South Coast Baptist College Incorporated
[2024] FWC 888
•10 APRIL 2024
| [2024] FWC 888 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185––Enterprise agreement
South Coast Baptist College Incorporated
(AG2023/5520 and AG2023/5533)
| DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 10 APRIL 2024 |
Applications for the approval of the South Coast Baptist College Teaching Staff Agreement 2024 and the South Coast Baptist College Operational Staff Agreement 2024
The applicant, South Coast Baptist College Inc, operates a co-educational, denominational school – the South Coast Baptist College – located in Waikiki, Western Australia and applies for the approval of two single enterprise agreements under section 185 of the Fair Work Act 2009 (Act). The first is titled the South Coast Baptist College Teaching Staff Agreement 2024 (Teaching EA), the second, the South Coast Baptist College Operational Staff Agreement 2024 (Operational EA). The relevant reference instrument for the Teaching EA is the Educational Services (Teachers) Award 2020 (Teachers Award). The relevant reference instrument for the Operational EA is the Educational Services (Schools) General Staff Award 2020 (General Staff Award). The Independent Education Union of Australia (IEU) is a bargaining representative for each agreement and does not support the approval of either agreement on several bases. Three concern both agreements while a further four concern only the Teaching EA. Taken together, the IEU contends there are some instances in which employees or prospective employees may not be better off overall if the applicable modern award applied rather than the relevant agreement.
The agreements were made after 6 June 2023 but the notification time for each agreement was before that date. In the result, in assessing the agreements against the agreement approval requirements of the Act, the old provisions of the Act pertaining to whether employees genuinely agreed to the agreements apply but the application of the new better off overall test (BOOT) provisions of the Act will determine whether the agreements pass the BOOT.
John Berkelaar is a bargaining representative for the Teaching EA and has raised an issue about the voting process through which the Teaching EA was approved. Joshua Beck is a bargaining representative for the Operational EA and has supported the IEU’s concerns regarding the Operational EA as to suspension without pay and dispute resolution provisions, which are discussed further below.
As to the issues common to the agreements, the IEU raises concerns about the fact that neither agreement incorporates the applicable modern award; that each agreement provides for suspension without pay in certain circumstances; and the absence of arbitral power in the dispute resolution procedure. The issues the IEU raises about the Teaching EA concern the absence of part-time employee reduction in hours redundancy pay and any prescription for maximum days of work, the deduction from wages when an employee fails to give notice of termination, and the provision permitting the applicant to terminate the employment of a teacher who is unable to meet the requirements of the job for whatever reason, including long-term absence from work or irregular attendance.
As the IEU properly concedes, there is no requirement under the Act for an award to be incorporated by reference or otherwise as a term or terms of an enterprise agreement. The real and only issue that IEU’s concern might raise is whether either agreement fails to pass the BOOT. The IEU has not suggested that either agreement fails to pass the BOOT. It has instead declined to express a view.[1] The applicant has expressed its view that each agreement passes the BOOT[2] and the IEU has elected not to advise the Commission whether it disagrees with one or more statements in the employer’s declaration relating to each agreement.[3] In its written submission, the IEU goes no further than to submit “that there are some instances in which a present or prospective award covered employee may not be better off overall if the modern award applied rather than the proposed Agreement”.[4] The instruments in the sentence above appear to have been inversed. I assume the IEU is contending that some employees may not be better off overall if the relevant agreement applied than if the modern award applied to the employment of those employees. But it does not say that the absence of incorporation results in the agreements failing to pass the BOOT. Indeed, the only suggestion that the agreements may not pass the BOOT relates to the suspension without pay provision of the agreements – a concern I share for reasons I will shortly explain.
Incorporation might assist an agreement to pass the BOOT but the fact that an agreement does not incorporate a reference award will never result in an agreement not passing the BOOT. That is because incorporation of a modern award is not an approval requirement. An agreement will pass the BOOT because each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied. And this is determined by undertaking a global assessment of whether each employee concerned would be better off overall, having regard to the more and less beneficial terms of the agreement compared to the relevant modern award.
