SGQ Pty Ltd T/A SGQ

Case •

[2018] FWCA 7106

•

22 NOVEMBER 2018
[2018] FWCA 7106

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

SGQ Pty Ltd T/A SGQ

(AG2018/2374)

APPLICATION FOR APPROVAL OF THE SGQ GROUP ENTERPRISE AGREEMENT 2018

Building, metal and civil construction industries

COMMISSIONER SIMPSON

BRISBANE, 22 NOVEMBER 2018

Application for approval of the SGQ Group Enterprise Agreement 2018.

  1. On 4 June 2018, SGQ Pty Ltd T/A SGQ (the Applicant) made an application for approval of an enterprise agreement known as the SGQ Group Enterprise Agreement 2018 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act).

  1. The Agreement is a single-enterprise agreement.  The Agreement was made on 1 June 2018 and was signed on that day by Mr Mark Goodwin, Managing Director on behalf of the Applicant and Mr James Moorhead, an employee of the Applicant. The Agreement was filed with the Commission on 4 June 2018 and the matter was initially allocated to Deputy President Masson.

  1. On 15 August 2018, the Member Assist Team sent an email to the Applicant’s representative, Mr Greg Power of Drayton’s Workplace Consulting, advising that a number of issues had been raised by Deputy President Masson with respect to the application. The Member Assist Team directed the Applicant to provide a response to the issues raised by 20 August 2018.

  1. On 20 August 2018, the Applicant requested an extension until 21 August 2018 to provide a response to the issues raised. The Applicant also indicated that the proposed submissions, undertakings and a revised F17 Declaration Form in support of the application would be reviewed. On 22 August 2018, the Applicant provided a response to the issues raised.

  1. On 20 September 2018, the Member Assist Team sent a further email to the Applicant requesting a response to issues that remained outstanding. The Member Assist Team directed the Applicant to provide a further response by 25 September 2018.

  1. On 25 September 2018, the Applicant provided a further response as requested.

  2. The matter was allocated to me and was listed for a Directions Hearing on 7 November 2018. At the Directions Hearing, the Applicant was directed to provide a further undertaking in relation to outstanding issues from the Applicant’s response on 25 September 2018.

  1. Set out below is a summary of the issues with the application and the responses received by the Applicant.

Notification of Voting Information

  1. In the email to the Applicant dated 15 August 2018, Deputy President Masson noted that Question 2.5 of the Form F17 provided that a Ballot Notice was placed on the company noticeboard and sent to employees via email. However, a copy of the Notice was not lodged with the Form F17.

  1. In the Applicant’s email dated 22 August 2018, the Ballot Notice provided to the employees was attached. The Ballot Notice provided that the ballot to approve the Agreement was to be conducted electronically on 18 May 2018.

  1. The Applicant’s response at Question 2.5 of the Form F17 provides that the employees were emailed a final copy of the Agreement and the Ballot Notice on 9 May 2018. The employees were also alerted to check their emails to ensure they understood the Agreement and Ballot Notice at a pre-start meeting on 9 May 2018. The Ballot Notice was also displayed on the company notice board.

  1. The Ballot Notice provided by the Applicant is consistent with the Ballot Notice referred to at Question 2.5 of the Form F17. In the circumstances, I am satisfied that the Applicant provided sufficient notification to its employees in respect of the voting to approve the Agreement as required by s.180(3) of the Act.

Explanation of Agreement

  1. In the email to the Applicant dated 15 August 2018, Deputy President Masson noted that Question 2.6 of the Form F17 provided that discussions were carried out with the employees and employees were provided with a summary document of the agreement. The Deputy President sought information on the following:

  • whether the Applicant took all reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, including the reductions in the Agreement, were explained to the relevant employees, as required by s.180(5) of the Act; and

  • the steps taken to explain the Agreement to employees, having regard to the decision in One Key Workforce Pty Ltd v CFMEU [2018] FCAFC 77; and

  • a copy of the summary document provided to employees referred to in Question 2.6 of the Form F17.

  1. In the Applicant’s email dated 22 August 2018, the Summary Document provided to the employees was attached.

  1. The Applicant submitted that, in the pre-start meetings held from 9 May 2018, the supervisors at each site explained the terms of the Agreement with the assistance of the Summary Document. The Applicant submitted further that the Summary Document was provided to the employees in these meetings for review and reference during these discussions. The Applicant also submitted that the employees were familiar with the bargaining process as the Agreement was modelled off the previous agreement which covered the employees under a similar structure for an all up rate of up to 55 hours per week.

  1. The Summary Document is a two-page document providing the following information about the Agreement:

  • The duration of the Agreement is approximately four years;
  • Employees will be classified in accordance with a six-level structure, with descriptions and full-time wage rates per hour provided at each level;
  • That “asphalt classifications” have been removed;
  • Wage rates will compensate for all penalty rates, loadings and allowances which may arise under the Modern Award;
  • Wage rates will increase over the next 3 years according to the increase awarded by the national CPI;
  • Board and accommodation, or living away from home allowance of $111 per day will be paid to relevant employees;
  • Ordinary hours of work are 38 hours per week, Monday to Friday;
  • Double time is paid for hours in excess of 55 hours per week;
  • Permanent employees are entitled to four weeks of annual leave per year and 10 days paid personal/carers leave.

  1. The Summary Document also states: “The following information is a summary of the proposed SGQ Group Enterprise Agreement 2018. If employees have any questions regarding the proposed agreement, please contact your supervisor.”

