Rapid Response Security Pty. Ltd. T/A Rapid Response Security

[2013] FWC 3731

[2013] FWC 3731

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Rapid Response Security Pty. Ltd. T/A Rapid Response Security
(AG2013/5861)

COMMISSIONER LEE MELBOURNE, 17 JUNE 2013

Application for approval of the Rapid Response Security - Enterprise Agreement -2013.

[1] An application has been made for approval of a single enterprise agreement known as the Rapid Response Security - Enterprise Agreement - 2013 (the Agreement). The application was made by Rapid Response Security Pty Ltd T/A Rapid Response Security (the Applicant) pursuant to s.185 of the Fair Work Act 2009 (the Act). The application for approval was lodged with the Fair Work Commission (the Commission) on 2 April 2013. The Agreement will apply in the security services industry.

[2] Part 2-4 of the Act (within which s.185 may be found) provides for the making of enterprise agreements. Section 171 of the Act sets out the objects of Part 2-4 as follows;

“ 171 Objects of this Part

The objects of this Part are:

(a) to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits; and

(b) to enable the FWC to facilitate good faith bargaining and the making of enterprise agreements, including through:

(i) makingbargaining orders; and

(ii) dealing with disputes where the bargaining representatives request assistance; and

(iii) ensuring that applications to the FWC for approval of enterprise agreements are dealt with without delay.

[3] Section 186 sets out the general requirements for when the Commission must approve an enterprise agreement. Section 187 sets out additional requirements for when the Commission must approve an enterprise agreement.

[4] Section 186 of the Act provides:

“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

(3) The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.

(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Requirement that there be no unlawful terms

(4) The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).

Requirement that there be no designated outworker terms

(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.

Requirement for a nominal expiry date etc.

(5) The FWC must be satisfied that:

(a) the agreement specifies a date as its nominal expiry date; and

(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.

Requirement for a term about settling disputes

(6) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).

Note 2: However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).”

[5] Section 187 of the Act provides;

“187 When the FWC must approve an enterprise agreement—additional requirements

Additional requirements

(1) This section sets out additional requirements that must be met before the FWC approves an enterprise agreement under section 186.

Requirement that approval not be inconsistent with good faith bargaining etc.

(2) The FWC must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.

Requirement relating to notice of variation of agreement

(3) If a bargaining representative is required to vary the agreement as referred to in subsection 184(2), the FWC must be satisfied that the bargaining representative has complied with that subsection and subsection 184(3) (which deals with giving notice of the variation).

Requirements relating to particular kinds of employees

(4) The FWC must be satisfied as referred to in any provisions of Subdivision E of this Division that apply in relation to the agreement.

Note: Subdivision E of this Division deals with approval requirements relating to particular kinds of employees.

Requirements relating to greenfields agreements

(5) If the agreement is a greenfields agreement, the FWC must be satisfied that:

(a) the relevant employee organisations that will be covered by the agreement are (taken as a group) entitled to represent the industrial interests of a majority of the employees who will be covered by the agreement, in relation to work to be performed under the agreement; and

(b) it is in the public interest to approve the agreement.”

The role of the Commission in approving agreements

[6] The role of the Commission in approving agreements was considered in Re McDonald’s Australia Enterprise Agreement 2009 1. In that case, the Full Bench determined that the role of the Commission includes facilitating enterprise agreements and I quote from that decision;

“[13] The appellants emphasised the facilitative aspects of these objectives. We agree that these objectives place the primary role for making enterprise agreements on the parties to those agreements and their representatives and that the role of Fair Work Australia (FWA) includes facilitating the making of enterprise agreements. In general we believe that the requirements for approval should be considered in a practical, non-technical manner and that reasonable efforts should be made to clarify matters with the parties and consider undertakings to clarify or remedy concerns to the extent that these may be available under s 190 of the Act.” 2

[7] I have applied this approach in the determination of this matter.

