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[2014] FWC 3028
Fair Work Commission
2014-05-08
Original judgment source is linked above.
s 185 - Application for approval of a single-enterprise agreement
Surf City Coaches Pty Ltd t/as Bus IT Queensland
Application for approval of the Bus IT Queensland Employees Enterprise Agreement 2013 - whether agreement meets the BOOT - National Employment Standards - Union objections - single day charters - confidentiality provision - redundancy and suitable alternative employment - breaches of vehicle regulations - Union coverage - undertakings proposed - agreement approved with undertakings.
[1] This decision concerns an application, filed by Surf City Coaches Pty Ltd t/as Bus IT Queensland (the 'applicant'), which seeks the approval of a single enterprise agreement to be known as the Bus IT Queensland Employees Agreement 2014 (the 'Agreement'). The application, filed on 1 April 2014, is made pursuant to the provisions of Part 2-4 of the Fair Work Act 2009 (the 'Act'). The Agreement is to cover 50 employees who are engaged as bus drivers, cleaners, mechanics and administrative staff at the applicant's bus transport operations in Mackay, Queensland.
[2] In a vote of employees, 28 from a total of 40 employees who cast a valid vote, agreed to approve the Agreement. There is no doubt that the Agreement was validly made and the employees genuinely agreed to approve the Agreement. I am also satisfied that the pre-approval processes were conducted in accordance with all of the relevant statutory requirements of the Act. I note that the Transport Workers' Union of Australia (the 'Union') was not involved in the negotiations for the Agreement and there was no employee nominated bargaining representatives identified in the application.
[3] In the Employer's statutory declaration in support of the application (Form F17), Ms L Grogan, the applicant's General Manager, identified the following awards as the relevant reference instruments for the purposes of the Better Off Overall Test (BOOT):
[1] Ms Grogan explained that the rates of pay are significantly higher for all classifications as follows:
' - Permanent bus drivers receive base rate of $27.50 for all hours (Award Grade 3 is $18.99 and Grade 4 is $19.07)
[1] The answer to question 3.5 as to any less beneficial terms in the Agreement compared to the Awards, was as follows:
'Rates of pay set out in the Agreement are for all hours worked and therefore overtime rates on a Monday to Friday after the first 10 hours may not exceed the Award rate. However the base rate are [sic] significantly higher than the awards and therefore an employee will always be better off overall.'
[2] Unsurprisingly, the applicant contends that the Agreement meets the BOOT and should be approved by the Commission. The Union filed an Employee organisation declaration in relation to the application (Form F18), in which it claimed to be a bargaining representative for the Agreement and was entitled to represent the industrial interests of some of the employees to be covered by the Agreement. However, the Union did not support the approval of the Agreement (despite wishing to be covered by it), primarily on the basis that it failed to meet the BOOT.
[3] At a telephone hearing of the application on 16 April 2014, Mr I Macdonald from the Australian Public Transport Industrial Association (APTIA) represented the applicant and Ms M Cerrato represented the Union. After both parties outlined their respective positions, the Commission directed that further written submissions be filed and served in respect to the remaining issues in dispute.
[4] The approval of enterprise agreements is dealt with in Division 4, Part 2-4 of the Act. S 186(1) provides that the Commission must approve an agreement if the requirements set out in ss 186 and 187 are met. For the purposes of this decision, the particular requirements set out in ss 186(2)(c) and (d) are relevant:
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.'
[5] S 55 is referred to in s 186(2)(c) and is set out as follows:
'55 Interaction between the National Employment Standards and a modern award or enterprise agreement
National Employment Standards must not be excluded
(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.
(2) A modern award or enterprise agreement may include any terms that the award or agreement is expressly permitted to include:
(b) by regulations made for the purposes of section 127.
(3) The National Employment Standards have effect subject to terms included in a modern award or enterprise agreement as referred to in subsection (2).
Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer's leave at a rate of pay that is higher than the employee's base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.
Enterprise agreements may include terms that have the same effect as provisions of the National Employment Standards
(5) An enterprise agreement may include terms that have the same (or substantially the same) effect as provisions of the National Employment Standards, whether or not ancillary or supplementary terms are included as referred to in subsection (4).
