SRSW Pty Ltd

[2015] FWC 994

[2015] FWC 994

FAIR WORK COMMISSION

DECISION

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

SRSW Pty Ltd
(AG2014/10717)

DEPUTY PRESIDENT ASBURY BRISBANE, 18 MARCH 2015

Application for approval of the SRSW Pty Ltd Enterprise Agreement 2014.

Background

[1] This decision relates to an application for approval of the SRSW Pty Ltd Enterprise Agreement 2014 (the Agreement). The application is made pursuant to s.185 of the Fair Work Act 2009 (the Act) and it is made by SRSW Pty Ltd (the Applicant), being the employer covered by the Agreement.

[2] The original application was incomplete as the Agreement filed was not a copy of the complete Agreement and the Form F17 - Employer’s statutory declaration in support of an application for approval of an enterprise agreement (the Form F17) was not witnessed by a “prescribed person”. The Applicant also failed to file a copy of the Notice of Representational Rights provided to employees. The Applicant remedied these matters.

[3] The Applicant is a labour hire business providing labour hire services in a number of industries. The Form F17 states that there are seven employees who will be covered by the Agreement and that six employees voted for, and approved the Agreement. However the material filed by the Applicant in some instances refers to there being six employees in total. The application identifies that each of the employees nominated themselves as a “self-appointed bargaining representative”.

[4] On 17 December 2014, the Construction, Forestry, Mining and Energy Union - Mining & Energy Division (the CFMEU), corresponded with the Commission to foreshadow that it had “concerns” regarding the content of the Agreement. Directions were issued to the CFMEU requiring particulars of its concerns and to the Applicant requiring a response to those matters.

[5] The application for approval of the Agreement was listed for Hearing on 4 February 2015. Prior to the Hearing confirmation was sought from the Applicant and the that they had filed all material upon which they intended to rely. The CFMEU filed a supplementary submission but otherwise confirmed it relied upon the material filed. The Applicant also confirmed that it had filed all material upon which it sought to rely in support of the application for approval of the Agreement.

[6] At the Hearing, Mr Andrew Thomas, National Industrial Officer on behalf of the CFMEU sought permission for the CFMEU to be heard in relation to the application. The Applicant, represented by Mr Stephen Nance, Director of Stephen Nance Workplace Relations Pty Ltd, objected to the CFMEU being heard in relation to the application.

[7] I decided to allow the CFMEU to be heard in relation to the application for approval of the Agreement. I did so because prior to the communication from the CFMEU I had concerns about whether the requirements of the Act for approval of the Agreement had been met and whether the Agreement passed the better off overall test (BOOT).

[8] Pursuant to s. 590 of the Act, the Commission has powers to inform itself in relation to any matter before it in a manner it considers appropriate. A small number of employees have made the Agreement; the Agreement operates in the Coal industry where the CFMEU has a presence; I have concerns about the Agreement; and there is no contradictor in the application for approval. In those circumstances, it is in my view appropriate to allow the CFMEU to be heard in relation to that application.

Issues for determination

Overview

[9] After consideration of the material filed by the Applicant in support of the application for approval of the Agreement; the concerns raised by the CFMEU; and the submissions of the Applicant in response to those concerns, I have identified the following issues that arise for determination in relation to whether the Agreement meets the requirements of the Act for approval:

● Whether the requirements in s. 188(a) in relation to compliance with each of ss. 180(2), 180(3) and 180(5) of the Act (broadly categorised as pre-approval requirements) have been met;
● Whether the Commission can be satisfied that there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by employees as required by s. 188(c);
● Whether the Agreement complies with s. 186(5) of the Act in relation to its nominal expiry date; and
● Whether the Agreement passes the better off overall test (BOOT).

[10] The basis upon which these issues arise for determination is summarised below.

Pre approval requirements

[11] Section 180(2) of the Act requires that during the access period for the Agreement, the employer has taken all reasonable steps to ensure that relevant employees were given a copy or the written text of the Agreement and material incorporated in it by reference, or reasonable access to a copy of those materials. Clause 6.1 of the Agreement states that it incorporates the Black Coal Mining Industry Award 2010, the Mining Industry Award 2010, the Building and Construction General On-Site Award 2010, the Hydrocarbons Industry (Upstream) Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010.