Background

[8] After considering the materials submitted with the application for approval, on 3 May 2013 I wrote to the Applicant’s representative (Mr Graham of Worksite Resolutions Pty Ltd T/A Australian Workplace Agreements) raising a number of matters of concern with the Agreement as lodged. 3

[9] These concerns included concerns as to the lawfulness of Clause 2 - “Incidence and Parties Bound”; as to whether the Notice of Employee Representational Rights had been provided within the statutory timeframe; that the consultative clause did not comply with the requirements of section 205 of the Act; that shift workers were not described or defined as such for the purposes of the National Employment Standards; that the public holidays clause was inconsistent with the National Employment Standards; that the performance and flexibility policy was not clear as to whether there were any limitations as to where an employee can be required to work; whether the agreement had been genuinely agreed to within the meaning of section 186(2(a) of the Act and finally, a concern that the agreement did not satisfy the better off overall test.

[10] My assessment of the application of the better off overall test to the Agreement was informed by analysis that I requested be undertaken by Fair Work Commission staff. That analysis made it clear that under a range of scenarios modelled employees would not be better off overall under the terms of the Agreement. Accordingly, I indicated in my letter to the Applicant’s representative dated 3 May 2013 that I had formed the preliminary view that the Agreement did not pass the better off overall test.

[11] On the concern relating to genuine agreement, I indicated that there may be a need to for further submissions and/or evidence to satisfy my concerns on this issue subsequent to dealing with the other issues that I had raised.

[12] I referred to the ability to accept undertakings pursuant to section 190 of the Act to satisfy my concerns. I asked that the Applicant respond by 10 May 2013 to the concerns I raised. I also indicated that the Applicant could seek a hearing or provide submissions in response to my letter.

[13] Mr. Graham on behalf of the Applicant responded with written submissions received on 10 May 2013. As part of those submissions, Mr. Graham provided a number of proposed undertakings relating to various matters raised in my correspondence.

[14] The undertakings did not however deal with the matters of concern I raised in respect to the better off overall test. With respect to the better off overall test, Mr Graham referred me to a number of decisions of the Commission as providing a basis for me to find that the Agreement as submitted passed the better off overall test. Among the decisions referred to was the decision of Senior Deputy President Hamberger in Lighthouse Protection Group Pty Ltd 4 which the Applicant asserts was approved with similar provisions contained within the Agreement that is now before me. Further explanations were provided by the Applicant as to how the Agreement should be considered as satisfying the better off overall test.

[15] I responded in writing to Mr. Graham on 21 May 2013. In that correspondence I noted that the following four matters of concern remained:

• Clause 2 “Incidence and Parties Bound” - The proposal made in your correspondence does not address the concern I had about the inconsistency of this clause with section 58 of the Act.



• Notice of employee representational rights - Your correspondence indicates that the notice of representational rights was “issued” on 25 February 2013. Your correspondence does not explain the steps taken by the employer to provide the notice to employees.



• Genuine Agreement - I note that I remain concerned that the explanatory document appears to be inaccurate in a number of respects and that this may be an issue in determining if there was genuine agreement within the meaning of the Act.



• Better off overall test - I note that you have provided additional submissions as to why I should determine that the agreement as lodged should pass the better off overall test. These submissions do not refute any of the modeling provided by the Fair Work Commission enterprise agreements team. You have not provided any undertakings or explanations around the loaded pay rates or voluntary hours issues that I raised in my earlier correspondence. In my letter of 3 May 2013, I indicated that I had formed a preliminary view that the agreement could not be approved as it does not pass the better off overall test. Having considered your correspondence I remain of that view.

[16] My letter dated 21 May 2013 advised that I proposed, based on my concerns not being addressed, to dismiss the application for approval of the Agreement. I again advised the Applicant that they may wish to seek a hearing in relation to the matter.

[17] Mr Graham on behalf of the Applicant sent further correspondence to me dated 24 May 2013. That correspondence referred me again to the decisions of the Commission the Applicant saw as authority as to why the Agreement should pass the better off overall test. The further correspondence did not provide any further proposed undertakings, nor seek to address in any way the other three matters of concern that I raised in my 20 May 2013 correspondence.

The matter for determination and the relevant legislation

[18] The matter for determination is whether or not I am satisfied that the Agreement has met the legislative requirements for approval given the four concerns that I continue to have, reflected in my correspondence of 21 May 2013. I have already indicated that I am inclined to dismiss the application based on my concerns about the application of the better off overall test. It is appropriate that I deal with that matter first.

