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austlii:cth/FWCA/2026/693
General information, not legal advice.
FWCA
2026-03-20
Original judgment source is linked above.
s.185 - Application for approval of a single-enterprise agreement
MUFG Retirement Solutions Business Services Pty Limited
MUFG RETIREMENT SOLUTIONS ENTERPRISE AGREEMENT 2025
Application for approval of the MUFG Retirement Solutions Enterprise Agreement 2025
[1] MUFG Retirement Solutions Business Services Pty Limited has applied for approval of a single enterprise agreement known as the MUFG Retirement Solutions Enterprise Agreement 2025 (Agreement). The application is made under section 185 of the Fair Work Act 2009.[1]
[2] The Finance Sector Union of Australia (FSUA) was a bargaining representative for the Agreement. It opposes approval of the Agreement. Its grounds may be summarised as follows:
(1) The Commission could not be satisfied that the Agreement passes the better off overall test (BOOT), when its terms are compared with those of the Banking, Finance and Insurance Award 2020 (Award) (the award which covers the relevant employees). In particular:
(a) in contrast to clause 20 of the Award, the Agreement does not provide the payment of overtime for employees in classifications 3, 4 and 5 under the Agreement;
(b) in contrast to clause 21.3(b)(i) of the Award, the Agreement does not provide for the payment of annual leave loading; and
(c) in contrast to clause 13A of the Award, the Agreement does not contain a clause conferring on employees a right to disconnect.
(2) Clause 41 of the Agreement, which is titled "Workplace Delegate's Rights" (sic), "falls short" of the delegates' rights for which section 350C provides. As a consequence, the Agreement does not contain a delegates' rights term for the purposes of section 205A(1), and therefore the Commission could not be satisfied that its approval would be in the public interest.
[3] For context, clause 6.1 of the Agreement provides that it "operates to the exclusion of any and all awards".
[4] I will deal in turn with the FSUA's contentions.
[5] In order to approve the Agreement, I must be satisfied that it passes the BOOT.[2] Relevantly for present purposes, that means being satisfied that each Award-covered employee, and each reasonably foreseeable employee, to whom the Agreement will apply would be better off overall if the Agreement, rather than the Award, applied to them.[3]
[6] The BOOT, as the name implies, calls for 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.[4]
No paid overtime entitlements above Level 2 classification
[7] The Agreement contains six employee classifications, described as being Level 1 through to Level 6. Only employees in Level 1 and Level 2 are entitled to be paid overtime for hours worked outside their ordinary span of hours.[5]
[8] The FSUA submitted that as a result of not being entitled to paid overtime, a Level 3 employee would be paid $4,929.60 less per annum than they would receive under the Award. For a Level 4 employee, that shortfall was said to be $2,659.20.[6] Three observations can be made about these submissions.
[9] First, the calculations underpinning the submissions assume that the employee is engaged on a full-time basis and works an hour of overtime every working day of the year. That "year" is 48 weeks, allowing for an employee's absence on annual leave. However, the Agreement defines the ordinary hours of work for a full-time employee to be an average of 37.5 hours per week.[7] Nothing in the Agreement requires an employee to work a particular number of additional hours, although there is an "expectation of additional hours being worked".[8] The FSUA did not explain why a work pattern requiring an hour of overtime every working day should be assumed for the purposes of conducting the BOOT assessment. Further, no allowance appears to have been made for an employee being absent from work for reasons other than annual leave, such as on public holidays or other leave.
[10] Second, in making its calculations, the FSUA compared the pay rates under the Agreement with the next highest level under the Award. That is, it compared the Level 3 salary under the Agreement with the remuneration (including overtime) that an employee at Level 4 under the Award would receive. It similarly compared Level 4 under the Agreement with Level 5 under the Award.
[11] The FSUA did not explain its rationale for taking that approach. In its Form F17B, MUFG declared that the six classification levels under the Agreement corresponded to the same levels under the Award. The FSUA did not challenge that declaration.
[12] When an "apples with apples" comparison is undertaken, and even assuming an hour of overtime each day, the FSUA's contentions largely fall away. This can be seen in the following table:[9]
[13] MUFG provided calculations which suggested that Agreement-covered employees would receive higher remuneration than this table suggests. However, its figures included payment for overtime at the applicable Agreement rate. The Agreement does not contemplate such payments.
