Vos Construction and Joinery Pty Ltd

[2013] FWC 4009

[2013] FWC 4009

FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009
s.185—Enterprise agreement

Vos Construction and Joinery Pty Ltd
(AG2013/7009)

COMMISSIONER RYAN MELBOURNE, 20 JUNE 2013

Application for approval of the Vos Construction & Joinery Pty Ltd Enterprise Agreement (Construction North) 2013-2016.

[1] An application was filed by Vos Construction and Joinery Pty Ltd on 17 June 2013 for approval of the Vos Construction and Joinery Pty Ltd Enterprise Agreement (Construction North) 2013 - 2016 (the Agreement). The application was accompanied by a Form F17, Employers Declaration in Support of Application for Approval of Enterprise Agreement.

[2] The Form F17 requires the employer to attach to the Form F17 a copy of the Notice of Employee Representational Rights (the Notice) that the employer issued to employees. Although the Form F17 declares that such a Notice was issued to employees no copy of the Notice was attached to the Form F17.

[3] The employer is required to file with the FWC a copy of the Notice.

[4] The Commission has a number of concerns with the Agreement.

[5] Clause 3 of the Agreement identifies who is covered by the Agreement and is as follows:

3. SCOPE

3.1 This Agreement covers all direct employees of Vas Construction and Joinery Pty Ltd in Tasmania who fall within the following category:

• Construction employees working mainly on construction sites that are located in the “63” telephone area of Tasmania, plus Coles Bay and Swansea.

3.2 This Agreement does not apply to non-Tasmanian based employees or employees of the Company who fall within the following categories:

• Construction employees working on construction sites that are located in the “62” and “64” telephone areas of Tasmania, except Coles Bay and Swansea;

• Joinery, Postforming and Shopfitting employees working in workshops or on construction sites (statewide);

• Glazing and aluminium employees working on construction sites or in a workshop (statewide);

• Staff employed under individual common law contracts or Individual Transitional Employment Agreements; and

• Any other employees of the Company except those specifically covered at

clause 3.1 above.

[6] Where an Agreement does not cover all of the employees of the employer the Form F17 requires that the employer explain how FWC can be satisfied that the group of employees to be covered by the Agreement was fairly chosen.

[7] In this instance the Form F17 merely said:

“The Agreement covers only employees of the employer who are employed in the classifications specified in the Agreement.”

[8] However the very structure of clause 3 of the Agreement suggests that the answer given in the Form F17 is not correct.

[9] The issue as to whether employees to be covered by the Agreement have been fairly chosen arises at several points within clause 3.

[10] Clause 3.1 identifies the group of employees to be included within the coverage and clause 3.2 identifies the group of employees to be excluded from coverage.

[11] Clause 3.1 describes the included group of employees as being conditional upon whether the employee is “working mainly on construction sites”. Thus if an employee is occasionally working on constructions sites then the employee is not included.

[12] The exclusions in clause 3.2 exclude specific types of employees even if they are working mainly on construction, such as joiners, postformers and employees using aluminium.

[13] Clause 3.2 also excludes all staff employed under individual common law contracts. It is far from clear who is meant to be covered by the word “staff”. If it includes all employees then there are no employees who could be covered by the Agreement as every employee has a common law contract. If however the word “staff” is meant to describe a particular group of employees the Agreement fails to do so.

[14] On the material before me I could not be satisfied that the group of employees to be covered by the Agreement has been fairly chosen.

