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[2020] FWC 6393
General information, not legal advice.
Fair Work Commission
2020-11-27
Original judgment source is linked above.
s.185 - Enterprise agreement
Healthe Care Burnie Pty Ltd T/A North West Private Hospital
HEALTHE CARE BURNIE PTY LTD ('NORTH WEST PRIVATE') AND HEALTH AND COMMUNITY SERVICES UNION HOSPITAL STAFF ENTERPRISE AGREEMENT 2020
Application for approval of the Healthe Care Burnie Pty Ltd ('North West Private Hospital') and Health and Community Services Union Hospital Staff Enterprise Agreement 2020.
[1] An application has been made for approval of an enterprise agreement known as the Healthe Care Burnie Pty Ltd ('North West Private Hospital') and Health and Community Services Union Hospital Staff Enterprise Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Healthe Care Burnie Pty Ltd T/A North West Private Hospital (the Applicant). The Agreement is a single enterprise agreement.
[2] A notice of employee representational rights was provided to employees on 25 June 2020 and the notice complied with the regulations. The Applicant states that employees were provided with access to the Agreement in the period from 14-21 September 2020 and that information about the terms and the effects of the terms of the Agreement was provided in a written form on 14 September 2020 and in staff briefings conducted in the period 15-18 September 2020.
[3] The Applicant states that employees were notified of the time, place, and method of voting via a voting memo distributed to all employees on 14 September 2020 and that voting occurred between 22-28 September 2020. A majority of those who voted approved the Agreement.[1]
[4] The Applicant filed a statutory declaration in support of the Agreement dated 7 October 2020. The statutory declaration noted that the relevant award for the purpose of the better off overall test (BOOT) was the Health Professionals and Support Services Award 2010[2] (the Award). The terms of the Award are not incorporated by the Agreement. The statutory declaration noted that some provisions in the Agreement were more beneficial than the Award, and some provisions were identified as less beneficial terms.
[5] The Health Services Union, Tasmanian Branch (HSU), which was a bargaining representative for the Agreement, also filed a statutory declaration dated 15 October 2020, in which they advised that while seeking to be covered by the Agreement, they held a number of concerns over the Agreement including NES and BOOT issues.
[6] In reviewing the Agreement for approval, the Fair Work Commission (the Commission) identified several concerns in relation to the Agreement and supporting documentation. These included pre-approval requirements, National Employment Standards (NES) compliance and better off overall test (BOOT) assessment considerations. The Commission wrote to the Applicant on 26 October 2020 and identified several issues requiring a response. In doing so, the Commission also raised with the Applicant the concerns held by the HSU which were detailed in their Form F18 statutory declaration.
[7] Following receipt and consideration of the responses from the Applicant which included submissions and undertakings, the Commission wrote to the parties on 12 November 2020, advising that it had formed a preliminary view that the Agreement was capable of approval subject to any further comments or concerns being raised by the bargaining representatives.
[8] In correspondence to the Commission on 12 November 2020, the HSU pressed their concerns in relation to the Agreement and provided submissions. The HSU further advised on the 13 November 2020 that they were content to rely on those written submissions in relation to the Commission's determination of the matter.
[9] The HSU identified a number of provisions within the Agreement which it contends are either not compliant with the NES or are less beneficial than the Award and as a consequence the Commission could not be satisfied that the Agreement met the statutory requirements necessary for approval. The relevant Agreement provisions identified by the HSU as deficient are as follows;
Clause 13(e)(i) - payment for work on a shift that commenced on a Sunday and/or a Public Holiday between 11pm - 12am;
Clause 14(c) - Part-time hours of work arrangements;
Clause 23 - Public holiday rates of pay;
Clause 21(j) - Unilateral cancellation of annual leave;
Clause 25(d) - Personal leave;
Clause 43(n) - Time of payment of accrued annual leave upon termination of employment;
Rates of pay - Administrative and Clerical Level 1 (Level 1) pay rate was not better than the equivalent Award rate; and
Non-payment of laundry allowance within the Agreement.
[10] I turn now to consider the matters raised by the HSU.
[11] The HSU's concern regarding clause 25(d) is in respect of the evidentiary requirements necessary to satisfy the employer that an employee was unable to attend duty on account of illness or injury. The specific concern is that clause 24(d)(i) requires the employee to "prove to the satisfaction of the employer that he/she was unable, on account of such illness or injury, to attend for duty on that day or days on which personal leave is claimed." The HSU point to the NES which says at s. 107(3) of the Act that the evidentiary requirements necessary are such as would satisfy a "reasonable person" rather than the employer. The HSU contend that the agreement provision is consequently inconsistent with the NES. The HSU seeks that the Commission note the deficiency in its approval decision, should the Agreement be approved.
