Tabcorp Assets Pty Ltd
[2014] FWCA 7575
•24 OCTOBER 2014
| [2014] FWCA 7575 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Tabcorp Assets Pty Ltd
(AG2014/8513)
TABCORP GRANVILLE ACCOUNT SALES OPERATORS ENTERPRISE AGREEMENT 2013
Retail industry | |
COMMISSIONER BULL | SYDNEY, 24 OCTOBER 2014 |
Application for approval of the Tabcorp Granville Account Sales Operators Enterprise Agreement 2013.
[1] An application has been made for approval of an enterprise agreement known as the Tabcorp Granville Account Sales Operators Enterprise Agreement 2013 (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.
Employers to be covered by the Agreement
[2] In the Form F16 - Application for approval of an enterprise agreement, which was filed with the application, it is noted that there are two employers that will be covered by the Agreement. The applicant, Tabcorp Assets Pty Ltd is the first employer and Tab Limited the second employer (collectively referred to as Tabcorp).
[3] Section 172(2) of the FW Act provides that an employer, or two or more employers that are single interest employers, may make an enterprise agreement (a single-enterprise agreement). Section 172(5) states that two or more employers are single interest employers where certain criteria are met:
“Single interest employees
172(5) Two or more employers are single interest employers if:
(a) The employers are engaged in a joint venture or common enterprise; or
(b) The employers are related bodies corporate; or
(c) The employers are specified in a single interest employer authorisation that is in operation in relation to the proposed enterprise agreement concerned.”
[4] In respect of what is meant by a common enterprise, Mason J in Australian Softwood Forests Pty Ltd v Attorney-General (NSW); Ex rel Corporate Affairs Commission (1981) 1, at paragraph 133, stated:
“An enterprise may be described as common if it consists of two or more closely connected operations on the footing that one part is to be carried out by A and the other by B, each deriving a separate profit from what he does, even though there is no pooling or sharing of receipts of profits. It will be enough that the two operations constituting the enterprise contribute to the overall purpose that unites them. There is then an enterprise common to both participants and, accordingly, a common enterprise.”
[5] The applicant’s representative has advised that the employers are related bodies corporate and engaged in a common enterprise. 2 The employers engage casual employees performing account sales functions with the same duties and responsibilities within the same classifications at the same address in furtherance of the business of the Tabcorp group of companies. As such, I am satisfied that the employers are single interest employers pursuant to s.172(5)(a)(b) of the FW Act, in that they are employers engaged in a common enterprise and or are related bodies corporate.
Better Off Overall Test
[6] The Commission is required to assess all applications for the approval of an enterprise agreement against a better off overall test (BOOT). An issue in this application for approval, is what reference instrument is to be used in applying the BOOT.
[7] Under Part 3 − Better off overall test, of the Form F17 − Employer’s statutory declaration in support of an application for approval of an enterprise agreement, at question 3.1, the applicant has listed the General Retail Industry Award 2010 (the Retail Award) as currently covering the employer and employees covered by the Agreement. At question 3.2, the applicant has listed the TAB Clerical and Administrative Staff PhoneTAB Operators Award 20043 as a pre-reform award or NAPSA4 that covered employees as at 31 December 2009.
[8] Having outlined the benefits and deficiencies of the Agreement in comparison with the Retail Award and the NAPSA the applicant at question 3.6 of the F17 states that they believe that the Agreement passes the BOOT.
[9] The Australian Municipal, Administrative, Clerical and Services Union - NSW Local Government, Clerical, Administrative, Energy, Airlines & Utilities Branch (the ASU) was a bargaining representative for the Agreement and has filed a Form F18 − Statutory declaration of employee organisation in relation to an application for approval of an enterprise agreement, giving notice pursuant to s.183 of the FW Act that it wants to be covered by the Agreement. The ASU has also advised that it does not support the approval of the Agreement on the ground that the incorrect reference instrument has been nominated and used by the Applicant for the purposes of the BOOT.
[10] The ASU submit that the correct reference instrument for the purposes of the BOOT is the Clerks - Private Sector Award 2010 (the Clerks Award). It is argued that when utilising the Clerks Award as the reference instrument, the Agreement does not pass the BOOT.