Effect of terms that give an employee the same entitlement as under the National Employment Standards
(6) To avoid doubt, if a modern award includes terms permitted by subsection (4), or an enterprise agreement includes terms permitted by subsection (4) or (5), then, to the extent that the terms give an employee an entitlement (the award or agreement entitlement) that is the same as an entitlement (the NES entitlement) of the employee under the National Employment Standards:
(a) those terms operate in parallel with the employee's NES entitlement, but not so as to give the employee a double benefit; and
(b) the provisions of the National Employment Standards relating to the NES entitlement apply, as a minimum standard, to the award or agreement entitlement.
Note: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave.
Terms permitted by subsection (4) or (5) do not contravene subsection (1)
(7) To the extent that a term of a modern award or enterprise agreement is permitted by subsection (4) or (5), the term does not contravene subsection (1).
Note: A term of a modern award has no effect to the extent that it contravenes this section (see section 56). An enterprise agreement that includes a term that contravenes this section must not be approved (see section 186) and a term of an enterprise agreement has no effect to the extent that it contravenes this section (see section 56).'
[6] S 193 deals with when an enterprise agreement passes the BOOT and what is meant by that term. It is expressed as follows:
When a non-greenfields agreement passes the better off overall test
(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.
(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.'
[7] At the risk of stating the obvious, an assessment by the Commission as to whether an enterprise agreement satisfies the BOOT is not a line-by-line comparison or a comparison to one discrete term in an Award to its corresponding term (or its absence) in the agreement. As was said by the Full Bench in National Tertiary Education Industry Union v University of New South Wales [2011] FWAFB 5163:
'[46] The test, as the name implies, requires an assessment of the overall benefit to an employee employed under an enterprise agreement as compared to the relevant award. This consideration does not require an assessment of the circumstances of each individual employee but, as s.193(7) allows, "... if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant award applied to that class , FWA is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee".
[47] As His Honour was well aware the Agreement contained some provisions which may be considered inferior to the counterparts provision in the Awards and provisions which were superior. There is nothing unusual about that. What he needed to satisfy himself of was whether, weighing the Agreement provisions as a whole with those in the Awards, an employee is better off overall. This, in our opinion, is clearly what His Honour did [footnotes omitted].'
[8] To reinforce the point, I cite the Full Bench's decision in Armacell Australia Pty Ltd and Ors [2010] FWAFB 9985 at para [41]:
'[41] The BOOT, as the name implies, requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement. The approach adopted by the Commissioner includes an identification of terms which might, on his view of the term, be less beneficial for an employee. There is nothing on the face of the Commissioner's decision to indicate what account if any he took of any terms which might be more beneficial for an employee. He obtained a large number of undertakings from all three employers in relation to terms which he considered undermined existing entitlements. It may be that if we applied the BOOT ourselves we might come to different conclusions to the Commissioner in relation to the number and nature of the undertakings required. To follow that course, however, would require each of the applications to be considered afresh with the necessary delay that would entail.'
[9] The Union originally raised BOOT concerns with a number of clauses in the Agreement. These concerns were narrowed by the offer, by the applicant, of undertakings in respect to some matters. These were acceptable to the Union. Pursuant to s 191(1) of the Act, the undertakings are taken to be terms of the Agreement. A copy of the undertakings is attached to the Agreement and marked as 'Annexure A'. However, the Union pressed the following matters.
[10] Cl 10 of the Agreement deals with Hours of Work, with sub-sections (e)-(g) specifically referring to charters. The sub-clauses are expressed as follows:
e) A Bus and Coach Driver, who is engaged on a day charter, in which the employee will return to the depot, may be rostered to work a broken shift divided into two working periods. In circumstances where an employee during a day charter does not return to the Depot the employee shall be paid in accordance with Clause 10 (f).
f) A Bus and Coach Driver, who is rostered to work on a charter in which the employee does not return to the depot that employee, subject to allowance referred to in clause 9 above, which prescribes a minimum rate per day whilst away overnight from the Depot, will only be paid for those hours that are actually worked and not Waiting Time.
g) An employee engage on extended charter / tour work of 3 or more day's duration will be paid;
a) Actual hours worked on the first and last days of the charter / tour and;
b) Eight (8) hours per day for all other days worked as part of the charter / tour.