[12] Read in isolation clause 24(d)(i) of the Agreement may be viewed as inconsistent with the NES. It is necessary however to read the personal leave clause in its totality. The clause goes on to detail the specific evidence that the employer may require be produced by an employee claiming personal leave. Sub-clause 24(d)(iv) specifically identifies a "certificate from a registered health practitioner or a statutory declaration..." The specificity in the Agreement of what may be required by the employer by way of evidence of a personal leave absence, is allowed for by s 107(5) of the Act. Read as a whole I do not accept that the clause is inconsistent with the NES. If, however I am wrong in my conclusion then clause 45 of the Agreement which deals with the relationship between the Agreement and the NES precedence would remedy any deficiency.
Clause 21(j) - unilateral cancellation of annual leave
[13] The HSU contend that the Agreement provides that the employer can unilaterally cancel an employee's approved leave which it contends is contrary to the NES. The Applicant disputes this and claims that the Agreement does not enable cancellation of approved leave. The Applicant further says that it has not, does not and will not rely on Clause 21(j) which relevantly states as follows;
(i) If, as a consequence of an employer instigated cancellation of approved annual leave (whether agreed or otherwise by the employee, and irrespective of when such cancellation notification is given) an employee incurs a monetary loss directly associated with pre-established annual leave holiday arrangements, and such loss is deemed to be unrecoverable, the employee shall be entitled to recover such otherwise unrecoverable costs from the employer.
[14] I agree with the HSU's construction of clause 21(j). A plain reading of the clause would lead to a conclusion that the employer would be able to cancel approved annual leave at any time. The NES makes no provision for such cancellation and at s 88(1) of the Act says that "paid annual leave may be taken for a period agreed between an employee and his or her employer". I regard the Agreement clause as inconsistent with the NES and intend to note that in my decision should the Agreement be capable of approval.
Clause 43(n) - Time of payment of accrued annual leave upon termination of employment
[15] The HSU submit that clause 43(n), which deals with payment of wages and monies owed on termination, is inconsistent with s. 90(2) of the Act which requires that an employer "must pay" accrued annual leave "when the employment of an employee ends". Clause 43(n) relevantly states as follows;
(n) When notice of termination of employment has been given by an Employee or an Employee's services have been terminated by the Employer, payment of all wages and other monies owing to the Employee under the Agreement and the NES will be made to the Employee no later than 7 days after the day on which the Employee's employment terminates."
[16] I see no tension between the Agreement provision and the NES. The NES does not state the timeframe within which the accrued annual leave payment must be made. It merely commands that such payment must be paid. I further note that clause 43(n) is entirely consistent with clause 21.3 of the Award which states as follows;
(a) The employer must pay an employee no later than 7 days after the day on which the employee's employment terminates:
(i) the employee's wages under this award for any complete or incomplete pay period up to the end of the day of termination; and
(ii) all other amounts that are due to the employee under this award and the NES."
[17] I am not persuaded that clause 43(n) is inconsistent with the NES.
Administrative and Clerical Level 1, Year 1 rate of pay
[18] The base rate of pay for the Administrative and Clerical Level 1, Year 1 (Level 1) classification under the Agreement was matched and found to be equal to that of the base rate of the Level 3 Support Services classification under the Award, that being the appropriately matched classification. The Applicant concedes that the Level 1 rate of pay under the Agreement is the same as the Award but says there are other beneficial terms under the Agreement that ensure that the BOOT is met in respect of that classification. The Applicant refers to a range of provisions that are more beneficial than Award conditions and which are set out in its Form F17 at question 10 and a range of conditions in the Agreement that are not conferred by the Award which are set out at question 11.
[19] The HSU challenge the Applicant's assertion and submit that not all Level 1 employees will be able to avail themselves of more beneficial aspects and cite an example of a casual employee working one three hour minimum engagement. No evidence was adduced by the HSU as to the likelihood and/or incidence of a casual employee classified at Level 1 Year 1 being engaged for a minimum engagement of 3 hours. Nevertheless, in respect of this classification level, the fact that the Agreement and Award rates are the same is a matter that must be weighed in my consideration of the BOOT.