[12] By virtue of s. 180(4) of the Act the Access period for a proposed enterprise agreement is the seven day period ending immediately before the start of the voting process. The Form F17 filed by the Applicant declares that the voting process for the Agreement commenced on 5 December 2014. Accordingly, the access period for the Agreement in the present case commenced on 28 November 2014. This means that the Applicant was required to take all reasonable steps to ensure that the relevant employees either had a copy of the Agreement and the incorporated Modern Awards or had access to those documents during the period of 28 November to 4 December 2014.

[13] Question 2.4 of the Form F17 requests that the employer specify:

“What steps were taken by the employer and on what date were they taken to ensure that the relevant employees were given, or had access to, the written text of the agreement and any other material incorporated by reference into the agreement during the 7 day period ending immediately before the start of the voting process”

[14] The response provided in the Form F17 filed by the Applicant indicates that a meeting with some employees was held in Brisbane on 24 November 2014 and that a meeting with the remainder of employees was held in Mackay on 28 November 2014. At those meetings employees were handed a copy of the proposed Agreement and a discussion took place, during which employees were able to ask questions about the proposed Agreement.

[15] With respect to the text of the Agreement itself, there is no evidence that the Agreement changed between the 24 November 2014 meeting and the subsequent vote for the Agreement on 5 December 2014. I accept that the material before me discloses that employees had a copy of the written text of the Agreement during the access period for the Agreement.

[16] However, the Form F17 provides no information about whether employees were provided with a copy of each (or any) Modern Award incorporated into the Agreement or whether the Applicant took any steps to ensure that relevant employees had access to these incorporated documents during the access period. Notwithstanding that it was on notice prior to the hearing that this was an issue for consideration, the Applicant provided no additional evidence to supplement the information set out in the Form F17. Instead the Applicant provided a written submission stating that employees had access to the incorporated documents because they are in the public domain.

[17] The Applicant further submitted that during negotiations and at the start of the access period, employees were advised that copies of the Modern Awards incorporated in the Agreement were available and that no employee chose to request access to them. There was no evidence provided to the Commission as to who informed employees of this and the manner in which the information was provided.

[18] There is Full Bench authority for the proposition that where material incorporated in an agreement by reference is in the public domain, it is not necessary that employees be provided with copies of such material. In support of its submissions that it had met the requirements in s.180(2) of the Act the Applicant referred to the decision of a Full Bench of the Commission in McDonald’s Australia Pty Ltd v Shop Distributive and Allied Employees Association 1 (McDonald’s) where, in the context of that matter, the Full Bench stated:

“We find that the employer was not required to take any further steps to ensure that the relevant employees had access to the South Australia legislation. Because the legislation is freely available in the public domain, no further steps were required.” 2

[19] The Applicant also referred to a later Decision of a Full Bench of the Commission in National Tertiary Education Industry Union v University of New South Wales 3(NTEIU)which held that:

“His Honour was correct to find he was bound to follow the decision of the Full Bench in McDonalds and no sufficiently persuasive submission was put to establish a basis that may have allowed him not to do so. We are not persuaded a sufficient argument has been made out to revisit the approach taken in McDonalds.” 4

[20] However, the Full Bench in that case went on to state:

“We do acknowledge however that there may be cases where the characteristics of the workplace and the composition of the workforce may require more than what that Full Bench indicated was adequate.” 5

[21] The Full Bench Decision NTEIU lends weight to the proposition that departure from the principles set out in McDonald’s may be warranted where the characteristics of the workplace and the composition of the workforce require such a departure. In this regard it must be borne in mind that the requirement for the provision of a written copy of an agreement and material incorporated by reference in an agreement, is to be understood in the context of the requirement in s. 180(5) for the employer to take all reasonable steps to explain the terms of the agreement and the effect of those terms to the relevant employees in an appropriate manner taking into account their circumstances and needs.

