Stonestreets Coaches Pty Ltd

[2014] FWCA 7039

[2014] FWCA 7039

FAIR WORK COMMISSION

DECISION

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

Stonestreets Coaches Pty Ltd
(AG2014/1858)

STONESTREET'S COACHES PTY LTD - ENTERPRISE AGREEMENT 2014

Passenger vehicle transport (non rail) industry
DEPUTY PRESIDENT SAMS	SYDNEY, 13 OCTOBER 2014

Application for approval of the Stonestreet's Coaches Pty Ltd - Enterprise Agreement 2014 - whether the Agreement meets the Better Off Overall Test (BOOT) - National Employment Standards - inconsistencies with the Fair Work Act’s provisions - undertakings provided - Agreement meets the BOOT - no inconsistencies with the Act - Agreement approved with undertakings.

[1] Stonestreets Coaches Pty Ltd (the ‘applicant’) filed an application, pursuant to s 185 of the Fair Work Act 2009 (the ‘Act’) on 22 July, 2014. The application seeks the Fair Work Commission’s (the ‘Commission’) approval of a single enterprise agreement to be known as the Stonestreet’s Coaches Pty Ltd - Enterprise Agreement 2014 (the ‘Agreement’). The Agreement is to cover 253 employees engaged as Bus and Coach Drivers and Cleaners based at the applicant’s depots at a number of locations in Queensland, including Ipswich, Gladstone, Toowoomba, Dalby, Chinchilla and Roma. The Agreement does not cover clerical/administrative or mechanical employees. Pursuant to s 186(3), I am satisfied that the group of employees to be covered by the Agreement was fairly chosen.

[2] The Agreement was negotiated with the Transport Workers’ Union (Queensland) (the ‘Union’) and one non-Union Employee Bargaining Representative (EBR), Mr Anthony Ellison. The employees were provided with the last notice of representational rights on 25 March 2014, and voting for the Agreement’s approval was conducted at the various depots over 3 days between 9 and 11 July 2014, thereby satisfying s 181(2) of the Act.

[3] The vote for the approval of the Agreement was 131 employees in favour of approval (76.6%) and 40 against (23.4%). The application for approval of the Agreement was filed within the statutory time period of 14 days (s 185(3) of the Act).

[4] The application was listed for mention and directions on 8 August 2014 as a consequence of the Union filing of a F18 in which it disagreed with a number of answers given by Ms Natalie Hope, Human Resources Manager, in the applicant’s F17 statutory declaration accompanying the application.

[5] The issues raised by the Union primarily related to the Better Off Overall Test (‘BOOT’) but also included other matters in relation to the National Employment Standards (NES) and the Act generally, such as:

● whether the requirement to work two additional hours was reasonable;

● the incorrect calculation of termination payments;

● the provision of a fifth week of annual leave for regular shift workers;

● the possibility of drivers working 6 from 7 days contrary to fatigue management rules;

● restrictions on the right to take protected industrial action;

● withholding of termination payments until all of the employer’s property is returned;

● the default super fund having no My Super product; and

● the legality of certain deductions from wages.

[6] The BOOT issues raised in the context of a comparison to the Passenger Vehicle Transportation Award 2010 [MA000063] (the ‘PVTA’), included the following:

● Question 3.4 asks if there are any provisions which are more beneficial than the relevant reference instrument. It is claimed that rates of pay are up to 18.69% above the relevant modern award, however, the rates being compared are ‘loaded’ rates with ‘base rates’.

● It is claimed in the Statutory Declaration that work performed on a Saturday or Sunday and afterhours is paid at the after hours rates shown in Schedule 1. Whilst we acknowledge those rates are listed in Schedule 1, the Agreement has no provisions for those rates to be paid. Clause 37 provides for the Standard rate to be paid for the Standard Working Week (40 hours) and Clause 43 Additional Hours - states that all additional hours are paid at the Standard Rate. There is no spread of hours and work can be performed on any of seven days per week. There are therefore no circumstances where the ‘after hours’ and weekend rates listed in the Schedule would actually be paid.

● It is claimed that employees received 160 hours annual leave and this is more beneficial than the PVTA. However, under the Agreement employees work a minimum of 40 hours per week, but are not entitled to a rostered day off per month. One additional day annual leave, does not offset the lack of rostered days off and is therefore not more beneficial.

