Schnitz HR Pty Ltd T/A Schnitz

[2015] FWCA 7569

[2015] FWCA 7569

FAIR WORK COMMISSION

DECISION

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

Schnitz HR Pty Ltd T/A Schnitz
(AG2015/5032)

SCHNITZ HR ENTERPRISE AGREEMENT 2015

Fast food industry
DEPUTY PRESIDENT BULL	SYDNEY, 9 NOVEMBER 2015

Application for approval of the Schnitz HR Enterprise Agreement 2015

[1] An application has been made by Schnitz HR Pty Ltd (the applicant) for the approval of an enterprise agreement known as the Schnitz HR Enterprise Agreement 2015 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement, and covers all employees of the applicant other than senior executives.

[2] The Fair Work Commission (the Commission) wrote to the applicant, via its legal representative Mr David Price on a number of occasions with respect to concerns with the Agreement. In particular, the concerns related to:

1. Dispute resolution term not meeting the requirements under s.186(6) of the Act;
2. Consultation term not meeting the requirements under s.205(1)(A);
3. Permitted deductions not meeting the requirements of s.324; and
4. Whether the Agreement satisfied the better off overall test as per s.186 of the Act.

[3] Final undertakings addressing the Commission’s concerns were received from the applicant on 30 October 2015.

Dispute resolution term

[4] The consultation term at clause 30 of the Agreement does not meet the requirements of s.186(6) of the Act, the clause does not allow for the settling of disputes about any matters arising under the Agreement or permit employee representation at all stages of the procedure.

[5] The model dispute resolution term at Schedule 6.1 of the Fair Work Regulations 2009 will be taken to be a term of the Agreement. A copy of the model consultation term is attached at Annexure A of this decision.

Consultation Term

[6] The consultation term at clause 32 of the Agreement does not meet the requirements of s.205(1A) of the Act, the clause does not provide specific consultation requirements with respect to changes to regular rosters or ordinary hours.

[7] Pursuant to s.205(2) of the Act, the model consultation term at Schedule 2.3 of the Fair Work Regulations 2009 will be taken to be a term of the Agreement. A copy of the model consultation term is attached at Annexure B of this decision.

Permitted deductions

[8] Clause 28(d) of the Agreement allows the employer to deduct money from an employee’s entitlements upon termination of employment for items that have not been returned to the employer.  These deductions may not be permitted deductions meeting the requirements of s. 324 the Act.  The applicant was advised that the relevant items listed in the clause may be of no effect as per ss. 253 and 326 of the Act.

Better Off Overall Test (BOOT)

[9] The applicant declared in its statutory declaration that the Agreement does not provide for any shift penalties, weekend penalties or annual leave loading, as well (as a reduced public holiday loading), which employees would otherwise receive under the Fast Food Industry Award 2010 (the Award), being the relevant reference instrument for the purposes of the BOOT in this application.

[10] The applicant also specifies that the higher base rates of pay and increased minimum engagement period for part time employees are more beneficial under the Agreement than the Award and that the Agreement satisfied the better off overall test.

Reduced Penalties

[11] The Commission was not satisfied that the higher rates of pay adequately compensated for the reduced entitlements under the Agreement, and requested the applicant provide indicative rosters in support of its application, which were received by the Commission on 12 October 2015. Upon analysis of the submitted rosters, the Commission was open to find that while the higher take home pay for employees were high enough to compensate for the removal of weekend and shift penalties, the Commission was not satisfied that the removal of weekend and shift penalties in conjunction with the reduced public holiday loading would result in employees being better off under the Agreement.

Undertaking in relation to the public holiday loading

[12] At the request of the Commission, the applicant has provided an undertaking that it will pay full-time and part-time employees a 250% penalty and casual employees a 275% penalty for all hours worked on public holidays. The public holiday loadings are in line with the Award, but due to the higher base rates of pay under the Agreement, are of a greater magnitude than the Award.

Part- time flex employees

[13] At cl.10.3 – Part-time Flex Employees – School based Trainees only, part time flex employees are defined as being ‘school-based trainee employees’ but engaged on the same basis as part-time employees for all purposes of the Agreement (cl. 10.3(a)). 

[14] These ‘part-time flex employees’ are paid a 15% loading in lieu of payment for personal leave and annual leave (see cl. 10.3(a)(ii) and cl. 20(a)). 

[15] Item D.6.1 of the National Training Wage Schedule in the Award (NTW schedule) states :

“A trainee undertaking a school-based traineeship may, with the agreement of the trainee, be paid an additional loading of 25% on all ordinary hours worked instead of paid annual leave, paid personal/carer’s leave and paid absence on public holidays, provided that where the trainee works on a public holiday then the public holiday provisions of this award apply”.  

[16] While this pay structure may be permissible for school-based trainees covered by the NTW Schedule of the Award, it is not permissible and constitutes a breach of the National Employment Standards for all other employees, especially in relation to the annual leave payment, see for example the Full Bench decision in Canavan Building Pty Ltd [2014] FWCFB 3202.

[17] There is no provision in the clause itself or in the Agreement that a ‘part-time flex employee’ will be undertaking a school-based traineeship such as to bring them within the scope of the NTW Schedule of the Agreement and the pay structure adopted therein.  

Undertaking in Part-time Flex Employees

[18] At the request of the Commission, the applicant has provided an undertaking that it will not engage anyone as a part-time flex employee under the Agreement.

Casual employees

[19] The National Employment Standards (NES) under Part 2-2 of the Act entitles all casual employees to 2 days unpaid carer’s leave, 2 days unpaid compassionate leave, unpaid community service, long service leave, parental leave and the right to request flexible working arrangements. 

[20] Clause 10.4(d)(iv) of the Agreement states that clause 22, which deals with unpaid personal/carer’s leave, shall not apply to casual employees.  This is inconsistent with the actual terms of cl. 22 which appear to offer casual employees two days unpaid personal/carer’s leave.  

Undertaking in relation to casual employees

[21] At the request of the Commission, the applicant has provided an undertaking that all casual employees will be entitled to 2 days unpaid carer’s leave, 2 days unpaid compassionate leave, unpaid community service leave, long service and parental leave and the right to request flexible working arrangements in accordance with the NES.
Conclusion

[22] Section 186 of the Act requires the Commission to be satisfied that the proposed agreement results in employees being better off overall under the Agreement than if they would otherwise be under the relevant award, being the Fast Food Industry Award 2010 in this application.

[23] Accordingly, the Commission provided the employer with an opportunity to provide written undertakings acceptable to the Commission in addressing the concerns identified pursuant to s.190 of the Act.

[24] The undertakings provided by the applicant address the Commission’s concerns as required under the Act. Taking into account the higher rates of pay under the Agreement and the undertakings provided by the applicant, I am satisfied that the Agreement results in employees being better off overall under the Agreement.

[25] The undertakings provided by the applicant are taken to be a term of the Agreement. A copy of the undertakings is attached at Annexure C.

[26] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[27] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 16 November 2015. The nominal expiry date of the Agreement is 1 June 2019.

[28] This decision and undertakings should be brought to the attention of employees covered by the Agreement by the applicant.

DEPUTY PRESIDENT

Annexure A

Annexure B

Annexure C

Printed by authority of the Commonwealth Government Printer

<Price code C, AE416478  PR573575>