[14] The theoretical shortfall for employees at Level 3 under the Agreement needs to be considered in light of my observations above as to the rationale for assuming an hour of overtime each day. Applying simple mathematics, if a Level 3 employee does not work the additional hour on 34 days of the year, there would be no shortfall.
[15] Third, any detriment arising from the absence of paid overtime must be viewed in the context of the Agreement as a whole. As MUFG submitted, the FSUA's submissions did not take into consideration the following provisions of the Agreement:
Credit time refers to additional hours worked beyond an employee's contracted hours, which can be accumulated and used to offset future working hours within a 6-month period. This allows flexibility in managing work hours, enabling employees to reduce their hours during quieter periods by using the time they've built up. For employees in Level 3 and 4, credit time applies to approved overtime worked instead of paid overtime or TOIL [time off in lieu], as their Salary already reflects the expectation of additional hours being worked to fulfill [sic] the inherent requirements of their roles.
22.6. The following provisions outline how credit time is accrued, used, and paid out, ensuring that additional hours worked by Level 3 and 4 employees are managed fairly and with flexibility to balance business and personal needs.
(a) This clause applies to full and part-time employees in Level 3 and 4 only under this Agreement.
(b) Under this clause, additional hours worked at the direction of the Employer will be credit time and will accrue on an ordinary time basis per hour (or part thereof).
(c) Credit time must be used within six months of its accrual, at a time or times agreed between the employee and the Employer.
(d) Accrued and unused credit time will be cashed out:
(e) Cashed out credit time will be paid at the employee's Hourly Rate plus shift loadings (if applicable at the time of accrual).
[16] In its submissions in reply, the FSUA discounted the significance of those provisions on the basis that they did not provide for an extra payment for overtime. It submitted that "[p]rovision of time off in lieu, as opposed to the payment of overtime rates, was considered to be a 'major reduction' in Re Gallis Pty Ltd (t/as Cucina By Toscanis)". In that case, Commissioner Lee observed:[10]
"The Agreement does not provide various Award entitlements and contains a number of less beneficial terms when compared with the Award. An extensive list of BOOT concerns were raised with the Applicant, as I was not satisfied that the rates of pay in the Agreement were high enough to compensate for the reduction in entitlements. The major reductions in the Agreement included the following:
[17] Read in context, the Commissioner's observations do not amount to a declaration that time in lieu as opposed to payment of overtime penalties will necessarily constitute a "major reduction" in benefits. The Commissioner was clearly remarking on the particular terms of the agreement before him.
[18] In any event, as MUFG submitted, clause 22.6 contemplates the possibility of an employee being paid for additional hours, albeit not at the time the hours are worked. That is, they can elect not to use the "credit time" and have it cashed out. I am mindful that this would be at the relevant ordinary time rate under the Agreement.
[19] In considering this issue I note also that in its Form F17B, MUFG listed a number of benefits for the which the Agreement provides that do not appear in the Award. The FSUA did not challenge that list.
[20] The Agreement does not provide for annual leave loading. Of itself, that is not material in the context of the Agreement as a whole. The differences between the rates of pay for each classification under the Agreement with those under the Award far exceed the quantum of the leave loading that an employee would receive under the Award for four weeks of annual leave.
[21] The absence of leave loading would only have significance, to my mind, if the calculations at [12] above could be accepted. The lack of leave loading would compound the shortfall in remuneration for an employee at Level 3, and lead to one at Level 4. However, those calculations rest on the same unsteady foundation as those of the FSUA - that an employee is at work, and works an hour of overtime, on 240 days of the year.
[22] The Agreement does not contain a right to disconnect provision. The FSUA submitted that as there is such a provision in the Award, "all employees to whom the Agreement applies would be worse off under the Agreement than they would be under the BFIA in this respect".
[23] In response, MUFG submitted that employees "are still protected by the FW Act - both by way of clause 6.2 of the MUFG Agreement as well as by s.333M of the FW Act in any event".