[22] In the McDonald’s Case, a Union was active in providing an explanation about the terms of the Agreement and the role played by the Union was taken into account in considering the reasonableness of the steps taken by the employer. In NTIEU the Full Bench noted that the parties were not new to bargaining. The Full Bench in that case also noted that there had been extensive information provided to relevant employees and that the employer had gone to great detail with respect to the pre-approval steps and the explanation of the terms of the Agreement. The involvement of the employer and a Union which had been a bargaining representative, together with the composition of the workforce, could properly inform the Commission in considering the requirements in s. 180(5)(a) in relation to the explanation of the terms of an agreement and their effect. 6 Further, in both cases, the document incorporated into the agreements by reference related to one entitlement, in one State - long service leave.

[23] These facts can be distinguished from those in the present case. Here, the Agreement contains only 19 clauses and the majority of entitlements for employees are derived from a number of Modern Awards, any of which may apply to employees depending upon the nature of their engagement from time to time. Those Awards provide for significantly different terms and conditions of employment, particularly with respect to provisions such as hours of work and work cycles that can have a major impact on the wages of employees.

[24] In my view an employee seeking to understand the terms of the Agreement and the effect of those terms would have great difficulty in the absence of a proper explanation with reference to the terms of the Agreement and those of the incorporated Awards. I am also of the view that an explanation of the terms of the Agreement and their effect would at least address the circumstances in which the industry sectors in which they may perform work could impact on the application of the Agreement (because of the application of the incorporated Modern Awards) and the effect of this on terms and conditions of employment.

[25] In the circumstances of this case, it is not reasonable for the employer to simply rely on the fact that the titles of the Modern Awards incorporated into the Agreement by reference are set out in the Agreement and that those Awards are available on the internet, as a basis for asserting that it has taken reasonable steps to give access to the incorporated material and to explain the terms of the Agreement and their effect to the relevant employees. This is particularly so when the Form F17 indicates that the Agreement is the first enterprise agreement between the employer and the relevant employees.

[26] As previously noted, the Form F17 makes no mention of Modern Awards being provided to employees or any attempt by the Applicant to facilitate access to those Awards by the Applicant employer. The Applicant was on notice that the CFMEU had raised this issue. The Commission confirmed prior to hearing that the Applicant had filed all material upon which it relied.

[27] The evidence before me does not satisfy me that the Applicant took all reasonable steps to ensure that employees were given copies of or had access to the incorporated documents. I am also unable to be satisfied that the employer took reasonable steps to explain the terms of the Agreement and their effect, as required by s. 180(5). In circumstances where the extent of the incorporated material exceeds the content of the Agreement proper, an explanation without the provision of the incorporated material or access to it, does not fulfil the obligation in s. 180(5) of the Act.

[28] I am also unable to accept that the Applicant has complied with s. 180(3) of the Act. That section requires that the employer take all reasonable steps, by the start of the access period, to notify employees of the time and place at which the vote will occur and the voting method that will be used. In the present case, on the Applicant’s own submission, the start of the access period was 28 November 2014, being seven days before employees were requested to approve the Agreement.

[29] The Form F17 filed by the Applicant states that the action to inform employees of the date and place at which the voting was to occur and the voting method to be used, was personal conversations with each employee on 3 December and an email sent to each employee on 5 December 2014. It is apparent from the Applicant’s Form F17 that the action to inform employees about the voting was not taken by the commencement of the access period. I accept that information about these matters may be promulgated after the access period has commenced. However, notification of these matters is required to be given by the start of the access period.

[30] The Applicant contended in its submissions that employees were “verbally informed” of the date and time of the ballot and the method of voting, at meetings during the access period. Again, notwithstanding that it was on notice that the timing of the provision of the required information about the ballot was in issue, the Applicant did not call any evidence to establish compliance with s. 180(3). Even if I accepted the Applicant’s submissions about employees being informed of these matters in meetings held during the access period, this is not sufficient to meet the requirement that the information be provided by the start of the access period.

[31] Accordingly, I am not satisfied that sections 180(2), (3) and (5) of the Act have been complied with and further that employees have not genuinely approved the Agreement because of s. 188(a)(i).

Other reasonable grounds for believing that the Agreement was not genuinely agreed to

[32] When the application for approval of the Agreement was initially filed, the Notice of Employee Representational Rights (NOERR) said to have been provided to employees as required by s. 174 of the Act was not appended to the Form F17. Further, in response to question 2.3 in the Form F17, which asks for information to establish that an employer has taken all reasonable steps to give employees notice of their right to be represented, the Applicant referred to a letter sent to employees via email. That letter was also not attached to the Form F17.

