Solar Systems Pty Ltd

[2012] FWA 4381

Note: An appeal pursuant to s.604 (C2012/4357) was lodged against this decision - refer to Full Bench decision dated 24 August 2012 [[2012] FWAFB 6397] for result of appeal.

[2012] FWA 4381

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Solar Systems Pty Ltd
(AG2011/14557)

COMMISSIONER RYAN MELBOURNE, 7 JUNE 2012

Solar Systems Pty Ltd Enterprise Agreement 2011.

[1] Application was made on 14 December 2011 by Solar Systems P/L for approval pursuant to s.185 of the Fair Work Act 2009 (the Act) of the Solar Systems Pty Ltd Enterprise Agreement 2011 (the Agreement).

[2] The Award which would otherwise apply to employees who will be covered by the Agreement is the Manufacturing and Associated Industries and Occupations Award 2010 (the Award).

[3] A hearing in the relation to the application was held on 16 January 2012 at which the Tribunal identified a number of concerns it had in relation to the Agreement. At the hearing the Applicant was represented by Ms Salewicz of the Australian Industry Group (AIG). The Applicant was given an opportunity to consider the concerns of the Tribunal and respond at a later date. The Applicant responded to the Tribunal on 3 February 2012 by way of written submissions from AIG together with undertakings signed by a senior employee of the Applicant and with an additional statutory declaration on behalf of the Applicant.

[4] One of the two undertakings offered by the Applicant does not address my concern. The written submissions of the Applicant make clear that in relation to some concerns of the Tribunal that the Applicant will not offer undertakings as the Applicant contends that the concerns are either misplaced or that the Applicant is entitled to have the Agreement approved notwithstanding the concerns of the Tribunal. The Applicant’s written submissions in response to the concerns raised by Fair work Australia in relation to clauses 28.6 and 29.4 are accepted as providing a sufficient answer to those concerns.

Applying the BOOT

[5] The Applicant in its written submission relied upon the decision of FWA in Top End Consulting Pty Ltd [2010] FWA 6442. I note that the decision in that matter dealt with the approach to be taken in applying the BOOT:

“26. The Better Off Overall Test is in slightly different terms to the no-disadvantage test in that the comparative assessment to be undertaken is not described by reference to the terms and conditions specified in an agreement and the reference instrument(s), but by reference to whether the employee would be better off overall under the agreement than the reference instrument(s). Notwithstanding this change in the wording, I am satisfied that the proper approach to the Better Off Overall Test also requires that reference be made to the terms and conditions of the relevant instruments, for the following reasons. Part 3 of the Form F17 Employer Declaration deals with comparison data and seeks information on the terms and conditions of the agreement and of the relevant reference instruments. The explanatory note at the commencement of Part 3 is as follows:

‘[FWA must apply the better off overall test to the agreement by reference to relevant instrument(s): see s.193 of the Fair Work Act 2009 and item 18 in Schedule 7 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. ...]’

27. There is nothing in s.193 to suggest that the Better Off Overall Test is to be assessed by matters extraneous to the terms and conditions of the relevant instruments. The test still requires that the status of the employees as better off overall, or otherwise, is to be assessed on the basis of the application of each instrument to the employee and not the intentions of the parties as to working arrangements which may flow from those terms.

28. In addition, the assessment of the Better Off Overall Test is to be undertaken at a particular point in time, being the “test time”. The test time is the time at which the application for approval of the agreement is made to Fair Work Australia. This reinforces that it is a comparison between the terms and conditions of employment that is to be assessed, rather than the practices and working arrangements that may flow from those terms, since the agreement cannot commence until after approval by FWA.

29. I have therefore concluded that the reasoning in Bupa should be adopted in assessing the Better Off Overall Test.”

[6] To put the decision in Top End Consulting into context it is necessary to set out the key part of the Full Bench decision in Bupa Care Services Pty Ltd[2010] FWAFB 2762 (Bupa).

