FWA 2798
Rhino Transport (QLD) Pty Ltd
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
RHINO TRANSPORT (QLD) PTY LTD ENTERPRISE AGREEMENT 2010
Road transport industry
CANBERRA, 14 MAY 2010
 This decision concerns an application filed by Rhino Transport (QLD) Pty Ltd (“employer”) on 26 March 2010 for approval of the Rhino Transport (QLD) Enterprise Agreement 2010 (“the agreement”) pursuant to section 185 of the Fair Work Act 2009 (the Act).
 On 19 April 2010, a hearing was held because of a number of concerns I had with the agreement. Mr Peter Schulz, agent, appeared on behalf of the employer.
 A number of aspects of the proposed agreement, relating to both the pre-approval procedures and the terms of the agreement were of concern. I will deal with them separately.
 The Form 17 statutory declaration filed with the application for approval of the enterprise agreement was made by Mr Peter Schulz, Director. In the application filed under s. 185 of the Act, Mr Schulz indicated that he was “a bargaining representative appointed by an employee”. Despite this he completed the Form 17, the “Employer’s Declaration in support of application for approval of enterprise agreement”. At the hearing of the matter Mr Schulz sought leave to appear as the agent of the employer. Mr Schulz’s role in somewhat confused.
 These irregularities aside, my main concern with the pre-approval procedures related to the requirement of s.181(2) of the Act.
 Section 181 of the Act provides that
Employers may request employees to approve a proposed enterprise agreement
(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.
(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.
(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.
 This is a mandatory provision of the Act. An agreement made within the 21 day period referred to in the section cannot be approved by Fair Work Australia (“FWA”).
 At clause 2.2 of the Form 17 the following information was provided:
Date on which the last notice of representational rights under s.173(1) was given to an employee who will be covered by the agreement:
18 February 2010
Date on which voting for the agreement commenced (voting commences on the first day that an employee is able to cast a vote - see s.181):
27 February 2010
Date on which the agreement was made (that is, the date on which the voting process by which employees approved the agreement concluded - see s.182):
22 March 2010
 This matter had been raised with Mr Schulz on 31 March 2010 in a preliminary telephone conference. The conference had been arranged as Mr Schulz had indicated that there was some urgency attached to the approval of the agreement and it was considered that it was sensible to advise him, at the earliest possible opportunity, that one of the mandatory requirements of the Act appeared not to have been met. In the same telephone conference a number of other concerns were also raised with Mr Schulz relating to the terms of the agreement. The matter was then listed for the earliest possible hearing. Had Mr Schulz taken the view that the matters raised with him may have resulted in the agreement not meeting the necessary requirements for approval it was open to him, at that stage, to withdraw the application and pursue a replacement agreement.
 The requirements of s.181(2) of the Act were again raised with Mr Schulz at the hearing on 19 April. Mr Schulz advised that the answer to the question in the Statutory Declaration was wrong and that the required 21 day interval had elapsed before the employees were requested to vote on the agreement. In support of his claim Mr Schulz tendered an undated document which he asserted had been provided to the employees. Mr Schulz had no personal knowledge of the provision of the document. I noted that I would not accept his assertion in relation to the requirement. I requested that he obtain from the employer, whom he stated had distributed the document, a statutory declaration concerning the timing of that distribution. I also requested that a similar document, confirming the timing, be provided by an employee. Mr Schulz undertook to provide those documents.
 The statutory declarations were provided soon after the 19 April hearing.
The Agreement terms
 At the hearing of the matter I also raised a large number of concerns about the terms of the agreement sought to be approved. I indicated to Mr Schulz that the agreement terms were such that I was unable to properly apply the “better off overall” test pursuant to s.193 of the Act and that I was concerned that the terms were so uncertain that I could not be satisfied that the employees could have “genuinely agreed” to approve the agreement, as in my view they could not possibly have understood what conditions of employment would apply under the agreement.
 Numerous problems with the wording of the agreement were raised with Mr Schulz.
It was indicated that the coverage of the agreement was confusing. Clause 3 of the agreement states:
“3.1 This agreement shall specify terms and conditions of employment and minimum rates of pay and salary ranges for all persons listed at Clause 8 of the Agreement.”
but no “persons” are listed at Clause 8 of the agreement. Clause 6.1 states that the agreement is binding on “all persons as defined in clause 2.5”. While “ persons” is not defined in clause 2.5, “employee” is :
“2.5 "Employee" means a person employed under this agreement in a classification shown at Clause 8 of the Agreement.”
As there are classifications in clause 8 it is possible discern what the coverage was intended for the agreement.
 Of greater concern than the confusing coverage clauses is that the Clause 4.4 of the agreement purports to incorporate award conditions but it is impossible to determine from which award those conditions should derive. “Award” is defined at clause 2.3 of the agreement as “the Awards listed at Schedule 1 of this Agreement”.
 Schedule 1 of the Agreement is as follows
“Relevant Awards and Legislation
Transport Workers (Long Distance Drivers) Award 2000 and / or the modernised Award replacing this Award.
Transport Industry (State) Award NAPSA and / or the Modernised Award replacing this Award;
Occupational Health & Safety Act 2000
New South Wales Long Service Leave Act 1955
Superannuation Guarantee Act
Fair Work Act 2010”
 Examples of agreement clauses which provide for the application of award clauses are:
“8.5 Where an entitlement exists special allowances will be paid in accordance with the Award.