[19] In order to approve the Agreement, I must be satisfied that the Agreement passes the better off overall test (a requirement for approval set out in s.186(2)(d) of the Act). Section 193 of the Act deals with the better off overall test. Section 193 of the Act reads:

“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.”

[20] The Applicant has referred me to the decision in Solar Systems Pty Ltd 5 in considering the proper approach to the application of the better off overall test. I note that the decision in Solar Systems Pty Ltd6affirmed generally the approach to the better off overall test adopted by the Full Bench in the Armacell Australia Pty Ltd7 (Armacell). I agree that the approach to the application of the better off overall in Armacell is the correct approach and I will apply it here.

[21] The Applicant also referred me to the decision in Top End Consulting Pty Ltd 8. In that decision, Deputy President Bartel found that the agreement did not pass the better off overall test.9 However, the Deputy President approved the agreement on the application of section 189 of the Act. There has been no suggestion that circumstances relevant to section 189 of the Act arise here. The decision in Top End Consulting Pty Ltd10has no relevance to my determination in this matter.

Does the agreement pass the better off overall test?

[22] In my correspondence to the Applicant of 3 May 2013, I provided a copy of the better off overall test analysis of the Agreement prepared by Commission staff.

[23] It is important to note that for the purposes of the better off overall test analysis conducted by Commission staff, the modern award used was consistent with the modern award identified in the Form F17 - Employer’s Declaration in support of Enterprise Agreement (Form F17) at question 3.1, relevantly the Security Services Industry Award 2010 (MA000016). Further, the analysis took into account that the Security Services Industry Award 2010 contains transitional provisions and the Applicant nominated the following award-based transitional instrument as applicable in the Form F17 at question 3.2; the Security Employees (Victoria) Award 1998 (AP796143).

[24] That analysis conducted by Commission staff included the following summary of the key issues of concern regarding the application of the better off overall test;

“ Voluntary additional hours

• Agreement clause 12 (h) allows for employees to work an unlimited amount of voluntary additional hours and be paid ordinary rates of pay.



• As shown in the modelling examples below employees could be considered not better off when working a 38 hour week if required to work weekends and/or nights meaning additional hours at ordinary rates would be a further reduction when compared to the award.

• Loaded wage rates may not compensate for award entitlements

• The agreement pays a loaded rate of pay in compensation for the removal of weekend penalty rates, shift loadings and allowances; it is not clear how employees would be better off under the proposed agreements loaded rates of pay.



• Modelling below shows three examples of how employees could be rostered under the agreement and be paid substantially less under the agreement when compared to the award.

• Part time employees rostering

• The agreement does not provide a regular agreed pattern of work for part time employees, under the award part time employees are entitled to an agreed regular pattern of work with any time worked in excess of the agreed hours paid at overtime penalty rates. The F17 q4.1 indicates that at time of voting all of the agreement employees were part time.

• Agreement contains Junior Rates of Pay

• The agreement contains junior percentages to calculate rates of pay for office employees and Security employees.



• The modern security award contains no junior rates of pay.



• The agreement contains no adult office employee rates of pay to calculate junior rates of pay.”

[25] Clause 12 of the Agreement is entitled “Hours of Work”. It provides that the employer will develop flexible working arrangements subject to the needs and requirements of the enterprise. The clause provides that full time employees will work 38 hours per week plus reasonable additional hours; no more than 12 ordinary hours per day for full time employees and for no more than 10 days in succession. The hours of work clause provides for work to be performed from Monday to Sunday at any time. That is, there is no spread of ordinary hours.

[26] Clause 10 of the Agreement includes a table with the relevant hourly pay rates for the four level classification structure. The pay rates are “loaded” pay rates which are between 10% and 15.8% higher than the relevant modern award ordinary rates. The clause in bold above the wages table makes it clear that the “loaded” rates are inclusive of weekend penalties, shift loadings, annual leave loading and “...all relevant allowances from the Award”. Agreement clause 12(h) allows employees to work an unlimited number of voluntary additional hours paid at the employee’s ordinary hourly rate. Overtime penalty rates are paid only for hours worked beyond rostered shifts.

