State Security & Protective Services (Aust) Pty Ltd

[2017] FWC 3810

[2017] FWC 3810

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

State Security & Protective Services (Aust) Pty Ltd
(AG2016/4942)

COMMISSIONER GREGORY MELBOURNE, 20 JULY 2017

Application for approval of the State Security and Protective Services (Australia) Pty Ltd (Casual Employees) Enterprise Agreement 2015-2018.

[1] An application has been made for approval of an Enterprise Agreement known as the State Security and Protective Services (Australia) Pty Ltd Casual Employees Enterprise Agreement. 2016 - 2019 (“the Agreement”). The application is made under s.185 of the Fair Work Act 2009 (“the Act”) by State Security & Protective Services (Aust) Pty Ltd (“ State Security”). It is a single enterprise agreement.

[2] The application and the F17 Employer’s Declaration indicate that the Agreement is intended to cover 21 employees who are all employed on a casual basis. Sub clause 12.1 of the Agreement sets out the proposed wage rates, which provide for a single rate of pay at each classification level for work performed at any time on Monday – Friday, and a single rate of pay at each classification level for all work performed on Saturday and Sunday. The Agreement also indicates that these wage rates are inclusive of all allowances, penalties and loadings that would otherwise apply under the terms and conditions contained in the underlying Security Services Industry Award 2010 1, except for work on public holidays, which is to be paid at double time.

[3] After reviewing the application, and the terms and conditions contained in the proposed Agreement, the Commission wrote to the Applicant seeking clarification about the proposed wage rates, in particular. It was noted in that correspondence that while the rates proposed for casual employees, who would be covered by the Agreement, are in excess of the rates contained in the underlying Security Services Industry Award 2010 for work performed between 6 a.m. and 6 p.m. on Monday to Friday, they are less than the rates contained in the Award for casual employees who perform work in the evenings after 6 p.m. They were also significantly less than the rates that apply for work performed at the weekends when rates of time and a half and double time apply under the Award.

[4] It was also noted that the additional amounts that are provided for work performed on weekdays are not sufficient to compensate for the shortfalls in other areas.

[5] It was also noted that the Agreement does not provide for any overtime entitlements in circumstances where casual employees can be entitled to overtime under the Award. The Award also contains various allowances that are not provided for under the terms of the proposed Agreement. In addition, it appeared that some employees could also receive lower rates for work on public holidays under the Agreement.

[6] State Security subsequently requested that the application be set down for hearing. Ms Sandy Nekic, State Security’s Client Services Manager appeared on behalf the Applicant. Mr Ashley Drage, who is a Security Supervisor with State Security, appeared as an Employee Bargaining Representative. Both appeared by telephone from Adelaide.

[7] State Security indicated in those proceedings that it was endeavouring to maintain a competitive position in the industry and was losing work because it was not able to match the wage rates that were apparently being paid by other competitor businesses. It also indicated that it provides a range of security services, including work at shopping centres, which is typically based around rosters on Monday to Friday, but it also provides security services at different events which typically involve work at the weekends.

Consideration

[8] I have indicated previously that I am aware from dealings with businesses operating in the security industry that the industry is very competitive. It appears as a consequence that many businesses look to develop enterprise agreements as a means of putting in place a set of arrangements that might enable employment costs to be reduced, compared to the arrangements that would otherwise apply under the terms and conditions contained in the Security Services Industry Award 2010.

[9] I have also indicated that it appears to be an industry sector that is impacted by the existence of some businesses that have little regard for their legal obligations in terms of the entitlements to be provided to their employees. These circumstances obviously make it very difficult for those businesses that are looking to maintain a competitive position in the industry, but are also endeavouring to comply with their employment obligations, which are ultimately underpinned by the terms and conditions contained in the Security Services Industry Award 2010. However, leaving these considerations to one side, in dealing with the present application I am required to have regard to the relevant statutory requirements.

[10] Section 186(1) of the Act requires that the Commission must approve an Agreement if it is satisfied that each of the various requirements in ss.186 and 187 are met. Section 186(2)(d) requires, in particular, that the Commission must be satisfied that the Agreement passes the “better off overall test.” The test is set out 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.” 2

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

[12] The recent Full Bench decision in Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi Lo Pty Ltd T/A Coles and Bi Lo 3 also makes 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. The Full Bench made this clear in the following terms:

“However the application of the BOOT require satisfaction, as at the test time, that each award covered employee and each prospective employee would be better off overall under the agreement.”

[13] Therefore, the Commission is now required to determine whether the terms and conditions contained in the proposed Agreement satisfy the requirements of this test when compared to those in the underlying Security Services Industry Award.

[14] As indicated, the proposed Agreement intends to provide a single rate of pay at each classification level for work performed at any time on Monday – Friday. It also proposes that a single rate of pay be provided at each classification level for work performed on Saturday and Sunday. Clause 12 of the Agreement indicates that these wage rates are to be paid on the basis that they are inclusive of all allowances, penalties and loadings, and are payable for all hours worked, apart from gazetted public holidays “where a rate of double the nominal rate will be paid.” 4

[15] The rates proposed in the Agreement are as follows:

Classification	Monday – Friday	Saturday and Sunday
Grade 1	$26.00	$29.00
Grade 2	$27.50	$29.50
Grade 3	$28.45	$30.50
Grade 4	$30.00	$33.00
Grade 5	$32.00	$35.00

[16] These rates set out for work on Monday – Friday are more than the rates that would apply to a casual employee under the Award for work performed during the day span from 6 a.m. to 6 p.m. on those days. However, in all other circumstances they are less than the rates that apply under the Award for work performed, for example, in the evenings after 6 p.m. and at any time at the weekends, when rates of time and a half and double time apply. In addition, there is no provision for a casual employee to be entitled to overtime payments, whereas this entitlement exists under the Award.

[17] Therefore, in circumstances where an employee is working predominantly in the evenings, or where work at the weekend is involved, it is not possible to be satisfied that each of those employees would be “better off overall” under the Agreement when compared with the terms and conditions contained in the Security Services Industry Award. It follows, in conclusion, that I am not satisfied that the Agreement can be approved.

[18] Having come to this conclusion I have also given consideration to whether further undertakings could be sought from the Applicant in an endeavour to deal with these deficiencies. However, I am satisfied that any such undertakings would involve changes that would represent an outcome that is significantly different from what was in contemplation by the parties when the Agreement was made and voted on. Therefore, I do not consider it appropriate in these circumstances to explore the possibility of obtaining undertakings from the Applicant.

[19] As indicated, I am not satisfied, in conclusion, that the terms and conditions contained in the proposed Agreement satisfy the requirements of the “better off overall test.” The application is accordingly dismissed.

COMMISSIONER

Appearances:

Ms Sandy Nekic and Mr Ashley Drage appeared on behalf of the Applicant.

Hearing details:

Melbourne and Adelaide (by telephone).

 1   MA000016

 2   Fair Work Act 2009 (Cth) s 193.

 3   [2016] FWCFB 2887

 4   Proposed State Security and Protective Services (Australia) Pty Ltd (Casual Employees) Enterprise Agreement 2015-2018 at cl.12.3

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