“25. Where there is a relevant reference instrument, the application of the “no-disadvantage test” requires a comparison of the terms and conditions of employment in the enterprise agreement against the terms and conditions of employment in any relevant reference instrument and an assessment of whether the terms and conditions in the enterprise agreement result, on balance, in a reduction in the overall terms and conditions of employment under any relevant reference instrument. The “no-disadvantage test” does not involve an analysis of matters other than the terms and conditions of the enterprise agreement against those in any relevant reference instrument. The effect the terms and conditions may have on the actions of an employer or employee is not relevant to the “no-disadvantage test”.”

[7] The approach adopted in Top End Consulting is not one I will follow. The Bupa decision was not concerned with the application of the BOOT but with the application of a No Disadvantage Test. Whilst Top End Consulting acknowledges that there is a difference between the BOOT and the NDT, the decision was that the approach to the application of the NDT was the appropriate approach to the BOOT. The decision in Top End Consulting referred to and relied on the wording in the then Form F17. The wording on a form produced by FWA under its rule making powers cannot supplant the clear wording of the Act.

[8] Section 193 of the Act does not say that “FWA must apply the better off overall test to the agreement by reference to relevant instrument(s)”

[9] The difference between the BOOT and the earlier NDT is clear.

[10] The Full Bench in Bupa were concerned with the application of an NDT which was provided for in Item 4(1) of Schedule 7 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 whereas the relevant provision which I must apply is s.193(1) of the Fair Work Act 2009. The two relevant provisions are set out below:

193(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if FWA 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.

4(1) An enterprise agreement passes the no-disadvantage test if FWA is satisfied that the agreement does not, or would not result, on balance, in a reduction in the overall terms and conditions of employment of the employees who are covered by the agreement under any reference instrument relating to one or more of the employees.

[11] The difference between the above two tests is not a subtle difference, it is real and substantial.

[12] The earlier NDT focussed on the overall terms and conditions of employment and the focus was on the respective instruments, ie the agreement and the award. The current BOOT does not focus on the respective instruments but rather on the employee and whether the employee is better off overall. The BOOT requires that FWA have regard to the position of the employee if an award applied to the employee against the position of the employee if an agreement applied to the employee.

[13] Whether an award or an agreement applies to an employee, the award or agreement is not the only source of workplace rights and entitlements of the employee. The BOOT is concerned with having regard to all of the workplace rights and entitlements because only by having regard to all of the rights and entitlements can an assessment be made as to whether the employee is Better Off Overall.

[14] The Full Bench in Bupa was required to focus on the instruments as that was the intent of the legislative provision which applied at that time. The BOOT however has a focus which is not limited to the respective instruments.

[15] I note the decision in Top End Consulting which said in relation to the BOOT that “the intentions of the parties as to working arrangements which may flow from” the terms of the enterprise agreement are to be disregarded. I agree that the intentions of the parties are to be disregarded when applying the BOOT. What cannot be disregarded for BOOT purposes is what the terms of the Agreement permit to be done. What is permitted by the terms of the enterprise agreement may not be intended to be acted upon, but if it is permitted then it may be acted upon. The same applies in relation to the Award which is to be considered for the purposes of the BOOT. An employer may not have the intention of using the breadth of the ordinary hours of work permitted by the award, but it is not what the employer intends that is relevant for the BOOT but what is permitted by the award.

[16] Inconsidering an application for approval of theUniversity of New South Wales (Professional Staff) Enterprise Agreement 2010[2010] FWAA 9588, VP Lawler said:

“96. It is trite to observe that awards typically contain both monetary and non-monetary terms and conditions. Obviously enough, the BOOT calls for an overall assessment. Comparing monetary terms and conditions is, at the end of the day, a matter of arithmetic. There is an obvious problem of comparing apples with oranges when it comes to including changes to non-monetary terms and conditions into the “overall” assessment that is required by the BOOT. In such circumstances the Tribunal must simply do its best and make what amounts to an impressionistic assessment, albeit by taking into account any evidence about the significance to particular classes of employees covered by the Agreement of changes to particular non-monetary terms that render them less beneficial than the equivalent non-monetary term in an award.”

