United Voice - New South Wales Branch

[2018] FWCA 4549

[2018] FWCA 4549

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

United Voice - New South Wales Branch
(AG2018/270)

SECOM SECURITY AUSTRALIA - EMPLOYEE ENTERPRISE AGREEMENT 2014 - 2017

Security services
SENIOR DEPUTY PRESIDENT HAMBERGER	SYDNEY, 2 AUGUST 2018

Application for termination of the Secom Security Australia – Employee Enterprise Agreement 2014-2017 – Fair Work Act 2009 (Cth) ss.225, 226 – agreement terminated.

[1] On 26 January 2018, United Voice (the applicant) applied to the Fair Work Commission (the Commission) under s.225 of the Fair Work Act 2009 (the FW Act) to terminate the Secom Security Australia – Enterprise Agreement 2014 – 2017 (the 2014 agreement).

[2] I issued directions on 22 February 2018 for the filing and service of written material by the applicant and Secom Australia Pty Ltd (the respondent). Hearings were conducted on 10 May and 13 June 2018.

[3] The applicant was represented at the hearing by S Bull, Industrial Coordinator/Legal Practitioner, and the respondent by T McDonald, solicitor.

[4] The applicant tendered written evidence from Stephen Drew, a control room operator employed by the respondent at No. 1 Martin Place, Sydney, 1 and Michael Vance, Industrial Officer of the applicant.2

[5] The respondent tendered written evidence from Saad Gillani, its National HR Manager. 3

The agreement

[6] The 2014 agreement was approved on 24 December 2014. 4 It has a nominal expiry date of 30 December 2017. The applicant is covered by the 2014 agreement.

[7] The hourly rates of pay under the 2014 agreement are set out at clause 3.2.1:

JOB LEVEL	FULL TIME/ PART TIME DAY RATE (Monday to Friday)	FULL TIME/ PART TIME LOADED RATE (Monday to Sunday)	CASUAL LOADED RATE (Monday to Sunday)	FULL TIME/ PART TIME Permanent night rate (Monday to Sunday)
SECOM LEVEL 1	19.55	24.97	28.39	27.08
SECOM LEVEL 2	20.08	25.68	29.13	27.85
SECOM LEVEL 3	20.41	26.13	29.59	28.32
SECOM LEVEL 4	20.73	26.56	30.04	28.79
SECOM LEVEL 5	21.37	27.35	30.91	29.73

[8] The definitions clause of the 2014 agreement (clause 1.2) provides that the ‘Permanent Monday to Friday day rate’ applies to employees who work 90 per cent of their rostered hours between Monday to Friday 0600 to 1800. The ‘Permanent Night Rate’ is paid to employees when no less than 85 per cent of their rostered hours are between 1800 and 0600.

[9] At the time of the 2014 agreement’s approval, the respondent gave certain undertakings about patterns of work.

The evidence

[10] Mr Drew gave evidence that he works a six-week roster. There are two other control room operators under the same roster where he works. He attached to his statement an analysis of what he would be paid under the Security Services Industry Award 2010 5 (the award) for the roster that he works.6 This purports to show that he would have earned $6,490.84 under the award compared to $5,957.64 under the 2014 agreement – a shortfall of $533.20 over the six-week period of the roster.

[11] In his statement, Mr Drew also noted that work on public holidays is paid for at a higher rate under the 2014 agreement than under the award. He said that this would reduce the disadvantage he suffers under the 2014 agreement compared to the award by between $696 and $835 per annum. 7

[12] In his statement, Mr Vance gave evidence of comparisons he had made of earnings under the award and the 2014 agreement for 14 employees whose rosters the respondent had produced pursuant to an order by the Commission. His first calculations, based on certain assumptions, show that eight of the employees would have earned more under the 2014 agreement than the award, and six would have earned less. On average, the employees were paid $56 less than they would have received under the award over a 16-week roster cycle. The calculations also compared what the employees would be paid after 1 July 2018 (when the award rates were to increase). That second set of calculations showed that all 14 employees would be paid less under the 2014 agreement – with an average shortfall of $829.49 over the 16-week period. 8