[33] Upon the Applicant providing the NOERR distributed to employees it was clear that the requirements in s. 174 of the Act with respect to form and content of the NOERR had been met. However, the covering email, said by the Applicant to have been sent to employees, raises an issue of whether the Commission can be satisfied that there are no other reasonable grounds for believing that the Agreement was not genuinely agreed to.

[34] The email is question is an email from Mr Mark Powell, Manager, Workforce, of the Applicant, dated 30 October 2014 and was addressed to each individual employee in the following terms:

“Dear...

Further to our conversation earlier over the phone, please find attached Employee Rep Rights Letter to review which outlines SRSW Pty Ltd’s intention to put an Enterprise Agreement with our workforce in place.

I require you to send me a return email ASAP to nominate yourself, or another person, as your bargaining representative...” (underlining in original)

[35] It was submitted by the CFMEU that this statement was misleading as to the representational rights of employees on the basis that they were instructed to nominate either themselves or another person, as a bargaining representative. There is no such requirement and the Union was the default bargaining representative of any members.

[36] In this regard the CFMEU referred to Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union 7 (Peabody) where the Full Bench stated:

“...where additional material is provided with the Notice and that material has the character of being, for example, misleading or intimidatory, then this will be relevant to the Commission’s assessment of whether the enterprise agreement had been ‘genuinely agreed’ by the employees.” 8

[37] In Peabody, the Full Bench found that a document appended to the Notice was promulgated by the employer as the notice itself and that the form and content requirements of the Act were not met.

[38] In the present case there is no basis for finding that the covering email purports to be the NOERR or part of it. The Form F17 filed with the application for Approval of the Agreement states in relation to the provision of the NOERR to relevant employees:

“We then sent every employee a letter notifying them of their Representational Rights through this bargaining process via email...

Copy of the email that was sent, as well as the Notice of Representational Rights is attached to the bottom of this form.”

[39] However, the issue remains as to whether the covering email was misleading or intimidatory. No evidence was led by either party from employees to the effect that they were or were not misled or intimidated by the covering email. However, the Full Bench’s reasoning in Peabody was directed at the “character of” the additional material.

[40] Despite the Applicant’s submission that the covering email “asked” employees to nominate a bargaining representative, the clear wording of the email was that the Manager, Workforce, of the Applicant “required” employees to “nominate yourself, or another person” and to do so as soon as possible.

[41] In Galintel Rolling Mills Pty Ltd 9a Full Bench of the Commission observed in relation to the provisions of the Act requiring the NOERR to be given to employees within a specified time frame that:

“The context and purpose of these provisions are important. Imposing a requirement for an employer to notify its employees of their rights of representation is obviously seen by the legislature as an essential ingredient of fair bargaining and agreement making under the Act. So too is the notion of employees being free to exercise their choice of representation…” 10

[42] The Full Bench in that case to stated that there is nothing wrong with an employer expressing a preference or giving employees advice about representation, but went on to state that if employers make statements that contradict the NOERR, there will be real questions about the genuineness of the Agreement.

[43] In Galintel, a “slip” was included at the bottom of the notice enabling employees to nominate bargaining representatives. The slip was headed: “Please complete the following slip and return the slip to …. Manufacturing Manager.” The Full Bench found that the slip was a request to employees to nominate a bargaining representative, rather than a mandatory requirement that they do so, notwithstanding that it would have been preferable for the Company to reiterate the optional nature of the appointment of a bargaining representative. As a result the NOERR was not invalid and there were no reasonable grounds for finding that employees had not genuinely agreed to the agreement.

[44] Making allowances for the change to the Act brought about by s. 174(1A), the comments of the Full Bench in Galintel remain relevant. In the present case, it is clear that the email sent to employees with the NOERR is not a “simple covering letter” as identified by the Full Bench in Peabody. The covering email purports to direct or require employees to nominate a bargaining representative. This is inconsistent with the rights of employees to simply rely on default representation or not to choose a representative at all. The right of an employee to rely on default representation is important because it allows an employee not to inform the employer that a Union is his or her default representative. In my view, the covering email issued with the NOERR is misleading and contradicts its terms.

