United Power Systems Australia Pty Ltd
[2024] FWCA 2328
•21 JUNE 2024
| [2024] FWCA 2328 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
United Power Systems Australia Pty Ltd
(AG2024/1499)
UNITED POWER SYSTEMS AUSTRALIA PTY LTD ENTERPRISE AGREEMENT 2024-2028
| Electrical contracting industry | |
| COMMISSIONER PERICA | MELBOURNE, 21 JUNE 2024 |
United Power Systems Australia Pty Ltd Enterprise Agreement 2024-2028
An application has been made for approval of an enterprise agreement known as the United Power Systems Australia Pty Ltd Enterprise Agreement 2024-2028 (the Agreement). The application is made under section 185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.
The Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 (Cth) (the Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Act, that commenced operation on 6 June 2023.
Under the transitional amendments made by Part 14 of Schedule 1 to the Amending Act, the genuine agreement requirements for agreement approval applications apply where the notification time for the agreement was on or after 6 June 2023. The genuine agreement provisions in Part 2-4 of the Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the notification time for the agreement was before 6 June 2023. The notification time for this Agreement was 8 April 2024. It follows the Amending Act genuine agreement provisions apply.
Under the transitional arrangements, by Part 16 of Schedule 1 of the Amending Act, amendments made to the better off overall test requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. This Agreement was made on 30 April 2024. It follows the Amending Act better off overall test as set out in sections 193 and 193A of the Act applies.
On 13 May 2024, the Commission issued a statement of concerns in relation to a number of matters in the Agreement. The National Electrical and Communications Association (NECA) on behalf of United Power Systems Australia Pty Ltd (UPSA) responded to those concerns by an email dated 14 May 2024.
Concern over whether the voters were “sufficiently representative”
Under s 188(2)(b), I cannot be satisfied an agreement has been genuinely agreed unless the employees requested to approve the Agreement by voting “are sufficiently representative having regard to the employees the agreement is expressed to cover”.
Principle 17 of the Statement of Principles On Genuine Agreement inform a consideration of whether the voters are sufficiently representative. Principle 17 states:
“Considering whether employees … are sufficiently representative as required by section 188(2)(b), the FWC may take into account:
· whether the employees entitled to vote on the enterprise agreement are to be paid the rates of pay provided for in the agreement, and
· the extent to which the employees entitled to vote on the enterprise agreement are employed across the full range of:
oclassifications in the agreement
otypes of employment in the agreement (for example, full-time, part-time and casual)
ogeographic locations the agreement covers, and
oindustries and occupations the agreement covers.”
Under Clause 3, the Agreement is expressed to apply to “all employees of the Company, both current and future when they perform work in any State or Territory, Australia wide”.
The two voters who approved the Agreement are employed in Victoria and, should the Agreement be approved, will be classified as an Electrical Worker Grade 6 and Electrical Worker Grade 10 under the classification structure in Schedule A of the Agreement.
I expressed a concern that as the Agreement is expressed to cover “employees when they perform work in any State or Territory” and the classification has ten levels, the two voters may not be sufficiently representative of the full range of either classifications or geographical locations covered by the Agreement.
On 4 June 2024 and 13 June 2024, I convened mention hearings to hear submissions regarding my concern on the “sufficiently representative” issue under s 188(2)(b).
NECA explained the employees who would be covered by the Agreement would operate from Victoria and would travel to work in other States and Territories. It argued that as the voters operate from Victoria in this way, they are “sufficiently representative” of the geographical locations covered by the Agreement.
The sufficiently representative undertaking
In answer to the concern that two voters (who would be classified under two of the ten classifications under the Agreement) may not be sufficiently representative of the full range of classifications under the Agreement, NECA proposed the following undertaking (“the sufficiently representative undertaking”):
2. The following classifications are removed from Schedule A:
A.1 Electrical Worker Grade 1
A.2 Electrical Worker Grade 2
A.3 Electrical Worker Grade 3
A.4 Electrical Worker Grade 4
A.5 Electrical Worker Grade 5
3. The following ordinary hourly pay rates are removed from the wage rates table in Schedule B:
Electrical Worker Grade 1: $26.00
Electrical Worker Grade 2: $26.67
Electrical Worker Grade 3: $27.55
Electrical Worker Grade 4: $28.14
Electrical Worker Grade 5 – A Grade Electrician: $34.64
Electrical Worker Grade 5 – B Grade Electrician: $32.30
The purpose of this undertaking is to reduce the classifications in the Agreement. The undertaking reduces the classifications to EW5 to EW10 by effectively removing the lower five classifications.