Clause 14(c) - Part-time hours of work arrangements
[20] The Commission and HSU identified concerns with respect to the Agreement's part-time employment provisions. The Applicant offered the following undertaking to address the concerns raised;
"Clause 14(c)-(e) of the Agreement will be amended and replaced with the following:
(c) Before commencing employment, the employer and employee will agree in writing on:
(i) The span of hours that the employee may be rostered within a fortnight. This span of hours shall include which shifts the employee may be rostered to work; and
(ii) The days of the week the employee may be rostered to work within a fortnight; and
(iii) The agreed number of contracted hours to be worked per fortnight (Agreed Fortnightly Hours).
(d) The Agreed Fortnightly Hours will be rostered consistent with the span of hours and days of the week as agreed in accordance with subclauses (c)(i) and (c)(ii), or as varied by agreement and recorded in writing (which may be by electronic means).
(e) Notwithstanding the overtime provisions prescribed under the Agreement, a part time employee may agree to work in excess of their rostered ordinary hours or their Agreed Fortnightly Hours at the ordinary rate of pay, provided that:
(i) all time worked by a part time employee which exceeds 8 hours per day, or 75 or 76 hours per fortnight (as applicable) will be paid at overtime rates. Provided that where a part time employee who has agreed to work a twelve hour shift, or a shift that is in excess of 8 and up to 11 hours in accordance with the Hours of Work provision of this Agreement, overtime rates shall apply after the completion of their rostered shift that is in excess of 8 and up to 11 hours, or their rostered 12 hour shift, as applicable;
(ii) such agreement is recorded in writing (which may be by electronic means);
(iii) any variation to the Agreed Fortnightly Hours may be made on a permanent or temporary basis, as agreed.
(f) No part time employee shall be directed to work in excess of their rostered ordinary hours or their Agreed Fortnightly Hours at their ordinary rate of pay.
(g) Where an Employee works, by agreement, in excess of their rostered ordinary hours or their Agreed Fortnightly Hours in accordance with this clause, such Employee shall record those additional hours on their timesheet for the corresponding period."
[21] The HSU contend that the undertaking if accepted would still result in part-time employees not being better off overall when compared to the Award which relevantly states at Clause 10 as follows;
(a) is engaged to work less than an average of 38 hours per week; and
10.2 Before commencing employment, the employer and employee will agree in writing on a regular pattern of work including the:
10.3 The terms of the agreement in clause 10.2 may be varied by agreement and recorded in writing.
[22] The HSU variously submit that;
Clause 14(c) would allow for unilateral change to part-time employees' patterns of work which may occur by the employer simply providing 7 days' notice;
Clause 14(c) does not provide for contractual certainty simply because there is agreement on total hours rather than under the Award where an employee will know the specific hours that will be worked;
Award employees are entitled to be paid overtime where directed to work outside the agreed pattern of work whereas Agreement employees have no such certainty as to the pattern of work;
• The Award requires the definitive pattern of work to be specified and variations to be recorded in writing as made clear by a Full Bench in Leading Aged Services Australia NSW-ACT[3] (Leading Aged Services).
[23] The Award provides for agreement to be reached between the employer and a part-time employee on commencement of employment on the number hours of work per week, the days on which those hours are to be worked and the starting and finishing times. Those hours can be changed by written agreement. It can be seen that the Award provisions provide a high degree of certainty for part-time employees.
[24] By comparison to the Award, the proposed undertaking would, if accepted, similarly fix the specific number of hours to be worked, although the hours would be set on a fortnightly basis as opposed to per week. The days on which those agreed number of hours per fortnight may be worked and the particular shifts that may be rostered would be subject to agreement on commencement of employment and may also be varied by written agreement on a permanent or temporary basis. I accept that the undertaking if accepted would allow the employer some additional flexibility in the rostering of part-time employees than would be the case under the Award provisions.
[25] It is the potential for variations in the days and times that the agreed hours may be rostered each fortnight that the HSU takes issue with and which it says is detrimental. The scenario of which the HSU complains is not one where there is flexibility for the employer to unilaterally increase the actual hours worked each fortnight beyond the agreed number of hours, but rather it is the days and shifts that may be varied within the span of hours agreed to by the employee.
[26] I accept that there may be a lifestyle detriment for some employees in terms of the variations in the pattern of work from fortnight to fortnight. The variation of work patterns may equally suit some employees. The degree of potential variation will also be dependent on what has been agreed in writing by the employee on commencement of employment or subsequently agreed in writing by way of variation. The guaranteed number of hours per fortnight and payment for additional hours at overtime rates where a part-time employee is directed to work beyond the agreed number of hours satisfies me that there is no financial detriment relative to the Award that arises from the proposed undertaking. I attach limited weight to the lifestyle detriment, to which I have referred above, in my assessment of the BOOT.