[17] I agree with the general sentiments expressed by his Honour above but I would add a couple of comments. Firstly, because the BOOT requires a balance of monetary and non monetary matters on both sides of the scale the comparison at the end of the day is not, and never can be, simply arithmetic. Secondly, the balancing required by the BOOT is “an impressionistic assessment” but one which is formed from careful consideration of all of the matters both monetary and non monetary which must be weighed.

[18] In Re Coles Myer Pty Ltd, a decision of the Australian Industrial Relations Commission concerning the nature of the then NDT, Whelan C said:

“[98]I agree with Mr West that the no disadvantage test is both a quantitative and qualitative assessment. It cannot be otherwise if we are to assume that conditions of employment can provide both personal as well as monetary value to employees e.g. rest breaks, forms of leave without pay, maximum hours of work.” 1

[19] The attribution of value to non monetary matters is not necessarily difficult but the attribution of a value to a non monetary matter which can be used in an “arithmetic” calculation is both difficult and unnecessary. Weighing two competing positions on scales does not require that everything be expressed in the same way. Monetary and non monetary matters can easily fit on each side of the scale for the purposes of calculating whether the BOOT is passed or failed.

Dispute Resolution

[20] The critical contention of the Applicant in relation to the Tribunal raising a concern over the lack of arbitration in Clause 37 - Dispute Resolution was that:

“In respect to consent arbitration, dispute settling terms in agreements do not need to provide for the arbitration of disputes if any of the parties to the agreement want it and can limit arbitration to circumstances where the parties agree (Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464). The Act does not permit Fair Work Australia to adopt a different application of the BOOT comparison if the agreement provides for consent arbitration in a dispute resolution clause only.”

[21] The decision of the Full Bench in the Woolworths case said:

“8]...........There is, however, one matter to which we should refer. That relates to the Commissioner’s view of precisely why the provision did not comply with s.186(6). At one point in his reasons the Commissioner said, in dealing with some arguments advanced by Woolworths:

“In my view this adds weight to the view that access to arbitration is a prerequisite to the approval of an agreement.”

[19] The section is concerned with the powers the tribunal may exercise in dealing with disputes. Section 595(1) provides that Fair Work Australia may only deal with a dispute if it is expressly authorised to do so. Section 595(2) provides that the tribunal may deal with a dispute by mediation, conciliation, making a recommendation or expressing an opinion subject to the qualification that it may not deal with the dispute by arbitration. Section 595(3) permits the tribunal to arbitrate if it is expressly authorised to do so. Section 595(4) operates to confer procedural powers. It seems to us clear enough from the text of these provisions that the legislature intended that Fair Work Australia can deploy voluntary methods of dispute resolution without the consent of the parties to the dispute, provided the dispute is one with which it is authorised to deal, but can only arbitrate if it has been specifically empowered to do so.

[21]...... Section 739(4) sets out the circumstances in which Fair Work Australia may arbitrate a dispute, providing that if the parties have agreed that Fair Work Australia may arbitrate, Fair Work Australia may do so. It appears to us that s.739(4) strongly implies the negative stipulation that if the parties have not agreed, Fair Work Australia has no power to arbitrate.

[23].... If the legislature has specifically provided for limits upon the use of arbitral power pursuant to dispute resolution procedures, it is difficult to see how the conclusion could be sustained that “arbitration is a prerequisite to the approval of an agreement.”

[37]....... If the legislature had intended to alter the effect of the Full Bench decision in Ampol it could easily have made that intention explicit. The absence of an express statement of intention suggests there is no such intention. Furthermore, as we have endeavoured to show, other relevant parts of the Fair Work Act do not support the conclusion the Commissioner reached, rather they tell strongly against it.”

[22] I am in furious agreement with the conclusions of the Full Bench but the decision in the Woolworth’s case does not touch upon the concern that I raised with the Applicant. The parties to an enterprise agreement can create any disputes settlement procedure they like that meets the requirements of s.186(6) of the Act. That is not in issue here.

