Visy Board Pty Limited
[2019] FWC 3391
•4 JUNE 2019
| [2019] FWC 3391 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Visy Board Pty Limited
(AG2018/5316)
COMMISSIONER BISSETT | MELBOURNE, 4 JUNE 2019 |
Application for approval of the Visy Board Truganina Enterprise Agreement 2018.
[1] Visy Board Pty Limited (Visy) has made an application to the Fair Work Commission (Commission) pursuant to s.185 of the Fair Work Act 2009 (FW Act) for the approval of the Visy Board Truganina Enterprise Agreement 2018 (Agreement). The Agreement is a single enterprise agreement. The application was made on 21 September 2018.
[2] Following the making of the application the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (AMWU) indicated that it wished to be heard in relation to the application.
[3] The application for approval of the Agreement was therefore listed for conference before me on 15 March 2019. Prior to the conference my chambers wrote to Visy (copied to the AMWU) to advise that I had a number of queries with respect to the Agreement and application for approval of the Agreement that they should consider prior to the conference. I also requested that the AMWU identify its concerns with the Agreement and application for approval of the Agreement prior to the conference.
[4] The issues raised by the Commission went to the signatory requirements for the Agreement (the address of the employee signatory to the Agreement was not included); details of the notification of the time and place of voting on the Agreement; classification matching between the Graphic Arts, Printing and Publishing Award 2010 1 (Award) and Agreement and matters in relation to the better off overall test (BOOT).
[5] At the first conference the AMWU identified a number of issues (in addition to those identified by the Commission) it said were such that the Agreement could not be approved including representational rights of employees, whether Visy had breached good faith bargaining requirements, whether employees were given access to the Agreement and incorporated materials during the seven day access period and whether the Agreement passed the public interest test. The AMWU further said that any undertakings given to resolve concerns about the Agreement would constitute a substantial change to the Agreement.
[6] At the conference on 15 March 2019 Visy sought permission to be represented by a lawyer in proceedings. It argued that the matter was complex and that it could be dealt with more efficiently if permission was granted (s.596(2)(a)). Given the breadth of issues raised by both the Commission and the AMWU in relation to whether the Agreement had been genuinely made and if it passed the BOOT I determined that the matter was complex and could be dealt with more efficiently if permission was granted. There was no objection to the grant of permission and I took this into account in deciding to exercise my discretion to grant permission to Visy to be represented pursuant to s.596(2) of the FW Act.
[7] A further conference of the parties failed to find any agreed resolution to the outstanding issues. Approval of the Agreement was therefore listed for hearing on 26 April 2019.
[8] At the time the Agreement was subject to negotiation and when Visy sought the employees approve the Agreement the employees who were engaged to work at the Truganina site were undergoing training. Some were being trained in Yatala in Queensland and some in Hamilton, New Zealand. One employee was at Reservoir in Melbourne. There is no dispute however that all employees were recruited to work at Truganina in Melbourne and that in October 2018 they were on site and working.
EVIDENCE
[9] Evidence was given in the hearing for the AMWU by Mr Stephen Mabbett, an employee of Visy at the time the Agreement was made; Mr Paul Chirgwin, National Organising Unit Coordinator with the AMWU and Mr Dean Griffiths, AMWU Organiser.
[10] Evidence was given for Visy by Mr Steven Gadd.
[11] Mr Gadd provided a revised Form F17 – Employer’s statutory declaration (statutory declaration) which is required by the Fair Work Commission Rules 2013 to accompany an application for approval of an agreement under s.185 of the FW Act.
[12] Mr Matthew Hermo was issued with an order that he attend and give evidence on the application by the AMWU. Mr Hermo is the employee representative who signed the Agreement.
[13] The AMWU also provided a witness statement for Mr Brett Merry. Mr Merry did not attend to give evidence. His statement was therefore not admitted.
[14] The AMWU also sought to have admitted as evidence witness statements of “Visy Worker 1”, “Visy Worker 2” and “Visy Worker 3”. None of these statements identified the person making the statement and those persons did not attend the hearing and hence could not be cross-examined on the evidence. I decided not to admit these statements as evidence but took them as further submissions.
LEGISLATION
[15] Section 185 of the FW Act requires that a bargaining representative for an agreement must apply to the Commission for approval of that Agreement. The application must be accompanied by a signed copy of the agreement and any required declarations. That application must be made within 14 days after the Agreement is made (s.185(3)(a)) although this period may be extended by the Commission.
[16] Section 186 of the FW Act provides that the Commission must approve an agreement if the requirements in s.186 and s.187 of the FW Act are met. As is relevant to the application before me these requirements are:
1. That the Commission is satisfied that the agreement has been genuinely agreed to by employees covered by the agreement (s.186(2)(a));
2. The terms of the agreement do not contravene s.55 of the FW Act (s.186(2)(c));
3. The agreement passes the better off overall test (s.186(2)(d));
4. That the group of employees covered by the agreement have been fairly chosen (s.186(3));
5. The agreement contains no unlawful terms (s.186(4)) and has no designated outworker terms (s.186(4A));
6. The agreement contains a nominal expiry date no more than 4 years after the day of approval of the agreement (s.186(5);
7. The agreement contains a term about settling disputes that meets certain criteria (s.186(6));
8. The Commission is satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation (s.187(2)).
[17] Section 188 of the FW Act establishes when employees have genuinely agreed to an agreement as required by s.186(2)(a). Section 188 of the FW Act states as follows:
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees…
[18] Section 180 of the FW Act sets out the requirements that must be met before employees are requested to approve an agreement by an employer. Sections 180(2), (3) and (5) of the FW Act provide as follows:
180 Employees must be given a copy of a proposed enterprise agreement etc.
…
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.