11.1 Employees may be employed as:
(c) Casual employees engaged on an irregular or occasional basis to cover peak workloads or the absences of full or part time employees
(ii) For work performed on weekends or public holidays casual employees other than long distance drivers shall be paid the hourly base rate of pay and penalty rates in accordance with the applicable award.
14.4 Employees will be paid the appropriate penalties as contained in the relevant awards.”
 Other provisions of the agreement are so uncertain as to be meaningless, for example
“8.3 Drivers undertaking long distance driving duties will be paid a Living Away From Home Allowance of $40.25 per day where an entitlement exists.”
“8.5 Where an entitlement exists special allowances will be paid in accordance with the Award” (there are no “special allowances” mentioned elsewhere in the agreement).
 The agreement provides no maximum hours of work for part-time employees and the requirement in clause 11.1(b) that part-time “working hours shall not be less than 3 hours per day” could be open to an unintended interpretation
 Other clauses that cause concern are:
“12.1 Driver employees agree to work sufficient hours in anyone day to meet client requirements provided that hours worked do not exceed Fatigue Management regulations.”
“12.6 An employee required to work overtime of at least 2 hours may be entitled to an unpaid crib break where necessary to satisfy any legislative obligations the Employer may have to provide the Employee with such break.”
 The meaning of the following clauses is unclear
“13.2 By agreement between the employee and the employer rosters may be altered within the standard roster period to meet unforseen circumstances. At least 24 hours notice of such a change would be given except in extreme circumstances.”
“14.2 The Employer may require an Employee to work reasonable additional hours of work at the applicable rates of pay, in addition to the Employees ordinary hours of work”
 Additionally I am concerned that at least one term of the agreement is inconsistent with the National Employment Standards (“NES”). Clause 17.1 of the agreement provides:
17.2 An employee shall be entitled to ten days personal leave per year paid at the Award base rate of pay with a pro rata accrual for each completed four week period in accordance with the Act.” (my emphasis)
The NES provides:
“Accrual of leave
(2) An employee’s entitlement to paid personal/carer’s leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.” (my emphasis)
The terms are inconsistent.
 The wording of the public holiday clause also adds to the confusion as it refers to “any other day proclaimed as a Public Holiday within the State”. On the face of the agreement there is no way of determining which “state”. The only references to a state are in the name of the employer “Rhino Transport (Qld) Pty Ltd” and in Schedule 1 to the Agreement which refers to “Relevant Awards and Legislation” and includes a reference to the “New South Wales Long Service Leave Act 1955.” This reference is erroneous. According to Mr Schulz the employer is a company which operates out of Queensland and the employees are employed in Queensland. The NSW Long Service Leave Act has no application. If the reference was intended to apply the legislation to employees covered by the agreement (as was suggested by Mr Schulz), it does not have that effect.
 Clause 20 of the Agreement is also of concern:
20.1 Redundancy payments will be made in accordance with provisions of the Act and Award but only apply to Full time or Part time employees but will not apply to Casual or Fixed term Employees.”
Under section 2 of the agreement, “Act” means the Fair Work Act 2009 but “award” could mean any of 4 awards. Determining what redundancy provisions apply is impossible.
 Mr Schulz was unable to enlighten me as to the name of the NAPSA which applies to the employment of the employees covered by the agreement. It would appear to be the Transport, Distribution and Courier Industry Award 2003, Qld (“the Queensland NAPSA”). The federal Road Transport (Long Distance Operations) Award 2000 is referred to by name but Mr Schulz was unable to advise if that award had ever had application to the drivers employed by the employer. He appeared to submit that the Queensland NAPSA had been the only award that had applied prior to January 2010.
 Section 190 of the Act provides that:
FWA 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) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.
(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA 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.
FWA must seek views of bargaining representatives
(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.
 It is my view that the defects of this agreement could not be rectified by the provision of undertakings. In any event, were undertakings to be offered, they would need to be so expansive that I could not be satisfied that they would not result in a substantial change to the agreement, as required by s.190(3)(b) of the Act.
 Employees have a right to know how approval of an agreement will affect their terms and conditions of employment. Nothing put by Mr Schulz gives me any confidence that the employees understood their entitlements prior to voting on the agreement and it is obvious from the manner in which the agreement is worded that nothing in that document would have informed them about the conditions that would apply were the document to be approved by FWA. Section 186(2) of the Act requires that before an enterprise agreement can be approved FWA must be satisfied that the agreement has been genuinely agreed to by the employees covered by the agreement. Given that a number of the most important terms of the agreement are incapable of interpretation it is my view that I have reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees. 1
 I gave Mr Schulz every opportunity to provide me with any additional information which may have convinced me that his assertion that the employees “know how it works” was correct. Nothing was supplied.
 According to Mr Schulz the urgency attached to the agreement approval is related to the issue addressed in clause 8.13 (National Code of Practice for the Building and Construction Industry) as the employer wishes to tender for contracts for which a prerequisite is an industrial instrument containing such a term. While I sympathise with the employer’s predicament the document lodged for approval is not capable of approval under the requirements of the Act.
 The majority of these matters were brought to Mr Schulz’s attention on 31 March, 5 days after the agreement was lodged. It should have been clear to him at that stage that the quickest way to rectify the situation and achieve the result desired by the employer would have been to withdraw the application and have a new, intelligible, agreement prepared for approval. Even when the matters were raised with him at the hearing he persisted with his view that the agreement deficiencies were not such that approval should have been withheld. I am unable to understand how he could have held that view.
P Schulz, agent for the employer.
19 April 2010.
1 Fair Work Act 2009, s.188(c).
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