● There are a range of provisions which are less beneficial than the PVTA which are not listed in answer to Question 3.5 including:

n Clause 6.9 appears to allow for the ‘averaging’ of hours of work for part-time employees over 52 weeks. The PVTA only provides for averaging of hours over 28 days.

n Clause 13.5 Part Time Regular Driver provides for employment over 42 weeks for the year. The PVTA provides that agreement must be reached on the usual hours to be worked, the days which will be worked and commencing and finishing times and entitles the employee to payment for those hours and for overtime rates to apply for additional hours. The PVTA also requires payment for the agreed hours.

n Clause 13.6(d) provides for a minimum engagement of 3 hours per day. The PVTA provides for a minimum of 2 hours per engagement for casual bus drivers working broken shifts transporting school children (ie. 4 hours per day.)

n Clause 15 Medical Examinations allows the employer to direct an employee to undertake a medical assessment in their own time in any circumstances. Any such direction would need to be reasonable, that is, the employer would need to have a genuine concern on reasonable grounds that the employee cannot perform the inherent requirements of the job. Attending such an appointment in unpaid time is a potential BOOT issue.

n Additionally, the PVTA provides for the payment of an allowance to an employee who undertakes a medical examination for the purpose of obtaining a license, whereas the Agreement provides for the employee to pay for such examinations.

n Clause 22.3 allows for stand down without pay to ‘enable investigations’ involving allegations of serious misconduct. There is no time limit to any stand down without pay.

n Clause 29.1 provides for Junior Rates of Pay. The PVTA provides that where a junior aged 18 years or more is required to drive a vehicle and is in sole charge of the vehicle, they are to be paid the relevant adult rate for the work being performed.

n Clause 9.1 allows for the variation of the Agreement by consent of ‘both parties’. However, there are no safeguards or limitation to any such variations and no requirement of any variation to be approved by FWC. This provision precludes the conduct of the BOOT, that is, the Agreement could not be said to pass the BOOT with such a provision.

n Clause 37 Hours of Work provides for the averaging of hours over a 12 month period. Coupled with ordinary hours of up to 12 per day (and potentially more), Saturday and Sunday work, up to 46 hours at ordinary rates, it is likely the Agreement does not meet the BOOT.’

[7] At a hearing of the application on 8 August 2014, Mr J Sharpe representing the applicant, relied on extensive written reply submissions filed that day. I shall return to these submissions shortly. Further directions were issued for the Union to respond by 11 August 2014 and for the applicant to file a final written reply by the 12 August 2014. The Commission would thereafter determine the application ‘on the papers’.

CONSIDERATION

Issues resolved by undertakings

[8] The following undertakings were offered by the applicant and accepted by the Union as resolving its concerns with the following issues:

● Clause 23.4 shall now read “An employee who is paid wages in lieu of notice upon termination shall receive such wages calculated in accordance with section 117 (2) (b) of the Fair Work Act 2009 (Cth)”.

● Notwithstanding clause 29.1 where a junior employee aged 18 years or more is required to drive a passenger vehicle and is in sole charge of that vehicle, the employee will be paid the adult rate assigned to the class of driving work that the employee is required to perform.

● Notwithstanding clause 47.2, for the purposes of Division 6 of the NES, a shiftworker means an employee who is a seven day shiftworker and who is regularly rostered to work on Sundays and public holidays. Such shiftworker will be entitled to an additional week of annual leave as provided for in the NES.

[9] Pursuant to s 191 of the Act, these undertakings shall be taken to be terms of the Agreement and are annexed to this decision as Annexure A. I shall now deal seriatum with the extant issues which I apprehend were the only matters pressed by the Union in their reply submission of 11 August 2014.

Whether there was agreement with the Union of the Agreement’s terms

[10] Notwithstanding that the Union seeks to be covered by the Agreement and did not object to the Agreement being put to a vote of employees, it maintained, through its organiser Mr Bob Giddens, that it had not agreed to all of the terms and conditions in the draft Agreement.

