DECISION

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

Shamrock Civil Pty Ltd
(AG2017/2918)

SHAMROCK CIVIL PTY LTD ENTERPRISE AGREEMENT 2017

Application for approval of the Shamrock Civil Pty Ltd Enterprise Agreement 2017.

[1] An application has been made for approval of a single enterprise agreement known as the Shamrock Civil Pty Ltd Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Shamrock Civil Pty Ltd.

[2] On 26 July 2017 the Construction, Forestry, Mining and Energy Union (CFMEU), Queensland and Northern Territory Branch sought access to the Form F16, Form F17 and Notice of Employee Representational Rights (NERR) filed by the Applicant in relation to the Agreement and indicated that it wished to make submissions in the matter. Copies of the Form F16, Form F17 and NERR were provided to the CFMEU QLD/NT Branch on 28 July 2017.

[3] On 3 August 2017 the CFMEU, Construction and General Division, Western Australia Branch also sought access to the Form F16, Form F17, NERR and any other documentation filed by the Applicant in relation to the Agreement, as well as details of any directions or dates of hearing set down by the Commission. Copies of the Form F16, Form F17 and NERR were provided to the CFMEU WA Branch on 4 August 2017.

[4] On 8 August 2017, 11 August 2017 and 15 August 2017 the Commission sought information from the Qld/NT and WA branches of the CFMEU about whether they were bargaining representatives for the Agreement for the purposes of section 176 of the Act. Only the Qld/NT Branch responded to the request. It elected not to provide any information to the Commission that would assist in dealing with whether it was a bargaining representative for the Agreement.

[5] On 28 August 2017 each branch of the CFMEU was advised by my chambers that I had formed the preliminary view that the CFMEU was not a bargaining representative for the Agreement and did not have standing in relation to the application. On that basis, I decided to consider submissions from the CFMEU but only in relation to the better off overall test (BOOT). I considered that the CFMEU was likely to be in a position to assist the Commission in its consideration on this issue, having regard to its particular knowledge of the Building and Construction General On-Site Award 2010 (the Award).

[6] On 31 August 2017, the CFMEU branches filed a combined submission in relation to the Agreement and the BOOT, including a table comparing the Agreement to the Award. The CFMEU expressed the view that the Agreement did not contain any more beneficial terms, and that the terms in the Agreement were either equivalent to the Award, less beneficial, or not provided for at all. 1

[7] The CFMEU advised that it considered the following terms to be less beneficial:

•  Terms applicable to employees outside the civil construction sector

•  Consultation term - no requirement to provide written information;

•  No dispute resolution training requirements;

•  A ‘fixed term’ employment category;

•  Narrower scope of redundancy entitlements;

•  Lower base rates of pay than the Award;

•  Piece rates;

•  No provision for a number of allowances in Clauses 20, 21 and 22 of the Award, including meal allowance, compensation for lost tools and fares and travel patterns allowances;

•  Span of ordinary hours;

•  Fortnightly pay;

•  Inclement weather;

•  Reduction in shiftwork provisions;

•  No term dealing with “presenting for work when not required”;

•  Reduced notice of annual shutdown; and

•  Absence of National Training Wage and School-based apprenticeship provisions.

[8] The Commission separately conducted an initial assessment of the Agreement and sought clarification from the applicant about the following issues:

•  Entitlements for shiftworkers and daily hire employees;

•  Meal breaks; and

•  Averaging of hours over a 12 month period for the purposes of assessing reasonable additional hours.

[9] A response to the issues identified by the CFMEU and the Commission was sought from the applicant. On 15 August 2017 and 6 September 2017 the applicant provided its responses to the issues raised. The CFMEU was given a further opportunity to comment on these responses and to review proposed undertakings given by the applicant. It took up that opportunity on 11 September 2017.

Better Off Overall Test

[10] Section 193(1) of the Act provides as follows:

“193(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.”

Consultation term - no requirement to provide written information

[11] The CFMEU identified a concern that the consultation term in the agreement did not reflect the Award term in clause 8.1(b)(iii) that information about introduction of changes will be provided to employees in writing. The applicant agreed that an undertaking may be required to address the concern and I am satisfied that the omission could give rise to a detriment to employees.

