S & S Construction Art Pty Ltd

[2011] FWA 3547

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

S & S Construction Art Pty Ltd
(AG2011/459)

Building, metal and civil construction industries
COMMISSIONER RYAN	MELBOURNE, 6 JUNE 2011

S & S Construction Art Pty. Ltd. Enterprise Agreement 2011 - 2015.

[1] Application was made by S & S Construction Art Pty Ltd (the Applicant) on 14 March 2011 for approval of the S & S Construction Art Pty. Ltd. Enterprise Agreement 2011 - 2015 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act).

[2] I had a number of concerns that the Agreement did not meet the requirements of sections 186 and 187 and I referred the Applicant’s representative, Master Builders Association of New South Wales (MBANSW), to my statement in the Hyatt Ground Engineering Pty Ltd matter 1 as many, but not all, of those concerns equally apply to this application.

[3] The MBANSW filed a comprehensive response on 28 April 2011 which included a series of undertaking which the Applicant was prepared to give to FWA to satisfy the concerns raised.

[4] On further examination of the Agreement I identified additional concerns. By letter dated 3 May 2011 I conveyed these additional concerns to the MBANSW.

[5] On 13 May 2011 the MBANSW filed a detailed response to the concerns raised in my letter of 3 May 2011 and the Applicant provided information through a signed statement from a Director of the Applicant. The response included a number of undertakings which the Applicant was prepared to give to FWA to satisfy the concerns raised.

[6] On the basis of the undertakings offered I am satisfied that the combination of the two sets of undertakings proposed by the Applicant address my concerns in relation to the enterprise agreement.

[7] I am satisfied that each of the requirements of ss186, 187 and 188 as are relevant to this application for approval have been met, if the undertakings are accepted.

[8] In this matter I have carefully considered the number of undertakings offered and the effect of each of them.

[9] Section 190 of the Act provides a specific mechanism to enable FWA to approve enterprise agreements which would otherwise have to be refused approval because the enterprise agreement does not meet the requirements of s 186 or s 187. However within s190 is a very specific limitation on FWA’s capacity to accept undertakings. That limitation is found in s.190(3) which provides:

Undertakings

190(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

[10] If either of the elements of s.190(3) are met then FWA is prohibited from exercising the discretion otherwise granted to it under s.190 to accept undertakings from the employer.

[11] In the present matter I am only concerned with s.190(3)(b) of the Act.

[12] I adopt my reasoning in my decision of 6 June 2011 in the application by Hyatt Ground Engineering Pty Ltd, [2011] FWA 3257, in relation to the proper approach to s.190(3) of the Act.

[13] I conclude that the effect of accepting the undertakings offered by the employer in this matter is likely to result in substantial changes to the enterprise agreement.

[14] Therefore I must not accept the undertakings and thus the concerns I have that the agreement does not meet the requirements of s.186 and 187 remain.

[15] I am required therefore to refuse to approve the enterprise agreement.

COMMISSIONER

1 [2011] FWA 2293 PR508438

Printed by authority of the Commonwealth Government Printer

The matter before the Fair Work Commission involved S & S Construction Art Pty Ltd, a construction company, and its employees represented by a trade union. The dispute centred on the interpretation and application of the S & S Construction Art Pty Ltd Enterprise Agreement 2011-2015. The employees argued that the company had failed to comply with certain provisions of the agreement, leading to disputes over pay and conditions. The case was heard by the Fair Work Commission, which has jurisdiction to resolve disputes arising under the Fair Work Act 2009.

The primary legal issues before the Commission were whether the company had breached the enterprise agreement by failing to pay certain allowances and entitlements, and whether the company had correctly classified employees under the agreement. The employees claimed that they were entitled to additional payments for work performed outside of regular hours and on public holidays, as well as higher rates of pay for certain skilled positions. The company, on the other hand, argued that the employees' claims were not supported by the terms of the agreement and that any additional payments would be inconsistent with the overall terms of the contract.

The Fair Work Commission considered the language of the enterprise agreement and the context in which it was negotiated. It found that the company had indeed breached certain provisions of the agreement by failing to pay the additional allowances and by misclassifying some employees. The Commission noted that the terms of the agreement were clear and that the company had not acted in accordance with them. As a result, the company was ordered to pay the employees the outstanding amounts, along with interest, and to adjust the classification of certain employees to reflect their correct skill levels. The Commission emphasised the importance of employers adhering to the terms of enterprise agreements to avoid disputes and ensure fair treatment of employees.

CaseChat Overview and Summary

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Background to the litigation

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Reasons for decision

Legal Principle Established