Clause 13(e)(i) - payment for work on a shift that commences on a Sunday and/or a Public Holiday between 11pm - 12am
[27] The Commission and HSU raised a concern in respect of clause 13(e)(i) of the Agreement which deals with work undertaken by a shift worker between 11.00pm and midnight on a Sunday or a Public Holiday. The HSU submits that the Agreement does not entitle an employee working such hours to be paid at Sunday or public holiday penalty rates whereas the Award provides for such an entitlement.
[28] Clause 13(e) of the Agreement states as follows;
Shift workers, for ordinary hours worked on a rostered shift, the major portion of which falls on a Sunday or public holiday, shall be paid as follows:
(i) Sundays - at the rate of double time the ordinary rate (in the case of a casual Employee, double time of the employee's loaded rate);
(ii) holidays as prescribed in subclause (a) - Definitions hereof at the rate of double time the ordinary rate (in the case of a casual Employee, double time of the employee's ordinary rate).
The above rates shall be in substitution for, and not cumulative upon the shift penalties set out in subclause (b) above.
(i) Where shifts commence between 11.00pm and midnight on a Sunday or a holiday the time so worked before midnight shall not entitle an employee employed on such a shift to the Sunday or holiday rate provided that the time worked by an employee on a shift commencing before midnight on a day preceding a Sunday or holiday and extending into such Sunday or holiday the time worked before midnight shall be regarded as time worked on such Sunday or holiday.
(ii) Where shifts fall partly on a holiday (as defined in subclause (a) above), that shift the major portion of which falls on a holiday, shall be regarded as the holiday shift.
(iii) Where a shift worker is required to work on a holiday as defined in subclause (a) and is granted time off in lieu thereof, the above penalty rate shall not apply."
[29] The effect of clause 11(e) is that where a shift commences at 11.00pm either on a Sunday or a public holiday, and where the major portion of the shift falls on a Monday or a non-public holiday, then payment for the hour of work between 11.00pm and midnight will be at the ordinary time rate that would apply to the major portion of the shift. The HSU submit that under the Award, payment for that hour where it falls on a public holiday or a Sunday would attract the appropriate penalty rate.
[30] In the case of the work performed on a public holiday, the entitlement is set out at clause 32.2 of the Award as follows;
32.1 Public holidays are provided for in the NES.
32.2 Any employee required to work on a public holiday will be paid 250% of the minimum hourly rate applicable to their classification and pay point for all time worked.
[31] Similarly, in the example of a shift commencing at 11.00pm on a Sunday night, under the Award an employee would receive the relevant Sunday penalty rate for that hour of work between 11.00pm Sunday and midnight. This is set out at clause 25.1 of the Award as follows;
(a) For all ordinary hours worked between midnight Friday and midnight Sunday a full-time or part-time employee will be paid 150% of the minimum hourly rate applicable to their classification and pay point.
(b) A casual employee who works on a Saturday or Sunday will be paid 175% of the minimum hourly rate applicable to their classification and pay point for all time worked, but will not be paid the casual loading of 25%."
[32] To address the concern raised in relation to clause 13(e) the Applicant proposed an undertaking to delete sub-paragraph (i) which is highlighted above at [29]. The HSU object to the proposed undertaking on the grounds that it would, if accepted, constitute significant change, and impose a financial detriment. The detriment to which the HSU points is in respect of a shift that commences at 11.00pm on the day before a Sunday or public holiday. The hour between 11.00pm and midnight would not, if the undertaking were accepted, attract the Sunday or public holiday penalty rate even though the balance of the shift from midnight onwards would attract the relevant Sunday or public holiday penalty rate. The HSU submit that the undertaking should be modified by deleting the less beneficial element of the clause and preserving the more beneficial impact.
[33] Turning to the provisions of the Agreement. It is correct that clause 13(e) allows for payment of 1 hour on a public holiday or a Sunday on a shift that commences at 11.00pm prior to a non-public holiday or a Monday at the ordinary time rates that prevail for the balance of the shift from midnight. The Award in that scenario would entitle the employee to payment at public holiday or Sunday penalty rates for that hour between 11.00pm and midnight.
[34] However, the effect of the Agreement provision is to also ensure that where a shift commences at 11.00pm on a day immediately prior to a public holiday or Sunday, then the affected employee would receive the relevant public holiday or Sunday penalty payment for the whole shift including the 1 hour period between 11.00pm and midnight. The HSU do not object to that effect of the provision which is self-evidently more beneficial than the Award.