[11] The Union submitted that cl 10(f) provides no payment for waiting time where a single day charter driver works a broken shift and does not return to the Depot. Under the Passenger Vehicle Transportation Award 2010 [MA000063] (the 'Award'), the employee would be entitled to be paid waiting time at the rate of 50%. Again, depending on the hours worked and time spent waiting, an employee may not be better off overall.
[12] The applicant submitted that cl 10(f) refers to overnight work in which a driver would not return to the Depot. Cl 21.5 (Waiting Time) of the Award, refers only to single day charters and not to the circumstances described in cl 10(f).
[13] The Union said that it was incorrect to submit that the clause only relates to overnight work and not to single day charters. Clause 10(e), which immediately precedes it, states that 'in circumstances where an employee during a day charter does not return to the Depot the employee shall be paid in accordance with 10 (f).' It was submitted that non-payment of waiting time remains a BOOT issue. If the clause is not meant to apply to Day Charters, the Union would accept an undertaking to that effect.
[14] In my view, there is some force to the Union's interpretation of cl 10(f) in respect to its application to work on day charters. This must be so, by the connection to cl 10(f) to the immediately preceding paragraph. However, cl 10(f) is also referable to cl 9 dealing with applicable allowances applying under the Award at cl 15.
[15] In my opinion, and despite the less than clear meaning of the words used, the concept of 'waiting time' is not ordinarily associated with discrete overnight breaks on trips for which Award allowances are otherwise applicable. Even if I be wrong about this conclusion, I do not consider this matter sufficiently outweighs the overall balancing exercise when the significant wage differentials between the Award and the Agreement are taken into account (e.g. 31% for Grade 3 Permanent Bus Drivers).
[16] Clause 14 deals with Driver's Safety and is expressed as follows:
'a) No employee shall drive a vehicle which contravenes the Motor Vehicle legislation and regulations other than for the purpose of completing a journey already commenced.
b) When required by the employer the employees shall be ready, willing and able to perform duties incidental to or peripheral with the driving of the vehicles including delivering descriptive commentary.'
[17] The Union submitted that cl 14(a) is entirely inappropriate. Any direction to drive a motor vehicle in a manner which contravened Motor Vehicle legislation and regulations would clearly be unlawful. Should an employee, in those circumstances, obey such a direction they could be liable to penalties, including penalties which impact on their drivers' licenses.
[18] The applicant submitted that the clause is in the Agreement to facilitate circumstances where a vehicle may breach regulations relating to the carrying of passengers, but is capable of being driven within the regulations, at least to the returning depot. It is a practical provision which is known to the Union and has never caused a problem in its application. The applicant further submitted that the Union's submission sought to renegotiate terms of the Agreement which had been approved by a majority of eligible employees at a time when the Union does not have a right under section 176 of the Act to be a bargaining agent. Moreover, the Transport Industry - Motor Bus Drivers and Conductors (State) Award [AN120607] in which the duplicate clause (Clause 36 - Defective Vehicles) had served New South Wales bus drivers, with the total support of the Union, for over 20 years.
[19] The Union noted the applicant's submission that the clause only applies where a vehicle may breach regulations relating to the carrying of passengers, but is capable of being driven within the regulations - although the clause itself does not say that. It is unnecessary, in any event, given employees are required to follow lawful and reasonable directions. The Union maintained that an undertaking should be provided which deletes Clause 14(a). The Union was unaware of any agreements where such a clause has been raised and considered by the Commission and found to be acceptable, albeit there may be agreements which have been approved that contain such a provision, but which had not been brought to the specific attention of the Commission.
[20] It is self-evident that an enterprise agreement cannot contain a provision which may be seen as requiring or permitting an employee to contravene State legislation or regulations, particularly in respect to safety. Nor can an agreement contain a term requiring an employee to comply with a direction of the employer to breach a state law or regulation. I accept, of course, that this is not the intent of clause 14(a) and from what the applicant has said about other similar terms in other industrial instruments, has not been applied in practice.
[21] However, in my view, sub-clause 14(a) is clumsily worded and self-contradictory. On its strict interpretation, it means that an employee could complete a journey in direct contravention of a law or regulation. However, the issue can be easily attended to by either:
(b) making it clear under what specific circumstances, according to law, a driver can return to the Depot.
An appropriate undertaking should be given in this respect.