[15] Clause 5 of the Agreement is as follows:

“5. COMPLETE AGREEMENT

a) For the purposes of this clause, the terms ‘award’ or ‘awards’ include any applicable award or collective agreement and includes those howsoever described in the Act as an award, federal award, transitional federal award, pre-reform federal award, pre-reform certified agreement, a modernised federal award, a preserved state agreement and a notional agreement preserving a state award.

b) This Agreement is intended to cover all matters pertaining to the employment relationship. In this regard, this Agreement represents a complete statement of the mutual rights and obligations between the Company (as the employer) and the employee(s) to the exclusion (to the extent permitted by law) of other laws, awards, agreements (whether registered or unregistered) custom and practice and like instruments or arrangements.

c) This Agreement regulates all terms and conditions of employment and thus expressly excludes and displaces the operation of any and all other matters and conditions of employment (including those howsoever described or identified as a preserved entitlement, preserved notional term, preserved notional entitlement, protected notional condition, preserved award term or protected award condition) in any award.

d) If a matter is not covered by this Agreement, then the provisions of the Building and Construction General On-Site Award 2010 shall be deemed to apply.”

[16] Two issues arise. Firstly, the very strength of language in paras (a), (b) and (c) make it difficult to see what work para (d) has to do. Secondly, para (d) does not incorporate any award term into the Agreement and it is difficult to see how para (d) could operate to deem an unknown award provision into operation as a term of the Agreement.

[17] Clause 19 of the Agreement provides for a system of RDO’s. If the RDO’s are not taken the employee is entitled to bank up to 5 of the RDO’s. However if the number of banked RDO’s exceeds 5 then if the employee does not reduce the number of banked RDO’s by using some them “the Company reserves the right to payout any RDO accrual in excess of 38 hours, provided the Company has given the employee sufficient opportunity to take the RDOs.”

[18] The concern in relation to the paying out of the RDO’s is at what rate will they be paid out.

[19] Once the Company converts the extra hours worked by the employee from an entitlement to an RDO into a payment of wages then it is clear that the employer is treating the additional hours worked by the employee as simply another form of overtime. Logic would suggest that if the employer pays out RDO’s then the rate of pay should be at the overtime rate.

[20] The employer needs to explain how the payout provision in clause 19.3 of the Agreement is intended to work.

[21] Clauses 20, 21 and 27.1 in combination raise an issue of significant concern in relation to types of employment under the Agreement.

[22] Clause 20 provides that all employees will be employed on the basis of daily hire. Yet clause 21 clearly provides for casual employment and clause 27.1 provides for part-time employment. The three clauses simply cannot coexist.

[23] The Building and Construction General On-site Award 2010 is the modern award against which this Agreement is tested for the BOOT. Clause 10 of the Award provides for 4 types of employment as follows:

“10. Types of employment

10.1 Employees under this award will be employed in one of the following categories:

(a) daily hire employees;

(b) full-time weekly hire employees;

(c) part-time weekly hire employees; or

(d) casual employees.

10.2 At the time of engagement an employer will inform each employee, in writing, of the terms of their engagement and, in particular, whether they are to be daily hire, full-time, part-time or casual employees.”

[24] As the Award makes clear there is a difference between “daily hire” and “casual”. The two types of employment are not the same nor are the terms interchangeable.

[25] The structure of the Agreement in trying to treat all employees as “daily hire” whilst at the same time permitting “casual” and “part time” employment results in an unworkable structure.

[26] Whilst undertakings offered by an employer can address most concerns raised by the Commission it may very well be that any undertakings to try and address my concerns over types of employment would result in substantial changes to the Agreement. If this was the outcome then the Commission would be obliged to refuse the undertakings pursuant to s.190(3) of the Act.

[27] Clause 27.2 of the Agreement deals with the subject of payment for personal leave. Relevantly clause 27.2 contains the following paragraph:

“All personal leave is only payable in relation to days that an employee is scheduled to be at work. If an employee is on annual leave, long service leave, an ROO, public holidays or not at work for any other reason and falls sick or otherwise requests personal leave in relation to these days while not at work, the Company is not required to provide the employee with personal leave for these days.”

[28] Clause 6 of the Agreement spells out the relationship between the NES and the Agreement as follows:

“6. NATIONAL EMPLOYMENT STANDARDS

6.1 This Agreement conforms to the requirements of the Fair Work Act 2009 (Clth) and the National Employment Standards (NES) and this Agreement should be read and interpreted as though it means to comply with the Fair Work Act 2009 (Clth) and the NES. Where a clause in this Agreement differs from those requirements this Agreement will take precedent only to the extent allowed by law.”