[24] Clause 6.2 provides that the Agreement "will be read and interpreted in conjunction with" the National Employment Standards (NES),[11] and the NES will prevail over the Agreement to the extent they provide a greater benefit. I cannot see the significance of this clause in the present context: the right to disconnect does not form part of the NES.
[25] But MUFG was correct that employees under the Agreement will retain the right to disconnect conferred by section 333M. The mere absence of a right to disconnect clause in the Agreement - which is the basis of the FSUA's contention - does not mean that employees will necessarily be "worse off", much less worse off overall.
[26] To my mind, the FSUA's case did not reflect an overall assessment of whether an employee would be better off under the Agreement. The Agreement provides for rates of pay and other terms which are more favourable than those under the Award. It is not enough, in my view, to posit a scenario in which employees might be left worse off. With some imagination, that may often be possible. It is necessary to show that the scenario is one which is likely to arise. The FSUA failed to do so. Its contention that the absence of paid overtime for employees at Levels 3 to 5 results in the Agreement failing to pass the BOOT was premised on the assumptions that employees at that level will work an hour of overtime every working day, and be absent only on annual leave. It did not explain why such an assumptions should be made.
[27] In the context of the Agreement as a whole, the fact that employees do not receive annual leave loading is not material.
[28] The mere absence of a right to disconnect term in the Agreement does not give rise to a BOOT issue.
[29] It follows that I am not persuaded that the Agreement fails to pass the BOOT on the grounds that the FSUA advanced.
[30] I can deal with this issue briefly. Clause 41 of the Agreement deals with workplace delegates' rights. The FSUA submitted that the clause does not meet the requirements of section 350C; that as a consequence, the Agreement does not contain a delegates' rights term for the purposes of section 205A(1); and therefore the Commission could not be satisfied that approval of the Agreement would be in the public interest.
[31] As MUFG submitted, the Act does not require the Commission to be satisfied that it is in the public interest to approve the Agreement.[12] The Commission must approve the Agreement if the requirements set out in sections 186 and 187 are met.[13] Those sections do not mandate that the Agreement contain a delegates' rights term.
[32] However, it was common ground that clause 41 is less favourable than the corresponding term - clause 27A - of the Award. The reasons for this included that clause 41 does not allow for the "reasonable access to training" for which clause 27A.8 of the Award provides, and does not reflect the changes to the Award term made as a result of the decision of the Full Bench in Decision [2026] FWCFB 5. It was also common ground that this was capable of being dealt with under section 205A(2).
[33] There is a slight irregularity in the notice of employee representational rights that was provided to employees. It referred to the agreement to be negotiated as the "Link RSS Enterprise Agreement". I can reasonably infer that the name of the agreement was itself the subject of change over the course of negotiations. But in any event, I consider this to be a minor procedural or technical error of the nature contemplated by section 188(5) of the Act. I am satisfied that the relevant employees are not likely to have been disadvantaged by the error. As a result, I will disregard it.
[34] Having regard to the material in the application and accompanying declaration, I am satisfied that each of the requirements of sections 186, 187 and 188 of the Act as are relevant to the application have been met.
[35] I find that clause 41 of the Agreement is less favourable than clause 27A of the Award. Under section 205A(2), clause 41 is of no effect and clause 27A of the Award is taken to be a term of the Agreement.
[36] The FSUA has given notice under section 183 of the Act that it wants the Agreement to cover it. As required by section 201(2) of the Act, I note that the Agreement covers the FSUA.
[37] The Agreement is approved. In accordance with section 54 of the Act, the Agreement will operate from 27 March 2026. The nominal expiry date of the Agreement is 27 March 2029.
[1] In this decision, all references to legislative provisions are to provisions of the Fair Work Act
[4] Armacell Australia Pty Ltd [2010] FWAFB 9985 at [41], quoted with approval in AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833 at [43]. See also Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887 at [6]
[6] The FSUA did not offer calculations in respect of Levels 5 and 6 under the Agreement.
[9] The figures are rounded to the nearest dollar. I have included Level 5 for completeness.
[11] As set out in Part 2-2 of the Fair Work Act
[12] cf. the position with greenfields agreements: section 187(5)(b)
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