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Enterprise agreements benchbook

An overview of legal procedure & case law

When an agreement passes

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Table of contents

On this page

  • When a non-greenfields enterprise agreement passes the BOOT
  • Case examples
  • When a greenfields agreement passes the BOOT
  • Case example
  • References

 

When a non-greenfields enterprise agreement passes the BOOT

An agreement that is not a greenfields agreement passes the better off overall test (BOOT) when the Fair Work Commission is satisfied that each present and prospective award covered employee would be better off overall if the agreement applied rather than the relevant modern award.[1]

The Commission needs to be satisfied that, weighing the agreement provisions as a whole with those in the award, an employee is better off overall.[2]

Related information

  • Base rate of pay
  • Identifying more and less beneficial terms – common defects & issues
  • Reduced or omitted award entitlements – common defects & issues

Case examples

Passes the better off overall test

Re Solar Systems Pty Ltd

Re Solar Systems Pty Ltd [2012] FWAFB 6397 (Watson VP, Sams DP, Deegan C, 24 August 2012).

At first instance, the Commission refused to approve the Solar Systems Pty Ltd Enterprise Agreement 2011 on the basis that the agreement did not pass the BOOT.

The employer appealed the decision, asserting that the Commission erred in approaching and applying the BOOT and in determining that the agreement did not pass the BOOT.

In granting permission to appeal and quashing the first instance decision, the Full Bench affirmed the approach to the BOOT taken by the Full Bench in Re Armacell Australia Pty Ltd and stated that the task of applying the BOOT is best expressed as applying the words in s.193.

The Full Bench stated that, for the purposes of 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.' The Full Bench was not satisfied that the first instance decision had done this. The Full Bench concluded that the Commission did not adequately or fairly apply the terms of the BOOT to the agreement, and placed little weight on the higher wages or further wage increases provided for in the agreement.

The Full Bench remitted the approval application to the Commission and the agreement was subsequently approved.

Re Datatech Australia Pty Ltd

Re Datatech Australia Pty Ltd [2013] FWCA 2313 (Bull C, 16 April 2013).

An application was made for the approval of the Datatech Australia Pty Ltd (NSW) Enterprise Agreement 2013–2017. The agreement provided for an ordinary span of hours between 5:00 am and 7:00 pm. The relevant modern award provides for an ordinary span of hours from 6:00 am to 6:00 pm.

The Commission questioned the increase in the spread of hours compared to the relevant modern award and how employees covered by this agreement were better off overall. The applicant advised that the rates of pay in the agreement were significantly higher, and consequently compensate for the increase in the span of ordinary working hours.

The Commission was satisfied that the increase in the span of ordinary hours satisfied the better off overall test, the agreement was approved.

Transport Workers' Union of Australia v Jarman Ace Pty Ltd T/A Ace Buses

Transport Workers' Union of Australia v Jarman Ace Pty Ltd T/A Ace Buses [2014] FWCFB 7097 (Catanzariti VP, Boulton J, Cambridge C, 28 October 2014).

An application was made seeking the approval of a single-enterprise agreement to be known as the Ace Buses Enterprise Agreement 2014. The agreement was to cover 69 casual employees, engaged as Bus Drivers (who transported school aged children with physical and intellectual disability between their homes and their school), Bus Supervisors (one of whom must accompany the Bus Driver on all trips) and administration staff.

At first instance, the Commission was satisfied that the agreement met the BOOT, and approved the agreement.

The TWU appealed, claiming that the Commission had erred in considering the benefits said to flow from the agreement and therefore had failed to apply the BOOT correctly. Specifically, the TWU was concerned about the Commission's characterisation of the following arrangements as 'non-monetary benefits':

  • the commencement of work from home, rather than a centralised depot
  • the use of buses for personal purposes, and
  • the use of mobile phones for personal purposes.

In addition, the TWU contended that the split shift arrangements under the agreement were significantly less beneficial than those applying under the relevant modern award and that the Commission had not accounted for the situation of employees who did not receive the above benefits.

