Security International Services Group Pty Ltd T/A SIS Group

[2015] FWC 8737

[2015] FWC 8737

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Security International Services Group Pty Ltd T/A SIS Group
(AG2015/3249)

COMMISSIONER GREGORY MELBOURNE, 22 DECEMBER 2015

Application for approval of the Security International Services (SIS) Group Pty. Ltd. Retail Security Single Enterprise Agreement - 2015.

[1] An application has been made for approval of an enterprise agreement known as the Security International Services (SIS) Group Pty. Ltd. Retail Security Single Enterprise Agreement - 2015 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by the Security International Services Group Pty Ltd T/A SIS Group. It is a single enterprise agreement.

[2] After reviewing the application and the terms and conditions contained in the proposed Agreement the Commission wrote to the Applicant’s representative, Mr Frank Bellomo, seeking clarification about a range of matters. Without going to the detail of each of those matters they concerned the following issues.

• The Commission sought further clarification about whether the group of employees to be covered by the proposed Agreement can be said to have been “fairly chosen.” In this context further information was sought about whether the group of employees to be covered are the only employees employed by the Applicant in the provision of security and related services.



• There appeared to be some discrepancies in regard to the information provided in the Employer’s Statutory Declaration about when the last Notice of Employee Representational Rights was provided to the employees.



• The Employer’s Statutory Declaration also indicated all of the employees to be covered by the proposed Agreement are employed on a part-time basis. Given this situation clarification was sought about whether the overtime entitlements for part-time employees in the underlying Security Services Industry Award 2010 were replicated in the terms and conditions contained in the proposed Agreement.



• The Agreement proposes that wages be increased by 1.5% at the end of each 12 months after the Agreement is approved. It was noted, in response, that this was less than the amount of increase awarded, for example, by the Commission’s most recent Minimum Wage Review Decision.



• Further clarification was sought about whether the “reasonable additional hours” clause provided for all such hours worked to be paid at the overtime penalty rate.



• The Agreement sets out four different hourly rates of pay for each of the three classification levels contained in the Agreement. These depend upon when an employee is rostered to work, and differentiate between work performed on Monday – Saturday between 7 a.m. and midnight; Monday – Saturday between the hours of midnight and 7 a.m.; and any work performed on either Sunday, or on a public holiday. It was indicated in response to this wage structure that the Commission had concerns about the rates proposed, particularly in regard to the Monday – Saturday, 7 a.m. – midnight roster. In this case the rates proposed are greater than the ordinary time rates in the Award for work performed during the day from Monday – Friday, but are less than the Award rates that apply for evening work, and certainly less than the Award rates that apply for ordinary time work performed on Saturday. The Commission continued to provide some examples in this regard, and indicated in conclusion that this situation raised issues about compliance with the requirements of the better off overall test.

[3] Correspondence was subsequently received in response from Mr Bellomo on behalf of the Applicant. It indicated, firstly, that the employees proposed to be covered by the Agreement are Loss Prevention Officers and the Applicant does not currently employ any other security officers in related security work. It also indicated there was only one other existing employee employed by the Applicant and that person provided operational management support to the loss prevention team.

[4] Further information was also provided about the issue raised about provision of the last Notice of Employee Representational Rights.

[5] In regard to the issue raised about the situation of part-time employees it was indicated that they are entitled to the same overtime provisions as contained in the underlying Security Services Industry Award 2010. It was also indicated in this context that all hours worked outside of those rostered in any cycle will be deemed to be overtime for these employees, and an example of this situation was highlighted in the modelling provided in conjunction with this correspondence.

[6] It was also indicated that the Applicant was prepared to provide an undertaking that the wage increases during the life of the Agreement would be 1.5%, or the amount awarded by the Commission in its annual Minimum Wage Review Decisions, whichever was the greater amount. Further information was also provided about the reasonable additional hours clause.

[7] The correspondence finally made reference to modelling that had been undertaken based on three employees, who had been randomly selected, with the relevant rates analysed over a four week period. It was indicated that this analysis demonstrated that over a four week cycle those employees were better off overall when the rates contained in the proposed Agreement were compared with those contained in the underlying Award. It was also indicated that the Applicant does not intend to roster any employees on afternoon shift only, or only on weekends. It was also pointed out that the proposed Agreement contains an additional week of annual leave for all employees, compared to the entitlement contained under the Award.

[8] The Commission responded to this correspondence by indicating it had reviewed, in particular, the examples of the rosters provided, together with the comparisons made between the entitlements contained in the proposed Agreement and those in the Award. However, it was also indicated it was obviously possible other roster arrangements might be put in place in the future, and the Commission continued to have concerns about whether the terms of the proposed Agreement satisfied the requirements of the better off overall test. It indicated it had concerns particularly because of the different span of hours proposed in the Agreement as compared in the Award. For example, under the Award an employee working after 6 p.m. has an additional penalty rate entitlement, which is not provided for in the Agreement, although obviously the Agreement provides a greater hourly rate for work performed during the day.

