Tab Limited

[2014] FWCA 7871

[2014] FWCA 7871

FAIR WORK COMMISSION

DECISION

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

Tab Limited
(AG2014/5587)

TABCORP NSW ON-COURSE ENTERPRISE AGREEMENT 2013

Retail industry
COMMISSIONER BULL	SYDNEY, 6 NOVEMBER 2014

Application for approval of the Tabcorp NSW On-Course Enterprise Agreement 2013. Issue of reference instrument for the purposes of the BOOT

[1] An application by Tab Limited (the Applicant) has been made for approval of an enterprise agreement known as the Tabcorp NSW On-Course Enterprise Agreement (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the FW Act). The Agreement is a single-enterprise agreement.

[2] The Applicant has completed the required Form F17. In respect of the Better off overall test (BOOT) at question 3.1, the Applicant listed the General Retail Industry Award 2010 (the Retail Award) as covering the Applicant and employees. At question 3.2, the Applicant nominates the Racecourse Totalisator (State) Award¹ (NAPSA)² as a pre-reform award or NAPSA that covered employees as at 31 December 2009, and states that it remains in force due to an application to have it modernised. 3

[3] In its application for approval of the Agreement, the Applicant has listed relating classifications under the Agreement in comparison with the Retail Award and the NAPSA. The Applicant has also outlined the terms and conditions of the Agreement which it says are more beneficial than the Retail Award and the NAPSA and the terms and conditions which are less beneficial. The Agreement incorporates 3% annual wage increases with a retrospective application subject to approval of the Agreement by the Fair Work Commission (the Commission). The Applicant states that they believe that the Agreement passes the BOOT.

[4] The Australian Municipal, Clerical and Services Union - (New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Branch (the ASU) was a bargaining representative for the Agreement and completed a Form F18 giving notice pursuant to s.183 that it wants to be covered by the Agreement. There were also a number of employees who were appointed bargaining representatives.

Background

[5] The ASU state that it does not support the approval of the Agreement on the ground that the incorrect reference instrument has been applied by the Applicant for the purposes of satisfying the BOOT. The ASU submits that the Retail Award is not the correct reference instrument and the correct reference instrument for the purposes of the BOOT is the Clerks Private Sector Award (the Clerks Award). It is argued that when utilising the Clerks Award as the reference instrument, the Agreement does not pass the BOOT.

[6] Telephone conferences were conducted by the Commission on 23 April, 14 May and 3 June 2014, where the parties discussed their positions. The parties were then requested to file and serve written submissions outlining their respective positions. The matter was the subject of a hearing before the Commission in Melbourne on 8 September 2014.

[7] The Commission granted leave for the Applicant to be represented by counsel under s.596(2)(a) of the FW Act. The granting of leave was not opposed by the ASU.

[8] Following the hearing, supplementary written submissions were filed by TAB Limited on 15 September 2015.

Submissions

[9] The ASU submitted that the work performed in the Agreement classifications does not fall within the classifications listed within the Retail Award and that the Agreement does not pass the BOOT when using the Clerks Award. A statement of Mr Jim Wallace, a Level 2 Operator was tendered by the ASU at the hearing.

[10] Ms Bernadette McLoughlin - General Manager, Phone and On-Course and Ms Anne Milne, a casual customer service operator, gave evidence on behalf of the Applicant. Approximately 85% of employees to be covered by the Agreement are employed as “on course” customer service operators. 4 Ms McLoughlin attested that 95% the duties of a Customer Service Operator were spent placing bets “as called by the customer.”

[11] The submissions of the Applicant were that each employee covered by the Agreement is required to perform sales functions namely the:

● receiving, arranging or making payment by any means;

● recording of sales; and

● provision of advice and assistance to customers

[12] It was submitted by TAB Limited that these tasks are not clerical in nature. It was further submitted that the core skills of an on-course customer service operator is to:

● sell and pay bets;

● maintain a cash float; and

● provide customer information and products

[13] During the Commission hearing counsel for the Applicant refined its argument in respect of the BOOT to arguing that the BOOT need only be applied against the NAPSA due to the operation of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act).