[35] In simple terms, the provision imposes a detriment relative to the Award in circumstances where a shift commences at 11.00pm on a Sunday or public holiday but confers a benefit when the shift commences at 11.00pm on a day immediately prior to a Sunday or public holiday. There is some logic to the provision in circumstances where shifts by reason of their starting times routinely straddle two days. It ensures consistent penalty payments across the whole shift rather than different penalty payments applying in respect of time worked before and after midnight. Clause 13(e) applies a "swings and roundabouts" approach to the application of shift penalties. The detrimental and equally beneficial impacts of the provision are likely to balance out for those employees that are regularly rostered on shift work. In those circumstances I do not regard the clause as a detriment.
[36] I would note at this stage that the HSU have not provided any specific worked examples or scenarios to make their case that the clause yields unfavourable outcomes from a BOOT perspective. Nevertheless, I accept that it is possible to identify hypothetical scenarios where an employee may be detrimentally impacted by the provision relative to the Award, including where an employee may only work one 8 hour shift and that shift commences at 11.00pm on a public holiday.
[37] Take the example of a casual employee classified at Level 1 Year 3 (Administrative and Clerical stream) under the Agreement who is required to work one 8 hour shift commencing at 11.00pm on a public holiday. The employee would receive a 20% night shift penalty on their ordinary rate of pay (inclusive of the 25% casual loading) for the full 8 hours. Under the Award however they would be entitled to receive the public holiday penalty payment of 250% for the one hour between 11.00pm and midnight and 140% of the base rate for the balance of the shift from midnight until 7.00am. The following worked example compares the entitlements under the Agreement versus the Award.
[38] The casual employee classified at Level 1 Year 3 under the Agreement would receive a base rate of $23.37 plus a 25% casual loading. This equates to an hourly rate of $29.21. I have used this Agreement classification as it only has a 2.4% margin above the relevant Award classification rate. If required to complete an 8 hour shift commencing at 11.00pm on a public holiday the employee would, under the Agreement, receive 8 hrs x $29.21 x 1.20 (Night shift penalty) = $280.42 for the 8 hour shift.
[39] Under the Award and applying the same example, the casual employee would be entitled to receive a base rate of $22.82 (Level 3 Award classification). Their earnings for the 8 hour shift would be as follows; (1 hour x $22.82 x 275%) + (7 hours x $22.82 x 140%) = $286.47. Under this example it is possible for the casual employee to receive a lower payment under the Agreement than the Award.
[40] Notwithstanding the above-referred detriment it would appear that if the casual employee in the above example worked additional hours then the detriment highlighted in the above example would be offset. This can be illustrated as follows. For an 8 hour dayshift the casual employee engaged at Level 1 Year 3 under the Agreement would receive 8hrs x $29.21 = $233.68. By comparison, under the Award they would be entitled to receive 8hrs x $22.82 x 25% = $228.20. The difference is not sufficient to entirely offset the detriment described above for work performed on an 8 hour shift commencing at 11.00pm on a public holiday. The difference in earnings under the Agreement and Award if the additional shift worked was an afternoon shift would be similar given the afternoon shift penalty payments under the Agreement and Award are both 115%. If the additional shift worked was a night shift the difference in earnings in favour of the Agreement would be greater given that the night shift penalty under the Agreement is 120% versus 115% under the Award.
[41] The analysis above indicates that in the example of only one 8 hour shift (commencing at 11.00pm on a public holiday) being worked by a casual employee engaged at Level 1 Year 3 under the Agreement, a detriment arises. That detriment would in my view be likely to be offset in circumstances where the casual employee was required to work additional hours. I do not accept the HSU submission that every possible working hours scenario must be assessed for potential detriment. There must be some basis on which the Commission could be satisfied that a particular scenario was more than merely hypothetical. The HSU have placed no material before me in relation to realistic or plausible scenarios.
[42] Having regard to the above I am not persuaded that the incidence of a detriment arising from the operation of clause 13(e) is likely. To the extent that a detriment may arise I accord it limited weight in assessing the BOOT for the reasons outlined above.
