Seventh-Day Adventist Aged Care (South Queensland) Ltd
[2011] FWA 5103
•5 AUGUST 2011
[2011] FWA 5103 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Seventh-Day Adventist Aged Care (South Queensland) Ltd
(AG2011/1789)
ADVENTIST AGED CARE SUPPORT AND ADMINISTRATION STAFF ENTERPRISE AGREEMENT 2011
COMMISSIONER HAMPTON | ADELAIDE, 5 AUGUST 2011 |
Application for approval of an enterprise agreement - additional annual leave for shiftworkers - whether s.196 requires the NES entitlement established by modern award to be provided in the agreement - agreement not approvable in present terms - undertakings discussed - liberty to apply.
BACKGROUND
[1] This matter concerns an application for approval of an enterprise agreement pursuant to s.185 of the Fair Work Act 2009 (the Act). The application has been made by Seventh-Day Adventist Aged Care (South Queensland) Pty Ltd (the employer) and the Agreement is the Adventist Aged Care Support and Administration Staff Enterprise Agreement 2011.
[2] The Agreement is intended to apply to over 200 employees in the aged care facilities conducted by the employer at five sites in Southern Queensland. The nature of those activities is such that the Aged Care Award 2010 and the Health Professionals and Support Services Award 2010 covers their employment.
[3] United Voice and the Australian Workers’ Union of Employees, Queensland (AWUQ) are employee bargaining representatives for the Agreement and have now opposed the approval application on the basis of the annual leave provisions of the instrument. In essence, the unions contend that the Agreement cannot be approved as it provides, for some shiftwork employees, a quantum of annual leave less than that required by the Act as a result of the operation of the National Employment Standards (the NES). This was said to be contrary to the requirements of s.196 of the Act.
[4] Given the nature of the issues arising from this application, on 2 August 2011 I convened a hearing in order to permit the parties to provide submissions and materials in relation to their respective positions.
[5] It is common ground that save for the issues arising from the annual leave provisions, there is no impediment to the approval of the Agreement.
THE RESPECTIVE ANNUAL LEAVE PROVISIONS
[6] The particular issues arise from clause 25.1 of the Agreement which provides relevantly as follows:
“25. Annual Leave
25.1 An employee (other than a casual employee) shall be entitled for each 12 month period to annual leave on full pay as follows and such annual leave shall be exclusive of any statutory holidays:
(a) not less than five weeks for employees employed as continuous shift workers where work is performed in three shifts per day (morning, afternoon and night) per 24 hour period, over seven days per week, and where employees are regularly rotated through such shifts over a 12 month period; and
(b) not less than four weeks in any other case.
Annual leave accrues continuously.”
[7] The relevant annual leave provision in the Aged Care Award 2010 is as follows:
“28.2 Quantum of annual leave
(a) For the purposes of the NES a shiftworker is defined as:
(i) an employee who is regularly rostered to work their ordinary hours outside the ordinary hours of work as a day worker as defined in clause 22.2(a); and/or
(ii) an employee who works for more than four ordinary hours on 10 or more weekends.
(b) For the purposes of the clause 28.2(a), a weekend means work in ordinary time on a Saturday and/or Sunday in any one calendar week.”
[8] The relevant annual leave provision in the Health Professionals and Support Services Award 2010 is as follows:
“31.1 Quantum of leave
(a) The NES provides that an employee who is defined as a shiftworker under this clause is entitled to an additional weeks annual leave on the same terms and conditions.
(b) For the purposes of the NES a shiftworker is an employee who works for more than four ordinary hours on 10 or more weekends during the year in which their annual leave accrues.’
[9] Mr Longwill, who appeared with permission for the employer, conceded that there would be some employees who would otherwise be entitled to five weeks annual leave under the Aged Care Award 2010, when applied along with the relevant NES, who would not be entitled to that extent of leave under the Agreement. 1 It is also likely that this would extend to the other modern award.
THE CONTENTIONS OF THE PARTIES
[10] The employer contended that it was a matter for Fair Work Australia to be satisfied that the requirements of s.196 had been met. That is, that the annual leave provisions of the Agreement contain a definition of shiftworker for the purposes of the NES.
[11] Mr Longwill pointed to what he contended was a number of other similar enterprise agreements 2 that had been approved by Fair Work Australia and drew the implication that the Tribunal must have been satisfied these met all of the approval requirements, including s.196 of the Act. This, it was said, followed a long history of similar arrangements operating particularly within agreements made in this sector in Queensland.3 He could not however point to any decisions touching upon the issue and in effect recognised that it may not always be apparent on its face that an agreement provision would have a differential impact in practice upon any shiftworkers who may be covered.