(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used…
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
[19] Section 181(2) of the FW Act requires that the request to approve an agreement not be made until at least 21 days after the last notice of employee representation rights (NERR) has been issued.
[20] If an application for approval of an agreement is made and the Commission has some concerns that it does not meet the requirements of s.186 or s.187 of the FW Act the Commission may approve the agreement with undertakings (s.190(1) and (2)).
[21] Such undertakings may only be accepted if they are not likely to cause financial detriment to any employee covered by the agreement and they do not result in substantial change to the agreement (s.190(3)).
[22] I have considered all of these relevant provisions of the FW Act in conjunction with the documents accompanying the application by Visy including the amended statutory declaration. I have also had regard to the evidence called and submissions made by the AMWU.
CONSIDERATION
Was the application properly made (s.185)?
[23] I am satisfied that the application has been made for approval of the Agreement in accordance with s.185 of the FW Act. Whilst the copy of the Agreement initially filed with the Commission had an incomplete signatory page this was rectified on request to Visy.
[24] Further, the application was accompanied by a signed statutory declaration by an authorised person of Visy. Following the conferences before the Commission and prior to the hearing of the application Visy sought to amend its statutory declaration to expand on some information provided and to correct errors in the first declaration.
[25] I have decided to accept the amended statutory declaration filed on behalf of Visy. Whilst there are matters raised in that statutory declaration that the AMWU takes issue with, these are dealt with below. The amended statutory declaration (which formed the evidence of Mr Gadd) does not involve substantial alteration to the first declaration filed but rather expands on that first statutory declaration provided. The amended statutory declaration does however amend an incorrect statement as to the rates of pay for casual employees.
[26] The Agreement was made by employees on 7 September 2018. The application for approval of the Agreement was made on 21 September 2018, within 14 days of the date the Agreement was made.
[27] I am therefore satisfied that the application for approval of the Agreement has been properly made in accordance with s.185 of the FW Act.
Was the Agreement genuinely agreed to by employees (s.186(2)(a))?
[28] Section 188 of the FW Act establishes when employees have genuinely agreed to an agreement as required by s.186(2)(a) of the FW Act. It is set out above.
Pre-approval steps
[29] I am satisfied, on the basis of the statutory declaration of Mr Gadd, that the request to approve the agreement was not made until at least 21 days after the NERR was issued to employees. Whilst Mr Mabbett said he did not recall receiving the NERR on 14 August 2018 he recalled reading that he could contact the Fair Work Ombudsman and said he was not suggesting the NERR was not provided.
[30] I am therefore satisfied that the requirements of s.181(2) of the FW Act have been met.
[31] Mr Gadd said in the statutory declaration that employees were provided with:
• a written copy of the proposed Agreement;
• a copy of the Commission document in relation to the NES;
• a memorandum dated 28 August 2018 headed “Enterprise Agreement Clauses”;
• a letter regarding voting which advised that voting would open at the commencement of the shift on 7 September 2018; and
• a document entitled “How to Vote” which advised that voting would close at 10.00am on 7 September 2018.
[32] Mr Gadd said he handed these documents to employees in Hamilton on 28 August 2018 and to employees at Yatala on 30 August 2018. He instructed Mr Glenn Palmer to hand the documents to the single employee at Reservoir on 30 August 2018.
[33] Mr Gadd also said that he placed two copies of the Award and the Long Service Leave Act 1992 (Vic) (LSL Act) in the lunch rooms at Hamilton and Yatala and Mr Palmer provided a copy of each at Reservoir.
[34] Mr Mabbett said in his evidence that the documentation referred to was provided to employees at Yatala on the Tuesday prior to the Friday when they were required to vote. Mr Mabbett said however that he was very unwell that week with food poisoning and it may be that the paperwork was provided the Thursday of the week prior to the date of the vote.
[35] I am satisfied, on the basis of the statutory declaration filed by Mr Gadd that employees were provided with the written text of the proposed Agreement and details in relation to the NES and details of the time and place of the vote and how the voting would occur prior to the commencement of the access period. Mr Mabbett acknowledged that he could have been wrong as to when he thought he received the paperwork as he had been ill. Given his uncertainty I am satisfied that I can rely on the evidence of Mr Gadd.
[36] I am also satisfied that employees had access to the relevant award and a copy of the long service leave legislation that would apply to them.
[37] I am therefore satisfied that the requirements of s.180(2) and s.180(3) have been met.