[23] I am also in agreement with the submission of the Applicant that “The Act does not permit Fair Work Australia to adopt a different application of the BOOT comparison if the agreement provides for consent arbitration in a dispute resolution clause only.” There is only one BOOT and there is only one way to apply it.

[24] What I understand the Applicant to have implied in its written submission is that a disputes procedure which meets the requirements of s.186(6) cannot be considered for the purpose of the BOOT.

[25] The Tribunal must apply the BOOT as at the test time to the Agreement. The Agreement contains a Dispute Resolution clause and in applying the BOOT the Dispute Resolution clause must be taken into account just as the wages, hours, allowances, etc must be taken into account.

[26] The dispute resolution clauses of both the Award and the Agreement are nearly identical in terms of the role of Fair Work Australia. Disputes which cannot be settled between the parties may be referred to Fair Work Australia for mediation, conciliation or consent arbitration. On its own the dispute resolution procedure in the Agreement is neutral in relation to the application of the BOOT. However as the BOOT is a global test then the operation of the dispute resolution procedure needs to be taken into account as part of the global approach to the BOOT.

[27] The relevance of a dispute resolution procedure for the BOOT is to compare the way in which different disputes can be dealt with under the Award or under the Agreement. The Award dispute resolution procedure applies to a “dispute in relation to a matter arising under this award, or a dispute in relation to the NES”. The Agreement dispute resolution procedure applies to “a dispute in relation to a matter arising under this Agreement (excluding disputes relating to Company policies not forming part of this Agreement), or a dispute in relation to the NES (other than disputes relating to flexible working arrangements or requests for extensions to parental leave)”.

[28] However neither dispute resolution clause deals with all of the disputes that may arise in the employer/employee relationship and there will be some matters which are in dispute but which cannot be dealt with under either dispute resolution procedure. A dispute about the existence of a right or obligation in relation to the employment relationship may not be a dispute about a matter arising under the Award or Agreement and as such is not amenable to resolution under either dispute resolution procedure. Where the Award covers the employee the employee could make an application to Fair Work Australia for a variation of the Award under s.157 of the Act so as to provide for a specific right or entitlement. Where the Agreement covers the employee the employee is not able to make any similar application to vary the Agreement.

[29] In other applications for approval of an enterprise agreement I have been able to attach a positive benefit for BOOT purposes to the relevant dispute resolution procedure where the dispute resolution procedure in the agreement has provided arbitration by Fair Work Australia as of right to either party and/or has provided for any dispute about any matter pertaining to the employment relationship to be dealt with under the dispute procedure. In the case of such clauses there are real and positive benefits flowing to employees from the provision of the dispute resolution and this is directly relevant to whether an employee is better off overall if employed under the terms of an enterprise agreement as against being employed under the award.

Averaging of Ordinary Hours

[30] The Tribunal identified a concern with clause 23.1 of the Agreement which provides as follows:

“23.1 The ordinary hours of work are an average of 38 per week.”

[31] Whilst the clause provides for averaging of the 38 hour week the averaging period was not identified. Application of the Better Off Overall Test (BOOT) cannot be done if the averaging period is unknown.

[32] The Applicant in its written submissions advised the Tribunal that “the applicant is prepared to make an undertaking to limit the averaging period to the maximum allowed by the Award.”(para 11of Submission of 3 Feb 2012) The undertaking offered to the Tribunal was in the following terms:

“In respect of clause 23 of the Agreement, Solar Systems Pty Ltd undertakes that the maximum averaging period for the purposes of that clause will be 12 months.”

[33] The undertaking does not address the concern raised by the Tribunal.

[34] The Award provides at clause 36 three relevant provisions which deal with the averaging of hours.

“36.2 Ordinary hours of work—day workers

(a) Subject to clause 36.5, the ordinary hours of work for day workers are an average of 38 per week but not exceeding 152 hours in 28 days.

