The Replay Garden City Trust T/A The Replay Garden City Trust
[2010] FWA 5925
•4 AUGUST 2010
[2010] FWA 5925 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
The Replay Garden City Trust T/A The Replay Garden City Trust
(AG2009/20371)
Entertainment and broadcasting industry | |
COMMISSIONER ASBURY | BRISBANE, 4 AUGUST 2010 |
Replay Garden City Trust Enterprise Agreement 2009.
Background
[1] On 18 December 2009, an application was made under s.185 of the Fair Work Act 2009 (the FW Act) for approval of the Replay Garden City Trust Enterprise Agreement 2009 (the Agreement). The Form F17 - Employer’s Declaration filed with the Agreement states that the kind of work to be done by employees under the Agreement is: “Attendants in an Amusement Centre” and that the Agreement is to operate in Queensland. In response to a question in the Declaration requesting the identification of all reference instruments (relevant awards or notional agreements preserving State awards) for the purposes of the no-disadvantage test, the Declaration states:
“AWARD FREE”.
[2] The employer did not make an application under Schedule 7, item 7 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) for Fair Work Australia (FWA) to designate an award for the purposes of the no-disadvantage test.
[3] In January 2010 the application for approval of the Agreement was listed for hearing, in order to deal with a number of concerns in relation to whether employees covered by the Agreement are award free and the implications of this for the Agreement passing the no-disadvantage test. The Australian Federation of Employers and Industries (AFEI) on behalf of the employer requested that any issues in relation to the Agreement be raised in writing, rather than dealt with at a hearing. The employer subsequently indicated that it wished to have any correspondence from FWA forwarded directly to it rather than through the AFEI. Correspondence ensued between FWA and the employer as follows:
- Letter to employer of 10 February 2010 advising of concerns about whether employees are award free and foreshadowing additional issues in relation to whether the Agreement would pass the no-disadvantage test;
- Response from employer of 16 February 2010 contending that employees are award free;
- Letter to employer of 23 April 2010 advising that the contention that employees are award free was not accepted and that any number of awards including the Engineering Award - State (Engineering Award) and the Retail Industry Award - State (Retail Award) could apply to employees on the basis of classification definitions in the Agreement;
- Letter from employer of 29 April 2010 restating contention that employees are award free because amusement centres are not involved in the selling of goods, and requesting advice to be provided on any further matters required to be addressed and that the employer was not proposing to attend a hearing and make further submissions at this time; and
- Letter to employer of 17 June 2010 advising that FWA had determined to designate the Retail Award for the purposes of determining whether the Agreement passed the no-disadvantage test, and outlining concerns about Agreement provisions in relation to weekend work, public holidays, additional hours and casual loading, in comparison with the Retail Award.
[4] The letter to the employer of 17 June 2010 proposed a number of undertakings in relation to these matters, and informed the employer that if the undertakings were not provided, the application for approval of the Agreement would be refused. The employer has not responded to this correspondence or provided undertakings in relation to these matters. Accordingly I set out below reasons for refusing to approve the Agreement.
Legislative provisions
[5] By virtue of item 2, Schedule 7 of the Transitional Act, where an application to FWA for approval of an enterprise agreement is made before 1 January 2010, s.186(2) of the FW Act operates so that FWA must be satisfied that the agreement passes the no-disadvantage test. For the purposes of determining whether an agreement passes the no-disadvantage test, FWA must be satisfied that the agreement does, or would not result, on balance, in a reduction of the overall terms and conditions of the employees who are covered by the agreement, under any reference instrument relating to one or more of the employees. 1
[6] Item 4 of Schedule 7 of the Transitional Act provides at sub-item 3 that an agreement is taken to pass the no-disadvantage test if there is no reference instrument in relation to any of the employees covered by the agreement. Sub-item 4 of Schedule 7 states that if there is a reference instrument in relation to one or more, but not all of the employees, and the agreement passes the no-disadvantage test in respect of that employee or employees, then the agreement passes the no-disadvantage test for all employees. Sub-item 4 also states that if there is a reference instrument in relation to one or more employees and the agreement does not pass the no-disadvantage test in respect of that employee or employees, then it does not pass the no-disadvantage test for any employee covered.
[7] The term “reference instrument” is defined in Schedule 7 of the Transitional Act, at item 5(1) as a “relevant general instrument” or a designated award. A relevant general instrument is defined in item 5(2) of Schedule 7 for an employee who is covered by an enterprise agreement, as:
“...an award based transitional instrument:
(a) that regulates, or would but for an enterprise agreement or another industrial instrument having come into operation regulate, any term or condition of employment of persons engaged in the same kind of work as that performed or to be performed by the employee under the enterprise agreement; and
(b) that applied, or would but for an enterprise agreement or another industrial instrument having come into operation have applied, to the employee’s employer immediately before the day on which the application for approval of the agreement was made under s.185 of the FW Act.”