Explanation of the terms of the Agreement
[38] In his statutory declaration Mr Gadd said that employees were provided with a copy of a memorandum (attachment SG-2 to the statutory declaration) which provided an explanation of the Agreement and that he conducted a meeting in Hamilton on 28 August 2018 and Yatala on 30 August 2018 with employees as a group. He said that each of these meetings went for about two hours. He said he also conducted one on one meetings with employees to further explain the Agreement and answer any questions employees may have and that copies of the Award were available to them. A meeting was also held with the employee in Reservoir.
[39] Mr Gadd’s evidence is that he did explain the terms of the Agreement in relation to the Award. He discussed the shift penalties in the Agreement compared to the Award, span of hours and weekend loadings amongst other things.
[40] Mr Gadd said that the meetings were conducted in English. Whilst he acknowledged that English might not be the first language of a number of the employees he was comfortable that they could converse in English. Further, he said there was no indication they had trouble reading English. Mr Gadd said he was comfortable with the English language skills of the employees as he had interviewed each of them as part of the recruitment process.
[41] Mr Hermo gave evidence that he could recall receiving a copy of the Award and of having the Agreement explained although he could not recall being told whether the Agreement might have been worse than the Award.
[42] Mr Mabbett said he could not recall Visy talking about the Agreement compared to the Award but agreed that he perhaps did not understand the Award comparison. He said however that Mr Gadd may have raised it and that the Award was available.
[43] Mr Mabbett said that hours of work and shift allowances were discussed as was the overtime rate.
Objectively identifiable terms
[44] The AMWU submits that Visy could not have properly explained the terms of the Agreement to employees as there are terms of the Agreement which are not objectively identifiable.
[45] In particular the AMWU refers to the pay increase referred to in clause 13 of the Agreement which states as follows:
13 WAGE INCREASE
All employees covered by this Agreement will receive the following increases to the current weekly wage for acceptance and implementation of this Agreement.
The following increases in wage rates will be applied during the life of this agreement starting with the first full pay period after the below.
A further amount of 2% per annum wage increase shall be operative from the anniversary of the Enterprise Agreement in 2019.
A further amount of 2% per annum wage increase shall be operative from the anniversary of the Enterprise Agreement in 2020.
A further amount of 2% per annum wage increase shall be operative from the anniversary of the Enterprise Agreement in 2021.
[46] The AMWU submits that there will be no “anniversary of the Enterprise Agreement in 2019” as it is now 2019 and the Agreement has not yet been approved.
[47] The AMWU relies on the decisions of the Full Bench of the Commission in Construction, Forestry, Mining and Energy Union v CSR Limited T/A Viridian New World Glass 2 (Viridian) where the Full Bench said that:
[20] …the Act requires that enterprise agreements contain terms and conditions of employment that are certain.
[48] The AMWU submits that to make the wage increase dependent on the timing of decision-making of the Commission creates an unacceptable level of uncertainty. This uncertainty must “render it impossible to reasonably explain the provision to employees.”
[49] Visy recognises the problem with clause 13 of the Agreement as written. It has sought to remedy the identified issue by the provision of an undertaking.
[50] That proposed undertaking is as follows:
In respect of clause 13, the wage increases will be applied as follows:
• 2% per annum wage increase shall be operative from 1 November 2019.
• A further 2% per annum wage increase shall be operative from 1 November 2020; and
• A further 2% per annum wage increase shall be operative from 1 November 2021.
[51] Mr Gadd gave evidence that when he spoke to employees about the Agreement he explained that Visy expected the Agreement to be approved in late 2018 with the first increase in rates from about November 2019, one year after Visy expected the Agreement would be approved (given it met the requirements of the FW Act).
[52] Mr Gadd said he had not expected the delay in the Commission in dealing with the Agreement. He said that the proposed undertaking with respect to the pay increase does no more than ensure the pay increases take effect from the time it was anticipated they would be effective.
[53] Visy accepts that there is uncertainty in the way the pay increase is expressed in the Agreement. It submits that the undertaking simply reflects what was always intended and what was explained to employees.
[54] It submits that the reliance by the AMWU on the decision in Viridian is misplaced as that decision dealt with terms of an Agreement that were uncertainly caused by the operation of the Building Code.
[55] Visy says that the uncertainty about the date of effect of the wage increases are not a BOOT issue.
Were the terms objectively identifiable?
[56] The application for approval of the Agreement before the Commission was filed by Visy on 21 September 2018. In filing the application Visy had no reason to think that it would take some six months before the file would be allocated to a member of the Commission to determine. It was, in this respect, not unreasonable for it to think the Agreement would be considered in 2018.
[57] I am, however, satisfied that employees were told that it was anticipated the Agreement would be approved in late 2018 (if it met the requirements of the FW Act) and that they would, therefore, receive a pay increase in late 2019. In this respect the undertaking proposed adds certainty to what employees were told.
[58] I deal below with whether or not the proposed undertakings result in a substantial change to the Agreement. In respect to the matter of whether the terms of the Agreement and the effect of those terms was explained I am satisfied that, in explaining the terms of the Agreement, Visy did explain that the effect of clause 13 was that a pay increase would be provided in late 2019, 2020 and 2021. In this respect that particular term of the Agreement was objectively identifiable.