[9] It was also noted that there is a significant difference between the hourly rate proposed to be paid for the Door Greeter classification under the Agreement for work performed on Saturday ($21), compared to the rate that applied under the Award ($29.15). It was noted in conclusion that any issue about whether an employee is better off overall under the proposed Agreement would depend upon the hours of work that are rostered, and these can clearly change from time to time. It was accordingly advised that the matter would be listed for hearing to enable further submissions and evidence to be provided in support of the application.

[10] The hearing took place on 9 December. Mr Frank Bellomo was granted leave to appear on behalf of the Applicant under section 596(2)(b) of the Fair Work Act 2009 (Cth). He appeared with the Applicant’s Operations Manager, Mr Jagmeet Mangat, and the Rostering Co- ordinator, Mr Abhishek Duseja. Mr Bellomo also provided a written outline of submissions in advance of the hearing. Those submissions indicated the Applicant generally rosters employees on the basis of between five and eight hours each day over a seven day period. It did not anticipate any need to significantly alter these roster arrangements in the future.

[11] Mr Bellomo, firstly, indicated that the employees now proposed to be covered by the Agreement are the only employees now employed by the Applicant, anywhere in Australia, who are involved in the provision of security and/or related services. However, he also suggested that the Applicant has relationships with other businesses operating in the security industry.

[12] He also indicated in his submissions that the Applicant was prepared to increase the rates contained in the proposed Agreement by the amount awarded in the most recent Minimum Wage Review Decision, and would be prepared to provide an undertaking to this effect. His submissions also indicated that the majority of hours to be worked by the employees to be covered by the Agreement would generally be rostered between 9 a.m. and 5 p.m. on Monday – Friday, with the balance of rostered hours worked outside of those times. However, no witness or other evidence was provided in support of these submissions.

[13] His submissions also emphasised that the Agreement contains an entitlement to five weeks’ annual leave each year, which is obviously greater than the entitlement contained in the underlying Security Services Industry Award 2010, and this should be taken into account in any consideration about satisfaction with the requirements of the better off overall test.

[14] I have again reviewed the application and the terms of the proposed Agreement, taking into account all of the submissions made on behalf of the Applicant, both in writing and in the hearing. I have had particular regard in this context to the proposed rates of pay and the differing penalty rate entitlements that apply under the terms of the Agreement, and under the Security Services Industry Award 2010.

[15] In summary, a comparative review of those rates indicates that for an employee working between five and six hours each day in a 9 a.m./5 p.m. Monday – Friday roster timespan there will likely be little difference between the earnings of an employee covered by the Agreement, and the earnings of an employee working under the terms contained in the Award.

[16] However, that situation changes for any employee rostered to work after 6 p.m. in the evening because the proposed Agreement does not provide for any additional penalty rate for work at these times, whereas the Award provides for an additional penalty rate of 21.7% on Monday – Friday, and time and a half for any work performed at these times on Saturday. This immediately raises issues in regard to satisfaction with the requirements of the better off overall test and these issues arise in circumstances where an employee is only working on one evening shift during the week. It would obviously be accentuated in circumstances where an employee is rostered to work on more than one evening in any week, and particularly if any work on Saturday is involved.

[17] Given the nature of the work performed by Loss Prevention Officers in a retail environment it seems inevitable, in the absence of any evidence to the contrary, that a proportion of those rostered hours would be performed in the evenings and at weekends.

[18] As a consequence I am not satisfied that any employee working in the evenings, or on Saturday, will be better off overall when the terms contained in the Agreement are compared with those contained in the underlying Award. This takes into account the additional one-week annual leave entitlement contained in the proposed Agreement, and the proposed undertakings to increase the existing rates by 2.5%.

[19] In considering an application for approval of an enterprise agreement s.186(2) of the Act requires that, inter alia, “the agreement passes the better off overall test.” Section 193 continues to state:

“(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.” 1

[20] The examples referred to above, even with the additional undertakings proposed by the Applicant, indicate that it is not possible to conclude that the employees would be better off overall under the terms of the proposed Agreement, when compared to those contained in the Security Services Industry Award 2010. It follows, in conclusion that I am not satisfied that the Agreement can be approved, even with the provision of the additional proposed undertakings, because it does not meet the requirements of the “better off overall” test.

[21] Having come to this conclusion I have also given consideration to whether further undertakings could be sought from the Applicant in an endeavour to deal with the deficiencies identified. However, this would involve changes that would represent an outcome that is significantly different from what was in contemplation by the parties when the Agreement was made, and subsequently voted on. Therefore, I do not consider that it is appropriate in those circumstances to explore the possibility of obtaining further undertakings from the Applicant.

[22] It follows that I am not satisfied that the terms and conditions contained in the Agreement satisfy the requirements of the better off overall test. The application is accordingly dismissed.

COMMISSIONER

Appearances:

Mr Frank Bellomo appeared on behalf of the Applicant.

Hearing details:

2015.

Melbourne:

9 December.

 1   Fair Work Act 2009 (Cth) at s.193

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