[22] Clause 16 deals with Confidential Information and is expressed as follows:
'a) Employees acknowledge that during their employment they may obtain access to, or become aware of confidential information, which is of commercial value to the Employer, a customer or a client of the Employer. Employees further acknowledge that this confidential information is owned by and will at all times remain the property of the Employer.
b) Both during employment with the Employer and after its termination, any information obtained by or disclosed to an Employee the course of employee employment [sic] must be kept strictly confidential.
c) Employees, during employment with the Employer and after its termination must not disclose to any person, any confidential information with prior consent of the Employer [sic], except to the extent that such disclosure is required by law.
d) The Obligations set out in this section do not apply to any confidential information that an Employee can demonstrate enters the public domain or becomes knowledge other than through your default, or the default of those whom an Employee is responsible for.
e) All documents, files, information, assets and property used in the course of an Employee's employment remain the property of the Employer and may not be used for any purpose outside of the execution of duties without prior written consent from the Employer.'
[23] The Union submitted that cl 16 deals with a matter which is inappropriate for inclusion in an enterprise agreement. It refers to common law duties and obligations. Asbury C, dealt with a similar provision in Glen Eden Thoroughbreds Pty Ltd T/A Ray White Shailer Park [2010] FWA 7217 ('Glen Eden Thoroughbreds') where she agreed with Gooley C's assessment in Smith & Nephew Pty Ltd [2010] FWA 2465. The Commissioners in both cases found that the exposure of employees to civil penalties for breach of the Agreement in respect of such provisions, was a relevant matter when considering whether the Agreement passes the BOOT.
[24] The applicant submitted the clause is a standard provision relating to confidential information found in many modern enterprise agreements. In the case of Glen Eden Thoroughbreds, Asbury C reviewed, amongst other things, a 'confidentiality clause', similar to the one envisaged in Clause 16 of the Agreement. At para [58], she considered that such a clause, which exposed employees to civil penalties, was a relevant matter for consideration of the BOOT. The applicant believed that the provision of a 'confidential information' clause is a matter relevant to the employment relationship and is an appropriate clause in the Agreement. In assessing the impact on the employees for the purpose of the BOOT, the applicant observed that the employees, particularly mechanics, drivers and clerks are remunerated well above the Award. An expectation not to contravene confidentiality is not an unreasonable outcome to impose upon employees in exchange for increased rates of pay. In any event, given the nature of the applicant's business, the likelihood of an employee breaching the provisions of the clause, which might give rise to a financial penalty being imposed upon the employee, is very remote.
[25] In my view, it is not to the point that a confidentiality provision is a common law obligation of an employee and therefore inappropriate for inclusion in the Agreement. Many terms of enterprise agreements (and Awards for that matter) also have a common law foundation. Notice of termination and summary dismissal are two such terms which readily spring to mind. I do not consider, as a matter of law, that it is impermissible to include a confidentiality provision in an enterprise agreement on the grounds contended for by the Union.
[26] While I have my own doubts as to whether such a clause is a relevant matter for the purposes of the BOOT, even if it is, the unlikelihood of it ever being invoked to the detriment of an employee, is so remote as to it being a neutral consideration in the BOOT balancing exercise.
[27] There are certain other grammatical errors in sub-clauses (b) and (c) of the clause. In order to make sense, they should read, with the changes highlighted, as follows:
'b) Both during employment with the Employer and after its termination, any information obtained by or disclosed to an Employee during the course of the employee**'s** employment must be kept strictly confidential.
c) Employees, during employment with the Employer and after its termination must not disclose to any person, any confidential information without prior consent of the Employer, except to the extent that such disclosure is required by law.'
An undertaking is not required for these corrections.
Cl 24 - Redundancy and suitable alternative employment
[28] Clause 24 deals with Redundancy and is expressed as follows:
b) Where an employee is transferred to lower paid duties by reason of redundancy, the same period of notice must be given as the employee would have been entitled to if the employment had been terminated and the employer may, at the employer's option, make payment instead of an amount equal to the difference between the former ordinary time rate of pay and the ordinary time rate of pay for the number of weeks of notice still owing.
c) An employee given notice of termination in circumstances of redundancy may terminate their employment during the period of notice. The employee is entitled to receive the benefits and payments they would have received under this clause had they remained in employment until the expiry of the notice, but is not entitled to payment instead of notice.