[14] The Applicant’s argument is based on the continued application of the NAPSA (the Racecourse Totalisator (State) Award) and its use as the reference instrument for the BOOT.

Is the NAPSA an “enterprise agreement” for the purposes of the Transitional Act?

[15] The two modern awards, the Retail Award and the Clerks Award at clauses 4.3 and 4.2 respectively exclude coverage of employees who are covered by a modern enterprise award or an enterprise agreement as defined by the Transitional Act. The clauses are shown below:

General Retail Industry Award 2010

“4.3 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.” (My emphasis)

Clerks-Private Sector Award 2010

“4.2 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.” (My emphasis)

[16] Various schedules of the Transitional Act are required to be examined to determine the validity of the Applicant’s argument. First is the need to define an “enterprise agreement” within the meaning of the Transitional Act.

[17] Schedule 2 of the Transitional Act provides the following definition of an “enterprise instrument”. At Part 1Interpretation of the Transitional Schedules it states:

“2 The Dictionary

enterprise instrument : see subitem 2(1) of Schedule 6.”

[18] Subitem 2(1) of Schedule 6 states:

“2 Enterprise instruments

2(1) Each of the following is an enterprise instrument:

(a) an enterprise award-based instrument;

(b) an enterprise preserved collective State agreement;

(c) a Division 2B enterprise award.” (My emphasis)

[19] An “award based transitional instrument” is defined in Schedule 3 of the Transitional Act -Continued Existence of Awards, Workplace Agreements and Certain Other WR Act Instruments. At Part 2 - Continued Existence of WR Act Instruments as Transitional Instruments. Item 2 defines NAPSAs as being award based transitional agreements.

“2 WR Act instruments that continue in existence as transitional instruments

(2)(5) Transitional instruments are classified as follows:

(a) awards, State reference transitional awards or common rules, and notional agreements preserving State awards, are award-based transitional instruments” (My emphasis)

[20] An award-based transitional instrument is defined to include an “enterprise award-based instrument”at subitem 2(2) of Schedule 6 Modern Enterprise Awards of the Transitional Act:

“2(2) An enterprise award-based instrument is an award-based transitional instrument, other than a State reference public sector transitional award, to which subitem (2A) or (2B) applies.

2(2A) ...

2(2B) This subitem applies to an award-based transitional instrument that is a notional agreement preserving State awards, if the notional agreement includes terms and conditions from a State award (within the meaning of the WR Act) that covered employees in:

(a) a single enterprise (or a part of a single enterprise) only; or

(b) one or more enterprises, if the employers all carried on similar business activities under the same franchise and were:

(i) franchisees of the same franchisor; or

(ii) related bodies corporate of the same franchisor; or

(iii) any combination of the above.” (My emphasis)

[21] A notional agreement preserving State awards (NAPSA) is defined in Schedule 8 Part 3 Notional Agreements Preserving State Awards of the Workplace Relations Act 1996 (WR Act) Subdivision A What is a Notional Agreement Preserving State Awards?

“Notional agreements preserving State awards

31 If, immediately before the reform commencement, the terms and conditions of employment of one or more employees in a single business or a part of a single business:

(a) were not determined under a State employment agreement; and

(b) were determined, in whole or in part, under a State award (the original State award ) or a State or Territory industrial law (the original State law);

a notional agreement preserving State awards is taken to come into operation on the reform commencement in respect of the business or that part of the business.”

[22] A State award is defined at s.4 Definitions of the WR Act:

"State award" means an award, order, decision or determination of a State industrial authority.”

