Village Roadshow Theme Parks Pty Ltd & Village Roadshow Theme Parks Entertainment Pty Ltd T/A Village Roadshow Theme Parks

[2017] FWCA 3468

[2017] FWCA 3468

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Village Roadshow Theme Parks Pty Ltd & Village Roadshow Theme Parks Entertainment Pty Ltd T/A Village Roadshow Theme Parks
(AG2016/3590)

VILLAGE ROADSHOW THEME PARKS - AWU AGREEMENT 2016-2018

Amusement, events and recreation industry
COMMISSIONER HUNT	BRISBANE, 3 JULY 2017

Application for approval of the Village Roadshow Theme Parks - AWU Agreement 2016-2018.

[1] On 21 June 2016 Village Roadshow Theme Parks Pty Ltd & Village Roadshow Theme Parks Entertainment Pty Ltd T/A Village Roadshow Theme Parks (collectively referred to below as Village Roadshow) applied for approval of an enterprise agreement known as the Village Roadshow Theme Parks - AWU Agreement 2016-2018 (the Agreement).

[2] The Agreement had been voted upon by employees on 7 June 2016, with a majority of employees voting in favour of the Agreement.

[3] The Australian Workers’ Union (AWU), being a bargaining representative for the Agreement has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2), I note that the Agreement covers the AWU.

[4] The AWU initially opposed the approval of the Agreement primarily on the basis that it did not satisfy the better off overall test (BOOT) as set out in s.186(2)(d) of the Act. Village Roadshow proposed undertakings to address a number of the issues raised by the AWU, however the issue of Sunday penalty rates and the BOOT remained unresolved.

Legislative context

[1] Section 186 of the Act sets out the general requirements that the Commission must consider to approve an enterprise agreement, and states:

‘186 When the FWC must approve an enterprise agreement—general requirements

Requirements relating to the safety net etc.

(2) The FWC must be satisfied that:

…

(d) the agreement passes the better off overall test.’

[2] The BOOT is provided for in s.193 of the Act, which states:

‘193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

When a greenfields agreement passes the better off overall test

(3) A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each prospective award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) 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.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.’

[3] In NTEU v UNSW 1, Lawler VP observed that the BOOT involves balancing an overall assessment of the terms and conditions of an agreement:

‘It is trite to observe that awards typically contain both monetary and non-monetary terms and conditions. Obviously enough, the BOOT calls for an overall assessment. Comparing monetary terms and conditions is, at the end of the day, a matter of arithmetic. There is an obvious problem of comparing apples with oranges when it comes to including changes to non-monetary terms and conditions into the “overall” assessment that is required by the BOOT. In such circumstances the Tribunal must simply do its best and make what amounts to an impressionistic assessment, albeit by taking into account any evidence about the significance to particular classes of employees covered by the Agreement of changes to particular non-monetary terms that render them less beneficial than the equivalent non-monetary term in an award. In my view, it may also be relevant to consider the terms of any existing agreement and whether there is a relevant change of position when compared to that existing agreement.’

[4] In Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited 2, the Full Bench summarised the prior authorities with respect to undertaking the BOOT:

‘The determination of this appeal requires us to consider, on all of the evidence before the Commission, whether the Agreement passes the BOOT. Section 193(1) of the Act provides that an enterprise 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 if the agreement covered the employee than if the relevant modern award covered the employee. In this case the relevant modern award is the General Retail Industry Award 2010 (the Award). It is well established that the test requires the identification of terms which are more beneficial for an employee, terms which are less beneficial for an employee, and an overall assessment of whether an employee would be better off under the agreement.’

[5] The relevant Modern Award for the purposes of the BOOT, as declared by Village Roadshow is the Amusement, Events and Recreation Award 2010 (the Award).

[6] The matter was first allocated to me on 26 July 2016, and the first occasion the Fair Work Commission (the Commission) met with Village Roadshow and the AWU was on 15 August 2016. It was clear that there were a number of substantial issues with the Agreement that would prevent it being approved by the Commission. I communicated to the parties the Agreement was not capable of passing the BOOT without undertakings being provided.

[7] Section 190 of the Act states:

“190 FWC may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under section 185; and

(b) the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2) The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern.

Undertakings

(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

FWC must seek views of bargaining representatives

(4) The FWC must not accept an undertaking under subsection (3) unless the FWC has sought the views of each person who the FWC knows is a bargaining representative for the agreement.

…”

[8] Relevant authorities are clear that the Commission may only approve an agreement with undertakings if it has first expressed a concern that the Agreement does not meet the requirements set out in sections 186 and 187. 3 In this matter, one of the significant concerns the Commission held was that the Agreement made with employees did not provide a penalty payment for work performed on Sundays. The Award provides a loading of 50% for ordinary hours worked on a Sunday.4

[9] Between August 2016 and May 2017, the Commission has assisted Village Roadshow and the AWU reach an acceptable outcome, which included the provision of acceptable undertakings. The Full Bench decision in United Voice v MSS Security Pty Ltd 5and subsequent decision of the Full Court of the Federal Court6 adversely impacted upon the scope available to Village Roadshow to provide reconciliation undertakings to address the issue of Sunday penalty rates.

[10] The Commission convened four conferences with the parties and heard evidence at a hearing on 4 May 2017. Following the hearing, further undertakings were proposed by Village Roadshow addressing the issue of Sunday penalty rates. The undertakings confer an obligation on Village Roadshow to perform a reconciliation for casual and part–time employees where they work a certain ratio of hours Monday through to Saturday, and compare those hours against ordinary hours worked on Sundays in the same fortnight. The undertakings provide for any shortfall that exists by working hours on a Sunday greater than the relevant ratio in the undertakings at the relevant time, to be paid to the employee in the next pay period, plus an additional dollar. I am satisfied that the effect of accepting the undertaking will not result in any financial detriment to any employee relevant to the consideration required in s.190(3)(a).

[11] On 30 June 2017, Village Roadshow provided a signed consolidated undertaking in accordance with r 2.07 of the Fair Work Regulations 2009. There is no requirement that the AWU on behalf of its members at Village Roadshow agree with the terms of the undertaking, simply that the AWU’s views are taken into consideration. It is noted the AWU has communicated to the Commission it considers the undertakings provided to be acceptable, and does not oppose the Commission approving the Agreement.

[12] Pursuant to s.190 of the Act, I accept Village Roadshow’s undertakings. In accordance with s.201(3) of the Act I note that a copy of the undertakings is attached to the Agreement and forms part of the Agreement.

[13] I am satisfied that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met.

[14]
The Agreement is approved, and in accordance with s.54 of the Act will operate from 10 July 2017. The nominal expiry date of the Agreement is 10 July 2019.

COMMISSIONER

 1   [2010] FWAA 9588 at [96].

 2   [2016] FWCB 2887 at [6] citing AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833; Armacell Australia Pty Ltd and others [2010] FWAFB 9985; National Tertiary Education Union v University of New South Wales[2011] FWAFB 5163; Solar Systems Pty Ltd [2012] FWAFB 6397.

 3   Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd[2017] FWCFB 1664 at [23].

 4   Amusement, Events and Recreation Award 2010 at cl 23.3.

 5   [2015] FWCFB 6923.

 6 [2016] FCAFC 124.

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