Modelling

[27] The Commission enterprise agreements team modelled the impact of applying the Agreement compared to the application of the relevant modern award under a range of scenarios. That modelling is set out below:

Model A - Permanent Level 1 employee working a 38 hour week, Wednesday to Sunday, half day shift and half night shift, is paid substantially less under the terms of the Agreement than under the relevant modern award.

Agreement Ordinary Rate	$20.30	Award Ordinary Rate	$17.76
Hours	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	38	100%	$771.40	Ordinary Time	11.4	100%	$202.46
$0.00	Night shift	11.4	122%	$246.40
$0.00	Saturday	7.6	150%	$202.46
$0.00	Sunday	7.6	200%	$269.95
Allowances	Amount	Value	Allowances	Amount	Value
Leave Loading	No	$0.00	Leave Loading	Yes	$9.08
Total			$771.40	Total			$930.36
Award Total Weekly Rate			$930.36
Agreement Total Weekly Rate			$771.40
Percentage Difference			-20.61%

Model B - Casual Level 1 employee working a 38 hour week, Wednesday to Sunday, half day shift and half night shift, is paid substantially less under the terms of the Agreement than under the relevant modern award.

Agreement Ordinary Rate	$24.45	Award Ordinary Rate	$17.76
Hours	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	38	100%	$929.10	Ordinary Time	11.4	124%	$251.72
$0.00	Night shift	11.4	146%	$295.66
$0.00	Saturday	7.6	174%	$235.30
$0.00	Sunday	7.6	224%	$302.79
Total			$929.10	Total			$1,085.48
Award Total Weekly Rate			$1,085.48
Agreement Total Weekly Rate			$929.10
Percentage Difference			-16.83%

Model C - Permanent Level 1 employee starting on a Monday, working 10 x 12 hour shifts (120 hours total), including (2 x 12 hours) days on weekends and half day shift, half night shift, is paid substantially less under the terms of the Agreement than under the relevant modern award.

Agreement Ordinary Rate	$20.30	Award Ordinary Rate	$17.76
Hours	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	120	100%	$2,436.00	Ordinary Time	26	100%	$461.76
$0.00	6pm-6am	26	122%	$561.96
$0.00	Saturday	12	150%	$319.68
$0.00	Sunday	12	200%	$426.24
$0.00	Overtime	6	150%	$159.84
$0.00	Overtime	38	200%	$1,349.76
Allowances	Amount	Value	Allowances	Amount	Value
Leave Loading	No	$0.00	Leave Loading	Yes	$9.08
Total			$2,436.00	Total			$3,288.33
Award Total Weekly Rate			$3,288.33
Agreement Total Weekly Rate			$2,436.00
Percentage Difference			-34.99%

[28] The above modelling shows comparisons between the award and Agreement that would leave employees substantially worse off under the terms of the Agreement than what employees would have otherwise been paid under the relevant modern award.

[29] As discussed, the above modelling and summary were provided to the Applicant. In response the Applicant’s representative made a number of submissions. Those submissions are summarised in the following paragraphs.

[30] In relation to voluntary additional hours, the Applicant submitted that it was overlooked in the analysis that voluntary requested hours must be at the employees request and that if it is an employer request then the hours are paid at the overtime rate. I have considered this submission and have determined that it does a not change the outcome of the modelling above.

[31] In relation to loaded wage rates not adequately compensating for award entitlements, the Applicant emphasises that the Agreement provides loaded rates;

“...on average 13.21% above the Award base rate and that the agreement provides for annual wage increases of 2% concluding with 6.1%.”

[32] It was noted in the analysis that the Agreement provides for loaded rates which are in excess of the relevant modern award rates. However, the modelling makes it clear that the loaded rates are not sufficient to make employees better off overall given that they are to compensate for weekend penalties, shift loadings, annual leave loading and “...all relevant allowances from the Award”.

[33] Other terms and conditions contained in the Agreement which are referred to as more beneficial than the equivalent terms and conditions in the relevant modern award are: the mobile phone procedure; the protective clothing procedure; the company motor vehicle procedure; the performance procedure; the drug and alcohol procedure and further education costs procedure. I have considered these additional benefits in applying the better off overall test.