[59] On the basis of the evidence before me I am satisfied that Visy has taken all reasonable steps to ensure that the terms of the Agreement, in addition to the pay increase, and the effect of those terms were explained to employees and that the explanation was provided in an appropriate manner.
[60] I have reached this conclusion as the meetings referred to by Mr Gadd were not the only meetings he had with employees and there is no complaint from the employee witnesses that the terms of the Agreement were not explained. Both Mr Hermo and Mr Mabbett said that they could not recall if they were given or had explained a comparison of the Award to the Agreement but both agreed they had access to the Award. Mr Mabbett’s evidence does not suggest that no explanation was given. Certainly matters associated with the provision of rest breaks (“smokos”) seems to have been the subject of apparently intense discussion. Mr Hermo agreed that annual leave loading, overtime, penalties and consultation had been discussed.
[61] Further, my conclusion is supported by the decision in Construction, Forestry, Mining and Energy Union v Jeld-Wen Australia Pty Ltd T/A JELD-WEN Australia QLD3(Jeld-Wen) where the Full Bench of the Commission considered whether the terms of an agreement had been explained to employees in circumstances where there was no date of effect in the tables setting out the rates of pay but rather a typographical error of “[insert date]” in circumstances where the intended dates of effect had been explained to employees.
[62] The Full Bench in that matter found that:
[28] The evidence in exhibit A indicates that the Respondent explained to the relevant employees that Appendix A of the Agreement would have included in it the dates which are the dates listed by Mr Grundy in exhibit A. It follows that the Agreement, combined with the evidence provided in exhibit A, gives effect to the explanation that the Respondent provided to the relevant employees. Therefore, the Respondent’s failure to adequately explain that there would be a typographic error in Appendix A of the Agreement is remedied by the evidence in exhibit A and specifically, the Undertaking regarding the relevant dates that should have been included. The weight of evidence indicates that the Agreement, when read in conjunction with the Undertaking in exhibit A, reflects the explanation that the Respondent offered to the relevant employees. It follows that the Agreement, when read together with exhibit A, adequately reflects the explanation that the Respondent provided the relevant employees, satisfying s.180(5) of the FW Act.
[underlining added]
[63] I am satisfied that Mr Gadd did explain the terms of the Agreement and the effect of those terms to employees including the expected dates for pay increases. The evidence before me does not allow me to conclude that the explanation was not appropriate taking into account the personal circumstances of employees.
[64] I am therefore satisfied that the requirements of s.180(5) of the FW Act have been met.
[65] For these reasons I am satisfied that the terms of the Agreement and the effect of those terms were explained to employees and that the requirements of s.188(1)(a) of the FW Act are met.
The Agreement was made in accordance with s.182(1)
[66] I am satisfied that the Agreement was made in that a majority of employees who cast a valid vote voted in favour of the Agreement. Of the 21 employees eligible to vote, 14 voted in favour of the Agreement.
[67] I am therefore satisfied that the requirements of s.188(1)(b) were met.
No other reasonable grounds to believe the agreement was not genuinely agreed to
[68] I have considered the formulation of the pay increases above. I do not believe that the clause on the pay increases is a basis on which to conclude the Agreement was not genuinely agreed to.
[69] I have also considered whether, because of the issue above as to the wages clause, employees could have genuinely agreed to the Agreement.
[70] In Jeld-Wen 4 the Full Bench also considered whether the agreement without the dates included for the pay increases was what the employees agreed to. The Full Bench found:
[29] Pursuant to s.186(2)(a) of the FW Act, the employees must have genuinely agreed to the enterprise agreement. We agree with the CFMEU’s submissions that the Agreement, with the relevant dates omitted from Appendix A, is not what the employees agreed to.
[30] However, as the weight of the evidence indicates that the employees agreed to the dates that are prescribed in the Undertaking, we do not agree with the CFMEU’s contention that the Agreement, combined with the Undertaking, can never meet the genuine agreement requirement. To the contrary, the Agreement, in conjunction with the Undertaking, gives effect to the terms and dates that the employees genuinely agreed to. It therefore follows that the Agreement, read in combination with the Undertaking, passes the requirement in s.186(2)(a) of the FW Act.
[footnote omitted]
[71] The AMWU further submits that s.188(1)(c) “focuses on the authenticity and moral authority of an enterprise agreement” and that “[m]ere agreement is insufficient. Consent of a higher quality is required.”
[72] The AMWU submits that the witness evidence raises real concerns in relation to freedom of association. In particular the AMWU relies on evidence of Mr Hermo who said that he was told that Mr Gadd preferred to handle the agreement without unions and the evidence of Mr Mabbett that he had a discussion with an employee who said that Mr Gadd had spoken to that employee about raising the union in the workplace. Mr Mabbett said that while Mr Gadd said nothing specific to him Mr Gadd made it known that “he didn’t like unions.”
[73] The AMWU also rely on the submissions of Visy Worker 1 that while Visy did say workers could be represented they made it clear they would rather have the Agreement dealt with in-house and Visy Worker 3 whose submission is that when a worker raised the union he was “told off” by management.