36.3 Ordinary hours of work—continuous shiftworkers

(b) Subject to clause 36.3(c), the ordinary hours of continuous shiftworkers are, at the discretion of the employer, to average 38 hours per week inclusive of meal breaks and must not exceed 152 hours in 28 consecutive days. Continuous shiftworkers are entitled to a 20 minute meal break on each shift which must be counted as time worked.

(c) By agreement between the employer and the majority of employees concerned, a roster system may operate on the basis that the weekly average of 38 ordinary hours is achieved over a period which exceeds 28 consecutive days but does not exceed 12 months.

36.4 Ordinary hours of work—non-continuous shiftworkers

(a) Subject to clause 36.4(b), the ordinary hours of work for non-continuous shiftworkers are an average of 38 per week and must not exceed 152 hours in 28 consecutive days.

(b) By agreement between the employer and the majority of employees concerned, a roster system may operate on the basis that the weekly average of 38 ordinary hours is allowed over a period which exceeds 28 consecutive days but does not exceed 12 months.

[35] The award provides an upper limit on the averaging period for day workers. Whilst clause 36.2 operates subject to clause 36.5 that sub clause only deals with matters as to the arrangement of the working hours within the maximum averaging period set by clause 36.2.

[36] Both clause 36.3 and 36.4 are premised on a maximum averaging period of 28 days but with the proviso that the averaging period can be extended to up to 12 months where a majority of employees agree.

[37] The Agreement, as it would operate subject to the undertaking offered by the Applicant, would permit the Applicant to set the averaging period as 12 months for all employees. Employees would have no say in the decision. There is a real difference between the approach of the Award and the approach of the Agreement. Under the Award the averaging period could only be extended for shift workers by agreement of the majority of employees. Equally the language of the Award would mean that if a majority of employees did not agree to have an averaging period greater than 28 days then the employer would be bound by the terms of the Award to have an averaging period of no more than 28 days. Under the Agreement the employees will have no say in the averaging period once the Agreement commences. Even if a majority of employees did not agree to the averaging period being 12 months they would nevertheless be bound by the terms of the Agreement and the dictates of the Applicant in relation to an averaging period of up to 12 months.

[38] The 28 day averaging period which is the default position in the Award was introduced when the concept of RDO’s was first introduced into awards in the 1980’s to permit employees the opportunity of working slightly longer days, 8 hours as against 7.6 hours, so that employees could bank .4 hours a day over 19 working days and then have the 20th work day off work on full pay.

[39] An averaging period of 12 months permits the employer to arrange the working of ordinary hours in accordance with the Agreement so that some weeks could contain a very large number of ordinary working hours while other weeks may contain nil hours.

[40] I do not consider that an averaging period of 12 months will, even with higher than Award pay rates, lead to an employee being better off overall.

Spread of Ordinary Hours of Work

[41] The Tribunal identified a concern flowing from the wording of clauses 23 and 24 in that the combined operation of the clauses permitted the employer to have ordinary hours worked for 12 hours between 6am and 6pm on every day of the week. The Agreement permits the employer to require an employee to work every day of every week (except public holidays) and to work up to 12 hours on every day. A 7 day work week is clearly permitted and a work week of 84 ordinary hours is clearly permitted.

[42] The Applicant in its written submission contended that “there is also no provision in the Award or NES that would entitle employees to at least two days off per week.”

[43] This contention is not correct. Clause 36.2 of the Agreement provides as follows:

36.2 Ordinary hours of work—day workers

(a) Subject to clause 36.5, the ordinary hours of work for day workers are an average of 38 per week but not exceeding 152 hours in 28 days.

(b) The ordinary hours of work may be worked on any day or all of the days of the week, Monday to Friday. The days on which ordinary hours are worked may include Saturday and Sunday subject to agreement between the employer and the majority of employees concerned. Agreement in this respect may also be reached between the employer and an individual employee.

