RCR Laser Pty Ltd

[2019] FWC 795

[2019] FWC 795

FAIR WORK COMMISSION

DECISION

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

RCR Laser Pty Ltd
(AG2018/3622)

DEPUTY PRESIDENT MASSON MELBOURNE, 8 FEBRUARY 2019

Application for approval of the RCR Laser Pty Ltd (Toowoomba, QLD) Employee Collective Agreement 2018-2022.

[1] An application has been made for approval of the RCR Laser Pty Ltd (Toowoomba, QLD) Employee Collective Agreement 2018-2022 (the Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (the Act). It has been made by RCR Laser Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

[2] A notice of employee representational rights was provided to employees on 20 April 2018 and the notice complied with the regulations. The Applicant states that employees were provided with access to the Agreement and information about the terms and the effects of the terms of the Agreement on 29 May 2018.

[3] The Applicant states that employees were notified of the time, place and method of voting at an employee meeting on 16 July 2018 and that voting occurred on 24 July 2018. A majority of those who voted approved the Agreement. 1

[4] The Applicant filed a statutory declaration in support of the Agreement. The statutory declaration noted that the relevant award for the purpose of the better off overall test was the Manufacturing and Associated Industries and Occupations Award 2010. 2

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

[6] In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified a number of concerns in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and better off overall test (BOOT) assessment considerations. The Commission wrote to the Applicant on 16 November 2018 and identified a number of issues requiring a response.

[7] The following issues were raised with the Applicant in the Commission’s correspondence dated 12 November 2018:

1. The authority of the signatory of the employer representative who signed the Agreement was unclear;

2. Clause 4.5(c) which deals with causal employees is expressed in a manner that may be inconsistent with the Federal Court’s decision in Workpac Pty Ltd v Skene [2018] FCFAC 131;

3. Clause 12.9 which deals with the cashing out of annual leave appears not to comply with s. 93(2) of the Act;

4. Clause 5.1 which deals with the termination of probationary employees provides that such employees may be dismissed with one day’s notice, contrary to the termination of employment notice provisions under the National Employment Standards (NES);

5. Clause 15.1 which deals with Public Holidays appears inconsistent with the NES entitlements;

6. Clause 20.2 which provides for redundancy was inconsistent with s. 120 of the Act;

7. A number of Better Off Overall Test (BOOT) concerns were raised including:

(a) Span of ordinary hours is not provided for within the Agreement;

(b) Starting time provisions in the Agreement that provide for early starts were inconsistent with the Award and less beneficial;

(c) Trainee rates were expressed to be equivalent to the relevant Award and as such were not more beneficial than the Award;

(d) Minimum engagement for overtime on a weekend or public holiday is not specified;

(e) Meal allowance for weekend work is not provided for;

(f) Sunday overtime penalty payment is less than the Award;

(g) Deduction of monies owing provisions appear contrary to s 324 of the Act;

(h) Definition of afternoon and night shift is less beneficial than the Award;

(i) A number of Award allowances are not provided for in the Agreement.

[8] In its correspondence of 12 November 2018, the Commission sought a response by the close of business on 21 November 2018. No response was received by that date.

[9] Correspondence was received from the Applicant’s representative on 23 November 2018 advising that the Applicant had recently gone into administration and that attempts to obtain instructions had not been successful. The Applicant’s representative advised that it would provide the Commission with an update on or by 27 November 2018. No response was received by the Commission by that date.

[10] Further correspondence was sent by the Commission to the Applicant on 30 November 2018 noting that no response had been received to earlier correspondence. A reply was sought by the close of business on 4 December 2018. A response was received from the Applicant’s representative on 5 November 2018 advising that the Commission’s correspondence had been forwarded to the Administrator.
[11] Further correspondence was sent by the Commission to the Applicant’s representative on 7 December 2018 noting that no response had been received to earlier correspondence. The Commission noted advice received that the Applicant had gone into administration and suggested that based upon those circumstances, the application could be withdrawn. An F50 Notice of Discontinuance form was provided.

[12] Further correspondence was sent by the Commission to the Applicant’s representative on 15 January 2019 noting that no response had been received to earlier correspondence. An immediate reply was sought, failing which, the application was liable to be dismissed by the Commission.

[13] Following the Commission’s correspondence of 15 January 2018, the Administrator for the Applicant contacted the Commission on 15 January 2019 seeking an extension of time within which to provide a response to the matters raised by the Commission. The Commission agreed to an extension of time to 7 February 2019. A further request by the Administrator for another extension of time on 1 February 2019 to beyond the 7 February 2019 deadline was declined. I now intend to deal with the application on the material before me.

Statutory Provisions

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

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

Basic rule

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

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

Requirements relating to the safety net etc.

  (2)  The FWC must be satisfied that:

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

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

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

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

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

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

Consideration

NES Issues

[15] I am satisfied that there are a number of clauses within the Agreement that conflict with the NES. These include clauses dealing with causal employment (clause 4.5(c)), notice of termination of probationary employees (clause 5.1), public holidays entitlement (clause 115(b)) and eligibility to redundancy (clause 120(b)(i)).

[16] While the identified issues are capable of being addressed by the provision of an undertaking pursuant to s 190(2) of the Act, no undertakings have been proffered to address the concerns. Nor have any submissions been made that would allay the concerns held by the Commission. I am not satisfied that the identified provisions do not contravene s 55 of the Act, and consequently, the requirements of s 186(2)(c) of the Act are not met.

BOOT Issues

[17] The Agreement provides for base wage rates ranging between 3.26% and 14.11% above the relevant Award classification base rates. The Applicant in its Form F17 states that the wage rates in the Agreement are of a sufficient margin above the Award to compensate for the range of less beneficial provisions contained within the Agreement. I do not accept that submission on its face having regard to the range of less beneficial provisions identified in paragraph [7].

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

Conclusion

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

DEPUTY PRESIDENT

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 1 Section 180 of the Fair Work Act 2009.

 2   MA000010.