[11] The applicant described this submission as ‘grossly misleading and disingenuous’. The applicant said that it could provide evidence that:

a) All bargaining meetings conducted were minuted.

b) Such minutes were endorsed and agreed to by all participants (including the TWU).

c) The minutes of the last meeting conducted on 11 June 2014 clearly records that all bargaining participants (including the TWU) had reached ‘agreement in principle’ on a proposed new agreement (inclusive of all of its terms and conditions) and that the proposed agreement would be presented to the workforce for voting.

d) Initially at the end of the last meeting some bargaining participants wanted to take the proposed new agreement out for ‘consultation’ and hold a further bargaining meeting. However it was in fact Mr Giddens who recommended that the agreement go out to voting rather than hold another bargaining meeting because the parties had reached ‘agreement in principle’ on the contents of the proposed new agreement. The applicant agreed to this approach recommended by the TWU.

[12] Obviously, the above disagreement is irrelevant to the statutory tests for approval of the Agreement. This argument does not go to process or the content of the Agreement and is perhaps an unfortunate reflection of the parties’ relationship. In any event, there is some force to the applicant’s submission that the concerns raised by the Union, after the approval of it by employees, seems to be an attempt by the Union to belatedly achieve what it could not achieve in bargaining. This would be an inappropriate misuse of the F18 and contrary to the objects of the Act in respect to bargaining. However, I intend to say no more about it.

Confusion over ‘Standard Rate’ and ‘After Hours Rates’

[13] The Union submitted that:

‘We again acknowledge that Schedule 1 refers to both Standard Rate and ‘After Hours’ Rate and that the definitions clause provides a definition of ‘After Hours’. However, Clause 37 of the Agreement provides that the Standard Rate will be paid for the Standard Working Week (40 hours) which is defined to include weekend work. Clause 43 Additional Hours states that all additional hours are paid at the Standard Rate. For clarity we suggest the following undertaking:

“Despite Clauses 37 and 43, all hours worked in accordance with the definition of “After Hours” in Clause 6.6 will be paid at the After Hours rate in Schedule 1 and not the Standard Rate.”

[14] The applicant responded as follows:

‘The TWU asserts that there is no spread of hours and no circumstances under which the ‘after hours’ rates listed in Schedule 1 to the Agreement would be paid. This claim is totally incorrect. Clause 6 - Definitions and Acronyms, clearly stipulates as follows:

“6.6 “After Hours” means all hours worked on a Saturday and Sunday also any hours worked on a Monday to Friday between midnight to 5.00am and 7.30pm to midnight”

The above provisions are contained within the ‘existing agreement’ (clause 7.6) and do not constitute a ‘relevant change in position’.

[15] In my view, there is no confusion over these provisions and no undertaking is required.

Averaging of Hours

[16] The Union put that:

‘For the purposes of the BOOT it is our view that hours can be averaged up to 152 hours on up to 20 days within a work cycle not exceeding 28 consecutive days under PVTA. Averaging hours over 12 months could therefore be a BOOT issue particularly where the Agreement provides for work over 42 weeks of the year and this matter should be subject to an undertaking that hours will be averaged over a maximum of 28 days.’

[17] The applicant responded as follows:

‘The TWU challenges the ability of an enterprise agreement to average hours of work over 52 weeks. As with paragraph 13 above, there is a long history of the FWC approving agreements with average hours over a 12 month period both within and outside of this industry.

Whether an averaging period occurs over a two week period, four week period, 12 month period, or anything in between, the only relevant consideration is whether employees will be better off overall.

The BOOT is to be applied on the basis of just that ‘better off overall’. The applicant submits that averaging hours over a 52 week period does not create a less beneficial circumstance - over a 52 week period employees will not work, on average, more than they’re required to by virtue of their employment contract.’

[18] There is abundant authority to support the applicant’s submission and I see no good reason to depart from that authority.

Varying the Agreement

[19] The Union submitted that:

‘Clause 9.1 allows for the parties to consent to varying the Agreement, without any safeguards and should be the subject of an undertaking that any such arrangements would leave employees better off overall, be subject to the flexibility provision or a formal variation to the Agreement pursuant to the Act.’