[74] The AMWU submits that the approach of Visy to the union – and hence freedom of association – “calls into question whether the agreement of the employees who voted for the proposed agreement was genuine.” Visy, it submits, has not come to the matter with clean hands. Further, it submits that there can be no genuine agreement where the spirit and the intent of the NERR is subverted by the actions of Visy.
[75] The evidence of Mr Gadd is that employees were told they could have a bargaining representative and he did not discourage employees from being represented. In this respect he said that the evidence of Mr Hermo was “inaccurate”.
[76] The claims made by the AMWU concerning the actions of Visy management in relation to representation of employees are serious. The only first-hand claim that Visy suggested they did not want unions involved comes from Mr Hermo. Mr Hermo had no grounds on which to manufacture this evidence. He came to the Commission on a direction that he attend. I would note however that Mr Hermo also gave evidence that Mr Gadd said employees could have an external representative if they wished.
[77] Mr Gadd said he did not tell employees they could not have a bargaining representative and he did not discourage them from being represented. On the basis of Mr Hermo’s evidence in cross-examination I am satisfied that employees were not told they could not have an external bargaining representative.
[78] It would be extremely concerning to the Commission if it was that Visy did or said things that indicated to employees that they could not be represented in bargaining. Whilst evidence was given of an employee being questioned as to the union, this evidence was not first hand. It is a substantial step, without corroborating evidence, to accept the hearsay evidence, as positive proof of actions by Visy to deliberately stop employees engaging the union or any other party as a bargaining representative.
[79] The evidence before the Commission does not support a finding that the AMWU was a default bargaining representative for employees or that employees were actively dissuaded from contacting the union if they so desired. In any event I find it hard, in the current environment of smart phones, for an employer to be able to stop employees contacting whoever they wish.
[80] I am not able to conclude from the evidence before me that Visy sought to “mislead or misinform employees or coerce or intimidate them in a way that interferes with their right to bargain or be represented by a person of their choice…” 5 Visy may not have been encouraging of contact with the AMWU but this is too far removed from taking active steps to deny employees their right to be represented although Visy would be cautioned to be very careful at how it represents its preference as to how bargaining might occur. If the evidence demonstrated that the AMWU was a default bargaining representative during the bargaining my conclusion may have differed.
[81] I should further add that the evidence is that Visy did facilitate discussions between the two groups of employees in Hamilton and Yatala such that the AMWU’s submissions on this point must be rejected.
[82] I am not convinced that s.188(1)(c) requires “consent of a higher order” than is otherwise required to approve an agreement. What it does do is allow the Commission to consider other grounds beyond those specifically mentioned. It invites a breadth of scrutiny unconstrained but I do not know that it invites consent of a higher order.
[83] I would conclude on this matter by observing that the employees concerned appear to have actively participated in the bargaining process. They sought changes to the Agreement as it was negotiated and had apparently robust discussions about their conditions of employment. They all participated in the vote with the Agreement being supported by 14 out of 21 employees. The other 7 opposed the Agreement. In this respect had Visy been attempting to (and I do not say they were) it did not appear to have coerced or intimidated its staff.
[84] I am therefore satisfied that the requirements of s.188(1)(c) are met.
Conclusion as to “genuinely agreed”
[85] For these reasons I am satisfied that the Agreement was genuinely agreed to be employees and the requirements of s.186(2)(a) of the FW Act are met.
Do the terms of the Agreement contravene s.55 of the FW Act (s.186(2)(c))?
[86] In correspondence sent to Visy and copied to the AMWU prior to the conference of 15 March 2018 I raised with Visy a number of areas where it appeared that the Agreement did contain terms that contravened s.55 of the FW Act in that they excluded some provisions of the NES.
[87] These provisions related to:
• payment for public holidays;
• evidence requirements for personal leave;
• redundancy entitlements;
• payment on termination; and
• entitlement to notice of termination for apprentices.
[88] In raising these issues I did note that clause 2(b) of the Agreement provides that the NES will apply as a minimum standard.
[89] Prior to the hearing of the application for approval Visy provided proposed undertakings that dealt with the issues identified above.
[90] I am satisfied that those undertakings are not likely to cause financial detriment to any employee covered by the Agreement and they do not result in substantial change to the Agreement.
[91] Based on the acceptability of the undertakings in this regard I am satisfied that the Agreement does not contravene s.55 of the FW Act and that the requirements of s.186(2)(c) are met.
Have the group of employees to be covered by the Agreement been fairly chosen (s.186(3))?
[92] The Agreement covers employees in the classifications listed in the Agreement working at the Truganina site.
[93] Visy submits that this group of employees is geographically distinct from other employees at Visy as they work at the one site and that they are operationally distinct from management employees who work at the site.
[94] I am satisfied, based on the information provided in the statutory declaration of Mr Gadd that the group of employees was fairly chosen and that the requirements of s.186(3) are met.
Unlawful terms (s.186(4) and s.186(4A))
[95] I am satisfied that the Agreement does not contain any unlawful terms and that the requirements of s.186(4) and s.186(4A) of the FW Act are met.