[13] The respondent tabled its own calculations for an employee working a three-week cycle at No. 1 Martin Place, where Mr Drew works. This showed the employee under the award earning about $73 more than under the 2014 agreement (taking into account leave and superannuation). 9

[14] Mr Gillani said that if the 2014 agreement was terminated, there would need to be changes to rosters and hours of work, as the current rosters are based on the enterprise agreement. 10

[15] Mr Gillani’s evidence was that 213 employees are covered by the 2014 agreement. A replacement agreement (the 2018 agreement) was made in March 2018. 78.4 per cent of the employees who voted voted in favour of the 2018 agreement. The 2018 agreement has been lodged with the Commission for approval.

[16] Mr Gillani said in his statement that employees under the 2014 agreement are generally engaged on 12-hour shifts. His evidence was that if the 2014 agreement was terminated employees would have to be employed on eight-hour shifts, which would cut the employees’ income by more than one-third. 11 The respondent would also be prevented from rostering employees on a 16-week roster cycle.

[17] Mr Gillani said that termination of the 2014 agreement would require the respondent to negotiate and notify its clients of the roster changes and re-negotiate contractual and other arrangements. 12

[18] Mr Gillani said that termination of the 2014 agreement would require the implementation of new rosters, ‘which are likely to involve radically different working arrangements’, and subsequently the provision of notice to, and consultation with, employees about those arrangements, as well as changes to payroll systems (including leave accruals). 13

[19] Mr Gillani said that that additional disruption would occur if the 2014 agreement was terminated (meaning the employees would be subject to the award) and the 2018 agreement subsequently approved.

[20] During his cross-examination, Mr Gillani said the main advantage the respondent has compared to competitors who are operating under the award is that the respondent has a composite loaded rate, whereas the award has a base rate with loadings based on the times and duration of the shift. 14

[21] Mr Gillani was asked to explain his written statement that the respondent would be unable to employ people on 12-hour shifts if the 2014 agreement was terminated. He said:

‘Yes, because with the 12-hour shifts if someone was on the award they would be – there could be a lot of different pay rates applicable to them which would give us a lot of difficulty rostering them, paying them correctly and managing the site because of the different variable loaded rates like permanent night, afternoon loading, Saturday loading, Sunday loading, which we don’t have at the moment, we only have a loaded rate and a public holiday rate…

… for example… [a]n officer who starts working on Friday afternoon at 5pm. Between 5 pm to 6 pm they receive the ordinary base award rate. Between 6 pm to 12 pm they get paid the 21.7% night loaded rate for Friday. From midnight Friday/Saturday to 0500 on Saturday they get paid the Saturday loaded rate. So effectively for one shift we have to implement three different rates. This poses a significant difficulty in the resources the company has and the training and expertise of our managers and our operational – the people who are doing roster coordination in managing these rosters. So… if we are forced to go back to the award, then obviously we’ll make sure that there are smaller shifts that are manageable instead of one shift having three different loaded rates.’ 15

[22] Mr Gillani said that the respondent’s payroll system is completely configured to the 2014 agreement. 16 He did, however, agree that it would be possible to reprogram the payroll system to the award, though this would require purchasing new software as well as extensive retraining for a range of staff.17

[23] Mr Gillani denied that when he was talking about difficulties and problems that reverting to the award would cause, he was really saying that the respondent would have to pay its employees more for the same work. 18

[24] Mr Gillani noted that the rates in the 2014 agreement for Monday to Friday day workers have been superseded by the rates in the award, and that it is these latter rates that are now paid. 19 He said that around 40 people are on the day rate.20 The largest group of employees are on the full-time / part-time loaded rate (Monday to Sunday).21 No one only works weekends.22

Consideration

[25] The termination of enterprise agreements after their nominal expiry date is dealt with in Subdivision D of Division 7 of Part 2-4 of the FW Act. This provides as follows:

‘Subdivision D—Termination of enterprise agreements after nominal expiry date

225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.’