For this reason, the IEU’s objection to the approval of the agreements, that they do not incorporate the applicable modern award, is rejected.
Both agreements permit the applicant to suspend employees without pay in certain circumstances. Clause 8.3 of the Teaching EA provides:
“8.3 Suspension
Notwithstanding any of the provisions in this Agreement, the School may suspend a Teacher with or without pay while considering any matter which in the view of the School could lead to the Teacher’s summary dismissal. Suspension without pay shall not be implemented by the School without prior discussion with the Teacher and shall not, except with the Teacher's consent, exceed a period of four weeks.”
Clause 7.4 of the Operational EA provides:
“7.4 Suspension
Notwithstanding any of the provisions in this Agreement, the School may suspend an Employee with or without pay while considering any matter which in the view of the School could lead to the Employee's summary dismissal. Suspension without pay shall not be implemented by the School without prior discussion with the Employee and shall not, except with the Employee's consent, exceed a period of two weeks.”
The Teachers Award and the General Staff Award do not contain such provisions.
The IEU contends that the suspension without pay provision in each agreement is needlessly onerous. It says the provision creates an obligation upon employees that does not otherwise exist under an award provision or at common law, and that it gives rise to a potential disadvantage in terms of assessing whether affected employees are better off overall.
The applicant says that the power to suspend employees under the above clauses is exercisable only where the conduct alleged is serious and could justify summary dismissal. It says that any such suspension would be for a relatively short period.
The applicant has nevertheless proposed undertakings. As to the Teaching EA, the applicant proposes to undertake that, if a teacher is suspended without pay under clause 8.3, the maximum period of suspension will be two weeks and if the teacher is not subsequently dismissed, the period of unpaid suspension shall be regarded as a period of paid suspension. As to the Operational EA, the applicant proposes to undertake that if an employee is suspended without pay under clause 7.4 and is not subsequently dismissed, the period of unpaid suspension shall be regarded as a period of paid suspension.
As I have earlier indicated, I share the IEU’s concerns, and I do not consider that either agreement can pass the BOOT. Suspension without pay is not facilitated under the applicable modern awards, and unless a contract of employment makes provision for it, such a suspension is not permitted at common law. If at test time, an employee is suspended without pay over concerns that the employee has engaged in serious misconduct which may justify summary dismissal, the employee would receive no pay for a period if the agreement applied, but if the relevant modern award applied, the employee would be entitled to be paid for the same period. None of the other more beneficial terms for which the agreements provide would compensate the employee if the employee’s employment was then terminated following the suspension. The undertakings proposed do not meet this concern. I have also considered the proposed form of undertaking set out in the IEU’s submissions[5] but it does not meet my concern. As I have said, as at test time an employee who is suspended without pay for whatever period and whose employment is then terminated has lost pay. This would not happen if the relevant modern award applied. Such an employee can never be better off overall if the relevant agreement applied rather than the relevant modern award. I will give the applicant an opportunity to proffer an undertaking to address the concern.
Turning next to the dispute resolution provisions of the agreements. The substance of the IEU’s complaint is that while the relevant modern awards allow for consent arbitration, the agreements do not expressly so provide. The IEU contends this is a disadvantage when compared to the relevant modern awards, as it limits the recourse an employee would have to resolve a dispute about their conditions of employment. It is a BOOT concern. There is no doubt, and the IEU appears to accept that the dispute settlement term of each agreement meets the requirement in s 186(6) of the Act. Moreover, that the provision appears to limit the powers of the Commission to make recommendations only on request by a party is something that is contemplated by s 739(3). The applicant submits that the dispute resolution procedure in each agreement does not prevent the parties in dispute from agreeing to take their dispute to the Commission and accepting the recommendation or decision of the Commission. No doubt, the Commission could, on request, make a recommendation, which the parties could agree to accept. Doubtless, the Commission could express an opinion about a dispute which the parties could agree to accept. But in each case, that is the result of a separate agreement between the parties, not by operation of any term of the agreements. Nevertheless, the arbitral provisions of the dispute procedures in the relevant modern awards proceed only by consent – that is, the prospect of arbitration when an employee wants it, is only available if the applicant consents. The nature of disputes that might garner consent is unknown and so the benefit for which the IEU contends under the modern awards is very conditional, and even then, presupposes an arbitral outcome favourable to an employee. In the end, I am not persuaded that the provisions in the agreements are in any material respect detrimental compared to the modern awards. This objection is rejected.