[11] A telephone conference was conducted by the Commission on 3 September 2014, where the parties discussed their respective positions. At the conference, the ASU advised that it had applied to the Commission for the making of an enterprise award to replace the TAB Clerical and Administrative Staff PhoneTAB Operators Award 2004, (the NAPSA). Following the conference the parties were requested to file and serve written submissions outlining their respective positions.
Relevant Reference Instrument
ASU Submissions
[12] The ASU’s 5 written submissions maintain that the classifications in the Agreement of Account Sales Operators Levels 1 and 2 and Customer Service Operators Level 3 are “sufficiently analogous” to clerical and administrative work and to call centre work to justify the Clerks Award as the reference instrument.
[13] The ASU submit that the existing enterprise agreement the Tabcorp NSW (Granville) Accounts Sales Operators Enterprise Agreement 2010 expressly incorporated the terms of the Clerks Awardat clause 5 − Award Incorporation. It argues the Retail Award cannot be used as the reference instrument as the Agreement does not cover work that falls within the definition of general retail industry and the Agreement classifications are not covered by the Retail Award. The Agreement covers casual employees employed at a call centre in Granville with the employees taking telephone calls and carrying out related wagering activities.
[14] It is noted that TAB Limited in completing its F17 for the approval of the previous enterprise agreement appears to use the Clerks Award as the reference instrument for the BOOT. 6
Tabcorp Submissions
[15] The written submissions of Tabcorp raise an issue not traversed in their F17 arising out of applying the provisions of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). Any reference to the Retail Award for the purposes of the BOOT is no longer relied upon by Tabcorp. 7
[16] It is submitted that the TAB Clerical and Administrative Staff PhoneTAB Operators Award 2004 (the State Enterprise Award) is an “enterprise instrument” for the purposes of Schedule 6 of the Transitional Act. That being the case, no modern award covers the employees and no modern award can be used for the BOOT which should be conducted against the NAPSA.
Conclusion
[17] In examining the validity of the argument put by Tabcorp it is necessary to conduct a somewhat tortuous exercise of applying various sections of the Transitional Act, the Workplace Relations Act 1996 (WR Act)and the FW Act before being able to reach a conclusion.
[18] Both the Clerks and Retail Awards specifically exclude from their coverage employees who are covered by a modern enterprise award or an enterprise agreement as defined by the Transitional Act. The relevant modern award provisions are extracted below:
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.”
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.”
[19] Tabcorp submit that the two modern awards above have no application as the employees and the employer are covered by an enterprise instrument within the meaning of the Transitional Act.
[20] In reaching a conclusion as to what is the relevant reference instrument for the BOOT it is first necessary to ascertain what is meant by the phrase “enterprise instrument” within the meaning of the Transitional Act. Schedule 2 of the Transitional Act provides the following definition:
“SCHEDULE 2 - Overarching Schedule about transitional matters
Part 1 -- Interpretation of the transitional Schedules
2 The dictionary
enterprise instrument: see subitem 2(1) of Schedule 6.”
[21] As can be seen from the above, the dictionary in the Transitional Act requires a further reference to Schedule 6 where the relevant provisions state as follows:
“SCHEDULE 6 - Modern enterprise awards
Part 2 -- The enterprise instrument modernisation process
Division 1--Enterprise instruments
2 Enterprise instruments
(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 underline)
[22] It is submitted that the NAPSA is an “enterprise award based instrument” An enterprise award based instrument is defined at 2(2) of Schedule 6:
“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 underline)
[23] An “award based instrument” is defined at Schedule 3 of the Transitional Act:
“SCHEDULE 3 - Continued existence of awards, workplace agreements and certain other WR Act instruments
Part 2 -- Continued existence of WR Act instruments as transitional instruments
2 WR Act instruments that continue in existence as transitional instruments
(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;
...
[24] In this part of the Transitional Act “award based transitional instruments” are defined to include notional agreements preserving State awards (NAPSA’s). A NAPSA is defined in Schedule 8 of the WR Act at item 31.
“SCHEDULE 8
Part 3 -- NOTIONAL agreements preserving State awards
Division 1 -- What is a notional agreement preserving State awards?
Subdivision A -- What is a notional agreement preserving State awards?
31 Notional agreements preserving State awards
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.”
(My underline)
[25] A State award is defined at s.4 of the WR Act
“Section 4
Definitions
"State award" means an award, order, decision or determination of a State industrial authority.”