(c) The ordinary hours of work are to be worked continuously, except for meal breaks, at the discretion of the employer between 6.00 am and 6.00 pm. The spread of hours (6.00 am to 6.00 pm) may be altered by up to one hour at either end of the spread, by agreement between an employer and the majority of employees concerned or, in appropriate circumstances, between the employer and an individual employee.

(d) Any work performed outside the spread of hours must be paid for at overtime rates. However, any work performed by an employee prior to the spread of hours which is continuous with ordinary hours for the purpose, for example, of getting the plant in a state of readiness for production work is to be regarded as part of the 38 ordinary hours of work.

(e) Where agreement is reached in accordance with clause 36.2(b), the rate to be paid to a day worker for ordinary time worked between midnight on Friday and midnight on Saturday is time and a half and/or the rate to be paid to a day worker for ordinary time worked between midnight on Saturday and midnight on Sunday is double time.

(f) A day worker required to work on a public holiday must be paid for a minimum of three hours work at the rate of double time and a half. The double time and a half rate must be paid to the employee until the employee is relieved from duty.”

[44] The hours of work of day workers is clearly premised on the normal ordinary hour working week being between Monday and Friday as is clear from the first sentence of clause 36.2(b). A seven day ordinary hour working week for day workers is a possibility under the Award but only where there is an agreement with a majority of employees. Absent the agreement of a majority of employees the ordinary hour working week is limited to Monday to Friday. The Agreement however permits the Applicant to require all day workers to work an ordinary hour working week of 7 days.

[45] It is clear from the language of clauses 36.3 and 36.4 of the Award that continuous shift workers and non continuous shift workers employed under the Award are not guaranteed two days off in each 7 days. However clause 36.5 of the Award provides that “the arrangement of ordinary working hours must be by agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned. This does not preclude the employer reaching agreement with individual employees about how their working hours are to be arranged.”

[46] Thus even where there is no specific provision for non working days in relation to shift workers under the award the very fact that the arrangement of working hours must be by agreement with a majority of employees means that the employer cannot simply direct employees to work each and every day of the week.

[47] In contrast the Agreement permits the employer to direct shift workers to work each and every day of the week.

[48] I note in relation to shiftworkers the answers given by the Applicant in its Statutory Declaration in support of the application:

“2.15 Does the Agreement cover any shiftworkers? (s.196)

[ ] Yes

[X] No

Shiftworkers covered by the Agreement do not meet the definition of shiftworker as set out in the National Employment Standards.

If “Yes”, please identify the clause, if any, that defines or describes an employee as a shiftworker for the purposes of the National Employment Standards:

Not applicable.”

[49] Section 196 of the Act provides 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.”

[50] It is clear that s.196 does apply to the Agreement in the matter before me. The Award contains at clause 41.3 a definition of shiftworker for the purposes of the NES as follows:

“41.3 Definition of shiftworker

(a) For the purpose of the additional week of annual leave provided for in s.87(1)(b) of the Act, a shiftworker is a seven day shiftworker who is regularly rostered to work on Sundays and public holidays.

(b) Where an employee with 12 months continuous service is engaged for part of the 12 month period as a seven day shiftworker, that employee must have their annual leave increased by half a day for each month the employee is continuously engaged as a seven day shiftworker.”

[51] As the requirement in s.196(1) is met then I must be satisfied as to the requirements of s.196(2).

[52] The very operation of clauses 23 and 24 and 34.5 of the Agreement permit shift work to be required to be performed over 7 days with shiftworkers being regularly rostered to work on Sundays and public holidays.

[53] There is no definition or description of shiftworker in the Agreement which would satisfy the requirements of s.196(2) of the Act. This lack of an appropriate definition of shiftworker for the purposes of s.87(1)(b) of the Act is not a matter which by itself would lead me to refuse to approve the Agreement. In the context of the present application where the Applicant has declined to offer any undertakings in relation to the key concerns I have raised in relation to clause 23 and 24 of the Agreement, even if the Applicant offered an undertaking to insert an appropriate definition of shiftworker for the purposes of s.87(1)(b) of the Act it would still leave the more substantial concerns unanswered.