The remaining issues concern only the Teaching EA. First, the IEU says that the Teachers EA does not provide for part-time employee reduction in hours redundancy pay. The IEU says by not providing a provision to address part-time redundancy, a part-time teacher engaged for at least 12 months by the applicant may experience a substantial reduction in contracted hours without their consent and so will be disadvantaged. There appears to be some acceptance of disadvantage, which should be resolved. The applicant says it has reached an in-principle agreement with the IEU to proffer an undertaking to meet the concern by providing for part-time redundancy if a part time teacher’s hours are reduced without their consent by 25% or more. The applicant’s proposed undertaking is as follows:
“Clause 8.17 – Redundancy
The School undertakes that, where a Part-Time Teacher’s hours are reduced without their consent by more than 25% following the redundancy of their position, they will be entitled to redundancy pay based on their period of service in accordance with the table in clause 8.17(a) provided that:
(i)the payment will be calculated using the difference between the Teacher’s weekly pay in their former position and their weekly pay in the new position; and
(ii)clause 8.17(f) will not apply.”
I accept that the issue raises an approval requirement concern. The proposed undertaking meets the concern.
Second, the IEU says that clause 8.9 of the Teaching EA does not address the maximum days of work. In the result, there are no outer limits on days of attendance. This is to be contrasted with clause 15 of the Teachers Award. The applicant appears to accept that there is a valid concern and says that it has reached an in-principle agreement with the IEU to include a limit on the days of work for a teacher. It proposes an undertaking in the following terms:
“Clause 8.9 Hours of work
The School undertakes in relation to a Full-Time Teacher’s hours of work that:
(i)the maximum number of days that a Teacher will be required to attend during term weeks and non-term weeks is 205 in each school year; and
(ii)in calculating the 205 days the following duties/activities/periods are not counted:
a. co-curricular activities conducted on a weekend;
b. school related overseas trips and interstate trips, conferences and similar activities undertaken by mutual consent during non-term weeks;
c. duties performed by a Teacher appointed to a leadership position in non-term weeks that are directly associated with their leadership position; or
d. duties undertaken in exceptional circumstances, such as the provision of pastoral care to students in the event of a tragedy in the school community.”
I accept that the issue raises an approval requirement concern. The proposed undertaking appears to meet the concern.
Third, the IEU says that some employees may not be better off overall because clause 8.6 of the Teaching EA allows the applicant to make a deduction from a teacher’s pay if the teacher fails to give adequate notice of termination of employment, capped at seven weeks’ pay, whereas that right is capped at two weeks under clause 32.3 of the Teachers Award. The IEU proposes that the cap be two weeks under the Teaching EA and that an undertaking to that effect be given. The applicant does not agree that the Teaching EA fails the BOOT for this reason, but says it acknowledges the concern raised by the IEU and proposes to give an undertaking to limit the payment that will be required from a teacher who fails to give the full seven week notice period when resigning to four weeks’ wages.
This will not resolve the concern. Plainly, as at test time, an employee who resigns but fails to give notice is liable to have deducted up to seven weeks’ wages. The Teachers Award permits only two weeks. Such an employee will not benefit from the beneficial terms of the Teaching EA because the employee has resigned, and only the detrimental term will apply. Such an employee is not better off overall if the Teaching EA applied than if the Teachers Award applied. I will allow the applicant an opportunity to provide an undertaking to meet this concern.
