[2012] FWAFB 6397

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Fair Work Act 2009
s.604 - Appeal of decisions

Solar Systems Pty Ltd



Appeal against decision [2012] FWA 4381 of Commissioner Ryan at Melbourne on 7 June 2012 in matter number AG2011/14557 - appeal against decision refusing to approve an enterprise agreement - application of the better off overall test - whether test correctly applied - whether approach to application erroneous - Fair Work Act 2009 - ss.185, 193, 604.


[1] This decision concerns an application for permission to appeal by Solar Systems Pty Ltd (Solar Systems) against the decision of Commissioner Ryan on 7 June 2012 in relation to the refusal to approve a single-enterprise agreement known as the Solar Systems Pty Ltd Enterprise Agreement 2011 (the Agreement) under s.185 of the Fair Work Act 2009 (the Act). 1 The appeal relates to the procedure adopted by the Commissioner and to the application of the better off overall test (BOOT).

[2] At the hearing of the appeal in Sydney on 25 July 2012, Ms P Salewicz with Mr M Mead appeared on behalf of Solar Systems.

[3] At the conclusion of the hearing we indicated that we were satisfied that Commissioner Ryan had erred in the overall approach to the application and in the conclusions reached. Permission to appeal was granted and the decision of Commissioner Ryan quashed. This decision provides further details of our reasons for these conclusions. The application for approval of the Agreement was remitted to Deputy President Sams for consideration. Deputy President Sams approved the Agreement on 3 August 2012. 2


[4] The Agreement was made on 12 December 2011 and the application for approval was lodged with Fair Work Australia on 14 December 2011. In its material in support of approval of the Agreement, Solar Systems identified the positive benefits of wage rates significantly higher than the rates contained in the Manufacturing and Associated Industries and Occupations Award 2010 3 (the Award) and a minor reduction in award entitlements in respect of excessive leave.

[5] Commissioner Ryan convened a hearing to address his concerns about the Agreement on 16 January 2012. Some matters were addressed to his satisfaction at the hearing. Other matters were dealt with by way of written responses and undertakings provided on behalf of Solar Systems on 3 February 2012.

[6] Commissioner Ryan’s decision refusing to approve the Agreement was handed down on 7 June 2012.

[7] In his decision the Commissioner commenced by considering the approach to the BOOT in s.193 of the Act. He analysed differences between the BOOT and the no-disadvantage test in the Workplace Relations Act 1996 and determined not to follow the approach to the BOOT adopted by Deputy President Bartel in Re Top End Consulting Pty Ltd. 4 He said:

[8] The Commissioner then deals with three specific aspects of the Agreement: the dispute resolution clause, averaging of ordinary hours, and the spread of ordinary hours. He then deals with other matters under the heading “Provisions of the Agreement which are more beneficial than the Award”. He then expresses his conclusions as follows:

Grounds of Appeal

[9] Solar Systems challenged several aspects of the decision. It contended that the Commissioner was in error in his approach to the BOOT, he misapplied the BOOT in relation to each of the specific matters he dealt with, and erred in his conclusions that the Agreement failed to pass the BOOT. We will consider each of the grounds of appeal separately.

Errors in Approach in Applying the BOOT

[10] Solar Systems submits that in declining to follow the decision of Deputy President Bartel, the Commissioner was adopting an approach which took his analysis away from the application of the relevant terms of the instruments and drew inappropriate distinctions between the BOOT and the previous no-disadvantage test.

[11] The Commissioner’s comments regarding the two tests are set out above. For our part we do not agree that the differences in the tests are as substantial as suggested by the Commissioner. Both tests require a comparison of the position of employees under respective instruments. There are differences in the wording. The BOOT requires a finding that each employee would be better off. The no-disadvantage test required a finding that there was no reduction in terms and conditions of “the employees.” In our view the approach of Deputy President Bartel was not incorrect and we affirm generally the approach to the BOOT adopted by the Full Bench in the Armacell Case. 5 There is a danger, in our view, in seeking to place a gloss on the legislative test beyond the words of the section. The task is best expressed as applying the words in s.193.

[12] Solar Systems submits that the Commissioner’s approach was not a global approach as required by s.193. It submits that the Commissioner took an approach more akin to a line by line analysis and when he found a provision to be less advantageous found that that particular provision would not pass the BOOT. Solar Systems instances the following conclusion on the dispute resolution matter as an example of such a finding:

[13] It is not clear that the Commissioner was in error in this respect. As required by s.193 he identified the more beneficial entitlements under the Agreement to higher wages and blood donors leave. He then balanced those benefits against the perceived disadvantages. His conclusion, set out above, is recorded by reference to his assessment of where the scales fell. We are of the view therefore that his approach of looking at the terms and conditions as a whole in relation to each employee in this respect was ostensibly consistent with the test in s.193.

[14] However, in the course of considering specific matters he made comments such as:

[15] As will be clear from the consideration of the specific matters below, the Commissioner’s approach of identifying certain areas of “concern”, finding that they were not more beneficial than the Award, and then elevating them to disadvantages compared to the Award such that they were found to outweigh the advantages of the Agreement undermined his approach to the BOOT. In order to be relevant to the BOOT a matter needs to be advantageous or disadvantageous. It is then a matter of balancing the items that fall within the two categories to come to an overall view. When the Commissioner’s decision is viewed as a whole it is not clear that he actually did this.

Dispute Resolution

[16] Solar Systems submits that in paragraph [29] of his decision quoted above the Commissioner erroneously characterised the dispute resolution clause as less beneficial than the Award. In fact the dispute settlement clause permits arbitration by consent and there is no access to unilateral arbitration under either instrument.