[12] The employer accepted that s.196 must be satisfied in order for the Agreement to be approved and when pressed on the meaning of s.196(2), Mr Longwill did not disagree with the central thrust of the approach to that provision as contended by the unions. 4
[13] Mr Spreckley who appeared for United Voice contended the evident intention of the Act was that the relevant NES entitlement for shiftworkers provided by the Act and the relevant modern award, must be maintained as a minimum in any enterprise agreement. This, it was argued, was the ordinary meaning of s.196 of the Act and this approach was reinforced by the provisions establishing the NES and those governing the relationship between the NES and modern awards and enterprise agreements. 5
[14] In light of the employer’s concession that some employees who would otherwise be entitled to five weeks leave under the NES (and the award) would not have that benefit under the Agreement, United Voice contended that this Agreement did not meet the approval requirements of the Act. United Voice did recognise that any concerns in this respect could be addressed by way of an appropriate undertaking, but indicated that its views should be sought on any proposal given the requirements of s.190(4) of the Act.
[15] United Voice also speculated that if Fair Work Australia was satisfied that s.196 had been met, the Tribunal would also need to be satisfied that the Better Off Overall Test established by s.193 of the Act (the BOOT) was met in relation to all classes of employees, including the “shiftworkers”.
[16] Mr Court who appeared for the AWUQ adopted and supported the submissions of United Voice.
THE STATUTORY CONTEXT
[17] The relevant NES is established by s.87 of the Act in the following terms:
“87 Entitlement to annual leave
Amount of leave
(1) For each year of service with his or her employer, an employee is entitled to:
(a) 4 weeks of paid annual leave; or
(b) 5 weeks of paid annual leave, if:
(i) a modern award applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or
(ii) an enterprise agreement applies to the employee and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards; or
(iii) the employee qualifies for the shiftworker annual leave entitlement under subsection (3) (this relates to award/agreement free employees).
Note: Section 196 affects whether FWA may approve an enterprise agreement covering an employee, if the employee is covered by a modern award that is in operation and defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Accrual of leave
(2) An employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.
Note: If an employee’s employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.
Award/agreement free employees who qualify for the shiftworker entitlement
(3) An award/agreement free employee qualifies for the shiftworker annual leave entitlement if:
(a) the employee:
(i) is employed in an enterprise in which shifts are continuously rostered 24 hours a day for 7 days a week; and
(ii) is regularly rostered to work those shifts; and
(iii) regularly works on Sundays and public holidays; or
(b) the employee is in a class of employees prescribed by the regulations as shiftworkers for the purposes of the National Employment Standards.
(4) ... (not relevant)
(5) ... (not relevant)”
[18] The provisions dealing with the relationship between the NES, modern awards and enterprise agreements are relevantly set out in ss.55, 56 and 57 of the Act as follows:
“55 Interaction between the National Employment Standards and a modern award or enterprise agreement
National Employment Standards must not be excluded
(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.
Terms expressly permitted by Part 2-2 or regulations may be included
(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:
(a) by a provision of Part 2-2 (which deals with the National Employment Standards); or
(b) by regulations made for the purposes of section 127.
Note: In determining what is permitted to be included in a modern award or enterprise agreement by a provision referred to in paragraph (a), any regulations made for the purpose of section 127 that expressly prohibit certain terms must be taken into account.
(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).
Note: See also the note to section 63 (which deals with the effect of averaging arrangements).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:
(a) those terms operate in parallel with the employee’s NES entitlement, but not so as to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).
56 Terms of a modern award or enterprise agreement contravening section 55 have no effect
A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.
Subdivision B—Interaction between modern awards and enterprise agreements
57 Interaction between modern awards and enterprise agreements
(1) A modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment.
(2) If a modern award does not apply to an employee in relation to particular employment because of subsection (1), the award does not apply to an employer, or an employee organisation, in relation to the employee.
...”
[19] Without detailing all of the statutory enterprise agreement approval requirements touching upon this application, the following are apposite for present purposes.
[20] The general requirements are established in part by s.186(1) of the Act as follows:
“186 When FWA 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, FWA must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: FWA may approve an enterprise agreement under this section with undertakings (see section 190).”
[21] Amongst the requirements established by s.187 of the Act are those relating to particular kinds of employees in ss.187(4) as follows:
“187 When FWA must approve an enterprise agreement—additional requirements
...