The adjective “sufficiently” in s 188(2)(b) derives from the word “sufficient” which has the plain meaning of “sufficing, adequate or enough”.[1] The adjective “sufficiently” qualifies the adjective “representative” in s 188(2)(b). I interpret the expression “sufficiently representative” to mean the voters must adequately represent the employees the Agreement is expressed to cover.
Applying this interpretation, I find the two voters who would be covered by two of the five remaining classifications adequately represent employees who would be covered by the Agreement. Taking into account this undertaking, the two voters are “sufficiently representative” of the classifications covered by the agreement under s 188(2)(b).
As the pattern of work under the Agreement will be for workers based in Victoria to travel to other States and Territories to work, and the two voters work according to that pattern, then they are also sufficiently representative of the geographical locations the Agreement is expressed to cover.
I am satisfied this undertaking meets my concern with respect to whether the Agreement was genuinely agreed under s 186(2)(b) as informed by s 188(2)(b).
Does the sufficiently representative undertaking make substantial changes to the Agreement?
After the receipt of the sufficiently representative undertaking, I asked for submissions on whether the removal of five of ten classifications under the Agreement by an undertaking would “result in a substantial change to the Agreement” under s 190(4). NECA argued that undertaking “lacks the breadth, scope, and extent to properly considered a substantial change within the meaning of the section”. It relied on two cases in support of this proposition.
One was a decision of Lee C in E. C Birch Proprietary[2] (Birch) in which the employer proposed eight undertakings including a “reconciliation undertaking” and seven others related to casual loading, minimum rest periods, minimum engagement periods and other matters. The Commissioner found that the “proposed undertakings make a substantial change to the outcome in terms of the better off overall test”.[3]
The other is a decision of Deputy President Asbury (as she then was) in Falcon Mining Pty Ltd[4] (Falcon). In that case, the employer sought to make a significant number of undertakings that would vary numerous provisions of the proposed agreement. The Deputy President found, “I have reached the conclusion that the undertakings offered by Falcon are so substantial, both in scope and number, that they will substantially change the Agreement[5].”
The reduction in the levels of the classification structure in Schedule A is not substantial in the manner considered in Falcon. The removal of five levels does not effect a change to the Agreement that is “substantial in scope or number”. The terms and conditions of employment within the body of the Agreement, other than those dealing with classifications, are not affected by the change. I therefore accept the “substance” of the Agreement essentially remains the same and therefore the change brought about by this undertaking is not “substantial” within the meaning of s 190(3)(b).
Other matters
The written undertakings provided by UPSA (including the sufficiently representative undertaking) are attached as Annexure A. I am satisfied the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. I therefore note the undertakings are taken to be terms of the Agreement under section 201(3) of the Act.
I note that the following provision is likely to be inconsistent with the National Employment Standards:
· Clause 4.3.6 – Casual conversion
However, noting clause 5.14.2 of the Agreement, I am satisfied the more beneficial entitlements of the National Employment Standards will prevail where there is an inconsistency with the Agreement.
Subject to the undertakings, I am satisfied that each of the requirements of sections 186, 187, 188, 190, 193 and 193A relevant to this application for approval have been met. The Agreement does not cover all the employees of the employer, however, taking into account the factors in sections 186(3) and (3A), I am satisfied that the group of employees was fairly chosen.
The Agreement is approved today 21 June 2024. It will operate from 28 June 2024 as required by section 54 of the Act. The nominal expiry date is 21 June 2028.
COMMISSIONER
Annexure A
[1] Australian Concise Oxford Dictionary (5th ed, 2009)
[2] [2012] FWA 2312.
[3] Ibid [74].
[4] [2016] FWC 5315.
[5] Ibid [210].
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