[34] Of these additional benefits, there is an unspecified allowance to be paid for the use of personal mobile phones. Further, private calls are to be kept to no more than one minute. This provision would seem to be of marginal benefit to employees.

[35] The uniform policy provides for the provision of uniforms to employees where employees are required to wear protective clothing. Clause 15.11(b) of the relevant modern award provides for the provision of a uniform where it is required. I do not consider the uniform policy to in fact be a benefit for the purposes of the better off overall test.

[36] The company motor vehicle procedure allows that a company vehicle “may” be provided but only for travelling to and from work and for work related purposes. Private use is not permitted. To the extent that commuter use of the vehicle is provided, this constitutes a benefit to employees. However, there is no certainty as to whether a vehicle will be supplied to some or all employees.

[37] The performance procedure is assumed to be the performance and flexibility policy at clause 22.3 of the Agreement. I can identify no particular benefit to employees in that clause.

[38] The drug and alcohol policy provides for a procedure for dealing with the use of drugs and alcohol in the workplace. I cannot detect any element of the procedure that could be considered a benefit to employees for the purposes of the better off overall test.

[39] The training policy allows for payment of training courses where employees are directed to undertake training and the payment at ordinary rates for time spent at such training. Were it the case that the employer was to direct an employee to undertake training and not meet the costs of such training, this would surely be less beneficial to the employee. In that context, payment for training undertaken at the direction of the employer is a neutral consideration in terms of the better off overall test. Further, payment for training that is not at the direction of the employer is entirely at the employer’s discretion. In the circumstances this may be a benefit in terms of the better off overall test.

[40] Overall, the additional benefits claimed by the employer do not provide a sufficient basis for considering that employees are better off overall when one considers the modelling of remuneration outcomes under the scenarios above.

[41] In relation to part time rostering, the Applicant’s submissions simply restated the relevant clauses in the Agreement. The submissions did not address the fact that the Agreement does not provide a regular agreed pattern of work for part-time employees (whereas under the relevant modern award, part time employees are entitled to an agreed regular pattern of work with any time worked in excess of the agreed hours paid at overtime penalty rates).

[42] With respect to junior rates of pay, the analysis conducted by the Commission and provided to the Applicant notes that the Agreement provides for junior rates of pay whereas the relevant modern award does not contain junior rates of pay, and additionally noted that the Agreement does not contain adult “Administration and General” rates of pay to calculate the junior rates of pay. In response, the Applicant submitted that;

“....the Security Industry is such that even those who perform clerical and administrative duties are generally Licensed Guards pursuant to the relevant State legislation. It is to that end the applicant included in the Definitions provisions of the agreement the term “Administration and General”. 11

[43] The Applicant also submitted that the junior employee rates in the Agreement are based on the junior minimum wages of the Miscellaneous Award 2010 12.

[44] As to the relevance of the Miscellaneous Award 2010, I note that this was not referred to by the Applicant in the Form F17. I do not believe the terms of the Miscellaneous Award 2010 would apply to the work covered by this Agreement as the Miscellaneous Award 2010 generally applies to areas not otherwise covered by a modern award. It is clear that the relevant award for the application of the better off overall test to this Agreement is the Security Services Industry Award 2010.

[45] With respect to the pay rate comparison contained in the analysis, the Applicant submitted that there were errors in the wage comparison table provided in the analysis and that the percentage difference is higher for three of the four classifications contained in the Agreement. I have considered this submission and it appears that the Applicant has recalculated the percentage differences based on the Agreement’s February 2014 rates of pay. These are not the rates of pay payable at test time, the relevant time for the application of the better off overall test.

[46] The Applicant also submits that, “…we would respectfully say the average rostered hours worked by the organisation, are in no way reflected by examples prepared by the assessment officer, and as such should not be relied upon as part of the BOOT by the Commissioner.”