[45] Accordingly, I am not satisfied that there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by employees. If the covering email alone is not sufficiently misleading to provide a basis for such a belief, when viewed in the context of the failure of the Applicant to comply with or meet the pre-approval requirements in ss.180(2) and (3) there are reasonable grounds for believing that the Agreement is not genuinely agreed to by employees.

Nominal expiry date

[46] The nominal expiry date for the Agreement is defined in clause 4.8 as being: “four (4) years after the Agreement’s operation date” at clause 4.8. However, clause 4.7 of the Agreement defines operation date as “seven (7) days after the date on which the Agreement is approved by the Fair Work Commission”.

[47] Section 186(5) of the Act provides as follows:

“186 When the FWC must approve an enterprise agreement—general requirements

Requirement for a nominal expiry date etc.

(5) The FWC must be satisfied that:

(a) the agreement specifies a date as its nominal expiry date; and

(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.”

[48] The effect of ss.186(5)(a) and (b) is that the Commission must be satisfied that the Agreement specifies a date as its nominal expiry date, which is not more than 4 years after the day on which the FWC approves the agreement.

[49] If the Commission were to approve the Agreement, clauses 4.7 and 4.8 of the Agreement operate so that the Agreement would have a nominal expiry date of 4 years and 7 days from the day on which the Commission approved it. Accordingly, I cannot be satisfied that the agreement specifies a date as its nominal expiry date and that the date will not be more than 4 years after the day on which the FWC approves the agreement.

BOOT

[50] The CFMEU submitted that the Commission cannot be satisfied that the Agreement passes the BOOT. The CFMEU acknowledged that it was only performing the BOOT in relation to the Black Coal Mining Industry Award (the Award).

[51] According to the CFMEU there are no provisions of the Agreement that would result in an employee being better off and in fact a number of provisions of the Agreement would result in detriment to employees. The provisions said to result in the Agreement failing the BOOT can be summarised as follows:

● There is no provision in the Award for “fixed term or fixed task” employment whereas the Agreement provides for this, resulting in detriment to employees in terms of job security;
● The Agreement provides for abandonment of employment whereas the Award does not;
● The Agreement provides for a 6 month probation period whereas the Award does not;
● The Agreement provides that where the Award provides for casual conversion the employee will not be entitled to the benefit of that clause but will received a 1% loading instead (although the CFMEU submitted that this is of no benefit to employees employed within the Black Coal Mining Industry because there is no casual conversion clause in the Award);
● The Agreement provides for casual employment whereas the Award does not;
● The Agreement provides for broader ordinary hours of work than are provided for in the Award;
● The disputes procedure in the Agreement provides for representation by a “workplace representative” which appears to limit representation to another employee in the workplace;
● The Agreement provides for remuneration under the Award and anything in excess is at the sole discretion of the Applicant.

[52] The Applicant submitted that the Agreement does pass the BOOT and that the application of the BOOT does not require a line by line comparison with the Modern Award. The Applicant quoted the Full Bench in NTEIU where it was stated:

“The test, as the name implies, requires an assessment of the overall benefit to an employee employed under an enterprise agreement as compared to the relevant award.  This consideration does not require an assessment of the circumstances of each individual employee but, as s.193(7) allows, “... if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant award applied to that class , FWA is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee”.” 11

[53] The Applicant is a new labour hire company offering employment in a number of industries. The flexibility and efficiency it requires to meet its clients’ demands means that the Agreement must also be specifically structured to permit the flexibility and efficiency. The ability of the Applicant to pay at market rate to attract and retain employees is an essential feature. Market rates between the various industries in which the Applicant operates are different.

[54] In the event that the Commission is not satisfied that the Agreement passes the BOOT, the Applicant submitted that the Agreement may still be approved by the provision of undertakings to meet the specific concerns of the Commission.

[55] In response to the specific matters raised by the CFMEU, the Applicant submitted:

“A The provision to engage an employee on a “fixed term” or Fixed tasks basis” does not lessen an employee’s job security because an employer has this right whether it is expressed in an award or not. We are aware of a number of Agreements where the CFMEU is a party to in the Black Coal Mining Industry that includes similar provisions.