[43] The Agreement provides for payment for work on public holidays at clause 13(e)(ii) at a penalty rate of 200% in the case of shift workers whereas the Award provides for a penalty rate of 250%. The Commission raised a concern in relation to that apparent detriment. The Applicant responded by proposing an undertaking which is set out below;
"3. The public holiday rates in clause 13(e)(ii) of the Agreement for ordinary hours worked on a rostered shift by shift workers apply, save and except that ordinary hours worked on a public holiday by shift workers in the following classifications will be paid at the corresponding rate, calculated on the ordinary rate of pay:
[44] The HSU submit that even with the undertaking provided by the Applicant a detriment arises in respect of casual employees required to work a single shift on a public holiday. They cite the example of a Level 4 Operational Employee to make the point and identify a difference between the hourly rate of pay of $55.92 per hour under the Agreement versus $63.50 per hour under the Award. That difference in the casual hourly rate of pay for work on a public holiday may, according to HSU, be unable to be offset by a casual employee accessing other more beneficial entitlements under the Agreement.
[45] The Applicant contends that the higher base rates that apply in the Agreement in respect of the Level 4 and above classifications and in respect of the Level 3 classification when the 1 November 2020 wage rate increase comes into effect, are sufficient to offset the lower public holiday penalty rate that applies in respect of shift workers. While I am satisfied that the proposed undertaking addresses the BOOT concern in relation to permanent employees, it is necessary to consider whether the undertaking addresses the detriment identified by the HSU in respect of casual employees.
[46] Turning to the example raised by the HSU; a casual Level 4 Operational Employee under the Agreement would receive a base rate of pay of $24.86 per hour on top of which they would be entitled to a 25% casual loading for ordinary hours of work. It is unclear whether the application of the 200% public holiday penalty is paid inclusive or exclusive of the casual loading. Clause 13(e)(ii) states that that the penalty rate is "(in the case of a casual Employee, double time of the employee's ordinary rate)" . The 'ordinary rate' of pay is defined in clause 10 of the Agreement in the following terms;
"Ordinary rate of pay' or 'ordinary rate' means the base rate of pay specified for the appropriate year of service applicable to the Employee in the appropriate classification in Appendix 1, but does not include overtime penalty rates, allowances, loadings, shift penalties, incentives, bonuses and other ancillary payments of a like nature."
[47] It appears that the definition of the 'ordinary rate' excludes the casual loading given that the definition of 'ordinary rate' "does not include..., allowances, loadings....". It follows therefore that a Level 4 casual employee undertaking shift work on a public holiday is entitled to receive the public holiday penalty rate of 200% applied to their 'ordinary rate' of $24.86 per hour. This results in an hourly rate of pay for shift work undertaken on a public holiday by a casual Level 4 employee of $49.72. If I am wrong and the public holiday penalty rate is applied to the base rate inclusive of the casual loading, then the hourly rate for work on a public holiday for a casual Level 4 Operational Employee is $24.86 x 1.25 x 200% = $62.15. Further, in the alternative, if the casual loading is applied in addition to and following the application of the public holiday penalty to the base rate of pay, then the hourly rate of pay will be $24.86 x 200% + $24.86 x 25% = $55.94 per hour.
[48] By comparison, an employee engaged under the Award at the equivalent Award classification of Level 4 would receive a base rate of $23.09 per hour to which the public holiday penalty rate of 275% (casual loading included) would be applied, resulting in an hourly rate of pay for work on a public holiday of $63.50.
[49] As observed above, it is unclear whether the casual loading is included or excluded from the calculation of public holiday penalty rates for casual employees under the Agreement and if included, on what basis. Having regard to that uncertainty I intend to adopt a cautious approach in my assessment of the detriment arising from a casual employee working a rostered shift on a public holiday. In doing so, the shortfall in the hourly rate of pay for a casual Level 4 Operational Employee under the Agreement versus the Award would appear to be up to $13.68 per hour if the public holiday rate is calculated exclusive of the casual loading. This is a significant detriment which weighs strongly against the BOOT being satisfied.
[50] It is noted that the Agreement Level 4 classification base rate that has been used in the example above enjoys a margin above the relevant Award classification according to Commission modelling of 7.65%. Obviously, where the base rate margin of Agreement classifications above the Award is greater, than the public holiday casual hourly rate detriment would diminish. To highlight the point, the following example is used of a Level 7 Operational Employee under the Agreement with a base rate of pay of $31.59 compared to the matched Award classification of Level 8 which attracts a base rate of pay of $25.62. The Agreement rate is 23.32% above the Award.
[51] If a casual employee classified at Level 7 under the Agreement was required to work a rostered shift on a public holiday, their hourly rate of pay would be $31.59 x 200% = $63.18 assuming the casual loading is not included in the calculation. Applying the alternative approaches of including the casual loading per [47] above, then the casual public holiday hourly rate would be either $31.59 x 1.25 x 200% = $78.97 per hour or in the alternative; $31.59 x 200% + $31.59 x 25% = $71.08 per hour.