The Full Bench stated that the application of the BOOT is a matter that involves the exercise of discretion and a degree of subjectivity or value judgement.

The Full Bench determined that the TWU had not demonstrated any error in the first instance decision and accordingly, permission to appeal was refused.

Does NOT pass the better off overall test

Re The Andrew Crawford Group Pty Ltd T/A Crawford Group Security and Investigations

Re The Andrew Crawford Group Pty Ltd T/A Crawford Group Security and Investigations [2013] FWC 5858 (O'Callaghan SDP, 19 August 2013).

An application was made for approval of The Andrew Crawford Group Pty Ltd Enterprise Agreement 2013. The agreement applied to employees who worked as static guards, crowd controllers or 'cash in transit escorts'.

The Commission did not consider that the agreement met the BOOT. Additional information provided by the employer addressed the concerns in relation to the agreement making process and the BOOT, with the exception of the Commission's concerns regarding pay rates for the crowd controller classification. For those employees, rates/penalties under the proposed agreement were higher than the award during the week but were lower for weekend and public holiday work. The majority of work for crowd controllers took place Thursday to Saturday.

The employer submitted that the agreement should be approved on the basis that the Commission had approved other agreements for its competitors with a similar discrepancy in rates.

The Commission was not satisfied that the agreement met the requirements of the BOOT with respect to the crowd controller classification. Following a conference, the employer offered an undertaking that the difference between the rates for weekend work under the relevant award and the agreement would not be more than the same difference under other agreements approved by the Commission.

Even with proposed undertaking, the Commission was not satisfied that the crowd controller employees received other benefits under the agreement to compensate for the lower weekend wages. Accordingly, the Commission was not satisfied that the agreement met the BOOT and the application for approval was refused.

Agreement included contingency or discretionary clauses

Re Glen Eden Thoroughbreds Pty Ltd T/A Ray White Shailer Park [2010] FWA 7217 (Asbury C, 16 September 2010).

An application was made for the approval of the Ray White Shailer Park Enterprise Agreement 2010. The application was opposed by the Property Sales Association of Queensland, Union of Employees (the PSAQ). The PSAQ submitted that the terms of certain provisions caused the agreement to fail the BOOT.

The Commission found that the agreement contained provisions usually found in common law contracts or implied into contracts by the common law (such as provisions dealing with restraint of trade, confidential information and intellectual property). Such provisions were not found in the award nominated for the purposes of establishing whether the agreement passed the BOOT. Generally, such provisions are not found in awards. In such cases the Commission can consider whether by including such terms in an enterprise agreement, employees are disadvantaged because the agreement imposes obligations or restrictions on them which are not imposed by a relevant award or under relevant common law principles.

The fact that agreement clauses involve contingent matters or discretion on the part of the employer that may or may not be exercised, should result in such clauses being viewed differently for the purposes of the BOOT. It must be assumed that contingent or discretionary clauses in agreements will be applied and they must be assessed against the terms of a relevant award on the same basis as other provisions of the agreement.

The Commission determined the inclusion of such terms was likely to result in a situation where award covered employees, both current and prospective, would not be better off overall if the agreement applied.

Not better off overall even when base rates of pay applied

Re KBK Security Services and Sentinel Traffic Control Service t/a KBK Enterprises Pty Ltd [2012] FWA 7336 (Asbury C, 27 August 2012).

An application was made for approval of the Sentinel Traffic Control Services Enterprise Agreement 2011. The primary activity of the employer was traffic control and security services. The AWU sought to be heard in relation to the application for approval of the agreement. The AWU also sought that the Commission refuse to approve the agreement on grounds including that it did not pass the BOOT.

The Commission found the agreement contained a number of terms that would result in award covered employees and prospective award covered employees not being better off overall. The effect of these terms did not appear to be balanced by corresponding benefits in the agreement.

The wage rates in the agreement were marginally above or marginally below the wage rates for corresponding classifications in each of the relevant awards. In the event the agreement was approved, s.206 of the Fair Work Act would operate so that the base rates in the agreement would not be less than the relevant modern award rate. However, even allowing for the effect of s.206, the rates in the agreement were not sufficient to offset the removal of other benefits in the awards.