Fourth, the IEU raises concerns about clause 8.6(f) of the Teaching EA. Clause 8.6(f) is as follows:
“Due to the nature of the School’s operations, and its obligation to provide continuity of teaching and learning activities (in circumstances where it is often difficult to temporarily fill a Teacher’s role in a specialist field or otherwise with a competent substitute at short notice), the School may terminate the employment of a Teacher who is unable to meet the requirements of the job for whatever reason, including long-term absence from work, and or irregular attendance. The School shall give the notice required in this subclause and shall not act harshly or without providing the Teacher with reasonable opportunity and support to address their inability to meet the requirements of the job.”
The IEU contends that clause 8.6(f) of the Teaching EA permits the applicant to “terminate the employment of a Teacher who is unable to meet the requirements of the job for whatever reason, including long-term absence from work, and or irregular attendance”,[6] subject to the applicant not acting harshly. It submits that this clause is punitive and would permit the applicant a wide remit to terminate the employment of teachers beyond matters of performance or conduct and contemplates termination of employment for “irregular attendance”,[7] which could arise for a number of reasons, including reasons protected by the Act. The applicant has proposed an undertaking to meet the concern as follows:
“The School undertakes that termination of employment of a Teacher for long term absence from work under clause 8.6(f) will not occur unless the Teacher’s absence extends for more than 12 calendar months or the total absences over an 18 month period have been more than 12 months.”
The issue raised is not one that engages with any approval requirement. The complaint in substance is that employment might be terminated in contravention of the Act. The term is not an objectionable term (see s 12 of the Act) but it is possible that the applicant might act in reliance of clause 8.6(f) of the Teaching EA to terminate the employment of an employee in contravention of Part 3-1 of the Act. That such an outcome is possible does not render the provision objectionable because the provision does not require, permit or have the effect of requiring or permitting that result. I will not accept the undertaking because the undertaking is not directed to a concern that one or more of the agreement approval requirements have not been met.
Mr Berkelaar filed submissions contending that some unidentified persons were ineligible to vote to approve the Teaching EA and were included in the employee list sent to the Vero, the external provider of ballot services engaged to conduct the ballot. Mr Berkelaar says that at least two people were able to vote who were not eligible to vote because one person did not commence employment until January 2024 and one person was a relief (casual) teacher who did not work during the voting period.
The applicant set out several reasons why these concerns may be dismissed. It is sufficient to simply restate one. Mr Berkelaar has provided no evidence to support his contentions and cites only the position of two employees who may not have been entitled to vote. Even if the assertions were to be accepted as fact, the result of the vote would be unaffected because there were 127 employees employed at the time, 86 employees cast a valid vote and 61 voted to approve the Teaching EA.
Except as indicated above, in all other respects I am satisfied that each of the remaining agreement requirements of ss 186 and 187 of the Act, as are relevant to these applications for approval, have been met.
I will allow the applicant a period of 7 days from the date of this decision to file in my Chambers signed undertakings for each agreement discussed at [14], [16]-[17], [18]-[19] and [21]. Before doing so, the applicant must consult the known bargaining representatives and it must advise my Chambers when filing the undertakings that it has consulted the bargaining representatives.
If the undertakings are acceptable, I will approve the agreements with undertakings, noting that the IEU wants the agreements to cover it. And I will deal in those approval decisions with the applicant’s applications under s 218A of the Act for the Commission to vary the agreements to correct or amend obvious errors, defects or irregularities.
DEPUTY PRESIDENT
Hearing details:
Matter determined on the papers
Written submissions:
Applicant, 1 March 2024
Mr John Berkelaar, employee bargaining representative, 16 February 2024
Mr Joshua Beck, employee bargaining representative, 6 March 2024
Independent Education Union of Australia, 16 February 2024 and 6 March 2024
Printed by authority of the Commonwealth Government Printer
<PR773245>
[1] Form F18 – Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement) filed in respect of each agreement at Q8
[2] Form F17A – Employer’s declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement) – notification time before 6 June 2023 filed in respect of each agreement at Q15
[3] Form F18 – Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement) filed in respect of each agreement at Q6
[4] Respondent’s outline of submissions at [2]
[5] Ibid at [5]
[6] Form F18 – Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement) filed in respect of each agreement at Q5
[7] Ibid
Printed by authority of the Commonwealth Government Printer
<PR773245>
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