No dispute resolution training requirements

[12] The CFMEU asserted that the Agreement contained “no dispute resolution training requirements”, although it provided scant detail about the concern. Clause 22.4 of the Agreement provides for dispute resolution training. On the materials before me, I am not satisfied that the Agreement is less beneficial than the Award in relation to dispute resolution training.

A ‘fixed term’ employment category

[13] The CFMEU asserted that the Agreement was less beneficial because it provides for ‘fixed term employment’, but did not elaborate on its concern.

[14] The fact that the Agreement provides for a category of employment that is not dealt with in the Award does not, in my view, automatically result in there being a detriment to employees.

[15] Fixed term employees enter into the employment relationship knowing that it is only for a defined period. They are entitled to the same terms and conditions of employment under the Agreement as other full-time and part-time employees, except in relation to redundancy which I deal with separately. While it may not be expressly contemplated in the Award, fixed term employment is a relatively common feature of employment in Australia and is used to address a range of scenarios including employment for a particular project, or to cover a period of parental leave.

[16] I am not satisfied that provision for fixed term employment in the Agreement results in employees being less better off overall than the Award.

Redundancy

[17] The CFMEU asserted that the Agreement contained exclusions to redundancy that were not in the Award, and valued this detriment at $38.35 gross per week per employee. It did not otherwise elaborate on its concern in submissions.

[18] The issue was recently considered in Construction, Forestry, Mining and Energy Union v Levent Painting Pty Ltd 2 and Construction, Forestry, Mining and Energy Union v Concrete Constructions (WA) Pty Ltd3.

[19] I accept that the Agreement limits the scope of its redundancy terms so that they do not apply to certain situations and categories of employment, whereas redundancy entitlements under clause 17 of the Award apply broadly to all employees in any situation where their employment comes to an end, except misconduct or refusal of duty. Having regard to the decisions above, I am prepared to accept for the purposes of this decision that the value of redundancy lost to those employees is $38.35 per week.

[20] In my view, the rates of pay payable under the Agreement are sufficient to compensate for this detriment for those employees to whom it applies, as discussed further below.

[21] Two other issues were raised in relation to redundancy (one by the Commission and one by the CFMEU). The Commission identified a potential inconsistent with the National Employment Standards in relation to employees with less than 2 years’ service. The CFMEU identified a potential inconsistency with section 120 of the Act. Undertakings have been provided to address these concerns.

Lower base rates of pay than the Award

[22] The CFMEU submitted that rates of pay in the Agreement were less beneficial when compared to the Award, and provided calculations in support of its submission. The calculations provided by the CFMEU are based on the CW1(d) “daily hire” classification in the Award and modelled on the following assumptions:

•  That employees will work a 50 hour week;

•  That employees are not working on a project;

•  The employees are not working in the metropolitan area; and

•  That the employee is made redundant in one of the scenarios where redundancy is not payable under the Agreement.

[23] I accept that 50 hours per week is relatively common in the civil construction sector and is therefore an appropriate basis for assessing the rates of pay under the Agreement for the purposes of the BOOT.

[24] The applicant submitted that it does not, and will not, employ “daily hire” employees under the Agreement. It offered to give an undertaking to confirm the position. I accept the applicants’ submission that the category of “daily hire employee” is not relevant to its business.

[25] The applicant confirmed that the site allowances applied to ‘All Levels’ of classification under the Agreement, with the result that as a minimum, employees would receive an allowance of $1.50 per hour in addition to the minimum rates of pay provided in clause 5.2 of the Agreement. If employees were engaged on project work, this allowance would increase to $2.29 per hour.

[26] For employees at Levels 2-4 under the Agreement, there is also an additional Recognition of Skill Allowance, which is paid on a ‘per hour’ basis. As a minimum, employees at these levels will receive an allowance of $5.32 per hour (including $1.50 per hour metro site allowance plus $3.82 per hour recognition of skill allowance) in addition to the minimum rates of pay provided in clause 5.2 of the Agreement. If employees were engaged on project work, this allowance would increase to $7.21 per hour.