(4) FWA 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.”
[22] Within Subdivision E is the provision relating the annual leave NES as follows:
“196 Shiftworkers
Application of this section
(1) This section applies if:
(a) an employee is covered by an enterprise agreement; and
(b) a modern award that is in operation and covers the employee defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Shiftworkers and the National Employment Standards
(2) FWA must be satisfied that the agreement defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Note: Section 87 provides an employee with an entitlement to 5 weeks of paid annual leave if an enterprise agreement that applies to the employee defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.”
CONSIDERATION
[23] The starting point for consideration of this matter is the terms of s.196 itself. This arises given that it is evident from the terms of s.186(1) and s.187(4) of the Act that unless the requirements of s.196 are met, the application cannot be approved, at least without undertakings that might address any concerns arising in that context.
[24] It is also evident that the circumstances contemplated in s.196(1) apply in this matter. That is, there are relevant employees who are covered by the enterprise agreement and there is a modern award that defines those employees as being a shiftworker for the purposes of the NES. This is done by virtue of the award provisions set out earlier in this decision. I note that there is no dispute that the modern awards are in operation and cover the employees concerned.
[25] It is significant that subsection 190(1) refers to certain employees and it is the circumstances of those employees that are directly dealt with in subsection 196(2). In that light, the ordinary and natural meaning of s.196(2) is that the enterprise agreement must also define or treat those particular employees as shiftworkers for the purposes of the relevant NES (s.87(1)(b)(ii)).
[26] This approach is bolstered by an appreciation of the manner in which the Act establishes and maintains the relevant NES within the overall system.
[27] Section 87 of the Act establishes the additional week’s annual leave for shiftworkers as part of the NES based upon the definitions for such employees in a relevant modern award or enterprise agreement. 6 More particularly, this operates subject to the provisions of an award or agreement that applies7 to the employment in question. It is not sufficient that the award covers8 the employee and this reinforces the need for each enterprise agreement, where relevant shiftworkers are employed, to expressly provide an appropriate definition that confirms the NES entitlement.
[28] Further, it is evident that the relevant elements of the NES are intended to be minimum standards that will apply to all national system employees. In general terms, any relevant enterprise agreement provision that is not at least as beneficial will not operate to the extent that it contravenes the NES (s.55 and s.56). 9 Although in this case it may be that the enterprise agreement would not contravene the NES, as the NES provision operates only when the modern award applies, the evident purpose of s.196 of the Act is to maintain the minimum safety net nature of the shiftworker annual leave NES under enterprise agreements. There is also no express provisions permitting this particular element of the NES to be modified (such as in the case of the payout of annual leave - s.93 and s.101).
[29] Unless s.196 is given its ordinary and natural meaning, the NES annual leave provision for shiftworkers could effectively be undermined and this would not be consistent with the broader context and apparent intentions of the Act in that regard. There is also no basis in the text of that provision or the Act more generally for departing from that meaning. 10
[30] To the extent that the import of s.196 could be said to be unclear, the elements of the Explanatory Memorandum 11 provided to the Parliament when introducing the Fair Work Bill 2008 relating to that provision would reinforce the approach that I have outlined above.
[31] The Explanatory Memorandum relevantly provides: 12
“Clause 196 – Shiftworkers
842. This clause sets out an additional requirement for FWA approval of an enterprise agreement in relation to shiftworkers.
843. Subclause 196(1) provides that this clause applies where an employee is covered by an enterprise agreement and a modern award that is in operation and covers the employee defines or describes the employee as a shiftworker for the purposes of the NES.
844. Subclause 196(2) requires FWA to be satisfied that the agreement defines or describes the employee as a shiftworker for the purposes of clause 87, which deals with annual leave. This would ensure that a shiftworker would receive five weeks annual leave for each year of service with his or her employer. A shift worker would not be able to trade away his or her extra week of annual leave under the agreement.”
CONCLUSIONS
[32] In circumstances where there are employees who fall within the scope of s.196(1) of the Act, Fair Work Australia must pursuant to s.196(2) be satisfied that the enterprise agreement also defines or treats those employees as being shiftworkers for the purposes of the relevant NES. Unless this is so, the agreement will not meet the relevant approval requirement called up by s.187(4) of the Act. I would add that a provision in an enterprise agreement that also included other employees within the definition of shiftworker for present purposes, or implied the relevant definition by providing the equivalent of the award-based NES leave, would appear to be permissible under s.196 of the Act.