[17] We agree that the comparison between the instruments should have led to a finding that there was no positive or negative impact in the dispute settlement clause. However, we are unsure from the Commissioner’s decision precisely what he was saying about the dispute resolution clause and its significance to the BOOT. Dispute resolution was raised by the Commissioner as one of his areas of “concern” in the hearing on 16 January. 6 The Commissioner expressed his concern as there being a lack of arbitration. We do not consider that this was an issue which should have been raised in that context given that the effect of the Award position was identical. Nevertheless, the Commissioner’s conclusion was expressed as there being no positive benefit in the clause. Solar Systems did not contend that there was such a positive benefit and in its submission was merely responding to the concern of disadvantage expressed by the Commissioner.

[18] It may be that ultimately the Commissioner had no regard to this matter, but in the absence of any clear articulation of the remaining concerns or negative aspects of the Agreement for employees, Solar Systems could be forgiven for thinking that in raising his concerns, his lengthy discussion of the matter in his decision and the absence of the finding of the neutral impact of the clause meant that this matter was part of his ultimate conclusion that the scales fell on the side of employees not being better off. We conclude however that the way the Commissioner dealt with this matter was inappropriate and that having raised the matter as his concern, he should have found that the dispute resolution clause did not detract from the Award conditions. It remains unclear what matters were considered to be so negative as to outweigh the positive impact of the higher wage rates in the Agreement.

Averaging of Ordinary Hours

[19] This was a matter that was raised as a matter of concern by the Commissioner in the hearing of 16 January. His concern was expressed as there being no period over which the average hours of 38 per week could be averaged. Solar Systems said that it would provide a draft undertaking on the matter. An undertaking was duly provided which allowed averaging over 12 months - being the same period permitted for averaging for shiftworkers under the Award.

[20] In his decision the Commissioner said:

[21] After considering the matter in more detail in [30] - [40] of his decision the Commissioner concluded:

[22] Solar Systems submits that it responded to the concern that was raised about the absence of a period for averaging and that the ultimate concern, that 12 months was too long a period, was not one that was ever raised by the Commissioner. It submits that if the matter was raised it would have been prepared to give an undertaking that the period of averaging would be the period of the roster applying on site and remains prepared to do so. It submits that in failing to raise the particular concern it was denied procedural fairness, and the conclusion that a 12 month average outweighs the benefits of above award wages is wrong in any event.

[23] We find that it was not appropriate for the Commissioner to rely on this matter in the way that he did. If there were concerns regarding the length of the period proposed they should have been raised expressly with Solar Systems.

Spread of Ordinary Hours

[24] In the Commissioner’s decision he said the following in relation to this matter:

[25] Solar Systems submits that this analysis stems from a negative approach to the Agreement and not a facilitative approach to determining whether the Agreement is capable of approval. It submits that the decision fails to acknowledge the safeguards in the Act for working excessive hours, that the Commissioner erred in his conclusions about guarantees in the Award about consecutive days off, failed to have regard to the agreement of employees to the Agreement in comparing the Award provisions and incorrectly interpreted the operation of the Act in relation to shiftworkers. It submits that the provisions implement what is permitted by the Award and should have been considered as neutral matters for the purposes of the BOOT. Further, Solar Systems submits that it was denied an opportunity to address the concerns about the absence of a definition of shiftworker in the agreement as they were not raised in the hearing of 16 January.

[26] We consider that the submissions of Solar Systems have substance in relation to these matters. In our view the Commissioner’s consideration was overly critical and failed to objectively assess the impact of the provisions of the Agreement in the light of the fact that the Agreement applied, at the time, to two employees who were not shiftworkers and would clearly operate within the framework of the safeguards contained in the Act.

[27] It appears to us that the Commissioner adopted an unsympathetic approach to the Agreement from the start. He raised a number of concerns in the hearing of 16 January. Although these concerns were partly addressed in the hearing and in further written submissions, in his decision over four months later, the Commissioner did not adequately or fairly apply the BOOT to the terms of the Agreement. He appeared to place little weight on the higher wages and the further wage increases provided for in the Agreement. His approach was to seek to extract additional benefits or demonstrate possible disadvantage from the operation of the provisions without properly seeking undertakings to address these concerns. He made findings that in certain respects there was no net benefit, and then apparently used those findings to justify a conclusion that overall employees were not better off. In doing so the claimed benefits were not fairly and appropriately considered against the very minor disadvantages in the Agreement, some of which were unintentional and able to be remedied. We also consider that in the context of this matter the delay in handing down his decision was inconsistent with the intention of the legislation that agreement approval applications are resolved expeditiously.


[28] For the above reasons we found at the conclusion of the hearing of the Appeal on 25 July 2012 that the Commissioner erred in his consideration of the BOOT to this Agreement. We granted permission to appeal, quashed the decision of Commissioner Ryan and remitted the matter to Deputy President Sams for determination as we considered that the various tests for approval, including the BOOT, required full reconsideration. Deputy President Sams approved the Agreement on 3 August 2012.



P. Salewicz with M. Mead for Solar Systems Pty Ltd

Hearing details:

July, 25.

 1   [2012] FWA 4381.

 2   [2012] FWAA 6554.

 3   MA000010.

 4   [2010] FWA 6442.

 5   [2010] FWAFB 9985.

 6   [2012] FWA 4381 at [20], see transcript of proceedings, 16 January 2012 PN59 - PN67.

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