[23] A State industrial authority is then defined to include:

“(a) a board or court of conciliation or arbitration, or tribunal, body, or persons, having authority under a State A to exercise any power of conciliation or arbitration in relation to industrial disputes within the limits of the State;”

[24] The State Award (NAPSA), in this case is the Racecourse Totalisator (State) Award which is an award of the Industrial Relations Commission of New South Wales 5 (NSWIRC), which is said to be an enterprise award by the NWSIRC as per clause 44C of Schedule 4 of the Industrial Relations Act 1996 (NSW).6

[25] It is submitted that the NAPSA Racecourse Totalisator (State) Award is an “enterprise award based instrument” as it is award-based transitional instrument as per 2(2) and 2(2B) above.

[26] Subitem 2(2) of Schedule 6 and Item 31 of Schedule 8 of the WR Act requires an award-based transitional instrument that is a notional agreement preserving State awards (NAPSA) to cover employees in a single business or part of a single business. The Transitional Act at Item 2 of Schedule 6 requires a NAPSA to cover employees in a single enterprise or a part of a single enterprise. 7

[27] It is then necessary to determine the meaning of “a single enterprise (or a part of a single enterprise).” This definition is found at Schedule 6 of the Transitional Act:

“3 Meaning of single enterprise and part of a single enterprise

3(1) A single enterprise is:

(a) a business, project or undertaking that is carried on by an employer; or

....

3(4) A part of a single enterprise includes, for example:

(a) a geographically distinct part of the single enterprise; or

(b) a distinct operational or organisational unit within the single enterprise.”

[28] It is submitted by TAB Limited that the State Award (NAPSA) covers a single enterprise, or part of a single enterprise. While this is not readily apparent from a reading of the State award, TAB Limited submits that this is the practical effect. The State award at clause 18 makes reference to its coverage at any horse, trotting and greyhound courses within New South Wales where either the TAB is operating or Intercity link wagering is available.

[29] The State award doesn’t directly define the reference to “TAB” however it appears clear by reference to the clause 15 Grievance Procedure and clause 12 Shortages where TAB Limited is named in substitution for the employer that TAB Limited are the employer. This position is confirmed by the evidence of Ms McLoughlin that TAB Limited has an exclusive licence to operate TAB and wagering at New South Wales racecourses and is the only body to do so at racecourses in New South Wales. 8 I am satisfied that the State award covers employees in a single enterprise or part of a single enterprise.

Applying the BOOT

[30] Schedule 7 of the Transitional Act is titled Enterprise Agreements and Workplace Determinations made under the FW Act. Part 4 of Schedule 7 which is titled Transitional Provisions to Apply the Better Off Overall Test after end of Bridging Period if Award Modernisation not yet Completed provides for the application of the BOOT for approval of enterprise agreements that cover unmodernised awards. In particular Item 18(1) states:

“18(1) This item applies in relation to an enterprise agreement made after the end of the bridging period if one or more of the employees covered by the agreement is an unmodernised award covered employee.”

[31] The bridging period referred to above is defined in Schedule 2—Overarching Schedule about Transitional Matters of the Transitional Act:

“2 The dictionary

bridging period means the period:

(a) starting on the WR Act repeal day; and

(b) ending immediately before the FW (safety net provisions) commencement day”

[32] The FW Safety Net provisions (the National Employment Standards and Modern Awards and Minimum Wages) commenced on 1 January 2010.

[33] Item 18(2) of Schedule 7 explains how the BOOT is to be applied to enterprise agreements for employees not covered by a modern award:

“18(2) Despite section 193 of the FW Act, if the enterprise agreement is not a greenfields agreement, the agreement passes the better off overall test under that section only if:

(a) the FWC is satisfied as referred to in subsection (1) of that section in relation to the agreement; and

(b) the FWC is satisfied, as at the test time, that each unmodernised award covered employee, and each prospective unmodernised award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant award-based transitional instrument and transitional APCS applied to the employee.” (My emphasis)

[34] A “prospective unmodernised award covered employee” is defined at Item 20 Definitions ofSchedule 7 in the following manner:

“prospective unmodernised award covered employee, for an enterprise agreement, means a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by an award-based transitional instrument (the relevant award-based transitional instrument) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer”

[35] The NAPSA in this application, the Racecourse Totalisator (State) Award, ceases to operate on 31 December 2013 unless an application has been made to the Fair Work Commission (the Commission) for the making of a modern enterprise award to replace the NAPSA. This is determined by reference to the Transitional Act at Item 9 of Schedule 6:

“9 Variation and termination of certain instruments to take account of enterprise instrument modernisation process

9(4) If, by the end of the period specified in paragraph 4(3)(b), no application under item 4 or 5 has been made in relation to an enterprise instrument, the instrument terminates at the end of that period.”