[26] 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;”
[27] The State Award, (NAPSA) the TAB Clerical and Administrative Staff PhoneTAB Operators Award 2004 was made by Justice Schmidt of the New South Wales Industrial Relations Commission on 18 June 2004. 8
[28] The State Award is also referred to as a NAPSA at Attachment B of the Award Modernisation decision of the Australian Industrial Relations Commission on 20 June 2008. 9
[29] 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 Item 3 of the Transitional Act:
“3 Meaning of single enterprise and part of a single enterprise
(1) A single enterprise is:
(a) a business, project or undertaking that is carried on by an employer; or
....
(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.”
[30] It is submitted by Tabcorp that the State Award (NAPSA) expressly only applies to a single employer, TAB Limited and expressly applies to a distinct operational unit, PhoneTAB. This conclusion is reached by reference to clause 27 − Area, Incidence and Duration of the State Award.
“This Award shall be (sic) apply to all casual staff employed by TAB Limited as PhoneTAB Operators.”
[31] NAPSA’s have a finite operational life as per Schedule 6 of the Transitional Act. Ordinarily the NAPSA in this application, the TAB Clerical and Administrative Staff PhoneTAB Operators Award 2004 would cease to operate on 31 December 2013. This is ascertained 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
...
(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.”
[32] Sub item 4(3)(b) of Schedule 6 of the Transitional Act specifies 31 December 2013, as the end date. Clearly that date has passed, however an extension to the automatic termination of a NAPSA on 31 December 2013 would appear to have been triggered as per sub item 9(4) of Schedule 6 with an application having made to modernise the TAB Clerical and Administrative Staff PhoneTAB Operators Award 2004. On 24 December 2013, the Australian Municipal, Administrative, Clerical and Services Union made an application to the Fair Work Commission for the making of a modern enterprise award to replace the State Award, being the application in matter EM2013/104. 10
[33] It follows from the above that the NAPSA is an enterprise instrument for the purposes of Schedule 6 Item 2(1)(a) of Transitional Act,which leads to the question of its relevance in applying the BOOT.
[34] Section 193 PASSING THE BETTER OFF OVERALL TEST of the FW Act at s.193(1) states that an enterprise agreement (that is not a greenfields agreement) passes the BOOT if the Commission is satisfied at the test time, that each award covered employee, and each prospective award covered employee, would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee. This section has no application where a modern award does not apply.
[35] Given that the State Award or NAPSA is an “enterprise agreement” for the purposes of item 2(1)(a) of Schedule 6 of the Transitional Act,it would appear by virtue of the exclusion clauses in both the Retail and Clerical Awards they do not cover employees who are covered by an enterprise instrument within the meaning of the Transitional Actor employers in relation to those employees.
[36] This takes us to Schedule 7 Enterprise agreements and workplace determinations made under the FW Act, of the Transitional Act, and in particular, Part 4 titled -- Transitional provisions to apply the better off overall test after end of bridging period if award modernisation not yet completed which states at Item 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.”
(My underline)
[37] In this application the allocation of employment of the 395 employees covered by the Agreement 11 between the two employers has not been made clear, as it is only TAB Limited which is a party to the State Award, whereas, the Agreement is proposed to cover two employers Tab Limited and Tabcorp Assets Pty Ltd. However, based on item 18(1) only one employee need be covered by the unmodernised award for that instrument to become the relevant award based transitional instrument for the purposes of the BOOT.
[38] The bridging period 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.”
[39] The FW Safety Net provisions (the National Employment Standards and Modern Awards and Minimum Wages) commenced on 1 January 2010.
[40] Schedule 7 of the Transitional Act goes on to state at item 18(2) of Part 4, how the BOOT is to be applied to enterprise agreements for employees not covered by a modern award.
“Non-greenfields agreements
(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 underline)
[41] At item 20 Definitions ofSchedule 7a prospective unmodernised award covered employee is defined:
“prospective unmodernised award covered employee, for an enterprise agreement, means a person who:
(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.”
[42] 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 to the TAB Clerical and Administrative Staff PhoneTAB Operators Award 2004 (the State Award) and the transitional Australian Pay and Conditions Standard.