[33] In this case, there are employees who are defined by the relevant modern awards as being shiftworkers for present purposes who fall outside of the “shiftworker” definition in clause 25.1 of the Agreement in relation to the additional week of annual leave. As a result, the Agreement does not meet the requirements of the Act and the application cannot be granted in its present form.
[34] It is however evident that an undertaking could be considered pursuant to s.190 of the Act that might address the situation. That is, as the concern arises from the approval requirements of s.187, the Act contemplates that such concerns can be addressed by way of an undertaking. Any such undertaking would however need to ensure that the employees are not subject to financial detriment and does not result in a substantial change to the Agreement. 13
[35] An undertaking, which adopted the relevant award definitions of shiftworker for the purposes of the NES and the additional week of annual leave provided in clause 25.1(a) of the Agreement, could deal with the deficiency arising from s.196.
[36] The Agreement would also need to meet the BOOT established by s.193 of the Act. It is possible that the Agreement here would meet that test, even with the loss of a week’s leave for some employees, given the other beneficial provisions of the instrument when considered in the context of each modern award. However, I would need to consider the precise circumstances of the Agreement and the relevant modern awards applying to all classes of employees, including the particular shiftwork employees concerned. The parties have not yet addressed the Tribunal on that matter.
[37] It is evident that the form of undertaking outlined above would also remove any potential concerns arising from the application of the BOOT.
[38] I note that the employer has foreshadowed that it would not be in a position to provide such an undertaking given that the package is said to already contain compensation for the reduced annual leave and it would not be willing to simply extend that element of the agreed package.
[39] Given the consequences of this decision, I will however provide an opportunity for the parties to reflect upon the options that might exist. In the event that the employer is unwilling or unable to give an undertaking to address the requirements of the Act, I will be obliged to dismiss the application.
[40] The employer is to confirm its position with Fair Work Australia and the employee bargaining representatives within 14 days of this decision. In the event that the employer intends to make an undertaking, I will convene a further hearing to enable all parties to be heard on that issue as is consistent with the requirements of s.190(4) of the Act.
[41] In the event that the application is subsequently discontinued or dismissed, it may also be appropriate for Fair Work Australia to assist the parties to negotiate through the consequences of that action. The employer or any of the (other) bargaining representatives may make application pursuant to s.240 of the Act to that end.
[42] Liberty to apply is also granted generally in this matter.
Appearances:
J Longwill of counsel (with permission) with S Lucas for Seventh-Day Adventist Aged Care (South Queensland) Pty Ltd.
K Court for the Australian Workers’ Union of Employees, Queensland.
J Spreckley with C Jones for United Voice, Queensland.
Hearing details:
2011.
Adelaide and Brisbane (video hearing):
August 2.
COMMISSIONER
1 Transcript PN 28.
2 These included agreements that I and other Members of Fair Work Australia had approved.
3 Mr Longwill for the employer also pointed out that the approach within the Agreement to the five weeks annual leave provision was not dissimilar to that found in s.228 of the Workplace Relations Act 1996 and in s.87(3) of the Fair Work Act as applying to award and agreement free employees. I did not understand Mr Longwill to contend that this was relevant to this matter other than by way of context.
4 Transcript PN30.
5 Mr Spreckley for United Voice advanced detailed submissions on these elements and also made reference to certain supporting material. I have had regard to those submissions in determining this matter.
6 S.87(3) directly establishes the additional week’s entitlement for award and agreement-free employees.
7 The meaning of “applies” is relevantly defined in s.47 and s.52 of the Act and in this case, the modern awards cover the employees but do not apply due to the existence of a preserved collective agreement. If an enterprise agreement is approved by Fair Work Australia, the modern awards will also continue to cover but not apply to the employees.
8 The meaning of “covers” is relevantly defined by s.48 and s.53 of the Act.
9 It is also the case that the terms of awards and enterprise agreements may supplement the terms of the NES.
10 Acts Interpretation Act 1901, s.15AA.
11 Explanatory Memorandum to the Fair Work Bill 2008 as introduced to the House of Representatives. The use of this material is permissible in these circumstances - Acts Interpretation Act 1901, s.15AB.
12 See also paragraphs 206 to 217 and 231 to 233 of the Explanatory Memorandum in relation to the NES and the relationship to awards and enterprise agreements.
13 S.190(1) refers specifically to concerns arising in relation to s.186 and 187 and s.190(3) establishes some limitations on the nature of those undertakings.
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