South Coast Recruitment Pty Ltd T/A WorkforceXS Nowra & Wollongong/Workforce Extensions Wollongong

[2018] FWCA 6802

[2018] FWCA 6802

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

South Coast Recruitment Pty Ltd T/A WorkforceXS Nowra & Wollongong/Workforce Extensions Wollongong
(AG2018/3873)

SOUTH COAST RECRUITMENT NSW & ACT ENTERPRISE AGREEMENT 2018

Building, metal and civil construction industries
COMMISSIONER GREGORY	MELBOURNE, 2 NOVEMBER 2018

Application for approval of the South Coast Recruitment NSW & ACT Enterprise Agreement 2018.

Introduction

[1] An application has been made under s.185 of the Fair Work Act 2009 (Cth) for approval of the South Coast Recruitment NSW & ACT Enterprise Agreement 2018 (“the Agreement”). The application is made by South Coast Recruitment Pty Ltd (“South Coast Recruitment”). It is a single enterprise Agreement. The documentation filed with the application indicates that South Coast Recruitment is involved in the recruitment and on hire of employees, and the proposed Agreement is intended to cover the employees involved in its construction business unit.

[2] The Form F16 Application also indicates that there were no Union or employee bargaining representatives involved in the process of making the Agreement, and it is intended to apply for a four year term. At the time the Agreement was made it was to cover 62 employees, who were all employed on a casual basis.

[3] After an initial review of the application, the Form F17 Employer’s Statutory Declaration, and the terms and conditions contained in the proposed Agreement, the Commission forwarded correspondence to the Applicant’s representative about a range of matters where further clarification was sought. These included various pre approval issues, compliance with the National Employment Standards, and issues relating to satisfaction with the requirements of the “better off overall” test.

[4] The Applicant’s representative subsequently requested that the matter be set down for hearing in order to expedite the application. It is noted in this context that a statement had previously been forwarded to the Commission from the Managing Director of South Coast Recruitment, Mr Ross Thompson, requesting that the application be dealt with as a matter of urgency, if possible, because approval of the Agreement would enable South Coast Recruitment to tender for some forthcoming project work. The matter was accordingly set down for hearing on 24 October 2018.

[5] Mr Benjamin Gee from FCB Workplace Law was given permission to appear under S.596(2)(a) of the Act as the matter involved a degree of complexity and his involvement might enable it to be dealt with more efficiently. The proceedings were conducted by video link. Mr Gee appeared from the Commission in Sydney and was accompanied by Mr Thompson.

[6] The submissions provided on behalf of the Applicant sought to address each of the matters referred to in the earlier correspondence from the Commission. It was indicated at the outset that the Agreement had been signed by three employees, and they had done so in their capacity as employees of South Coast Recruitment who were to be covered by the proposed Agreement. There was no requirement for them to have been appointed as employee representatives in order to be able to sign the Agreement. It was also indicated that the Notice of Employee Representational Rights provided to the employees replicates the coverage of the Agreement as set out in clause 1.2.

[7] The Applicant also proposed to deal with any concerns about clause 2.2 of the Agreement, which appeared to create the ability for another Agreement to have application during the life of the present Agreement. It proposed in response to provide an undertaking that the relevant clause be omitted from the Agreement in its entirety.

[8] In regard to clause 32.3(b) of the Agreement South Coast Recruitment submits that in the context of its business operation the clause has been drafted in order to be more likely to entitle the benefit of the additional weeks’ annual leave for employees working as shift workers in the electrical contracting industry. It also submits in response to the issues raised about clause 35.6 that it is in substantially the same terms as the relevant provisions in each of the three underlying Awards.

[9] In terms of the issues raised about the consultation obligations in Clause 5 South Coast Recruitment submits that sub clause 5.1 was not intended to limit its consultation obligations, but was instead an explanatory statement concerning the nature of the business environment in which it operates. Sub clause 5.2 then continues to set out the obligations that apply in regard to consultation.

[10] South Coast Recruitment continued to make submissions in regard to the wage rates in the Agreement and indicated, in summary, that the rates provided in respect of the plumbing classifications satisfy the requirements of the “better off overall” test when a direct comparison is carried out between the respective rates of pay in the underlying Award and those contained in the proposed Agreement. However, there were some typographical errors in the rates proposed for the plumbing and mechanical services trades special class classifications, and these were proposed to be addressed by way of an undertaking.

[11] It was also indicated that these details would be confirmed in correspondence to be sent to the Commission. The Commission subsequently received further correspondence from the Applicant’s representative following the conclusion of the hearing setting out the rates in the Agreement for each of the relevant classifications. It also provided a table which compares the Agreement rates to the appropriate classification rates in the relevant Awards. It was also indicated that the hourly rates in the Agreement are those that are to apply from the date it commences operation, and are inclusive of any industry allowance, special allowance, follow the job loading, tool allowance, employee protection allowance, and specific licence allowances as provided for in clause 20 of the Agreement.
[12] It was also noted that the relevant allowances in the Awards are intended to be applied under the terms of the Agreement in the same way as they are applied in the relevant Awards. In addition, the concerns raised about apprentices are also be addressed by a further undertaking to the effect that apprentices would not at any time be employed under the terms of the Agreement.