  1. The Summary Document therefore provides an accurate and concise explanation of the key terms of the Agreement that is consistent with the actual terms of the Agreement.

  1. I am satisfied that the use of the Summary Document, together with the opportunities for discussion afforded to employees by the Applicant at the pre-start meetings leading up to the vote, were reasonable steps to ensure the terms and effect of the Agreement were explained to the relevant employees under s.180(5) of the Act.

Rates of Pay

  1. In the email to the Applicant dated 15 August 2018, Deputy President Masson noted that the following classes of employees appeared to be paid at rates under the Award:

·   Year 1 and 2 adult apprentices who have not completed Year 12; and

·   Year 1 adult apprentices who have completed Year 12; and

·   Year 1 trainees.

  1. The Applicant provided an undertaking in respect of the percentage of the wage rate applicable to adult apprentices and trainees. The undertaking was provided to the Commission in a document signed and dated 15 November 2018 by Mr Goodwin in his capacity as Managing Director of the Applicant (the Applicant’s Undertakings).

BOOT Issues

  1. In emails dated 15 August 2018 and 25 September 2018, Deputy President Masson expressed the view that that the pay rates for employees may not be high enough to compensate for the reductions in entitlements under the Agreement. Deputy President Masson also expressed the view that he did not consider the employees to be better off overall under the Agreement, when compared to the Building and Construction General On-site Award 2010 (Award) for those reasons.

  1. Deputy President Masson expressed the following issues with the Agreement:

Longer Time Span

  1. Under clause 7.1 of the Agreement, ordinary hours may be worked between 4:00am to 6:00pm from Monday to Sunday. Under clause 33.1 of the Award, ordinary hours may be worked between 7:00am to 6:00pm from Monday to Friday.

Weekend Penalties

  1. Under the Award, employees may only work ordinary hours between Monday to Friday. As such, employees working on weekends will be entitled to overtime in accordance with clause 37 of the Award, which determines the rates of overtime to be paid on Saturdays and Sundays.

  1. No such penalties are provided in the Agreement, which allows employees to work ordinary hours on weekends without penalties.

Overtime Trigger

  1. Under clause 7.2 of the Agreement, overtime is only paid for hours worked in excess of 55 hours per week or 110 hours per fortnight. Under clause 36.2 of the Award, employees are entitled to overtime for all hours worked beyond an employee’s ordinary time of work.

Part-Time Employees

  1. Under clause 13.3 of the Award, part-time employees have set weekly ordinary hours that are determined before commencing employment and which can be only altered by written agreement. The Agreement does not appear to contain equivalent provisions.

Allowances

  1. The Agreement does not appear to provide the allowances contained in clauses 20-25 of the Award, except for the living away from home. However, the living away from home allowance does not contain all components of the living away from home allowances, as found in clause 24 of the Award.

Redundancy Scheme

  1. Clause 5.3 of the Agreement indicates that redundancy will be as per the NES, which may be less beneficial than the industry specific redundancy scheme found in clause 17 of the Award.

  1. The Applicant has addressed some of the concerns of Deputy President Masson by providing submissions on the calculation of the loaded hourly rates of pay as compared for employees who work 38 hours per week, 45 hours per week and 55 hours per week. The Applicant submitted that these patterns of work were the actual average fortnightly hours worked by full-time employees of the Applicant since 1 July 2017. The Applicant submitted that the Agreement passes the BOOT for full-time employees on this basis.

  1. The Applicant provided undertakings in respect of the remaining issues outlined by Deputy President Masson which were included in the Applicant’s Undertakings.

Directions Conference on 7 November 2018

  1. At the Directions Conference on 7 November 2018, I directed the Applicant to provide a further and final undertaking in the following terms:

“1.The Company agrees to provide the following further undertaking in relation to the application AG2018/2374 for approval of the SGQ Group Enterprise Agreement before the Fair Work Commission.

·     In the event that an employee is required to perform in excess of an average of 50 ordinary hours per week in a fortnightly pay cycle, a reconciliation will be conducted within 7 days of the end of that fortnightly pay cycle to determine whether the employee would have been paid for that fortnightly pay cycle under the Agreement more than if the employee was covered by the Building and Construction General On-site Award 2010. 

·     In the event that the reconciliation finds that the employee would not be paid for that fortnightly pay cycle more than if the employee would have been paid under the Building and Construction General On-site Award 2010 , the employee will be backpaid an amount within a further 7 days after the expiry of the 7 day period following the end of the relevant fortnightly pay cycle, so that they will be paid for that fortnight, no less than what they would have received if they had been covered by the Building and Construction General On-site Award plus 1%.”

  1. These were also included in the Applicant’s Undertakings.

Conclusion

  1. The Applicant’s Undertakings adopt the wording suggested by Deputy President Masson and myself where appropriate and otherwise address the issues with the Agreement.

  1. I am satisfied by the Applicant’s responses in the F17 form, additional documents submitted and the Applicant’s Undertakings in relation to the issues set out above in respect of the notification to the employees of the vote, the steps taken to provide an explanation of the Agreement to the employees and the coverage of the employees. I accept the undertakings offered and on the basis of those undertakings I am satisfied that the Agreement satisfied the BOOT.  

  1. I am satisfied that each of the requirements of ss186, 187 and 188 as are relevant to this application for approval have been met.

  1. The Agreement is approved and will operate in accordance with s.54 of the Act.

COMMISSIONER

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