[52] Under the Award a casual employee classified at Level 8 who is rostered to work a shift on a public holiday would be entitled to receive an hourly rate calculated in the following manner; $25.62 x 275% = $70.45 per hour.
[53] The above examples reveal that while a casual employee engaged under the Agreement would receive a lower public holiday hourly rate than under the Award, that detriment versus the Award recedes as the base rate margin of the Agreement over the Award increases. The concern is unlikely to arise in respect of the Health Professional classifications under the Agreement where the margin of the Agreement rates above the Award are 35% or greater. Similarly, high margins of Agreement pay rates above the Award are present in respect of Administrative and Clerical classifications at Level 4 and above whereas Levels 1-3 Administrative and Clerical classifications fall in the range of 0-24% above the Award and all Operational Employee classifications fall in the range of 2.92% - 23.32% above the Award. It is in respect of the Levels 1-3 Administrative and Clerical classifications and all Operational Employee classifications that I remain concerned from a BOOT perspective in respect of the rostered shifts undertaken on a public holiday by a casual employee.
[54] The HSU identify that while the Agreement provides for the provision of uniforms at clause 38 it (the Agreement) does not include a laundry allowance, unlike the Award which provides for a laundry allowance of $0.32 per shift or $1.49 per week, whichever is the lesser. I accept that the absence of a laundry allowance from the Agreement is less beneficial than the Award and will need to be weighed in my consideration of the BOOT.
[55] Section 186(1) of the Act establishes a "basic rule" that where an application for approval of an enterprise agreement is made under s.185 (which prescribes the time in which such an application must be made and its content), the Commission must approve the agreement if the requirements in ss.186 and 187 are met. Sections 186 and 187 set out a range of approval requirements. Section 186(2) sets out approval requirements in relation to the safety net, and relevantly provides as follows:
"186 When the FWC must approve an enterprise agreement - general requirements
(a) if the agreement is not a greenfields agreement - the agreement has been genuinely agreed to by the employees covered by the agreement; an
(b) if the agreement is a multi-enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(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.
[56] Section 193 prescribes what is necessary to pass the better off overall test. It relevantly states:
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.
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
(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."
[57] It will be seen from the statutory provisions provided above that an enterprise agreement will be found to have passed the BOOT if the Commission is satisfied, that at the test time, each award covered employee and each prospective award covered employee employed under the Agreement would be better off overall if the Agreement applied to the employee rather than if the award applied to the employee.
[58] The application of the BOOT is not applied as a line by line test. Rather, it is a global consideration of the provisions in the Agreement compared to the award/s, taking into account those provisions that are less beneficial and weighing them against those provisions that are more beneficial.
[59] Before turning to consider the specific BOOT concerns raised, it is necessary to identify the range of provisions in the Agreement that are either more or less beneficial than Award provisions. The more beneficial provisions may be shortly summarised as follows;
Meal breaks for shift workers;
Shift work penalty rates;
Saturday penalty rates for casual employees;
Sunday penalty rates;
Overtime penalty rates for shift workers;
Casual conversion provisions;
Definition of shiftworker for purposes of NES annual leave entitlement is broader than the Award;
Redundancy pay;
Personal leave accrual;
Compassionate leave entitlement of 3 days per occasion;
Higher duties;
Time off in lieu (TOIL);
Community service leave;
On-call payments;
Re-call minimum payment;
Meal break on overtime;
Family violence leave; and
Wage rates in the Agreement, the Level 1 rate aside, range between 0.74% and 63% above equivalent Award rates of pay. A further 2% increase to pay rates will apply from 1 November 2020.
[60] The Agreement also contains benefits that are not conferred by the Award including;
Change of roster without sufficient notice attracts overtime penalties;
Penalty payment for day worker working through meal break;
12 week's paid parental leave;
Additional 2 weeks of annual leave may be 'purchased';
Public holidays on rostered days off for part-time employees;
Superannuation salary sacrifice arrangements;
'More responsible duties' allowance which may apply where the higher duties allowance is not payable;
Breast feeding facilities;
Training allowance of $0.80 per hour payable for employees required to deliver on the job training;
'Close call' allowance payable for employees on call required to be on 'close' call - minimum payment of 6 hours at ordinary rate if not required to attend work;
Late payment of wages provision;
4 days per annum representative leave to cover trade union delegate training, attendance at conferences, meetings and courses; and
Role regrading provisions;
[61] The Form F17 also identified a range of benefits that are either less beneficial than the Award or where there are Award provisions that are not conferred by the Agreement. Those entitlements include;
Public holiday penalty rates;
Casual minimum engagement of 2 hours versus 3 hours under the Award;
Casual overtime rates calculated on the ordinary rate of pay excluding casual loading;
Altered span of day work hours for Level 2 & 3 Administrative and Clerical classifications;
Agreement provides for up to 12 ordinary hours per day (by agreement) versus a maximum of 10 hours under the Award;
Part-time hours of work provisions; and
A range of Award allowances are not provided for in the Agreement including heat, nauseous work, occasional interpreting, blood check, telephone and tool allowances.