[29] The last sentence of clause 6.1 means that no provision of the Agreement will exclude any NES entitlement and thus ensure that the Agreement does not breach s.55 of the Act.

However the very language of clause 27.2 appears to misrepresent to employees their entitlements under the NES.

[30] At the very least the relevant paragraph from clause 27.2 of the Agreement is in direct conflict with s.89 of the Act. S.89 is as follows:

“89 Employee not taken to be on paid annual leave at certain times

Public holidays

(1) If the period during which an employee takes paid annual leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid annual leave on that public holiday.

Other periods of leave

(2) If the period during which an employee takes paid annual leave includes a period of any other leave (other than unpaid parental leave) under this Part, or a period of absence from employment under Division 8 (which deals with community service leave), the employee is taken not to be on paid annual leave for the period of that other leave or absence.”

[31] What is clear from the operation of s.89 is that if an employee is entitled to personal leave during a period of annual leave then the employer is obliged not to treat the employee as being on annual leave for the period the employee is entitled to paid personal leave.

Clause 27.2 of the Agreement seeks to do exactly the opposite and to deny an employee their entitlement to paid personal leave during a period of annual leave.

[32] Whilst clause 6 of the Agreement prevents clause 27.2 from overriding the employees entitlements under s.89 of the Act it appears that the sole purpose of the second paragraph of clause 27.2 is to represent to employees that their entitlement to access personal leave is less than what they would be entitled to access under s.97 and s.89 of the NES.

[33] Section 186(4) of the Act requires that before the Commission can approve an enterprise agreement the Commission “must be satisfied that the agreement does not include any unlawful terms”.

[34] Section 194 of the Act defines an “unlawful term” and a term which is an “objectionable term” is an unlawful term.

[35] Section 12 of the Act defines “objectionable term” as follows:

“objectionable term means a term that:

(a) requires, has the effect of requiring, or purports to require or have the effect of requiring; or

(b) permits, has the effect of permitting, or purports to permit or have the effect of permitting;

either of the following:

(c) a contravention of Part 3-1 (which deals with general protections);

(d) the payment of a bargaining services fee.”

[36] The representations made within clause 27 are clearly misrepresentations of employees’ entitlements and may be misrepresentations which contravene s.345 of the Act. If so then the second paragraph of clause 27 would be an objectionable term.

[37] Clause 27.4 of the Agreement contains a cross reference in the third paragraph which does not make sense. This makes it difficult to understand the intention and the effective operation of the paragraph.

[38] Clause 28 of the Agreement deals with Carers Leave and contains the following notice provision:

“The employee shall, wherever practicable, give the employer notice prior to the absence of the intention to take leave, the name of the person requiring leave and their relationship to the employee, the reason for taking such leave and the estimated length of the absence. If it is not practicable for the employee to give prior notice of the absence, the employee shall notify the employer by telephone of such absence at the first opportunity on the day of the absence.

[39] The requirement to notify the employer on the day of absence is inconsistent with the notice requirements of s.107(2) of the Act.

[40] Whilst s.107(5) of the Act permits enterprise agreements to include terms relating to the kind of evidence that an employee must provide to an employer there is no provision within s.107 which permits an enterprise agreement from containing a term which provides for notice requirements which are more onerous on an employee than the notice requirements of s.107(2) of the Act.

[41] Where an enterprise agreement seeks to replace the operation of s.107(2) of the Act with a more onerous notice requirement such a term of an enterprise agreement would appear to contravene s.55 of the Act and an enterprise agreement with such a term could not be approved by the Commission given the operation of s.186(2)(c) of the Act.

[42] I will give the employer 7 days to file any submissions it wishes to make and to offer any undertakings to the Commission to address any of the concerns raised. I will then consider and decide the application.

COMMISSIONER

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