[26] I am satisfied that the applicant, being an employee organisation covered by the 2014 agreement, has made a valid application for its termination, in accordance with s.225 of the FW Act.

[27] I do not consider that it would be contrary to the public interest to terminate the 2014 agreement. The 2014 agreement is clearly out of date. The evidence indicates that – at least from 1 July 2018 – employees under the 2014 agreement are worse off than they would be under the award.

[28] Indeed, the respondent has recognised the need to replace the 2014 agreement, not least by negotiating with its employees the 2018 agreement, which contains increased rates of pay compared to the 2014 agreement. The respondent lodged the 2018 agreement with the Commission for approval on 12 April 2018. It is currently listed for hearing on 23 August 2018.

[29] I was not presented with any direct evidence about the views of the respondent’s employees, besides those of Mr Drew. It is unclear how many employees United Voice represents. The respondent notes that a substantial majority of those who voted approved the 2018 agreement, which is in similar terms to the 2014 agreement, albeit with higher pay rates. However, that does not mean they would oppose the termination of the 2014 agreement if the choice was between that agreement and the higher rates in the award.

[30] It is clear that the employer opposes the termination of the 2014 agreement and United Voice supports it.

[31] What would be the likely effect of terminating the 2014 agreement? If the agreement were terminated prior to the Commission approving the 2018 agreement, it would mean the employees revert to the award’s entitlements. I broadly accept Mr Gillani’s evidence that this would have a substantial and detrimental effect on the respondent’s business. It would, at the very least, need to reconfigure its payroll system. It would also probably affect the respondent’s method of rostering employees, and its relations with its clients.

[32] It is not entirely clear that moving to the award would necessitate replacing 12-hour shifts with 8-hour shifts, as suggested by Mr Gillani. After all, the award does make specific provision for 12-hour shifts, though I acknowledge that they might be more difficult to administer in the absence of loaded rates.

[33] There is no doubt that employees would be somewhat better off under the award than the 2014 agreement – though to the extent that the respondent winds back the use of 12-hour shifts some employees may in practice take home less pay each week, while working shorter hours.

[34] It would certainly be undesirable to terminate the 2014 agreement with immediate effect – thereby placing the employees on the award – only to have the 2018 agreement come into effect a few weeks later. This would involve two disruptions to the respondent’s business for little obvious gain. On the other hand, it cannot be assumed with any degree of certainty that the 2018 agreement will be approved by the Commission. If, for any reason, that agreement is not approved, refusing to terminate the 2014 agreement would mean that the employees are left on a sub-standard agreement, potentially indefinitely.

[35] In all the circumstances, I consider that it would be appropriate to terminate the 2014 agreement with effect from the first pay period on or after 2 November 2018. Of course, if the 2018 agreement is approved by the Commission in the meantime, the 2014 agreement would no longer be in operation, and its termination would be moot.

SENIOR DEPUTY PRESIDENT

Appearances:

S Bull for United Voice.

T McDonald, solicitor, for SECOM Australia Pty Limited.

Hearing details:

Sydney.

2018.

May 10, June 13.

 1   Exhibit 1.

 2   Exhibit 6.

 3   Exhibit 2.

 4   [2014] FWCA 9388. The Commission subsequently corrected the Agreement under s.602 of the FW Act in [2016] FWCA 193. This included a correction to the Secom Level 3 full time / part time day rate (Monday to Friday) in cl 3.2.1.

 5   MA000016.

 6   Annexure SD-1.

 7   Exhibit 1 [7]-[8].

 8   Exhibit 6 annexure MV-1.

 9   Exhibit 7.

 10   PN592-3.

 11   Exhibit 2 [11](a)-(c).

 12   Exhibit 2 [11](d).

 13   Exhibit 2 [11](g)-(h).

 14   PN630.

 15   PN638-9.

 16   PN690.

 17   PN701-3.

 18   PN734.

 19   PN811-3.

 20   PN898.

 21   PN910.

 22   PN912.

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