[27] Modelling undertaking by the Commission indicates that a CW1 employee working a 50 hour week who is entitled to the $1.50 per hour metro site allowance will earn $1390.06 per week under the Agreement, compared to $1323.19 under the Award. The Award calculation is based on a CW1(d) weekly hire employee working 50 hours per week, including the industry and special allowance as well as $38.35 per week for redundancy. In each case the calculations include a factor for annual leave and leave loading.

[28] I am satisfied that the Agreement provides more beneficial rates of pay than the Award.

[29] In my view the rates of pay in the Agreement are sufficient to compensate for potential detriments arising in relation to redundancy pay and the broader span of ordinary hours.

Allowances

[30] The CFMEU identified a litany of concerns in relation to allowances not provided for under the Agreement when compared to the Award. The concerns were briefly stated in a table attached to the CFMEU submissions.

[31] Clause 5.6 of the Agreement provides as follows:

5.6 Where due to the nature of the work the Employee is performing, the Employee would be entitled to an additional allowance or special rate under the terms of the Building and Construction General On-Site Award 2010, the Company will pay the employee that allowance or special rate in accordance with the terms of the Award as varied in addition to the minimum rate of pay specified in clause 5.2 above.

[32] The applicant clarified in response that clause 5.6 of the Agreement is intended to provide for the range of allowances such as meal allowances and higher duties allowances, when applicable, as provided for under the Award.  It also provides for the inclusion of any future allowances that may become payable under the Award.

[33] I accept the submissions of the applicant. I am not satisfied that there is any detriment to employees in relation to allowances payable under the Award as compared to the Agreement.

Span of ordinary hours

[34] The CFMEU identified the different span of hours in the Agreement (6am – 6pm) compared to the Award (7am – 6pm) as less beneficial to employees.

[35] Under the Award, employees can agree with the employer to start the working day at any time between 6.00am and 8.00am (clause 33.1(viii)) and such hours are treated as ordinary hours of work.

[36] I am not satisfied that the span of hours from 6.00am to 6.00pm in the Agreement represents a detriment to employees. Even if it did, I consider that any alleged detriment would be offset by the higher rates of pay contained in the Agreement.

Presenting for work but not required

[37] The CFMEU asserted that clause 19.4 of the Award, which deals with where new permanent employees present for work but are not required, is a term that is either “less beneficial or not provided for” in the Agreement.

[38] The applicant provided a submission in response advising that it had never encountered such a scenario, but that if it arose, employees would be sent home for the day on full pay. I also note the provisions of the Agreement in relation to inclement weather, discussed below.

[39] On balance, I do not consider that this issue is an impediment to the approval of the Agreement.

Piece rates

[40] The CFMEU identified the lack of piece rates in the Agreement as “less beneficial or not provided for” when compared to the Award.

[41] The Award provides for an employer and employee to agree to remunerate the employee in whole or in part by piece rates, instead of the rates and allowances in the Award. The Agreement makes no provision for the payment of piece rates.

[42] I am not satisfied that the absence of an ability to reach agreement on piece rates in lieu of other award rates of pay represents a detriment to employees. The Agreement provides enforceable minimum rates of pay that are more beneficial than the Award. It is not necessary for the Agreement to deal with every possible scenario contemplated by the Award as a pre-condition to approval.

Inclement weather

[43] The CFMEU identified concerns relating to clauses 23.3 and 23.5 of the Award, which deals with inclement weather. The terms were said to be “less beneficial or not provided for” but no detail was provided about the concern.

[44] The Agreement deals with inclement weather in clauses 4.22-23 and 26. I am satisfied that the Agreement deals with inclement weather in a way that does not represent a detriment to employees. To the extent that there is any potential detriment said to arise, the applicant has offered an undertaking to apply the additional wet weather procedure in accordance with clause 23.13 of the Award.

Fortnightly pay

[45] The CFMEU raised a concern relating to clause 31 of the Award, which provides for wages to be paid weekly. It says the provision of fortnightly pay under the Agreement is “less beneficial or not provided for”.

[46] I am not satisfied that the payment of wages fortnightly rather than weekly is of such detriment to employees that it leaves them in a position where they would not be better off overall under the Agreement than the Award.

Reduction in shiftwork provisions

[47] The CFMEU raised concerns about shiftwork provisions as follows: “no paid breaks. Reduction in broken shift provisions.”

