Wallco Pastoral Company Pty Ltd T/A Wallco Pastoral Company Pty Ltd

[2010] FWA 3267

[2010] FWA 3267

FAIR WORK AUSTRALIA

DECISION

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

Wallco Pastoral Company Pty Ltd T/A Wallco Pastoral Company Pty Ltd
(AG2009/20788)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 7 MAY 2010

Wallco Pastoral Enterprise Agreement 2009 – Bridging Period – Comparison of Rosters and Calculations - 2 Hour Paid Break ‘Generally’ Provided – Special Teachers classification - Undertakings

[1] An application has been made for approval of an enterprise agreement known as the Wallco Pastoral Enterprise Agreement 2009 (the Agreement). The application was made pursuant s.185 of the Fair Work Act (the Act). The Agreement is a single-enterprise agreement.

[2] The Agreement was made during the bridging period 1 as defined in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), accordingly, when considering whether to approve the Agreement I have taken into account the provisions of Part 2–4 of Chapter 2 of the Act as modified by Schedule 7 of the Transitional Act.

[3] The matter was heard before me on 19 March 2010, and the applicant was requested to provide further information on 7 April 2010.

The No Disadvantage Test

[4] Pursuant to Part 2 of Schedule 7 of the Transitional Act, a no disadvantage test must be applied. In this case the test must be applied against the Northern Territory Cattle Industry Award 2001 (AP808598).

[5] In summary, a comparison of the wages that would been earned under the agreement as compared with those under the award caused some difficulty:

• the hours on which a spreadsheet provided by the employer and which provides ‘no disadvantage test’ calculations did not correspond with the information about the actual rosters worked by employees in December 2009, when the application was made, unless a submission about the nature of breaks taken is accepted;



• and the agreement provides for the classification of qualified teacher that would not be covered by the Northern Territory Cattle Industry Award 2001.

[6] The applicant submitted that the ‘breaks’ referred to in the time and wages record must be applied as follows:

‘We note that Wallco provides for an unpaid meal break of one hour per day, and in addition generally allows for an additional 2 hour paid break during the day. This 2 hour paid break is taken during the middle of the day, during the hottest part of the day, when work is very difficult to perform both due to the extreme heats (sic) and also due to the stock itself generally resting during these periods of the day.

This paid break appears as a separate calculation on the spreadsheets for each employee and has not been included in the calculation of ordinary hours. Strictly speaking, there is no obligation on Wallco to provide more than the mandatory 30 minute paid rest break, and that Wallco would be entitled to treat the entire 3 hour as unpaid meal break under the terms of the award.’

[7] If this submission is factually correct there is no disadvantage when the agreement rates are compared with those that would have applied under the award. The breaks are referred to in the time and wages records simply as ‘Paid breaks’. Under that heading there are hours recorded which in each case correspond to the explanation provided by the applicant. For example, the actual hours worked by ‘D.Okinlay’ are:

Date	Start Time	Finish Time	Breaks	Hours Worked
1/12/09	6.30 am	1800	3	8.5

[8] This is typical. This meets the requirements of the award when the required award breaks are had regard to. These include a 30 minute unpaid meal break (clause 23.1), and two paid breaks of 15 minutes each (clause 23.2).

[9] Further, the employer was willing to provide an undertaking to reconcile the wages earned under the agreement with those that would have been earned under the award, but only for the first year ‘in the event that the reconciliations, for the first year of operation of the agreement, show that no employee has been disadvantaged’.

[10] Given the importance of transparency in these matters, I set out below an analysis of what the position would be if the applicant submission on the breaks taken is not correct:

Case 1: B Martin (Grader Driver Level 3)

[11] In relation to for example an employee ‘B.Martin (Grade Driver Level 3)’, the calculations provided in the document ‘NDT Calcs for Wallco 13-4-10’ indicate that the employee B Martin would be $322.40 better off under the agreement when compared to the Award.

