Watco Australia Logistics Pty Ltd T/A Watco Australia

[2021] FWCA 7303

[2021] FWCA 7303

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Watco Australia Logistics Pty Ltd T/A Watco Australia
(AG2021/8604)

WATCO AUSTRALIA LOGISTICS PTY LTD MAINTENANCE AND ROLLINGSTOCK AGREEMENT 2021

Rail industry
COMMISSIONER MCKINNON	MELBOURNE, 24 DECEMBER 2021

Application for approval of the Watco Australia Logistics Pty Ltd Maintenance and Rollingstock Agreement 2021.

[1] Watco Australia Logistics Pty Ltd (Watco) has applied under s.185 of the Fair Work Act 2009 (the Act) for approval of a single enterprise agreement known as the Watco Australia Logistics Pty Ltd Maintenance and Rollingstock Agreement 2021 (the Agreement). The Agreement was made on 15 November 2011.

[2] The Australian Rail, Tram and Bus Industry Union (the Union) objects to the approval of the Agreement. It submits that the Agreement should not be approved because:

1. The Notice of Employee Representational Rights (the Rights Notice) was not issued to employees who will be covered by the Agreement in New South Wales.

2. The loaded rates in the Agreement remove penalty payments and there is insufficient modelling to demonstrate how this meets the better off overall test.

3. Penalties incorporated into the annual wage rate are not accompanied by sufficient modelling in relation to the better off overall test.

4. Some of the language used in the Agreement is inconsistent with the National Employment Standards (NES) (for example, in relation to requiring employees to work on public holidays).

5. Clause 20.1.1 requires employees to work 80 hours per fortnight or 40 hours per week, which is less beneficial than the NES.

[3] I do not share the concerns of the Union and I am satisfied that the Agreement meets the various requirements for approval. These are my reasons.

The Rights Notice

[4] The Agreement covers employees in the role of Field Service Technician (referred to as “Team Members” in the Agreement) who perform maintenance work in the rail supply chain at locations in Queensland, New South Wales and Victoria. There are seven such employees in Queensland and none in either New South Wales or Victoria. However, Watco has secured a contract in New South Wales that begins on 1 January 2022. In anticipation of the commencement of that contract, it has offered employment to ten employees in New South Wales, who have each accepted the offers but have not yet commenced employment.

[5] The Union says that because the prospective employees in New South Wales were not given a copy of the Rights Notice, the Rights Notice was defective. I do not agree. The employees were not employed at the notification time for the Agreement and there was no requirement for the Rights Notice to be issued to them.

[6] The information before me, which is not in dispute, is that the Rights Notice was issued to each of the seven employees in Queensland, who were the only employees that would be covered by the Agreement at the time. That is, they were the only Field Service Technicians employed by Watco in either Queensland, Victoria or New South Wales at the notification time for the Agreement on 30 August 2021.

[7] I am satisfied that the Rights Notice was issued to employees in accordance with the Act.

Employees will be better off overall

[8] The better off overall test in this case is to be assessed against the Manufacturing and Associated Industries Award 2020.

[9] Rates of pay under the Agreement are above the rates in the Manufacturing Award by a margin of 44.59% - 75.51% for casual employees and 51.75% - 84.15% for permanent employees. These are loaded rates of pay and the value of the loading is sufficient to compensate for detriments identified by both the Union and the Commission, including in relation to overtime, shift, public holiday, weekend and other penalty rates, the recording of part-time employment arrangements and the payment of stand-by allowance.

[10] I am satisfied employees will be better off overall under the Agreement. I arrive at this conclusion independently of any modelling done by either Watco or the Union, because none has been provided. The Commission’s analysis, which I accept, confirms that on balance, the benefits of the Agreement outweigh the detriments such that employees will be better off overall.

The Agreement does not exclude the NES

[11] The Agreement deals with the interaction between the Agreement and the NES, in terms similar to a model clause developed by the Commission to assist parties when making enterprise agreements. The term ensures that the Agreement is read and interpreted in conjunction with the applicable relevant Award and the NES. In the event of inconsistency, the Agreement is to prevail except where the NES provides a greater benefit, in which case the NES will prevail. These terms ensure that the Agreement does not exclude the NES, either in whole or in part, including in relation to public holidays.

[12] The Agreement provides for employees to work up to 80 “counted” or ordinary hours per fortnight. This is not inconsistent with the NES, which permits an employer to require employees to work more than 38 hours per week if the additional hours are reasonable. A requirement to work an additional two hours per week is prima facie a reasonable requirement. Employees of Watco appear to find the requirement unremarkable, being as it is accompanied by a degree of flexibility as to how those hours of work are implemented in practice. It is not uncommon for employees to work in excess of 40 hours per week where overtime is available. In addition, and because the Agreement is read and interpreted in conjunction with the NES, and the NES prevails where it provides a greater benefit, employees retain the capacity to have their personal circumstances taken into account in determining whether the requirement to work two additional hours per week is reasonable in particular circumstances.

[13] I am satisfied that the Agreement does not exclude the NES.

Relevant employees are shiftworkers for the purposes of the NES

[14] The Agreement provides an additional week of annual leave for employees who would be shiftworkers under the Manufacturing Award, consistent with the requirement that it do so under the NES. This is because the definition of shiftworker in the Agreement is derived from, and is the same as, the definition of shiftworker in the Manufacturing Award: that is, “a 7 day shiftworker who is regularly rostered to work on Sundays and public holidays” (see Agreement clause 5 and Manufacturing Award clause 34.2).

The Union cannot be covered by the Agreement

[15] The Union has filed a Form F18 stating that it wants to be covered by the Agreement. The difficulty is that only a bargaining representative for the Agreement can give notice under section 183 of the Act that it wants to be covered by an enterprise agreement. The Union does not meet this description.

[16] The Union has members in New South Wales who will become covered by the Agreement once they are employed by Watco on and from 1 January 2022. However, none of these individuals were employees of Watco at any time during the making of the Agreement - from the notification time to when the agreement was made – and that remains the case. It follows that the Union was not a default bargaining representative for any employee of Watco. It was also not appointed as a bargaining representative by any of the employees who made the Agreement.

[17] The consequence of these facts is that the Union was not a bargaining representative for the Agreement. It cannot be covered by the Agreement.

Conclusion

[18] 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.

[19] The Agreement is approved and will operate from 31 December 2021. The nominal expiry date of the Agreement is 24 December 2024.

COMMISSIONER

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