[48] The Commission sought clarification from the applicant about the operation of the shiftwork provisions. The applicant responded by confirming that shiftworkers are not employed in its business.

[49] I accept that the shiftwork provisions, as currently drafted, could leave some employees worse off under the Agreement than the Award. The concern can be remedied by an undertaking from the applicant.

•  breaks

[50] The CFMEU identified a concern about “no penalty rates paid for late meal breaks”. It did not provide any detail about its concern. It also identified “no third crib allowance where 2 or more hours OT worked” as a “less beneficial or not provided for” term in the Agreement.

[51] I accept that the taking of meal breaks under the Agreement as made could operate in a way that was detrimental to employees when compared to the Award.

[52] The applicant offered an undertaking to address the concerns, which I deal with later in this decision.

Minimum engagement on Saturdays and public holidays

[53] The CFMEU identified a concern that the Agreement was either less beneficial or did not provide for minimum engagement periods for work on Saturdays and public holidays.

[54] I accept that the absence of a minimum engagement is a detriment to employees under the Agreement when compared to the Award.

[55] The applicant provided an undertaking to address the concern by confirming that the minimum engagement period on such days would be four hours, which is the same as provided in the Award.

Reduced notice of annual shutdown

[56] The CFMEU said that the reduced notice period for an annual shutdown of 2 weeks rather than 8 weeks was “less beneficial or not provided for” in the Agreement.

[57] I accept that the shorter notice period is a detriment to employees under the Agreement when compared to the Award.

[58] The applicant offered an undertaking that the notice of shutdown would be 2 months. If accepted, this undertaking would result in a slight benefit to employees when compared to the Award.

Relevance of the National Training Wage and School-based apprenticeship provisions

[59] The CFMEU identified that the “national training wage” and “school-based apprenticeship” provisions of the Award are either “less beneficial or not provided for” in the Agreement.

[60] The applicant advised that the particular provisions were not relevant to their business.

[61] I accept that the provisions are not relevant to the business and on that basis, I do not consider that any detriment arises from their omission from the Agreement.

Averaging of hours over a 12 month period

[62] A concern was raised that the Agreement allowed for the averaging of hours over a 12 month period for the purposes of assessing reasonable additional hours.

[63] I accept that there may be scenarios where a longer averaging period than that provided in the Award leaves employees worse off under the Agreement.

[64] The applicant has offered an undertaking to address the concern.

Clarification of scope

[65] The CFMEU expressed a concern that the Agreement was not clear as to whether it applied only to the civil construction sector or more broadly.

[66] I note that the Agreement is titled “Shamrock Civil Pty Ltd Enterprise Agreement 2017 and that the Form F17 accompanying the application identifies the primary activity of the employer as “civil construction – concrete, formwork and reinforcing”.

[67] I am satisfied on the materials before me that the agreement was made on the understanding that it will apply to employees in the civil construction sector only. To clarify the position in the Agreement, the applicant has sought that clause 2.1(b) of the Agreement be amended to include the words “and engaged on any work in the Civil Construction Sector.”

[68] In the interests of certainty, I will allow the amendment under section 586 of the Act.

Undertakings

[69] As noted throughout this decision, the Applicant has offered to provide written undertakings in relation to the Agreement. The undertakings are set out in Annexure A.

[70] I am satisfied that the undertakings attached in Annexure A will not cause financial detriment to any employee covered by the Agreement.

[71] While there are a number of undertakings provided, in my view they are generally dealing with matters of detail, which is to be expected in circumstances where the Agreement is challenged on a ‘line by line’ rather than an ‘overall’ basis. I am satisfied that the undertakings will not result in substantial changes to the Agreement.

[72] Subject to the undertakings referred to above, on balance I am satisfied that the agreement passes the BOOT and that each of the additional requirements in ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

[73] The Agreement is approved and, in accordance with section 54 of the Act, will operate from 22 September 2017. The nominal expiry date of the Agreement is 14 September 2021.

COMMISSIONER

Annexure A

 1   Annexure A to Outline of Submissions of the CFMEU.

 2   [2017] FWCFB 3911

 3   [2017] FWCFB 3912

Printed by authority of the Commonwealth Government Printer

<Price code G, AE425467  PR596153>