The Commission was not satisfied that the BOOT had been met. The application for approval of the agreement was refused.

When a greenfields agreement passes the BOOT

A greenfields agreement passes the better off overall test if the Commission is satisfied, as at the test time, that each prospective award covered employee would be better off overall if the agreement applied than if the relevant modern award applied.[3]

Case example

Passes the better off overall test

Greenfields agreement

Re Meales Concrete Pumping (Qld) Pty Ltd [2012] FWAA 6089 (Sams DP, 19 July 2012).

An application was made for approval of a greenfields agreement to be known as the Meales Concrete Pumping (QLD) Pty Ltd Ichthys Onshore Construction Greenfields Agreement. The agreement was proposed to cover craft and construction employees on the Ichtys Onshore Construction Project engaged in on site construction work, on site commissioning work and onshore marine construction work and related activities at the marine offloading facility at Blaydin Point, Northern Territory. The agreement was negotiated with the AWU, AMWU, CFMEU and CEPU.

The agreement provided for a number of conditions which either replicated current industry standards, or were significantly in excess of or more beneficial than the terms of the relevant award. The Commission was satisfied that the agreement passed the BOOT.

Upon reviewing the terms of the preapproval process documentation and the agreement itself, the Commission was satisfied that all of the requirements of the Fair Work Act had been met, and that it was in the public interest to approve the agreement.

References

[1] Fair Work Act s.193(1).

[2] National Tertiary Education Industry Union v University of New South Wales [2011] FWAFB 5163 (Harrison SDP, Sams DP, Deegan C, 10 August 2011) at para. 47, [(2011) 210 IR 244].

[3] Fair Work Act s.193(3).

Updated time

Last updated

24 May 2019

 

 