Nominal expiry date (s.186(5))
[96] The Agreement contains a nominal expiry date at clause 5 of “four (4) years from the date of certification.”
[97] I am satisfied that this meets the requirements of s.186(5) of the FW Act (accepting that the date of “certification” is the date of approval).
Dispute settlement terms (s.186(6))
[98] Clause 24 of the Agreement is the “AVOIDANCE OR SETTLEMENT OF DISPUTES” clause.
[99] The clause applies to disputes in relation to a matter arising under the Agreement or the NES.
[100] The clause allows for an employee party to the dispute to appoint a representative for the purposes of the procedures.
[101] The clause also provides a procedure that allows the Commission (erroneously referred to as Fair Work Australia but which can be amended) to settle disputes.
[102] I am therefore satisfied that the requirements of s.186(6) have been met.
Does the Agreement pass the better off overall test (s.186(2)(d))?
[103] Section 193 of the FW Act states as follows:
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.
…
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 subsection 182(4) or 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.
[104] There is no disagreement that the relevant award for the purpose of determining if the Agreement passes the BOOT is the Graphic Arts, Printing and Publishing Award 2010.
[105] The AMWU submits that the Commission must be satisfied that each award covered employee and prospective award covered employee must be better off under the proposed agreement than they are under the Award. This much is evident from s.193(1) of the FW Act set out above although I would add that the determination of whether each employee and prospective employee would be better off overall is to be made at the test time and the test time, in this case, is 21 September 2018 (s.193(6)).
[106] Visy provided an analysis of the effect of current rosters on employees and submits that this demonstrates that employees will be better off overall. In addition Visy have supplied a number of proposed undertakings that it says will remedy concerns raised by the Commission.
[107] The AMWU submits that there are any number of foreseeable future work arrangements such that the Commission cannot be so satisfied that the Agreement passes the BOOT because the Agreement, when compared to the Award, has:
• lower shift loadings for afternoon, night and morning work;
• expanded hours for day work;
• lower weekend loadings;
• casuals being paid below award rates; and
• no limit on how long an employee can remain at the Grade 5 level.
[108] The AMWU submits that the rosters provided by Visy are no more than indicative rosters that do not take into account seasonal fluctuations or periods of peak demand.
[109] The AMWU submits that the evidence of Mr Chirgwin demonstrates that a “wide variation in shifts are already being worked, with a small number of workers starting before 5.00am, a significant group starting at 5.00am and then staggered start times for workers.” It says the evidence of Mr Griffiths “clearly demonstrates that a class of prospective workers would be significantly worse off in terms of wages, even before the full value of the loss of Award conditions was considered.”
Lower shift loadings
[110] I accept (and it is not disputed) that the shift loadings in the Agreement are lower than those in the Award.
[111] Visy argue that, on the basis of its rosters, the lower shift penalties are offset by adequately higher base rates of pay.
Expanded hours for day work and lower weekend loadings
[112] The Award specifies day work as occurring between 7.00am and 6.00pm. The Award allows for the spread of hours to be increased by one hour at one end of the day only by agreement between the employer and the majority of employees.
[113] The Award provides that the days on which ordinary hours are worked may include Saturday and Sunday by agreement between the employer and the majority of employees affected. Ordinary hours worked on a Saturday or Sunday are paid at 200% of the ordinary rate of pay.
[114] The Agreement provides for a span of hours between 6.00am and 6.00pm.
[115] The ordinary hours of work under the Agreement can be arranged on any day Monday to Sunday although ordinary hours of a Saturday or Sunday will be paid at 150% of the ordinary rate of pay.
[116] Whilst not conceding any issue with this Visy have proposed an undertaking that ordinary hours will only be worked Monday to Friday and that all weekend work will be overtime. Further, it submits that, in making the Agreement, employees have effectively agreed to the extension of ordinary hours by one hour as provided for in the Award.
Casual employees
[117] The Agreement and Award contain different rates of pay for casual employees.
[118] In correspondence to Visy prior to the first conference in the matter on 15 March 2019 the Commission raised with Visy the disparity in casual rates of pay and that, except for the Agreement Grade 5 classification ( which is equivalent to a Grade 1 under the Award), casual employees would receive less under the Agreement than the Award.
[119] In a reply on 14 March 2018 and prior to the conference Visy indicated that there was a typographical error in Appendix 1 of the Agreement. It said that the amounts in the Grade 4 rate had been transposed and a copying error then repeated through the table. Visy provided the corrected rates in a draft undertaking of 14 March 2018. This is replicated in an updated draft undertaking tabled during the hearing of the application. All rates are shown in the table below.
[120] The competing rates of pay for casual employees are:
Agreement classification | Agreement casual (Appendix 1 casual rate + 25%) | Award casual employee rate of (Clause 17 wage | Amended agreement casual rate as provided in a draft undertaking + 25% casual loading |
Grade 1 | $26.16 | $27.55 | $27.56 |
Grade 2 | $25.27 | $26.14 | $26.15 |
Grade 3 | $24.35 | $25.27 | $25.29 |
Grade 4 | $23.68 | $24.34 | $24.35 |
Grade 5 | $23.68 | $23.66 | $23.68 |
[121] The AMWU submits that, even if the Commission did accept the undertaking in relation to the rates of pay for casual employees the Commission could not be satisfied such employees would be better off overall because of the loss of other benefits.
