DECISION

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

RECS (QLD) PTY LTD
(AG2015/5383)

RECS (QLD) PTY LTD ENTERPRISE AGREEMENT 2015

Application for approval of the RECS (QLD) PTY LTD Enterprise Agreement 2015.

[1] An application has been made for approval of an Enterprise Agreement known as the RECS (QLD) Pty Ltd Enterprise Agreement 2015 (the Agreement). The application was made pursuant to Section 185 of the Fair Work Act 2009 (the Act). Section 185 is in Part 2–4 of the Act which provides for the making of Enterprise Agreements between an employer and their employees who are employed at the time the agreement is made and who will be covered by the agreement. The application has been made by RECS (QLD) Pty Ltd (the Applicant). The Agreement is a single-enterprise Agreement.

[2] The Agreement covers all on-hire employees engaged anywhere in Australia who would otherwise be covered by any of 11 listed modern awards. The Awards cover a wide range of industries and occupations including manufacturing, construction, mining, road transport, oil, gas, maritime and clerical. The F17 Statutory Declaration states that the Agreement covers all employees of the employer other than senior executives. I am not satisfied that this statement is accurate as the employer employs some persons who are not “on-hire”. However, I am satisfied that the group selected for coverage is operationally and organisationally distinct from those employees who administer and market the business. I am satisfied that the business operates or intends to operate across Australia and that the modern awards which define the coverage represent the scope of work that the company offers services or intends to offer services. I am satisfied that the fairly chosen requirement is met.

[3] I am satisfied from the F17 Statutory Declaration that the requirements of the legislation in respect to the notice of representational rights, the access period and the notice of the time and place of voting have been followed. The application for approval was made within 14 days of the Agreement being made.

[4] The Applicant says that there are 3 employees covered by the Agreement and I accept that those employees voted to approve the Agreement.

[5] The Applicant says that the terms of the Agreement were explained to employees. There were no bargaining representatives and there was no negotiation. The employer drafted a proposed agreement and provided it to employees by email. Employees were provided with a link that directed them to the relevant Awards.

[6] The Agreement incorporates all 11 listed modern awards. The Agreement applies where there is any inconsistency. Employees, but not the employer, are prohibited from making any further claims.

[7] The Agreement imposes a number of additional obligations and restrictions on employees which are not found in the Award. The Agreement excludes the casual conversion clauses in the various awards and pays a 1% additional casual loading after six months service. The Agreement provides for 0.1% per hour greater than the relevant award. The Agreement allows for any over award payments to be offset against any entitlements, terms, conditions, penalties and allowances which might otherwise apply to employees.

[8] The model consultation and flexibility terms will apply.

[9] Section 180(5) of the Act requires that all reasonable steps must be taken by the employer to explain the terms of the agreement and the effect of those terms. It is quite common for the Fair Work Commission to identify terms which it believes may disadvantage employees in circumstances where the employer has failed to identify these matters in the F17 Statutory Declaration and in the information provided to employees. In this case the employer failed to identify a number of matters which disadvantage employees. Where these matters are minor it does not necessarily mean that Section 180(5) has not been complied with. The requirement is about “reasonable steps”. Where the matters are more significant the Fair Work Commission might not be satisfied that Section 180(5) has been met and as a consequence the requirement for genuine agreement in Section 188 may not be met and this will prevent the Agreement being approved. In the circumstances of this case I am satisfied, on a fine balance, that reasonable steps were taken to explain the terms of the agreement and the effect of those terms.

[10] Clause 13.8 permits overpayments of wages to be deducted at a time and in a manner which is at the Company’s sole discretion. This term is of no effect as it is clearly to the benefit of the employer and is unreasonable in the circumstances (Section 326 of the Fair Work Act 2009). The same may apply to Clause 15.2 which allows for deduction of any money owed from employee entitlements upon termination of employment.

[11] The following are some of the matters in the Agreement which disadvantage employees when compared to the Awards or some of the Awards:

1. Clause 6 requires employees to comply with any specific client policies and procedures applicable to their assignment. These policies and procedures are unknown and were not available at the time the Agreement was voted on. This requirement could potentially allow a variation to the Agreement to occur without meeting the requirements of the Act for variation. Employees could be significantly disadvantaged by making this requirement an enforceable term of the Agreement.