B Where SRSW offers an assignment to an Employee, the letter of the Assignment will be read in conjunction with the Agreement and will set out the remuneration, initial hours of work, position title, applicable Relevant Award and a guide to the duration of the Assignment. The employee is then free to choose whether they accept the Assignment or not.

C A provision to include “abandonment of employment” provides certainty to the employee and employer regarding what constitutes “abandonment of employment”. It is a reasonable provision to include in an agreement. It certainly does not disadvantage an employee whether a similar provision is included in an award or not. It provides a process that the employer must follow before any decisions are made that an employee has abandoned their employment. Whether the provision is expressed in an agreement or not, it is a circumstance that can arise where an employee is absent from work without a reasonable excuse for an unreasonable period. . We are aware of a number of Agreements where the CFMEU is a party to in the Black Coal Mining Industry that includes similar provisions.

D The inclusion of a probationary period of 6 months does not disadvantage an employee because there is no expressed term in an award or agreement, an employer has a right to engage a new employee on a probationary employment. The purpose of the probationary period is to assess if the employee is suitable for the role and business. . We are aware of a number of Agreements where the CFMEU is a party to in the Black Coal Mining Industry that includes similar provisions.

E The casual engagement is necessary for the efficient operation of a labour hirer company. Under the Agreement a casual employee will be paid 25% calculated on the base rate. Other than the Black Coal Mining Industry award, the other reference award contains a provision for casual engagement. If the applicable modern award provides a casual conversation, it has been agreed that by the Company paying an additional one percent on top of the 25% loading, will offset the requirement, if any, to offer part-time or full-time work. This additional 1% payment is beneficial to an employee when under the award there is no such payment and the offer of casual conversion is predicated on the business operation.

F The hours of work clause does not disadvantage an employee compared to an employee covered by the Award. The issue that the CFMEU raises about the working of the 12 hour shift is by agreement, also applies under this agreement. Clause 10 of the Agreement requires the Employer to provide information regarding the Assignment including working shifts. If the employee does not agree to the offer which may include a 12 hour shift then the employee will not accept the offer. We are aware of a number of Agreements where the CFMEU is a party to in the Black Coal Mining Industry that includes similar provisions.

G Under the Dispute Settlement clause of the Agreement, we would contend that the employee is not restricted in being represented. However, if the Commission believes that this issue needs to be clarified by the Employer, then we would not hesitate to provide an Undertaking.”

[56] The Applicant submitted that the terms of the Agreement are not dissimilar to the terms of other Agreements approved by the Commission, subject to undertakings.

[57] Given the other issues I have identified above with respect to pre-approval steps and failure to meet the requirements of the Act necessary for a conclusion that the Agreement has been genuinely agreed to by relevant employees, I do not propose to make detailed findings in relation to whether the Agreement passes the BOOT. It is sufficient to note a number of matters which in my view prima facie lead to a conclusion that the Agreement does not pass the BOOT.

[58] By virtue of clause 6.1 of the Agreement, a number of Awards as set out above are incorporated. Clause 6.2 of the Agreement provides that: “The relevant Modern Award is to be read and applied in conjunction with the terms and conditions in this Agreement. To the extent that there is any inconsistency, the Agreement shall prevail.” Clause 9.3 of the Agreement provides that employees can be engaged on a full time, part time or casual basis on either a base hourly rate or an all-inclusive rate as referred to in clause 13.3 of the Agreement. By virtue of clause 10 of the Agreement employees are offered assignments by letter which is required to include details of matters such as remuneration and hours of work.

[59] Clause 12 of the Agreement deals with hours of work. That clause is in the following terms:

“12. HOURS OF WORK

12.1. The Company and Employees covered by this Agreement commit to:
12.1.1. flexibility in any way that ordinary hours are organised and worked to meet a Client’s (sic) operational requirements;
12.1.2. working reasonable additional overtime;
12.1.3. working shift work as required;
12.1.4. providing work coverage if required on a continuous roster basis;
12.1.5. be at the crew pre-start meeting each day at the specified start time; and
12.1.6. remain at their workplace until their designated finishing time.
12.2. The Company may implement any form of ordinary time rosters (with overtime to be determined within those roster) which are required to meet the needs of the Client including 12 hour shifts.
12.3. Operational requirements or other circumstances may arise where different methods of working ordinary hours may be required to be implemented for an Employee or group of Employees.
12.4. Employees will be advised of the working hours arrangements expected of them prior to commencing and Assignment.
12.5. On a special needs basis and by agreement in writing between Employee(s) within a particular work group and the Company, the span of hours may be varied.”