Period of time as Grade 5 employee
[122] The Agreement sets a rate of pay for a Grade 5 employee of $22.36 per hour.
[123] A Grade 5 employee is defined in the Agreement as a “New starter to business, employee under training until competent in the appointed role, that the employee has been allocated.” [sic]
[124] The equivalent classification under the Award is a Level 1. The rate of pay for a Level 1 under the Award is $18.93 per hour.
[125] A Level 1 employee is defined in Schedule B of the Award:
An employee at this level is undertaking up to 38 hours of induction training. This does not restrict or limit the employment of new employees at a higher level should they be accepted as possessing experience or skills appropriate to a higher level.
An employee at this level:
• performs elementary routine duties of a repetitive nature;
• works under direct supervision;
• is aware of the tasks required at level 2;
• observes safe work practices;
• undertakes literacy and numeracy training (if required) to perform tasks functionally; and
• undertakes training so as to enable them to work at level 2.
On the completion of the required training, the employee will be reclassified to level 2.
[126] A Level 1 employee under the Award therefore moves to and is paid as a Level 2 after 38 hours of induction.
[127] A Grade 5 employee under the Agreement could remain at that level for an indeterminate amount of time.
[128] The disparity in treatment at the entry level in the Agreement compared to the Award was raised with Visy at the conference on 15 March 2018. In response Visy provided a draft undertaking that the Grade 5 classification would only be applied for up to 38 hours.
[129] This draft has been replicated in the proposed undertakings tabled during the hearing of the application.
Part-time employees and overtime
[130] The Award provides that a part-time employee be paid at the applicable overtime rate for all hours worked in excess of the agreed hours. It was not clear whether this was the intent of the Agreement.
[131] In response to this matter being raised Visy proposed an undertaking that part-time employees will receive payment at the overtime rates where they perform work in excess of their set average weekly hours. The proposal is replicated in the proposed undertakings tabled during the hearing.
Tooling Repair Technician
[132] In response to the matter being raised by the Commission Visy proposed an undertaking, replicated in the proposed undertakings tabled during the hearing, that the Tooling Repair technician will not “oversee the Tooling Preparation Technician” but rather will co-ordinate their own work with the Tooling Preparation Technician.
Consideration
[133] Mr Chirgwin’s evidence is that on 18 and 22 March 2019 he visited the Visy Truganina worksite to speak to employees. He says that on the first day he attended he arrived at approximately 5.45am and was surprised to see a large number of cars in the car park as he expected workers would commence at 6.00am.
[134] He says that on 22 March 2019 he attended with a colleague and observed a small number of employees commence before 5.00am. Another group arrived in time to commence work at 5.00am and they confirmed with him that their shift commenced at 5.00am.
[135] Mr Chirgwin said, in answer to questions raised in cross-examination, that he understood day shift commenced at 7.00am. He agreed that employees could be working overtime prior to the start of day shift but said that no-one starting before 6.00am said they were working overtime.
[136] Mr Griffiths’ uncontested evidence is that he analysed the payments due to a Level 3 Award employee working night shift of 7 hours and 36 minutes Wednesday to Sunday and compared this to what the same employee would receive under the Agreement. He assumed the worker was trained to render first aid and held appropriate first aid qualifications.
[137] On his analysis the employee would be $54.04 per week better off under the Award than the Agreement. Further, he said that if the span of hours for night shift was altered by an hour so that it finished at 1.06am it would then be classified as afternoon shift under the Agreement then the employee would be over $100 worse off under the Agreement compared to the Award.
[138] Visy have provided a proposed undertaking that ordinary hours for shift work will only be arranged Monday to Friday. This would, if it was accepted by me, appear to resolve the issues raised by Mr Griffiths as his findings are dependent, in part, on the reduced rate for ordinary hours of work on a Saturday and Sunday.
[139] The AMWU submits that I cannot be satisfied that the Agreement passes the BOOT given the potential further work demands. The AMWU do not provide detail of these potential future rosters. An analysis is therefore not possible. I do note however that any changes to rosters must be subject to the consultation provisions in the Agreement. Further, I do not consider it possible for the Commission to determine if employees will be better off overall on the basis of some future unknown work arrangement. There must be some objective basis to an analysis of work arrangements.
[140] As to the current rosters, the evidence before me does not allow me to conclude that employees are commencing ordinary hours of work prior to 6.00 am. Whilst Mr Chirgwin’s evidence is that he saw employees arriving at work prior to 6.00am he did agree that employees can work overtime prior to the commencement of ordinary hours. That those workers did not tell him they were working overtime is not evidence that they were not.
[141] I am, however, concerned that without the undertakings proposed by Visy (see Annexure A) the Agreement may not pass the BOOT.
Can the Commission accept the proposed undertakings?
[142] Section 190 of the FW Act states as follows:
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 subsection 182(4) or 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.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.
