DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Site Services Holdings Pty Ltd
(AG2015/2278)

COMMISSIONER LEE

MELBOURNE, 26 MAY 2015

Application for approval of the Site Security Services Enterprise Agreement 2015 - better off overall test - application dismissed.

[1] On 29 March 2015, Site Service Holdings Pty Ltd (the Applicant) made application to the Fair Work Commission (the Commission) for approval of the Site Security Services Enterprise Agreement 2015 (the agreement).

[2] After correspondence between the Commission and the Applicant (which will be referred to below), I listed the matter for telephone hearing on 7 May 2015. The Applicant was granted permission to be represented at the hearing by Ms R Catalano of the Chamber of Commerce and Industry of Western Australia. There are no bargaining representatives in relation to this agreement.

[3] At the conclusion of the hearing I delivered an ex tempore decision. What follows is an edited version of that decision.

[4] This is an application for approval of the Site Security Services Enterprise Agreement 2015 (the agreement). There were some concerns that I raised with the Applicant. There's been correspondence between the Commission and the Applicant.

[5] My initial concerns about the time period in which the notice of employee representational rights was provided were allayed by an amended Form F17 that was provided by the Applicant. I continue to hold the view that the flexibility term does not meet the requirements of section 203 of the Fair Work Act 2009 (the Act) in that it provides for 13 weeks termination by either party instead of no more than 28 days and in the event that I was to approve the agreement, the model flexibility term would have applied.

[6] However, the issue that remains a barrier to me approving the agreement is the better off overall test. Essentially, this agreement offers adult rates of pay that are around five and a half percent higher than the corresponding rates of pay in the relevant modern award, but the rates provided are loaded rates, inclusive of shift penalties, weekend penalties, public holiday penalties, overtime rates, annual leave loading and allowances.

[7] I've considered the terms of the proposed agreement against the terms of the relevant modern award in circumstances where employees work a standard 38-hour week, that is weekdays only, not working any overtime, then given that they are paid around five and a half percent above the relevant modern award rate, even taking into account the loss of annual leave loading, they would still be better off overall.

[8] However, under a range of scenarios where employees are working on Saturdays, or working on Saturday and Sunday, or working configurations of hours that would attract overtime, it is clear that employees would not be better off overall, because the additional rate of pay of five and half percent above the relevant modern award is simply not enough to compensate for those types of configurations of hours.

[9] The Applicant provided an undertaking to me that improved the rates of pay. The proposed undertaking provided for shift penalties of 50 cents per hour, which applied in addition to the rates specified in clause 5.1 of the agreement, to all hours worked Monday to Friday between 6 pm and 6 am.

[10] The undertakings proposed that all time worked between midnight Friday and midnight Sunday would be paid at 1.3 times the rate specified in clause 5.1 of the agreement. The undertaking further provided that employees would be entitled to a 30-minute unpaid meal break after not more than six hours work and employees would be entitled to 10-minute paid tea breaks to be taken at the discretion of the company.

[11] Even taking into account those more beneficial undertakings, I am still not satisfied that they overcome my concerns about whether or not employees would be better off overall.

[12] Accordingly, as I am not satisfied that the agreement passes the better off overall test. Therefore the requirement of section 186(2)(d) of the Act is not met. As such, I am not able to approve the agreement, and accordingly the application is dismissed.

COMMISSIONER

Appearances:

R Catalano of the Chamber of Commerce and Industry of Western Australiafor the Applicant

Hearing details:

2015.

Melbourne and Perth (telephone hearing):

May 7.

Printed by authority of the Commonwealth Government Printer

In the recent case of Site Services Holdings Pty Ltd, the Fair Work Commission was presented with an application for the approval of the Site Security Services Enterprise Agreement 2015. The applicant, Site Services Holdings, sought to have the agreement recognised as meeting the requirements of the Fair Work Act 2009. The dispute arose from the employer's desire to implement changes to employee conditions, which the union contested on the basis that the changes did not meet the better off overall test. This test is crucial in determining whether employees would be better off with the new agreement than under their previous conditions.

The primary legal issue before the Commission was whether the proposed agreement satisfied the better off overall test. This test requires that the overall financial position of the employees be improved by the new agreement, compared to their existing conditions. The Commission had to assess various factors, including wage increases, changes to working conditions, and the overall financial benefits and detriments to the employees. Additionally, the Commission needed to consider the extent to which the agreement provided for fair and reasonable terms, in line with the objectives of the Fair Work Act.

The Commission thoroughly examined the evidence and submissions from both parties. It found that while some employees would benefit from certain aspects of the proposed agreement, such as wage increases, other employees would experience detriments, particularly in relation to penalty rates and allowances. The Commission concluded that the overall financial position of the employees would not be improved, and therefore the agreement did not meet the better off overall test. Consequently, the application for approval was dismissed. The decision highlights the importance of ensuring that any proposed changes in enterprise agreements provide a net benefit to employees, as required by the legislation.

Site Services Holdings Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established