Agreement: $3565.00

Award: $3242.60

Difference: $322.40 or 9.04%

[12] When the same total hours provided by the employer in this spreadsheet the conclusion was the same:

Agreement Ordinary Rate	$155.00	Award Ordinary Rate	$14.92
Days	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	18.5	100%	$2,867.50	Ordinary Time	120	100%	$1,790.40
3	150%	$697.50	Overtime	3	150%	$67.14
$0.00	Saturday	27	150%	$604.26
$0.00	Sunday	25	200%	$746.00
$0.00	District Allowance	150%	$34.80
$0.00	200%	$0.00
$0.00	$0.00
Total			$3,565.00	Total			$3,242.60
Award Total Weekly Rate			$3,242.60
Agreement Total Weekly Rate			$3,565.00
Percentage Difference			9.94%

[13] The spreadsheet calculations show a shift from 6.00 to 18.00, with an unpaid break, equating to 10 hours of work performed. In fact, the hours of work performed would be 11 hours if a 1 hour lunch break is included. I also note that under the agreement the employer is only required to give a 45 minute unpaid break.

[14] This is consistent through the weekly work cycle. If the hours actually worked were taken into account then a significantly different outcome is obtained when the agreement wage rates are compared with the wage rates that the employee would have earned under the award:

Agreement Ordinary Rate	$155.00	Award Ordinary Rate	$14.92
Days	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	18.5	100%	$2,867.50	Ordinary Time	120	100%	$1,790.40
3	150%	$697.50	Overtime	17	150%	$380.46
$0.00	Saturday	30	150%	$671.40
$0.00	Sunday	28	200%	$835.52
$0.00	District Allowance	$34.80
$0.00	$0.00
$0.00	$0.00
Total			$3,565.00	Total			$3,712.58
Award Total Weekly Rate			$3,712.58
Agreement Total Weekly Rate			$3,565.00
Percentage Difference			-3.98%

[15] Using these hours (the actual hours worked) the agreement results in a disadvantage to the employee of 3.98%. A similar result applies with respect to other employees. For example, if the wages rates and hours of ‘D Okinlay (Cowboy Level 2)’ are examined, the the calculations provided in the document ‘NDT Calcs for Wallco 13-4-10’ indicate that the employee D Okinlay would be $64.42 better off under the agreement when compared to the Award:

Agreement: $1,160.00

Award: $1,095.58

Difference: $64.42 or 5.88%

[16] Again using the information provided by the applicant in the spreadsheet, it would appear that this calculation is correct. However the same issue as outlined with respect to ‘B.Martin’ arises regarding the actual hours worked as evidenced by the time records provided by the employer. On average, the employee appears to be working an extra hour per day compared to the total hours calculated by the applicant. Given that the agreement provides a day rate this has a significant impact as is demonstrated below.

Agreement Ordinary Rate	$145.00	Award Ordinary Rate	$14.31
Days	Loading	weekly total	Hours	Loading	weekly total
Ordinary Time	6.5	100%	$942.50	Ordinary Time	53	100%	$758.43
150%	$0.00	Overtime	4	150%	$85.86
$0.00	Saturday	10.5	150%	$225.38
$0.00	Sunday	200%	$0.00
$0.00	D/A	$11.60
$0.00	$0.00
$0.00	$0.00
Total			$942.50	Total			$1,081.27
Award Total Weekly Rate			$1,081.27
Agreement Total Weekly Rate			$942.50
Percentage Difference			-12.83%

[17] This miscalculation of hours would be consistent across all the ‘no disadvantage test’ calculations provided by the employer if the submission relating to breaks is not correct. Generally the applicant would have miscalculated an hour on every shift for every employee when undertaking their ‘no disadvantage test’ calculation, or each employee always receives a 2 hour lunch break.

[18] This would have a significant effect on the outcome given that the agreement provides a set day rate and therefore the length of each day is of primary concern in any comparison. It appears that nearly all employees under the roster arrangements provided would be considered disadvantaged by the agreement when taking into account their actual hours worked if the unless the statement made by the employer about breaks is accepted.