[54] An aspect of the concern in relation to the hours of work clause was the capacity to have employees work 12 hour shifts each day.

[55] The Applicant contended in its written submission as follows:

“19. Regarding the second issue, the applicant agrees that the Agreement will allow it to work employees on 12 hour shifts.

20. It says, however, that the shift arrangements allowed in the Agreement are lawful under the Award. The Award allows an employer to run 10 or 12 hour shifts with majority agreement of its employees (clause 36.5). By virtue of having agreed to the clause allowing 12 hour shifts in the Agreement, the employees have made a majority agreement for the purposes of clause 36.5 of the Award. There is nothing in the Award or the Act that required an employer to mirror the Award's majority agreement provisions in an agreement, seek majority agreement for the agreement and then seek further majority agreement for the shift pattern once the agreement has been approved by Fair Work Australia. This construct of the Award provisions is overly complex and onerous, and not in line with the modern award and enterprise agreement objectives contained in the Act (sections 134 and 171).”

[56] I agree with the Applicant’s contentions as expressed in the first, second and fourth sentence of paragraph 20 of its written submissions.

[57] However I disagree with the contention expressed in the third sentence that:

“By virtue of having agreed to the clause allowing 12 hour shifts in the Agreement, the employees have made a majority agreement for the purposes of clause 36.5 of the Award.”

[58] The Agreement is a stand alone document and is not an agreement made under a clause of the Award. Once the Agreement commences to operate it will displace the operation of the Award. What can only be done by agreement with a majority of employees under the Award will be able to be done by direction of the employer under the Agreement. There is a significant difference in what the award permits and what the Agreement permits.

[59] The written submissions of the Applicant made clear that the Applicant did not intend to offer undertakings to Fair Work Australia on any of the matters I raised concerning the hours of work.

Provisions of the Agreement which are more beneficial than the Award

[60] The Applicant in its Statutory Declaration in support of the application in answer to questions 3.4 and 3.5 identified two clauses of the Agreement which provide more beneficial terms and conditions of employment than the terms and conditions in the Award. The two clauses are Clause 13 - Minimum Wages and Clause 32 - Blood Donor Leave

[61] The wage rates in clause 13 of the Agreement are clearly in excess of the Award rates. However, all allowances provided by clause 32 of the Award (with the exception of a leading hand allowance and a first aid allowance separately provided for in clause 18 of the Agreement) are included in the rates of pay specified in clause 13 of the Agreement. I also note that the shift penalties in the Agreement generally match those of the Award with one clear exception and that is the Agreement does not provide for the 50% shift penalty provided for in clause 37.3(b) of the award. Having said this I am still satisfied that employees employed under the terms of the Agreement will be paid more than they would be paid under the Agreement but the difference is not as great as first appears from a simple comparison of the ordinary hourly rates of pay.

[62] The provision of paid Blood Donor Leave to permanent employees and unpaid leave to casuals is qualified by being subject to operational requirements. The provision of any form of Blood Donors Leave is a matter that has real social value. But the issue before me is what weight does this form of leave have in assessing the BOOT. I certainly don’t want to lessen the social utility of providing any form of Blood Donor Leave but the weight that can be attached to his form of additional paid or unpaid leave is minimal for the purpose of the BOOT.

Conclusion

[63] I have considered each of the aspects of this Agreement which are improvements over the award and I have considered each of the aspects of this Agreement which are less beneficial than the award.

[64] The scales for the BOOT fall clearly on the side of a finding that an employee will not be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

[65] Given that the Applicant was offered an opportunity to offer undertakings to Fair Work Australia but declined to do so on several key concerns of Fair Work Australia I determine that the agreement does not meet the requirements of s.186(2)(d) of the Act.

[66] The application in this matter is dismissed.

COMMISSIONER

Appearances:

Ms P. Salewicz, Australian Industry Group, for the Applicant

Hearing details:

2012
Melbourne
January 16

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