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          • Fair Work timeline
      • The history of the Australian minimum wage
        • The Great Strikes
        • The first minimum wage: The Victorian minimum wage
        • The Harvester Decision
        • The impact of the Great Depression
        • Working it out: Cost of living versus capacity to pay
        • The removal of award rate discrimination
        • The wage explosion & economic crisis
        • The modern era: The development of a modern minimum wage
      • Treasures of the archives
        • Launch speech?Treasures of the Archives
        • 1. Professor Isaac
        • 2. Register of organisations
        • 3. Perlman letters
        • 4. Sir Richard Kirby photograph
        • 5. Oral history program
        • 6. AIRC sign
        • 7. Folder of wage decisions
        • 8. Centenary exhibition
        • 9. Women's exhibition poster
        • 10. Isaac letters
    • The modern era
    • Past Presidents
    • Past Members
      • Past Members 1956 to present
      • Past Members to 1956
  • Unfair dismissals benchbook
    • Overview of unfair dismissal
    • Glossary & naming conventions
    • Coverage for unfair dismissal
      • Who is protected from unfair dismissal?
      • People excluded from national unfair dismissal laws
        • Independent contractors
        • Labour hire workers
        • Vocational placements & volunteers
        • Public sector employment
      • Constitutional corporations
      • High income threshold
      • Modern award coverage
      • Application of an enterprise agreement
      • What is the minimum period of employment?
        • How do you calculate the minimum period of employment?
        • What is continuous service?
        • What is an excluded period?
      • Bankruptcy
      • Insolvency
    • What is dismissal?
      • When does a dismissal take effect?
      • Terminated at the employer's initiative
      • Forced resignation
      • Demotion
      • Contract for a specified period of time
      • Contract for a specified task
      • Contract for a specified season
      • Training arrangement
      • What is a transfer of employment?
      • Periods of service as a casual employee
      • What is a genuine redundancy?
        • Job no longer required due to changes in operational requirements
        • Consultation obligations
        • Redeployment
      • What is the Small Business Fair Dismissal Code?
    • What makes a dismissal unfair?
      • Valid reason relating to capacity or conduct
        • Capacity
        • Conduct
      • Notification of reason for dismissal
      • Opportunity to respond
      • Unreasonable refusal of a support person
      • Warnings – unsatisfactory performance
      • Size of employer's enterprise and human resources specialists
      • Other relevant matters
    • Making an application
      • Application fee
      • Timeframe for lodgment
      • Extension of time for lodging an application
      • Who is the employer?
      • Multiple actions
      • Discontinuing an application
    • Objecting to an application
    • Commission process
      • Conciliation
      • Hearings and conferences
      • Preparing for hearings and conferences
      • Representation by lawyers and paid agents
      • Rescheduling or adjourning matters
      • Bias
    • Remedies
      • Reinstatement
        • Order for reinstatement cannot be subject to conditions
        • Order to maintain continuity
        • Order to restore lost pay
      • Compensation
        • Calculating compensation
        • Mitigation
        • Remuneration
        • Other relevant matters
        • Compensation cap
        • Instalments
    • Dismissing an application
    • Evidence
    • Costs
      • Costs against representatives
      • Security for costs
    • Appeals
      • Staying decisions
    • Role of the Court
  • Waltzing Matilda and the Sunshine Harvester Factory
    • Introduction
    • The book
      • Book launch
    • The film
      • Film launch
    • Historical material
      • 38 Hour Week Wage Principle [1983]
      • 40 Hour Week Case [1947]
      • 44 Hour Week Case [1927]
      • Apprenticeship indentures
      • Australian Minimum Wage and fitter (trades) rate since 1906
      • Boot Trades Case
      • Careers in Bootmaking and Boot Repairing
      • Cattle Industry Case 1966
      • Commercial Printing Case [1936]
      • Commonwealth Conciliation and Arbitration Act 1904
      • Cost of living newspaper articles from the early 1900s
      • Debates
      • Equal Pay Case 1969
      • Equal Pay Case 1972
      • Fruit Pickers Case
      • Gas Employees Case
      • Graph of Australian Minimum Wage since 1906
      • Harvester Case
      • Historic case judgments on the Fair Work Commission's website
      • Kingston's evidence
      • Linesmen's Case
      • Maternity Leave Case [1979]
      • Metal trades base level minimum wages [1967–2015]
      • Methods of wage adjustment
        • Establishing an Australian Minimum Wage 1907?1922
          • The origins of the Australian minimum wage
          • The 'needs' principle and 'capacity to pay'
          • Women's wages
          • First indexation decision
        • Quarterly indexation 1922–1953
        • The Great Depression 1931
        • Prosperity loadings 1937
        • World War II 1939–1945
        • The post-war period: 1953–1965 basic wage inquiries
        • The total wage 1966–1967
        • Removal of discrimination in award rates
        • Reintroduction of quarterly wage indexation 1975–1978
        • Six monthly wage indexation 1978–1981
        • Wage explosion 1981–1982
        • Reforming awards and work and management practices 1987–1991
        • Six monthly wage indexation 1983–1987
        • Enterprise bargaining and a minimum wage safety net 1991–1996
        • Statutory adjustments
        • The minimum wage in real terms
      • Mrs Beeton's cookbook
      • Paternity Leave Case [1990]
      • Personal/Carer's Leave Test Case [1995]
      • Piddington report
      • Re Bagshaw [1907]
      • Significant cases on the Fair Work Commission's website
      • Statistics for the purpose of comparison with the Australian minimum wage
      • The Amalgamated Society of Engineers v. The Adelaide Steam-ship Company Limited and Others
      • The Australian minimum wage from 1906
      • The Federated Marine Stewards and Pantrymen's Association v. The Commonwealth Steamship Owners' Association and Others
      • The Victorian minimum wage 1896
        • Legislative Council Second Reading Speech to the Factories and Shops Bill 1896
      • The first Award: 1906 Steam-ship Crew
      • 100 years of the minimum wage—Statistical comparison
    • Mrs Beeton's cookbook
    • Glossary
    • Related sites
    • Educational materials
  • AWRS First Findings report

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