours of work.” It also states it must allow for those employees to be represented, if they choose, for the purposes of that consultation. A more recent amendment to the Act also contains more specific requirements when the changes impact on the employees’ regular roster or ordinary hours of work.

[36] The consultation term in the Agreement goes further than the model clause in some respects in that it commits Qube to not only advise the employees of relevant changes, but also to provide advice to the Union. However, while sub clause 10.2 dealing with changes to the employees’ regular roster or ordinary hours of work states that employees may be represented by the Union, or another representative, the same entitlement is not contained in sub clause 10.1. I consider this to be more in the nature of a technical defect than one of any significance. I also prefer, as far as possible, for an agreement to contain wording that has been developed by the parties in their negotiations. Nevertheless, in dealing with the objection raised by the TWU I am satisfied the consultation term in the Agreement does not strictly comply with the requirements of the Act. The Commission accordingly requested that Qube provide an undertaking that allows for employees to be represented, if they choose, for the purposes of sub clause 10.1. That undertaking has been forthcoming.

[37] Flexibility Term (Clause 21) – Two issues appear to be raised in regard to the flexibility term contained in the Agreement. Firstly, the wording of clause 21.3 which sets out which matters cannot be effected by the process in sub clause 21.2. In this context the TWU submits that a flexibility term usually sets out the matters that can be varied, rather than those that cannot. However, I am satisfied that by setting out the matters that cannot be effected the flexibility term makes clear that the remaining matters in the Agreement can be the subject of an individual flexibility arrangement. The TWU also submits that the clause refers to an employee being no worse off overall as a result of an individual flexibility arrangement, rather than being “better off overall,” as the legislation provides for. Again, I consider this to be more in the nature of a technical objection, rather than an objection of any substance. However, in order to be strictly compliant with the requirements of the legislation the Commission again requested Qube provide an undertaking that any flexibility arrangement include details of how the employee will be better off overall in relation to the terms and conditions of her or his employment as a result of the arrangement.

[38] It follows from the conclusions I have come to in regard to each of these matters that they do not act to prevent the Agreement from being approved. As indicated, I also propose to accept the undertakings that have been provided by Qube. They variously deal with the payments to be provided to employees at the Maryvale site when they take annual leave, what is to apply when additional hours are worked by part-time employees and, finally, clarification about the operation of the Consultation and Flexibility terms. In accepting these undertakings I am satisfied they do not cause financial detriment to any employee to be covered by the Agreement, or result in substantial changes to it. They are attached to this decision, and they will now be taken to be a term of the Agreement.

[39] One further matter remains to be dealt with. The application to approve the Agreement was filed more than 2 weeks after the 14 day period provided for in s.185 of the Act. However, the section provides a discretion to the Commission to extend the time for filing where “in all the circumstances, the FWC considers it fair to extend” the period. Qube provided an explanation for the delay, which indicates it was due to a variety of factors associated with obtaining a signed agreement and completing the accompanying documentation that is required to be filed with the application. There is no evidence of action on its part which caused any unreasonable delay. I consider it is accordingly appropriate in all the circumstances to exercise the discretion available to the Commission to extend the date for lodging the application to the date when it was actually lodged.

[40] The TWU has also given notice in its form F18 that it wants to be covered by the Agreement. It is accordingly noted that under s.183 the Agreement covers the Union. I am also satisfied that each of the requirements in ss. 186, 187, 188 and s.190 of the Act, that are relevant to this application for approval, have been met.

[41] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 20 May 2015. The nominal expiry date of the Agreement is 17 June 2017.

COMMISSIONER

Attachment A:

 1   Transcript at PN137

 2   Ibid

 3   [2012] FWAFB 6397

 4   [2010] FWAA 9588

 5   Submissions of the TWU at para C1

 6   Transcript at PN119

 7   MA000038

 8   MA000039

 9   Proposed Qube Logistics (Vic) Pty Ltd Workplace Agreement 2014 at cl.12

 10   Above n.v at para B5

 11   Transcript PN124

 12   Above n.ix at cl.17

 13   Transcript at PN192

 14   Ibid at PN195

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