Item 8 of Schedule 7 of the Transitional Act provides as follows:
“8. Designated awards - after application for FWA approval
(1) This item applies to an enterprise agreement if there is no relevant general instrument in relation to an employee who is, or a class of employees who are, covered by the agreement.
(2) FWA must determine that an award is a designated award for the employee or employees referred to in subitem (1), if it is satisfied that:
(a) on the date on which the application for approval of the enterprise agreement was made under section 185 of the FW Act, the employee or employees are or would be employed in an industry or occupation in which the terms and conditions of the kind of work performed or to be performed by the employee or employees:
(i) are usually regulated by an award; or
(ii) would, but for an enterprise agreement or another industrial instrument having come into operation, usually be regulated by an award; and
(b) there is an award that satisfies the requirements specified in subitem (3).
(3) An award or awardsdetermined by FWA under this item:
(a) must be an award or awards regulating, or that would, but for an enterprise agreement or another industrial instrument having come into operation, regulate, terms or conditions of employment of employees engaged in the same kind of work as the work performed by the employee or employees under the enterprise agreement concerned; and
(b) must, in the opinion of FWA, be appropriate for the purpose of deciding whether an enterprise agreement passes the no-disadvantage test; and
(c) must not be an award that regulates the terms and conditions of employment in a single business only (being the single business specified in the award).
(4) FWA may determine different awards under subitem (2) in relation to different employees.
(5) A determination made under this item is not a legislative instrument.”
Agreement Classifications
[8] The agreement contains a classification structure at clause 16.1 which refers to Customer Service Attendants, Assistant Manager, Technician and Manager. The definitions relating to the classification structure indicate that Customer Service Attendants variously undertake the following duties:
- Customer service and sales procedure;
- Opening and closing of store;
- Assisting in on-the-job training;
- Cash handling;
- Cleaning of machines and store.
Technicians undertake the following duties:
- Repair and maintain games and machines on a daily basis;
- Fault finding on machines;
- Repair power supplies, motors, chassis, PCB’s and other devices;
- Set up and install new machines and associated hardware;
- Problem solve game segment errors.
Employer Submissions
[9] The employer maintained its view, via several pieces of correspondence, that employees are not covered by a relevant general instrument and are award free. The employer has pointed to the fact that it has been operating other Queensland and New South Wales amusement centres on this basis. The employer also stated that other identical agreements made during the bridging period with respect to those centres had been approved by FWA. Further, the employer stated that advice from its industry association, the Australian Amusement, Leisure and Recreation Association was that amusement centres have traditionally been award free. In response to the proposition that there are any number of Queensland Awards which cover work of the kind described in the classification definitions in the Agreement including the Retail Industry Award - State (Qld) (Retail Award) and the Engineering Award - State (Qld) (the Engineering Award), the employer stated that employees are not selling goods and maintained the view that these awards are not appropriate.
Conclusions in relation to award coverage
[10] I do not accept the submission that employees covered by the Agreement are award free. In any event, it is not determinative that employees covered by the Agreement are or were award free. What is relevant is whether, when the application for approval of the Agreement was made, employees performing work in the classifications found in the Agreement would, while performing such work in the State of Queensland, be employed in an industry or occupation in which terms and conditions of the kind of work performed by those employees, are usually regulated by an award.
[11] The Retail Award applies as stated in clause 1.4, as follows:
“1.4.1 This Award applies to all employees and their respective employers, engaged in the reception and/or preparation and/or hire and/or sale and/or delivery and/or installation of any goods and/or services by retail...”
[12] The classification of Shop Assistant is defined in clause 5.1.1 of the Retail Award in the following terms:
“ (a) "Shop Assistant" (92.14%) means - an employee engaged in the reception, sale, or delivery by hand of any goods for sale by retail and/or for hire, wherever employed, and shall include all managers, heads of departments and section heads, salespersons, floor walkers, floor superintendents, floor supervisors, cash order and/or time-payment collectors, travellers, wireless salespersons, electrical goods and/or appliances salespersons, hearing aid appliances salespersons, carter salespersons, produce salespersons, window dressers, ticket writers, order collectors, mail order assistants, storepersons, packers, porters, linoleum and carpet layers and cutters, rubber mat and rubber floor covering layers and cutters and all other floor covering cutters and layers demonstrators, footwear repair receivers, dry-cleaning receivers in retail stores, message juniors who are not covered by any other Award, all persons employed or engaged in selling, demonstrating or canvassing for or taking orders for goods for sale by retail and/or for hire or in any duties in taking orders for goods for sale by retail and/or for hire or in any duties in any way incidental thereto, employees engaged as dusters in furniture, crockery or hardware shops, all employees in or connected with the pattern department in any shop or shops automobile and/or farm implements, spare-parts and/or accessories salespersons, storepersons in retail bulk stores, all employees in florists' shops not covered by any other Award, and cosmetic and/or beauty aid consultants and persons employed for special occasions, e.g. Santa Claus'.”