[20] The applicant submitted as follows:

‘The TWU raises issue with the ability of the parties to vary the Agreement at clause 9.1. The intention of the parties, including the TWU who agreed to this clause during bargaining, is that the Act must be complied with when seeking to vary the Agreement. Rather than fill the Agreement with copious amounts of legislative extracts, all parties to the negotiations (again, including the TWU) understand that to give effect to any variation, the relevant provisions of the Act must be complied with.’

[21] Irrespective of any Agreement provisions, an enterprise agreement can only be varied according to the provisions of the Act, namely ss 210 or 217. As any provision to vary the Agreement, contrary to the Act, would be rendered invalid, it is unnecessary to amend Clause 9.1 by way of an undertaking.

Stand downs during disciplinary investigation

[22] The Union submitted that:

‘Clause 22.3 allows for stand down without pay to enable investigations into allegations of serious misconduct, which the applicant has submitted would potentially take ‘weeks or months’ to complete. We would suggest either an undertaking that such stand down would be ‘with pay’ or there be a time limit on the period an employee would be stood down without pay, up to the over-Award margin provided for in the wage rates after factoring in other provisions the wage rates also compensate for. ‘

[23] In response the applicant said:

‘The TWU takes issue with the Agreement’s ability to stand down employees without pay to investigate an issue. Specifically, Mr Biagini comments that there is no time limit for which an employee can be stood down. The applicant is not required to provide a time limit. Moreover, it is nearly impossible to impose a standard time limit for all circumstances - some investigations may take weeks, some investigations may take months. In any event, the ability to stand down employees without pay is something authorised by s 524 of the Act. Further, the Act in no way limits what that time period may be.’

[24] In my view, the applicant’s submission above is legally and practically correct. No undertaking limiting the employer’s capacity to legally stand down an employee during an investigation is warranted.

Withholding termination payments

[25] The Union put that:

‘Clause 26.3 allows for the withholding of all payments due on termination until return of company property. Such entitlements could be substantial and include annual leave and long service leave accruals. There are no provisions in the Act which allow for the withholding of such termination payments. The TWU has not submitted that this prevents the Agreement from being approved. However, it is our view that an undertaking may be required in respect of this issue, rather than relying on an employee to be aware that the provision has no effect pursuant to Section 253 of the Act.’

[26] The applicant submitted that:

‘The TWU claims clause 26.3 (c) ‘could’ be contrary to the Act and ‘maybe’ an unlawful deduction. This exact same clause is contained within the ‘existing agreement’ (clause 31) as approved by the FWC and which does not constitute a relevant change in position.

Furthermore, the TWU fails to provide any details whatsoever to support their claim. The deduction is reasonable and lawful. If however the FWC deems this clause is in contravention of the Act then it should not prevent the Agreement from being approved. Rather, such clause would be deemed as having no effect pursuant to section 253 of the Act.’

[27] The applicant correctly submitted that if the provision contravened the Act, then it would be invalid in any event. Given this fact, there is no requirement for an undertaking on the matter.

[28] Finally, I note that a number of the Union’s concerns relate to matters which remain unchanged from the previous Agreement, as approved under the current statutory regime. In this respect, I note what Lawler VP said in the last sentence of para [96] of University of New South Wales re University of New South Wales (Professional Staff) Enterprise Agreement 2010 [2010] FWAA 9588:

‘In my view, it may also be relevant to consider the terms of any existing agreement and whether there is a relevant change of position when compared to that existing agreement.’

In my opinion, where the provisions of an agreement are identical to an existing agreement, approved under the same statutory tests, it may be presumed such provisions have been earlier found by the Commission to be in compliance with the Act.

[29] There are no further BOOT issues which would prevent the Commission from approving the Agreement. Given my conclusions on the above matters and considering the pre approval processes and the content of the Agreement, I am satisfied that all of the statutory requirements, in respect to the approval of this Agreement, have been met; specifically ss 180, 186, 187, 188, 190, 191, 192 and 193.

[30] Pursuant to s 201(2) of the Act, the Union shall be covered by the Agreement. Pursuant to s 54 of the Act, the Stonestreet’s Coaches Pty Ltd - Enterprise Agreement 2014 shall operate from 20 October 2014 and have a nominal expiry date of 19 October 2018.

DEPUTY PRESIDENT

Final written submissions:

Applicant - 8, 12 August 2014

Transport Workers’ Union of Australia - 11 August 2014

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