d) An employee given notice of termination in circumstances of redundancy must be allowed up to one day's time off without loss of pay during each week of notice for the purpose of seeking other employment. If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee must, at the request of the employer, produce proof of attendance at an interview or they will not be entitled to payment for the time absent. For this purpose a statutory declaration is sufficient.
e) If a full time employee's position becomes redundant through the loss of a bus service contract, which is a source of the Company's business and the employee's employment is terminated for that reason the Company shall endeavor to offer the employee full time employment with an associated company where a vacancy exists with no loss of entitlements of sick leave, annual leave or long service leave; or seeks to ensure that the replacement contractor employs the maximum number of existing Employees for the contract area an employee shall not be entitled to any severance payment or accelerated long service leave if:
(ii) The Company offers reasonable alternative employment with an associated company; or
(iii) The Company obtains or the employee receives an offer of reasonable alternative employment for the Employee with another organization.
Reasonable alternative employment means employment that utilizes skills and capabilities in which the employee is competent, is based within a reasonable commuting distance of the employee's current place of employment; and does not involve a significant reduction in salary or benefits.
f) In the event that no other employment is available as referred to in sub clauses (i) and (ii) [sic] the Employer reserves the make application to Fair Work Commission [sic] to reduce any redundancy payments.'
[29] The Union pressed the need for an undertaking in relation to the non-payment of severance pay where the employer has obtained suitable alternative employment. Clause 24 (f) provides for an application to be made to the Commission to reduce redundancy payments in the event that 'no other employment is available'. However, s 120 of the Act requires an application to be made to the FWC for an order to reduce redundancy payments where the employer has obtained 'suitable alternative employment' for the employee.
[30] The applicant submitted that cl 24(f) of the Agreement meets the requirements of the National Employment Standards (NES) in that it recognises the requirement to approach the Commission in order to seek to reduce any redundancy payments.
[31] While I accept no malintent by the applicant, in my opinion, it is desirable for cl 24(f) to be consistent with the other provisions of the clause which refer to 'reasonable alternative employment'. This will avoid any confusion or uncertainty. I propose that the words 'reasonably alternative' be inserted before 'employment' in cl 24(f). That said, the offending clause, as it is interpreted by the Union, cannot, as a matter of law, displace the terms of the NES or s 120 of the Act.
[32] The Union claimed that it is a bargaining representative for one or more employees covered by the Agreement. Ms Cerrato provided to the Commission confidential details of at least one employee's membership of the Union. The applicant strongly opposed the claim by the Union on the basis that it does not have any members employed. After investigation by the applicant, it believed that no employee is a member of the Union. The applicant further submitted that s 594 of the Act has no application to establishing the eligibility of the Union to become a bargaining agent within the meaning of section 176, because it would create a bizarre circumstance where the veracity of the evidence of the Union that it had members, could not be tested by the applicant when it had made submissions to the contrary.
[33] There can be no doubt that the Union is entitled to represent the industrial interests of its members employed by the applicant as bus drivers. The Union provided the Commission, on a confidential basis, with the name and membership details of an employee employed by the applicant and who would be covered by the Agreement. It was concerned at the repercussions for its member/s if their Union membership was disclosed to the employer. In my view, it is open to accept such evidence as demonstrating Union membership, notwithstanding the employer's objections, so long as the evidence is an extract of the Union's true business records and not just a name on a piece of paper. I am satisfied that the former is the case.
[34] Accordingly, from the information provided by the Union, it is entitled to be a bargaining representative for one or more of its members who are to be covered by the Agreement. In addition, the Union has filed a Form F18 in this matter in which it seeks to be covered by the Agreement. In the absence of any sound basis for refusing to recognise the Union as being covered by the Agreement, it is not open to the Commission to deny such coverage. For the purposes of s 201(2) of the Act, the Union shall be covered by the Agreement.
[35] Consequent upon the receipt of the undertakings, within 7 days, in respect to cl 14 and cl 24, I propose to approve the Bus IT Queensland Employees Enterprise Agreement 2013. Pursuant to s 54 of the Agreement, the Agreement shall operate from 15 May 2014 and have a nominal expiry date of 15 May 2016.
Mr I Macdonald of the Australian Public Transport Industrial Association for the applicant
Ms M Cerrato for the Transport Workers' Union of Australia
Printed by authority of the Commonwealth Government Printer
Transport Workers' Union of Australia - 17, 24 April 2014
Printed by authority of the Commonwealth Government Printer