[143] The application for approval has been made in accordance with s.185 of the FW Act. Further, I am concerned that, without the undertakings the Agreement may not meet the requirements of s.186 of the FW Act.
[144] The AMWU submits that I cannot accept the undertakings as they will result in a substantial change to the Agreement such that they would breach s.190(3)(b) above. The AMWU says that to accept the undertakings would be to “unilaterally foist upon employees [sic] terms and conditions of employment for which they have not collectively bargained…[and] have not had an opportunity to vote [on].”
[145] The AMWU is particularly concerned with the wages (addressed above) and the undertaking in relation to casual employees.
[146] The AMWU also submits that the Agreement will operate for four years from its date of approval and the proposed undertaking as to the timing of the payment of wage increases means that employees will have to wait up to 20 months from the last pay increase (in November 2021) to commence bargaining for the next agreement. This will leave a substantial period of time when the employees will be without an increase and not the 12 months as originally proposed (if the Agreement had been approved in 2018).
[147] The AMWU also submits that an undertaking to overcome the BOOT issues with respect to the casual rates of pay is also a substantial change to the Agreement. Likewise with other undertakings proposed.
[148] The AMWU accepts that the undertakings may improve the Agreement but says this does not mean the changes are not substantial.
[149] The AMWU relies on the decision in Re Hyatt Ground Engineering Pty Ltd 6 in which Commissioner Ryan said that:
[30] The sense in which the word “substantial” appears in s.190(3)(b) is in my view to describe changes to the agreement as result of undertakings offered where the changes are not “trivial or minimal” or “ephemeral or nominal”.
[31] In this sense “substantial” is not a quantitative term but a qualitative term. A number of trivial or minimal changes to the agreement may not constitute a substantial change to the agreement. However even a single change to a provision of the agreement where the change was not trivial or minimal would constitute a substantial change to the agreement.
[150] Whilst I acknowledge the views expressed by Commissioner Ryan it would be wrong to read his decision as meaning anything except that the proposed undertakings need to be considered on their merits and in the context of the Agreement as a whole. The effect of those undertakings, particularly (as was discussed above in Jeld-Wen) in the context of how the Agreement was explained to employees must also be a relevant consideration.
[151] I do not consider that the determination of “substantial change” is a numerical count (and I do not take the AMWU submission to be this). There is no question that the proposed undertakings will benefit employees covered by the Agreement.
[152] The proposed undertaking with respect to the date of the pay increases does no more than give effect to what employees were told would be the likely dates of the pay increases. To this extent the undertaking does not present a substantial change to the Agreement.
[153] With respect to the rates for casual employees, the Agreement that was voted on by employees had rates of pay for casual employees that were below the Award rates. The undertaking amends the rates on the basis that there was a typographical/transposition error. The evidence before me does not disclose if any earlier draft of the Agreement or information provided to employees showed the higher rate.
[154] I have taken into account that there were no casual employees engaged at the time the Agreement was made. I have also taken into account the apparent care in constructing a set of rates for casual employees that are marginally better than the Award rates. I have also accepted the evidence that the error was typographical.
[155] In these circumstances I am satisfied that the undertaking in relation to the casual rates of pay is not a substantial change to the Agreement. It was an unfortunate error but its rectification does not change the nature of payment or structure or introduce any new concept into the Agreement.
[156] As to the remaining proposed undertakings (2-6, 8-10 and 12) I am satisfied they do not result in a substantial change to the character or nature of the Agreement. I am therefore satisfied that the undertakings do not create a substantial change to the Agreement.
[157] There are no bargaining representative’s such that their views must be sought in relation to the proposed undertakings (s.190(4)).
[158] For these reasons I consider the proposed undertakings acceptable.
Conclusion as to the better off overall test
[159] I am satisfied on the basis of the undertakings proposed by Visy and an analysis of the rosters provided by Visy and provided to the AMWU prior to the hearing and further consideration by the Commission on the basis of the undertakings that the Agreement will result in employees being better off overall than they would be under the Award.
[160] The Commission has undertaken an analysis of the rosters and potential working hours. There is no basis to find that employees will not be better off overall.
[161] For this reason I am satisfied that the requirements of s.186(2)(d) of the FW Act have been met.
CONCLUSION
[162] Visy has provided draft written undertakings. A copy of the undertakings is at Annexure A. I am satisfied that 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 will therefore accept the undertakings once signed.
[163] I have identified an error in clause 24 of the Agreement where the Commission is erroneously referred to as Fair Work Australia. Visy is requested to resubmit that page of the Agreement with the typographical error corrected.
[164] On receipt of the signed undertakings and the corrected clause 24 the Agreement will be approved.
COMMISSIONER
Appearances:
A. Farr for Visy Board Pty Limited.
R. Wainwright for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
Hearing details:
2019.
Melbourne:
April 26.
<PR708370>
ANNEXURE A
1 MA000026.
2 [2105] FWCFB 3889.
3 [2016] FWCFB 4461.
4 Ibid.
5 Re Central Queensland Services Pty Ltd T/A BHP Billiton Mitsubishi Alliance [2015] FWC 1554.
6 [2011] FWA 3527.
Printed by authority of the Commonwealth Government Printer
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