[13] The coverage of the Retail Award is not limited to retailing of goods, but also encompasses retailing of services. The coverage of the Engineering Award State is set out in clause 1.5 as follows:
“1.5.1 Subject to the exemptions listed in clauses 1.5.2 and 1.5.3, this Award shall apply throughout the State of Queensland to employees and employers of such employees engaged in the industries and occupations of engineering, metal working, electrical/electronic, fabricating and vehicle building and to all their branches and all allied industries who were previously covered by one of the following Awards:
(a) Coach and Motor Body Building Industry and Farriers' Award - State;
(b) Electrical Engineering Award - State;
(c) Electroplaters' Award - State;
(d) Engine Drivers' Award - State (in regard to classifications transferred from that award and appearing in Schedule 16);
(e) Mechanical Engineering Award - State;
(f) Sheet Metal Workers' Award - State; and
(g) Typewriter, Adding, Cash Register and other similar Machines Mechanics' Award - State.
Or who would have been covered by these awards had they not been rescinded; employees and employers of such employees in those industries and occupations above for whom classifications and wage rates are prescribed by this Award:
Provided that those provisions inserted into this Award for "illustrative purposes" only, are excluded.
1.5.2 This Award shall not apply to any employee or employer who is covered by:
(a) Any other award in force;
(b) Any industrial agreement which specifically excludes the operation of this Award; and
(c) Any other industrial agreement in force in relation only to the matters covered in that industrial agreement.”
[14] The Engineering Award contains a classification structure comprising 14 broad levels, which include encompass skills such as:
- Use of tools and equipment;
- Keyboard skills;
- Engineering, fault finding and repair work; and
- Computer skills.
[15] In my view, one or more of the employees covered by the Agreement would have terms or conditions of employment regulated by the Retail Award or the Engineering Award, and either or both of those Awards would have applied immediately before the day on which the application for approval of the Agreement was made. I am also of the view that item 8 of Schedule 7 of the Transitional Act operates so one or both of these Awards should be designated for the purposes of determining whether the Agreement passes the no-disadvantage test.
Designated Award
[16] I determine that the Retail Industry Award - State (Qld) is the designated award pursuant to item 8 Schedule 7 of the Transitional Act, for an employee or class of employees of the employer, for the purpose of determining whether the Agreement passes the no-disadvantage test.
The no-disadvantage test
[17] After considering the substantive terms of the Agreement, I am of the view that it does not pass the no-disadvantage test when considered against the terms of the Retail Award, for the following reasons. The Agreement provides for ordinary work to be performed on weekends and does not provide for any penalty payments for such work. This can be contrasted with the Retail Award which provides loadings of 25% for ordinary work performed on Saturdays and 50% for ordinary work performed on Sundays.
[18] The Agreement does not provide for any minimum payment or penalty rate for work performed on a public holiday. The Retail Award provides for a four hour minimum payment for work performed on public holidays, and that such work will be paid for at the rate of double time and a-half. The Agreement entitles the employer to require employees to work reasonable additional hours and to pay for those hours at ordinary rates, or for the additional hours to be banked and taken as time off. Under the Retail Award such hours would be treated as overtime and paid at the penalty rates of time and a-half for the first three hours and double time thereafter. Although the Retail Award provides for time off in lieu of overtime, such an arrangement must be mutually agreed in writing, and the time off must be equivalent to the prescribed penalty rate for the overtime. The casual loading in the Agreement is set at 20% in contrast to 23% under the Retail Award.
[19] The wage rates in the Agreement are less than those under the Retail Award. However, this does not automatically result in the Agreement failing the no-disadvantage test, given s.206 of the Act which requires that employees are paid at the least the minimum rate under a modern award or the national wage. However, the wage rates in the Agreement are not sufficient to provide a benefit to offset the reductions in terms and conditions in comparison to those in the Retail Award.
[20] Accordingly, I am not satisfied that the Agreement passes the no-disadvantage test. The employer has been given an opportunity to address these matters by way of undertakings under s.190 of the Act, and has declined to do so. The application for approval is refused. I Order accordingly.
COMMISSIONER
1 Item 4 sub-item 1 of Schedule 7 of the Transitional Act.
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