[62] I have considered several BOOT concerns above that were raised by both the Commission and the HSU. Those issues are;
Level 1 pay rate;
Part-time hours of work provisions;
Clause 13(e) in respect of work performed between 11.00pm and midnight on a public holiday or a Sunday;
Public holiday penalty rates applying in respect of shift work; and
Laundry allowance.
[63] Turning firstly to the Level 1 pay rate. As I have found above, the pay rate is equivalent to the relevant award classification rate and as such will not meet the BOOT unless there are other more beneficial provisions in the Agreement that apply. Having regard to the range of more beneficial provision and the less beneficial provision I am satisfied that the BOOT is met in respect of the Level 1 classification rate. In reaching this conclusion I have also had regard to the proposed undertakings and also to the nature of the work performed by an employee in this classification which is unlikely to entitle them to a range of allowances (provided by the Award) that are not conferred by the Agreement, and to which I have referred above at [61]. I have also taken into account the laundry allowance issue.
[64] Turning to the part-time hours of work provisions. In weighing the range of more beneficial provisions and less beneficial provisions and having regard to the proposed undertaking I am satisfied that the lifestyle detriment to which I have referred above at [26] is more than offset by the more beneficial provisions provided by the Agreement.
[65] With respect to the operation of clause 13(e) in respect of work performed between 11.00pm on a public holiday or Sunday and midnight, I accept that the clause may produce a minor detriment in a scenario where only one shift is worked by a casual employee on either a Sunday or public holiday. There is no evidence before me that such a scenario is other than hypothetical or speculative. It seems more likely to me that a casual employee who may be engaged to work a night shift would be required to work other additional shifts, even if only on an irregular basis. In these circumstances the benefits that would accrue from such additional shifts would offset the detriment of the forgone penalty payment for the hour worked between 11.00pm on a public holiday or a Sunday and midnight. The proposed undertaking 2 is not required nor able to be accepted given I do not hold a concern.
[66] Turning to the penalty rate for casual employees working a shift on a public holiday, the difference in the effective hourly rate of pay for such work between the Agreement and Award is significant. As stated above at [49], I have adopted a cautious approach in assessing the detriment given the uncertainty as to whether the casual loading is included or excluded from the calculation of the public holiday penalty rate under the Agreement. Based on the exclusion of the casual loading from the calculation, the hourly rate payable to a Level 4 Operational Employee under the Agreement provides for an hourly rate of up to $13.68 per hour lower than the Award confers.
[67] Based on the significant detriment identified above I am not satisfied that casual employees engaged in a Level 1-3 Administrative and Clerical classification or in an Operational Employee classification and where rostered to work shifts on a public holiday are better off overall under the Agreement.
[68] Finally, I refer to the absence of a laundry allowance in the Agreement. The allowance provided for under the Award is up to a maximum of $1.49 per week. Save for the Level 1 classification to which I have referred to above, the wage rates in the Agreement and other benefits are sufficient to offset the absence of a laundry allowance, the pay rates ranging from 0.74% up to 60% above the equivalent Award classification rates.
[69] I am satisfied on a preliminary basis that, save for the specific BOOT concern I have identified in respect of casual employees rostered to work on a public holiday, the other statutory requirements necessary for approval of the Agreement are met and that the Agreement is capable of approval. Furthermore, the undertakings proffered by the Applicant will not cause financial detriment nor result in substantial changes to the Agreement.
[70] The Applicant will be afforded an opportunity to address the casual employment concern that I have identified above and is invited to provide further submissions and/or undertakings on or by 4.00pm on Wednesday 2 December 2020 following which the HSU will be provided a further 2 days within which to comment. Should the Applicant decline to provide further submissions and/or revised undertakings to address the remaining concern identified above I will proceed to determine the matter on the material before me.
[1] Section 180 of the Act
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