Application of the BOOT
[43] The Tabcorp F17 lists a number of benefits both monetary and non-monetary under the State Award not repeated in the Agreement. It is submitted by Tabcorp that the:
● Attendance Productivity Scheme,
● Saturday Attendance Bonus Scheme, and the
● Error Free Bonus Scheme.
under the State Award are no longer relevant as the associated performance requirements have been dispensed with under the Agreement. This argument is dependent to a certain extent on the difficulty for employees in meeting the associated performance requirements. However, it is noted that the sanctions at clause 14 of the State Award for achieving less than a 90% attendance record are not contained in the Agreement.
[44] The allowances under the State Award that are not included in the Agreement are said to be absorbed by the higher hourly rates and the higher classification bands for supervisor work under the Agreement.
[45] The Agreement contains three operator classification levels whereas the Award has a single operator level plus a Trainee Operator classification.
Agreement | State Award (NAPSA) |
Account Sales Operator - Level 1 | Trainee Operator PhoneTab Operator |
Account Sales Operator - Level 2 | |
Customer Service Operator - Level 3 |
[46] The Agreement rates are substantially higher than those contained in the State Award and will further increase on 1 July 2015 by 2.6%, if the Agreement is approved. The wage rates for Operator Levels 1, 2 and 3 in the Agreement are well above the wage rates in the State Award.
[47] Employees under the Agreement are entitled to one weeks’ notice of termination which is not provided for under the State Award (the employees being on casual contracts of employment). The rest break entitlement under the Agreement is more beneficial for employees than the State Award where employees work more than seven hours as they are entitled to an additional 15 minute rest break. On the other hand the State Award provides a better entitlement to a meal break for an employee which arises after 5.5 hours as opposed to the Agreement at 6.5 hours.
[48] A specified and limited number of employees 12 are entitled to a redundancy payment should redundancy circumstances eventuate, whereas, redundancy is not provided for in the State award.
[49] The Finishing at Night Allowance is more beneficial under the State Award for employees who commenced employment after 14 July 2010 with Tabcorp.
[50] Schedule 7 Item 18 of the Transitional Act requires the Commission to be satisfied 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 the relevant award-based transitional instrument and transitional APCS applied to the employee. The ASU submit that in applying the State Award as a reference instrument for the BOOT some employees would be worse off.
[51] The ASU acknowledge that the Agreement rates of pay are superior to the State Award but state that as it is an unmodernised award it is difficult to make a comparison in the rates between the two instruments. The ASU submissions in respect of applying the BOOT are more comprehensive in comparison with the Clerks Award, but as held above, this is not the relevant reference instrument.
[52] Other than making some general observations which Tabcorp have responded to, the ASU has not demonstrated through any wage or condition exercise that any employee to be covered by the Agreement will not be better off overall when compared to the State Award.
[53] Having considered the written submissions by both parties, I am satisfied that employees would be better off overall under the Agreement.
[54] The Australian Municipal, Administrative, Clerical and Services Union being a bargaining representative for the Agreement, has given notice under s.183 of the FW Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers this organisation.
[55] The Agreement will cover employees working on a casual basis at Tabcorp’s premises in Granville, New South Wales in any of the classifications in the Agreement. I am satisfied that pursuant to s.186(3A) of the FW Act, this group is fairly chosen as being geographically or organisationally distinct.
[56] I am satisfied that each of the requirements of ss.187 and 188 of the FW Act as are relevant to the application for approval have been met.
[57] The Agreement is approved. In accordance with section 54(1), the Agreement will operate from 31 October 2014. The nominal expiry date of the Agreement is 30 June 2016.
COMMISSIONER
1 148 CLR 121.
2 Email of 20 October 2014.
3 AN120534 - A State award made by the New South Wales Industrial Relations Commission.
4 Notional agreement preserving State awards.
5 The ASU’s Outline of Submissions was titled NSW Local Government, Clerical, Administrative, Energy, Airlines & Utilities Branch (t/a United Services Union) of the Australian Municipal Administrative and Clerical Services Union which is a variation on the name of the union in its Form F18 Statutory Declaration.
6 AG2010/9878.
7 Email of 20 October 2014.
8 No. IRC 3427 of 2004.
9 [2008] AIRCFB 550.
10 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 with final submissions due by 5 November 2014.
11 See Q 2.10 of F17.
12 Appendix 3 of the Agreement.
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