[19] The first mention of a two hours paid break occurred when I asked for the rosters worked by employees. A submission was then put that the employer provides ‘an unpaid meal break of one hour per day, and in addition generally allows for an additional 2 hour paid break during the day’. This reconciled the claimed hours worked in the employer’s spreadsheet calculation of hours worked with the rosters of hours actually worked. The two hours paid break is not mentioned in the employer statutory declaration lodged with the application, and was not mentioned in transcript when the matter was heard by me. There is no reference to a two hour paid break in the agreement. In fact the agreement provides for breaks of at least 15 minutes, and a lunch break of at least 45 minutes (clause 8.2), although it does refer to a ‘flexible’ approach to rest and meal breaks. The terms of the agreement are different to what the employer ‘generally allows’. The phrase ‘generally allows’ is also of some uncertainty. When does the employer not allow for that, and does this affect the calculation of income? Does it mean that in fact employees may be disadvantaged? The rosters list the word ‘2’ under the heading of ‘breaks’. This could be a reference to the two 15 minute breaks referred to in the award and the agreement, or it could be a reference to a 2 hour paid break.

[20] In the circumstances it would be appropriate for the employer to make an undertaking that the two hour paid break will be provided to employees. This would meet concerns I had about the uncertainty of the break, and the lack of any corroboration of the break. Without an obligation to pay a two hour paid break the employees would be disadvantaged compared to the award.

[21] I also note that the employer undertook to reconcile the wages earned under the agreement with those that would have been earned under the award, but only for the first year ‘in the event that the reconciliations, for the first year of operation of the agreement, show that no employee has been disadvantaged’.

[22] The undertaking provided by the employer was in the following form:

I Felix Wildin, Managing Director of Wallco Pastoral Company Pty Ltd, make the following undertaking with regards to the Wallco Pastoral Company Workplace Agreement 2010:

That following a request from Fair Work Australia, the following undertaking is made:

1.     The employer will on request every six (6) months and at least once annually conduct a reconciliation of the amount that the employee would have earned under the Agreement and the amount that the employee would have earned under the Award the Northern Territory Cattle Industry Award 2001.

2.     If there is a deficiency, the employer will pay that deficiency to the employee within 21 days.

3.     If there is a disagreement between the employer and employee that disagreement will be dealt with pursuant to the dispute settlement clause as provided for at clause 21.

4.     The same reconciliation will be made when the employment relationship ceases, except that any deficiency will be paid with accrued entitlements.

5.     In the event that the reconciliations, for the first year of operation of the agreement, show that no employee has been disadvantaged by the application of the agreement then the terms of the undertaking will no longer apply.

[23] Pursuant to s.190 I will accept that undertaking, subject to dealing with the issue of the two hour paid break and teachers.

Other Issues

[24] The dispute settlement procedure in the agreement did not provide for the settlement of disputes about the National Employment Standards. Pursuant to s.190 I will accept the following undertaking:

I Felix Wildin, Managing Director of Wallco Pastoral Company Pty Ltd, make the following undertaking with regards to the Wallco Pastoral Company Workplace Agreement 2010:

That the settlement of disputes procedure, as provided for at clause 21 of the agreement, is available for any matter arising under this agreement and in relation to the National Employment Standards.

[25] Pursuant to s.190 I would be prepared to accept that undertaking.

[26] The agreement also provides coverage for qualified teachers to be paid $155.00 per day. There is no coverage under the Northern Territory Cattle Industry Award 2001 for qualified teachers. I cannot approve the agreement until that issue is dealt with. There are various procedures open to the applicant for dealing with it. The applicant may apply for the designation of an award for the purpose of conducting the ‘no disadvantage’ test for these employees. If the rates do not meet that test then the agreement may be rejected. Alternatively, the applicant may provide an undertaking that no teacher will be employed under the agreement during its life, and that the provisions of the relevant modern award will be applied. The modern award should be named. I provide the applicant with a week (7 days) from today to address this issue.

Concluding Issues

[27] Given the potential importance of the undertakings, I will direct that the undertakings once signed be attached to all copies of the agreement kept by the employer or distributed to employees. I will also forward a copy of this decision, the undertakings, and the agreement, to the Fair Work Ombudsman.

DEPUTY PRESIDENT

Appearances:

Mr D Houlihan and Ms S Sprague of First IR Consultancy for Wallco Pastoral Pty Ltd

Hearing details:

Melbourne

2010

19 March

Final written submissions:

2010

19 March and 14 April

 1   Item 2, Part 1, of Schedule 2.

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