State Security & Protective Services (Aust) Pty Ltd

[2016] FWC 3296

[2016] FWC 3296

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

State Security & Protective Services (Aust) Pty Ltd
(AG2015/6611)

COMMISSIONER GREGORY MELBOURNE, 24 MAY 2016

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 2015-2018 (“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 approximately 20 employees all of whom are employed on a casual basis. Sub clause 12.1 also sets out the proposed wage rates, which provide for a single rate of pay for work on Monday – Friday, and a single rate of pay for all work performed on Saturday and Sunday. The Agreement also indicates that these wage rates specified 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, 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 following matters. Firstly, it was noted that the casual rates proposed to be provided for work on Monday – Friday are approximately 4% more than the casual rates that would apply for work performed during the day under the Security Services Industry Award 2010, however, they are significantly less than the casual rates that apply for work performed in the evenings on Monday – Friday under the Award.

[4] Secondly, the casual rates in the Agreement for work performed at the weekends are all significantly below the rates that would apply for that work under the Award. It was noted that this applies in particular for work performed on Sunday. In addition, it was noted that the Agreement does not appear to provide for any overtime entitlement for casual employees.

[5] The Applicant provided a response to that correspondence indicating it was endeavouring to establish an Agreement that would enable it to be competitive in the security industry in South Australia. It was also noted that an overtime entitlement was not included in the proposed Agreement because it is not viable to pay overtime in the industry. It also indicated it proposed to provide an undertaking which would provide for minimum and maximum shift lengths, and also provide for hours to be worked on the basis of an averaging arrangement

[6] The Commission then advised the Applicant, in response, that it continued to have concerns about satisfaction with the requirements of the “better off overall” test. It indicated it was concerned, in particular, about the position of an employee who was only rostered to work at weekends or in the evenings. It also indicated it was difficult to see how the test could be met in those circumstances. The Applicant was given the option of having the matter set down for hearing to enable further submissions and evidence to be provided, and it was then listed for hearing after the Applicant decided it wanted to take up this option.

[7] The Applicant was represented in those proceedings by Ms Sandy Nekic, the Customer Service Manager at State Security, and Mr Ashley Drage, a Security Officer with State Security.

[8] The Applicant indicated in these proceedings that other agreements containing similar provisions had been approved in the past. It also indicated in response to a question from the Commission that the hours of work that could be performed by the casual employees to be covered by the proposed Agreement fluctuated and could, for example, on some occasions involve up to 40 hours per week being worked, but on other occasions involve only 5 – 10 hours each week.

[9] It also indicated that some employees work only at the weekends or in the afternoon/evening primarily because this suits their lifestyle. It was also indicated that the employees are primarily employed at the Grade 1 classification.

[10] The Applicant also indicated it is involved in a very competitive industry in which some businesses do not appear to comply with the applicable arrangements in regard to rates of pay and conditions, and the proposed Agreement is intended to enable the business to be able to compete in that environment.

Consideration

[11] I am aware from previous dealings with businesses operating in the Security Industry that the industry is very competitive. It also 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. This appears to be the case, in particular, in regard to the additional penalty rate entitlements that apply for work performed at the weekends and in the evenings, when many of these businesses are being asked to provide security services.

[12] Some businesses also appear to enter into contracts to supply security services, but then enter into further sub contract arrangements for the supply of labour to service those contracts, which pay little regard to the applicable employment obligations.

[13] These circumstances obviously make it very difficult for those businesses who are trying to maintain a competitive position in the industry, and 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.

[14] However, leaving aside these considerations, in dealing with an application for approval of an enterprise agreement s.186(2) of the Act requires the Commission to be satisfied that the Agreement passes the “better off overall” test. Section 193 continues to state:

“(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.” 1

[15] As indicated, the proposed Agreement intends to provide a single rate of pay at each classification level for work performed 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.” 2

[16] The rates proposed in the Agreement are as follows 3:

Monday – Friday	Sat. & Sunday
Grade 1	$25.00	$26.50
Grade 2	$26.00	$28.00
Grade 3	$27.50	$29.50
Grade 4	$30.00	$32.00
Grade 5	$31.50	$33.50

[17] The rates set out above that are contained in the Agreement are generally between 2% and 15% above the rates contained in the Security Services Industry Award 2010, although at the Grade 1 level, where the Applicant’s submissions indicate most employees are classified, the difference between the Agreement and Award rates is only between 2 and 3 per cent.

[18] When these rates are compared with the rates contained in Security Services Industry Award 2010 they are significantly less than the Award rates for work performed in the evenings and on Saturday and Sunday. Those hourly Award rates for casual employees are as follows:

For work performed between 6 p.m. and 6 a.m. – Monday to Friday

Grade 1 – $28.48

Grade 2 – $29.30

Grade 3 – $29.78

Grade 4 – $30.29

Grade 5 – $31.27

(It should also be noted that a higher penalty rate also applies in the Award for employees who are permanently rostered to work in the evenings.)

For work performed on Saturday

Grade 1 – $33.98

Grade 2 – $34.95

Grade 3 – $35.53

Grade 4 – $36.13

Grade 5 – $37.31

For work performed on Sunday

Grade 1 – $43.69

Grade 2 – $44.94

Grade 3 – $45.69

Grade 4 – $46.46

Grade 5 – $47.97

[19] These rates demonstrate the extent of the difference between the rates contained in the proposed Agreement and those in the Award for work performed in the evenings and at weekends. While the Applicant indicated in its submissions that many of its employees are rostered to work primarily across Monday to Friday and during daytime hours, it also indicated that some employees are rostered to work only at the weekends or in the evening.

[20] These comparisons and the circumstances referred to indicate it is not possible to conclude that each of the employees to be covered by the proposed Agreement would be “better off overall” when compared to the terms and conditions contained in the Security Services Industry Award 2010. It follows, in conclusion, that I am not satisfied that the Agreement can be approved because its terms and conditions do not satisfy the requirements of the “better off overall test.”

[21] 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 subsequently voted on. Therefore, I do not consider it appropriate in these circumstances to explore the possibility of obtaining further undertakings from the Applicant.

[22] 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:

2016.

Melbourne and Adelaide (by telephone):

29 March.

 1   Fair Work Act 2009 (Cth) at s.193(1)

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

 3   Ibid at cl.12.1

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