Tabeel Trading Nominees Pty Ltd T/A Tabeel Trading
[2024] FWCFB 199
•4 APRIL 2024
| [2024] FWCFB 199 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional instruments
Tabeel Trading Nominees Pty Ltd T/A Tabeel Trading
(AG2023/4338)
| Timber and paper products industry | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 4 APRIL 2024 |
Application to extend the default period for Tabeel Trading Nominees Pty Ltd Employee Collective Agreement 2008
Pursuant to subitem 20A(4) of Sch 3 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the Act), Tabel Trading Nominees Pty Ltd T/A Tabeel Trading has applied to extend the default period for the Tabeel Trading Nominees Pty Ltd Employee Collective Agreement 2008 (the Agreement) until 30 June 2024.
The application is made in accordance with subitem (6)(a) on the grounds that bargaining is occurring for a proposed enterprise agreement that will cover the same, or substantially the same, group of employees as are covered by the Agreement and that it is appropriate to do so. The application was made after the notification time for the proposed enterprise agreement.
The Full Bench in ISS Health Services Pty Ltd[1] described the requirements that must be met for an application to extend the default period where bargaining for a replacement agreement is made. Although that case involved a Division 2B State employment agreement to which Sch 3A of the Act applies, the principles are identical to those applying to agreements to which Sch 3 applies. The requirements are as follows:
i.The application was made after the notification time for the proposed enterprise agreement;
ii.The proposed enterprise agreement covers the same employees as the Agreement; and
iii.Bargaining for the proposed enterprise agreement is occurring.
The Applicant has provided material to the Commission which establishes that a notice of employee representational rights was issued to all staff on 11 October 2023 and that the first bargaining meeting occurred on 6 November 2023. We are satisfied on the material provided that the requirements in subitem (7) are met.
As subitem (7) is met, subitem 6(a) requires consideration of whether it is otherwise appropriate in the circumstances to extend the default period. In ISS Health Services, the Full Bench considered it appropriate to do so where the parties sought time to negotiate a replacement agreement and are not simply seeking to extend an agreement for the maximum period for the sake of convenience. The Full Bench also took into account that while the zombie agreement remained in place, the employees would be better off overall than if the relevant modern award applied.
The Applicant operates a business in the Timber Industry in Mount Gambier. It has 127 employees including 101 employees who will be covered by the replacement agreement.
The employees covered by the Agreement are covered by either the Timber Industry Award 2020, Road Transport and Distribution Award 2020, Manufacturing and Associated Industries and Occupations Award 2020 or Clerks – Private Sector Award 2020 depending upon the area of the Applicant’s business they work in.
In relation to whether employees are better off under the Agreement compared to the relevant Modern Award, the Applicant has submitted that it has ensured that the base Award rates are currently being paid to employees. It says that the Agreement provides for penalties which are less than Award rates as a fixed rate of pay is applied in the Agreement, but that this has been beneficial to employees as it allows for ordinary hours to be worked when preferred by employees due to the nature of the timber industry, including commencing work early in the morning to allow for inclement weather.
The Agreement does not have a span of hours provision. Hours are worked by agreement between the Applicant and individual employees and vary according to individual factors, climatic conditions, variations in demand and availability of wood and the amount of wood harvested. Nominal hours are an average of 38 hours over a 52 week period but employees are expected to work reasonable additional hours on a regular basis. Depending upon the area of operation the employee works in, the Agreement provides that the employee can expect to work up to 55 to 60 hours per week on average based on a 52 week period.
The Agreement provides that employees will be paid an individually negotiated wage depending upon their skills, experience and net worth to the Applicant which is at least the minimum applicable rate in the Agreement. This rate is the same regardless of whether work is performed on Public Holidays, Sunday or outside of the employee’s normal work patterns.
The Agreement preserves a number of allowances from the Timber and Allied Industries Award 1999 and various South Australian state based awards.
In contrast, the Timber Industry Award 2020 provides that ordinary hours are worked between the hours of 6:30am and 6:30pm Monday to Friday and by agreement on weekends. Overtime is paid at the rate of 150% of the ordinary hourly rate for the first 2 hours and 200% of the ordinary rate thereafter. Penalty rates are paid for weekend work and for afternoon and night shifts. The other Modern Awards that cover the Applicant’s employees also have span of hours, overtime and penalty rates provisions. Employees who would otherwise be entitled to these benefits under the relevant Award are therefore deprived of them by operation of the Agreement.
In a number of recent Full Bench decisions, the Commission has rejected applications to extend the default period of transitional instruments that have inferior conditions compared to the relevant Modern Award. In Kalfresh Management Services Pty Ltd,[2] the Full Bench declined to extend the default period of the agreements because of their inferior and outdated terms.[3] In Surf Hogs Pty Ltd T/A Hog’s Breath Café Surfers Paradise,[4] the Full Bench found that it was not appropriate to extend the default period of the agreement because employees were likely to be disadvantaged by its inferior conditions if it continued to apply prior to finalisation of the new agreement.[5] In Pakwin Pty Ltd T/A Inglewood Hotel,[6] the Full Bench declined to grant a short extension of the default period of the agreement to 1 May 2024, because the potential disadvantage to employees of allowing the agreement to continue outweighed the time and resources involved in the employer making the necessary administrative arrangements to give effect to the sunsetting agreement and then to incorporate changes required from any replacement agreement.[7]
We believe that the circumstances of the employees of the Applicant are comparable to the employees referred to in those decisions. The submissions of the Applicant indicate that employees are being paid Modern Award base rates only with the effect that they are not receiving weekend and other penalty rates and overtime rates despite being required to work excessive overtime on a weekly basis under the Agreement. The employees are therefore significantly worse off than if the relevant Modern Award applied.
The Applicant issued the notice of representational rights on 11 October 2023 and the first bargaining meeting took place on 6 November 2023, just one month before the Agreement was due to terminate under subitem (1). The Applicant sought an extension of the default period that is 8 months from the commencement of bargaining. Based on this timeframe, if the Applicant had initiated bargaining in or before April 2023, it is likely that a replacement agreement would have been made before the Agreement was due to terminate on 6 December 2023. The Applicant has not explained why it was not able to do this.
The Applicant has not pointed to any potential prejudice or inconvenience it would experience if the Agreement terminates prior to a replacement agreement being finalised and approved by the Commission. Taking into account all of these matters, we have decided that it is not appropriate for us to extend the default period of the Agreement and we dismiss the application.
As our decision is to refuse to extend the default period under subitem 20A(6) of Sch 3 and our decision is made after the sunset date in the Act, subitem (10)(e) provides that we must extend the default period for the Agreement to the day of this decision or specify a day that is not more than 14 days after the day of this decision. We have decided that to enable the parties to make the necessary administrative arrangements to give effect to the sunsetting of the Agreement the default period is extended until 11 April 2024.
DEPUTY PRESIDENT
[1] [2023] FWCFB 122.
[2] [2023] FWCFB 217.
[3] Ibid, [14].
[4] [2024] FWCFB 12.
[5] Ibid, [16].
[6] [2024] FWCFB 179.
[7] Ibid, [11]-[12].
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