[36] Sub item 4(3)(b) specifies 31 December 2013, as the end period, however on 24 December 2013, the Australian Municipal, Administrative, Clerical and Services Union made application to the Commission for the making of a modern enterprise award to replace the State award, being the application in matter EM2013/102. 9 Therefore an extension to the otherwise termination of the NAPSA on 31 December 2013 operates.

[37] It follows from the above that the NAPSA is an enterprise instrument for the purposes of Schedule 6 subitem 2(1)(a) of Transitional Act.

[38] The Commission is required to assess all enterprise agreements approval applications against the BOOT.

[39] On the basis of the reasoning above, the employees covered by the Agreement are prospective unmodernised award covered employees which results in the BOOT being applied against the Racecourse Totalisator (State) Award (the State Award) and the transitional Australian Pay and Conditions Standard.

[40] Both parties agree that if the Racecourse Totalisator (State) Award is applied as the reference instrument for the BOOT the Agreement passes the BOOT. The initial reference to the Retail Award for the purposes of the BOOT by TAB Limited was not argued in their final submissions. 10 I find that the Agreement passes the BOOT as per Schedule 7 of the Transitional Act.

Undertaking

[41] TAB Limited have provided an undertaking to increase the wage rates under the Agreement for Level 2 and 3 employees for the period 1 July 2014 to 31 December 2014, this follows the Commission’s 2014 annual wage review decision. This undertaking is taken to be a term of the Agreement. A copy of the undertaking is attached at Annexure A.

Amendment of Agreement

[42] Tab Limited has advised that the reference to its name in the Agreement at clauses 4 and 5 is incorrect. The references to “Tabcorp Limited” should read “TAB Limited”. Pursuant to the Commission’s powers under s.586 of the FW Act to correct documents in matters before it, the Agreement is amended to make the necessary changes to reflect the employer’s correct legal identity.

[43] The Australian Municipal, Administrative, Clerical and Services Union being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers this organisation.

[44] The Agreement will cover employees working at TAB Limited on a casual basis in the Applicant’s on-course gaming business in New South Wales in any of the classifications in the Agreement. I am satisfied that pursuant to s.186(3A) of the Act, this group is fairly chosen as being geographically or organisationally distinct.

[45] I am satisfied that each of the requirements of ss.187 and 188 of the Act as are relevant to the application for approval have been met.

[46] The Agreement is approved. In accordance with section 54(1), the Agreement will operate from 13 November 2014. The nominal expiry date of the Agreement is 1 January 2017.

COMMISSIONER

Appearances:

Mr Marc Felman, Counsel for the Applicant.

Mr Justin Cooney for Australian Municipal, Clerical and Services Union - (New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Branch

Hearing details:

2014.

Melbourne:

8 September

15 September 2014 supplementary written submissions of Applicant

ANNEXURE A

1 AN120451 A State award made by the New South Wales Industrial Relations Commission

2 Notional agreement preserving state awards

 3   Made in the Fair Work Commission on 24 December 2013 by the Australian Municipal, Clerical and Services Union

 4   B McLoughlin witness statement 17 June 2014 Exhibit A1 at 15

 5   See NSWIG Vol. 346 Pg. 501

 6   See NSWIRC website

 7   There is no relevant material difference in the definitions of single business and single enterprise

 8   Transcript PN56-61

 9   It is noted that via a statement of a Full Bench on 9 October 2014, the ASU and other parties have been invited to make written submissions on the validity of the application.

 10   See TAB Limited supplementary written submissions 15 September 2014

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