[47] The Applicant provided no other information in either of its submissions as to what the average hours worked by the organisation are or in what way the modelling did not reflect them. In any case, further consideration of what the average hours worked may be does not provide a basis for determining that the better off overall test is met. The decision of the Full Bench in Bupa Care Services Pty Ltd and P & A Securities Pty Ltd as trustee for the D’Agostino Family Trust T/A Michel’s Pastisserie Murwillumbah and Others 13 makes clear that in applying the better off overall test, the Commission must compare what the Agreement provides as compared to what the applicable modern award provides. The Full Bench stated that “[a]fterall, it is the terms and conditions of employment in the enterprise agreement that determine the work obligations under the enterprise agreement”.14While employees may not work a particular work arrangement now, the Agreement allows that they may do so in the future. It is clear that the modelling is based on a range of scenarios that are permissible within the terms of the Agreement.

[48] The Applicant makes a number of references throughout both submissions to the decision of Senior Deputy President Hamberger in Lighthouse Protection Group Pty Ltd 15and seeks to draw parallels with that agreement. The Applicant also notes that Commission staff noted as follows in the summary of the better off overall test analysis:

“The F17 nominates a similar agreement AG2012/4751 which was approved with undertakings however we note that the agreement was lodged prior to the most recent minimum wage decision and contains various differences including the rates of pay. Therefore we note there are similarities but it has not been considered a like agreement in terms of the BOOT”

[49] Overall, it is submitted by the Applicant that the approach taken by Senior Deputy President Hamberger regarding the better off overall test to the agreement in Lighthouse Protection Group Pty Ltd 16 should be replicated in the present matter.17

[50] Irrespective of whether there is any similarity in any of the provisions between the Agreement that is now sought to be approved and the agreement in Lighthouse Protection Group Pty Ltd 18, there is no basis under the terms of the legislation for finding an agreement passes the better off overall test on that basis. Each agreement must be considered on its own terms, at test time. The better off overall test should be applied in a manner consistent with the approach in Armacell. Based on that approach and considering the terms of the Agreement overall, I am not satisfied that the Agreement passes the better off overall test.

Conclusion:

[51] The better off overall test requires that each employee and prospective employee is better off overall (as at test time) if the agreement applied to the employee than if the relevant modern award applied to the employee. 19

[52] The analysis above clearly demonstrates that employees will not be better off overall under a range of scenarios. The analysis has considered any additional benefits that accrue to employees under the Agreement. The most significant benefit cited by the employer that is relevant at test time is that of the “loaded rate”. It is clear that the loaded rate and any additional benefits under the terms of the Agreement, are not sufficient to compensate for the loss of a number of award conditions, such as to leave employees better off overall.

[53] I cannot approve the Agreement as I am not satisfied that the Agreement passes the better off overall test (as required by section 186(2)(d) of the Act).

[54] In light of my decision that the Agreement does not pass the better off overall test, it is not necessary to further consider the three other concerns that I have with the terms of the Agreement and the process for making the Agreement. However, I note that should the applicant seek to have another enterprise agreement approved in the future, these concerns if not remedied would likely need to be addressed in order for such an agreement to be approved.

[55] For the reasons outlined above, the application is dismissed.

COMMISSIONER

 1   [2010] FWAFB 4602

 2   Re McDonald’s Australia Enterprise Agreement 2009[2010] FWAFB 4602, at [13]

 3   Letter to Mr Robert Graham, Worksite Resolutions, dated 3 May 2013

 4   [2012] FWAA 3742

 5   [2012] FWAFB 6397

 6   Ibid

 7   [2010] FWAFB 9985

 8   [2010] FWA 6442

 9   Top End Consulting Pty Ltd [2010] FWA 6442, [35]

 10   [2010] FWA 6442

 11   Applicant’s submissions dated 10 May 2013, page 5

 12   MA000104

 13   [2010] FWAFB 2762

 14   Bupa Care Services Pty Ltd and P & A Securities Pty Ltd as trustee for the D’Agostino Family Trust T/A Michel’s Pastisserie Murwillumbah and Others[2010] FWAFB 2762, [25]

 15   [2012] FWAA 3742

 16   Ibid

 17   Applicant’s submissions dated 10 May 2013, page 4

 18   [2012] FWAA 3742

 19   Fair Work Act 2009, s.193(1)

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