2. Clause 7 requires the employees to follow lawful and reasonable directions from both the employer and also from the client and failure to do this may result in disciplinary action including termination of employment. This clause makes what may be a common law requirement an enforceable agreement term with possible penalties for non-compliance. Generally the consequence of non-compliance is disciplinary not enforcement. For this reason the clause is not a significant disadvantage but it is not immaterial.

3. Clause 8 Safety and Health includes an extensive list of obligations on employees which are not contained in the Awards. As appears to be common in Agreements the only enforceable health and safety obligations are on the employee not the employer. The clause makes what might be in employer policies an enforceable agreement term with possible penalties for non-compliance. It includes onerous and intrusive matters such as drug and alcohol testing at any time and without cause.

4. Clause 9.4 provides for abandonment of employment to be deemed after two days absence. None of the safeguards associated with abandonment of employment provisions in Awards are included.

5. Clause 9.2 provides for fixed term, fixed task and maximum term employment. Clause 10.6 provides that each assignment may be a discrete period of employment and Clause 12.5 provides that each assignment ends when the client changes shift pattern or roster cycle. Clause 10.7 provides that assignments may end at the company’s discretion. The combination of these clauses may be in conflict with rights under the National Employment Standards and rights to protection from unfair dismissal. In order to ensure that this is not an unlawful term which excludes or modifies the application of unfair dismissal rights it needs to be clear that this does not affect continuity of employment or unfair dismissal rights.

6. Clause 12.3 provides that the maximum ordinary hours of work is 12 hours. The provisions in the relevant Awards concerning daily ordinary hours vary. However, generally Awards only allow shifts of 12 hours where certain conditions and safeguards are met. Those safeguards are not included in the Agreement. Some Awards, such as the Transport and Distribution Award do not provide for 12 hour shifts.

[1] I am not satisfied that 0.1% per hour is sufficient compensation for these matters.

[2] I considered the employer’s submissions about these matters. Following the hearing the employer has provided undertakings that:

•  Clause 6 client policies and procedures do not form part of the Agreement.

•  The requirements for drug and alcohol testing do not form part of the Agreement (Clause 8.2.2 and 8.3).

•  The abandonment of employment provisions do not form part of the Agreement (Clause 9.4).

•  The provisions in respect to 12 hour shifts do not form part of the Agreement (Clause 12.3).

•  Clauses 9.2 and 12.5 do not replace or alter any rights under the NES or unfair dismissal provisions.

[3] I am not satisfied that the additional 1% is sufficient compensation for the removal of the right to casual conversion in Awards. I accept the submission of the employer that there have been a number of agreements approved by the Fair Work Commission which contain this provision. The substitution of non-monetary entitlements for monetary entitlements is often a difficult matter to judge. Casual conversion offers employees the opportunity for job security and access to paid leave. Employees may value these matters differently. There will be differential issues for employees. For example, those with a disability or with particular family circumstances will be likely to gain greater benefit from increased job security and access to paid leave. For the purpose of the BOOT it may not be appropriate to see all casual employees as a single class in this particular circumstance. I note that the F17 Statutory Declaration reveals that two of the three current employees who will be covered by the Agreement are casuals. One of the employees is an Aboriginal or Torres Strait Islander. Job security is likely to be a particularly valuable consideration for employees of indigenous background.

[4] The employer submitted that the Fair Work Act 2009 provides regular casual employees with protection from unfair dismissal and this reduces the importance of the casual conversion clause. I am satisfied that casual employees in the labour hire industry are not guaranteed any particular number of hours of work and therefore their income is precarious. Casual conversion offers those employees the opportunity for guaranteed 38 hours of work and pay per week if full time or regular guaranteed hours if part time. This is a major potential advantage to some casual employees.

[5] I provided the employer with the opportunity to make submissions about these matters either in the lead up to the hearing or at the hearing. I considered those submissions.

[6] Following the hearing the employer provided an undertaking that the exclusion of the casual conversion provisions of the Awards would not apply (Clause 11).

[7] I am satisfied that the undertakings will ensure that the Agreement meets the BOOT.

[8] I am satisfied that the undertakings do not result in financial disadvantage to employees. Given the scope of the concerns in this matter and the limited number of matters contained in the Agreement apart from the Award incorporation, I was concerned that the undertakings might represent a substantial change to the Agreement. However, on balance I am satisfied that they do not result in a substantial change to the Agreement.

[9] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[10] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 6 November 2015. The nominal expiry date of the Agreement is 30 October 2019.

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