[60] Clause 13 deals with wages and simply provides that:

“13. REMUNERATION

13.1. The rates of pay, terms and conditions in this Agreement represent the minimum that will be paid to Employees. The Company will assess the market conditions and may pay Employees a higher rate of pay or more attractive terms where it is determined by the Company, at its sole discretion. Given the nature of labour hire, any increase above the minimums may vary from Assignment to Assignment and will be entirely at the discretion of the Company.
13.2. Details of the payment associated with each Assignment will be advised to you prior to your commencement.
13.3. In some situations the Assignment may provide for an all-inclusive rate in satisfaction of any and/or all entitlements, terms, conditions, loadings, penalties and allowances which might otherwise apply to you under the Award or this Agreement. This may also include flat or rolled up hourly rates or may include the payment of an annualised salary on a weekly or fortnightly basis. The total payment to you on each Assignment will be better than you would have received under this Agreement or Relevant Modern Award for the work performed.”

[61] The Agreement contains no rates of pay, allowances or other monetary entitlements. It contains no parameters with respect to hours of work such as maximum or minimum ordinary hours over a defined period, work cycles, rosters, shift allowances or penalty payments for weekends, public holidays or work outside ordinary hours.

[62] Arguably clause 12 of the Agreement purports to allow arrangements with respect to all of these matters to be agreed between the employer and the employee and such arrangements would override the terms of any Modern Award that would otherwise apply to employees with respect to the matters set out above.

[63] Such provisions would undoubtedly provide flexibility for the employer. However, there is no provision in the Agreement that would entitle employees to be paid any more than the minimum rates in the Award. There is no benchmark for higher rates of pay to be calculated so that employees would be paid at a rate which would result in them being better off overall under the Agreement than they would be for working the same hours under the relevant Modern Award.

[64] At best, employees would be paid the same rate they would be paid if they were covered by the relevant Modern Award. In short, there is no basis upon which it could be said that employees are better off overall under the Agreement than they would be if the relevant Modern Award applied to them. To the contrary, employees would arguably be better off overall if the relevant Modern Award applied to them instead of the Agreement.

[65] The Modern Awards referred to in the Agreement, prescribe clearly defined parameters with respect to hours of work including ordinary hours, overtime hours, maximum cycles over which those hours can be worked and averaged and other related terms and conditions of employment.

[66] There is no general term in the Agreement to require employees working arrangements agreed to under clause 12 of the Agreement to be paid more than they would be entitled to be paid for working the same hours under the relevant Modern Award. There are no apparent benefits in the Agreement to offset the removal of Award provisions with respect to hours of work and related matters.

Conclusion

[67] The Commission must approve an enterprise agreement where an application is made under s.185 and the requirements set out in ss.186 and 187 are met. For the reasons set out above I am not satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement. I am also not satisfied that the Agreement passes the BOOT.

[68] Given that I am not satisfied that the Agreement has been genuinely agreed to by employees on the basis of non-compliance with ss.188(a)(i) and/or (3) the Agreement cannot be approved. I note that had I otherwise concluded that the pre-approval requirements had been complied with I would have provided the Applicant with an opportunity to remedy the BOOT matters that have been identified. However, the deficiencies in the pre-approval process cannot be cured by an undertaking.

[69] The application for approval is dismissed and an order to that effect will issue with this Decision.

DEPUTY PRESIDENT

 1   [2010] FWAFB 4602.

 2 Ibid at [43].

 3   [2011] FWAFB 5163.

 4 Ibid at [24].

 5 Ibid at [24].

 6   Ibid at [33]

 7   [2014] FWCFB 2042.

 8 Ibid at [70].

 9   [2011] FWAFB 6772 at [43].

 10 Ibid at [39].

 11   National Tertiary Education Industry Union v University of New South Wales [2011] FWAFB 5163 at [46].

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