[13] The next issue concerned the wording in sub clause 14.1, which appeared to suggest on one view that work arrangements could be established on a project by project basis in a different manner to the terms and conditions contained in the Agreement. However, the submissions provided on behalf of South Coast Recruitment indicated that the relevant wording in this context is contained in the last sentence of sub clause 14.1 when it states:

“Accordingly, the roster or work pattern may be set on a project by project basis and will be worked in accordance with the terms of the Agreement.”

[14] This was intended to make clear that ultimately whatever rosters or work pattern arrangements are put in place they would at all times be governed by the terms and conditions contained in the Agreement.

[15] It was next indicated that the Applicant intended to provide a further undertaking to deal with the concerns raised about the working of ten hour shifts. It would provide that such shift arrangements would have no application in circumstances where an employee was working for less than five days in a week. This would address the concerns that had been raised about the possibility of an employee working ten ordinary hours in a shift and receiving less than the entitlements to apply to an eight hour shift plus overtime.

[16] South Coast Recruitment next proposed a further undertaking to deal with the potential concerns raised about weekend work. It would provide that any work performed on Saturday, by any employee, would be paid at the relevant overtime penalty rates. This would mean that any time worked prior to 12 noon on Saturday would be paid at the rate of time and a half for the first two hours and double time thereafter, with all time worked after 12 noon on Saturday being paid at double time. A further undertaking was also proposed in response to the issue of minimum engagements for casual employees, and would provide for a four hour minimum start for all casual employees to be covered by the proposed Agreement.

[17] The Applicant continued to indicate in its submissions that in terms of the undertakings being proposed they would clearly not result in any financial detriment to any employee, and the employees would instead be financially better off. It continued to submit that whether considered in isolation or taken together the proposed undertakings do not result in substantial changes to the Agreement, and simply respond to some relatively limited circumstances identified in regard to the application of the terms and conditions in the Agreement.

[18] It was also indicated that South Coast Recruitment now intended to provide copies of the proposed undertakings to each of the employees to be covered by the Agreement. A period of time would then be provided up until 3 p.m. on Friday, 26 October 2018 for the employees to give consideration to the terms of those proposed undertakings. South Coast Recruitment also indicated that it would then provide advice to the Commission about whether any of the employees had raised issues about any of the undertakings, or wished to make further submissions about what was being proposed.
[19] The Commission was subsequently advised by the Applicant’s representative late on Friday, 26 October 2018 that the proposed undertakings had been circulated by email to each employee to be covered by the proposed Agreement, and none of the employees had indicated that they wanted to make further submissions about what was being proposed.

Consideration

[20] Section 186(1) of the Act requires the Commission on application for approval of an enterprise agreement to approve the agreement “if the requirement set out in this section and section 187 are met.” 1 Section 186(2), firstly, requires that the Commission must be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement,”2 and, secondly, that “the agreement passes the better off overall test.”3

[21] Section 188 of the Act continues to deal with the circumstances in which employees can be said to have genuinely agreed to an enterprise agreement. It states:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.” 4

[22] As indicated, s.186(2)(d) requires that the Commission must be satisfied that the Agreement passes the “better off overall test.” The requirements of the test are dealt with in s.193(1) in the following terms:

“193 Passing the better off overall test

When a non greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC 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.” 5

[23] Section 193(6) also provides that the “test time” is the time the application for approval is made under section 185.

[24] It is well established that the application of the “better off overall” test requires the identification of terms and conditions in the proposed Agreement that are more beneficial for the employees, and those which are less beneficial, with an overall assessment then being made about whether the employees would be “better off overall” under the Agreement.

[25] It is also clear that the assessment must be carried out in a way that ensures each employee, and each prospective employee, would be “better off overall” under the Agreement. It is not sufficient for the Commission to simply be satisfied that a majority of the employees would be better off.

[26] The Commission has now been provided with the written undertakings that were foreshadowed by the Applicant’s representative during the course of the proceedings. A copy of those undertakings is attached in Annexure A. I am satisfied that they will not cause financial detriment to any employee to be covered by the Agreement, and that they do not constitute substantial changes to the Agreement. The undertakings are accordingly approved and will now be taken to be a term of the Agreement.

[27] I am otherwise satisfied that each of the requirements of ss.186, 187, 188 and 190, as relevant to this application for approval, have been met.

[28] The Agreement is approved, and in accordance with s.54 of the Act will operate from 9 November 2018. The nominal expiry date of the Agreement is 1 November 2022.

COMMISSIONER

Appearances:

B Gee with R Thompson for the Applicant.

Hearing details:

2018.

Melbourne and Sydney (by videoconference):

October 24.

Annexure A

 1   Fair Work Act 2009 (Cth) s 186(1).

 2   Fair Work Act 2009 (Cth) s 186(2)(a).

 3   Fair Work Act 2009 (Cth) s 186(2)(b).

 4   Fair Work Act 2009 (Cth)s 188.

 5   Fair Work Act 2009 (Cth) s 193.

Printed by authority of the Commonwealth Government Printer

<AE500669  PR702036>