Queensland South Native Title Services Limited
[2022] FWC 2178
•16 AUGUST 2022
| [2022] FWC 2178 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Queensland South Native Title Services Limited
(AG2022/1798)
| COMMISSIONER SIMPSON | BRISBANE, 16 AUGUST 2022 |
Application for approval of the Queensland South Native Title Services - Enterprise Agreement 2021-2024
An application has been made for approval of an enterprise agreement known as the Queensland South Native Title Services - Enterprise Agreement 2021-2024 (the Agreement). The Application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Queensland South Native Title Services Limited (the Applicant). The Agreement is a single enterprise agreement.
The matter was allocated to my chambers on 14 June 2022.
On 20 June 2022, Mr Richard Muffatti of the Community and Public Sector Union (CPSU) filed a Form F18 - Declaration of employee organisation in relation to an application for approval of an enterprise agreement and two supporting documents. The F18 disagreed with the employer’s declaration identifying the Clerks-Private Sector Award 2020 (Clerks-Private Sector Award) as the relevant award for the purpose of applying the Better Off Overall Test (BOOT), rather than the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award).
The matter was listed for Mention/Directions on 4 July 2022. During the Mentions/Directions, I confirmed with the parties that my chambers would send correspondence identifying potential BOOT concerns in the Agreement with respect to the Clerks-Private Sector Award and the SCHADS Award. Directions were subsequently issued to file material regarding award coverage. The matter was listed for Hearing on 7 September 2022.
On 2 August 2022, the Applicant’s representative sent the following email to my chambers:
“Dear Commissioner
RE: AG2022/1798 - Application by Queensland South Native Title Services Limited
I refer to our previous communications with the Fair Work Commission and the previous mention. I thank the Commission for the extension you provided.
QSNTS and the CPSU have expressed different views about the underpinning Award for the proposed Agreement, and QSNTS has requested that the question of Award coverage be determined prior to the Fair Work Commission deciding whether to approve the proposed agreement.
QSNTS has undertaken extensive investigations and has sought Counsel’s advice as to the likely outcome of the issue concerning award coverage.
Having considered that advice, QSNTS now instructs us to inform the Commission that it no longer seeks to have the issue of Award coverage determined by the Commission, and accepts for the purposes of the application before the Commission that the Social, Community, Home Care and Disability Services Industry Award is the appropriate Award for the purposes of the BOOT test for the proposed agreement.
It is also accepted that, on that assumption and in light of the content analysis presently before the Commission, the proposed agreement will not pass the BOOT test in its present form. In these circumstances it is understood that the Commission is required by the Act to refuse the application for approval. QSNTS has also instructed that we inform the Commission that it does not intend to offer any undertakings to attempt to remedy this position, and will instead take the opportunity to comprehensively review and reconsider its overall approach these matters.
We therefore request that the Commission now proceed on that basis.
…”
The Applicant confirmed by way of email on 3 August 2022 that they sought for the Fair Work Commission (the Commission) to make a determination based on the material before it.
LEGISLATION
Section 186(1) and (2) of the Act is 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 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; and
(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.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen…”
Section 193 provides:
“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.
FWC must disregard individual flexibility arrangement
(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.
When a greenfields agreement passes the better off overall test
(3) A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that 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.
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”
Section 189 relevantly provides that:
“189 FWC may approve an enterprise agreement that does not pass better off overall test—public interest test
Application of this section
(1) This section applies if:
(a) the FWC is not required to approve an enterprise agreement under section 186; and
(b) the only reason for this is that the FWC is not satisfied that the agreement passes the better off overall test.
Approval of agreement if not contrary to the public interest
(2) The FWC may approve the agreement under this section if the FWC is satisfied that, because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
(3) An example of a case in which the FWC may be satisfied of the matter referred to in subsection (2) is where the agreement is part of a reasonable strategy to deal with a short term crisis in, and to assist in the revival of, the enterprise of an employer covered by the agreement.
Nominal expiry date
(4) The nominal expiry date of an enterprise agreement approved by the FWC under this section is the earlier of the following:
(a) the date specified in the agreement as the nominal expiry date of the agreement;
(b) 2 years after the day on which the FWC approved the agreement.”
CONSIDERATION - BOOT ISSUES
Having considered the position of the Applicant, in conjunction with the submissions of the CPSU and the material before the Commission, I am satisfied that the SCHADS Award is the appropriate Award for the purposes of applying the BOOT.
Classification matching of the Agreement against the SCHADS Award indicates that whilst some employees may receive higher rates of pay, a range of classifications under the Agreement will be paid a rate of pay below the SCHADS Award, ranging from between 2.31% and 12.62% less than the Award.
There are additional issues that raise potential concerns that the BOOT may not be satisfied, including minimum engagements for casual and part-time employees, shift penalties, weekend penalties, public holiday penalties, time off in lieu (TOIL) arrangements, and other entitlements under the SCHADS Award that do not appear in the Agreement.
Given correspondence from the Applicant set out above at [5], accepting that the SCHADS Award is the appropriate Award, and that it does not propose to offer undertakings to address concerns raised by the Commission with respect to the BOOT, I am not satisfied that the Agreement passes the BOOT.
CONCLUSION
Having determined that the Agreement does not pass the BOOT, the requirement for approval set out in s.186(2)(d) has therefore not been met.
Furthermore, I am not satisfied there are exceptional circumstances that would warrant the approval of the Agreement and therefore the Agreement cannot be approved pursuant to s.189.
On the above grounds, the application is dismissed.
COMMISSIONER
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