AG2009/20080, Transcript of Proceedings [2010] FWATrans 215 (23 February 2010)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 24777-1

SENIOR DEPUTY PRESIDENT HARRISON

AG2009/20080

s.185 - Application for approval of a single-enterprise agreement

Application by SJK Security Consultants Pty Ltd & SJK Security Consultants Pty Ltd
(AG2009/20080)





Sydney

3.06PM, TUESDAY, 9 FEBRUARY 2010

Reserved for Decision

PN1

THE SENIOR DEPUTY PRESIDENT: Good afternoon. It's Harrison SDP here. Do I have Mr Houlihan on the line now?

PN2

MR D. HOULIHAN: You do, your Honour.

PN3

THE SENIOR DEPUTY PRESIDENT: I think you're accompanied by a representative of the company and a representative of the employees of the company.

PN4

MR HOULIHAN: They're on a separate line, your Honour.

PN5

THE SENIOR DEPUTY PRESIDENT: Very good. Can each of those persons hear me?

PN6

MR H. GULAN: Yes, your Honour.

PN7

THE SENIOR DEPUTY PRESIDENT: Good. Now, at your request, Mr Houlihan, we having a transcript of this hearing made and there is a reporter here in court in Sydney. The matter was previously before me and I raised some concerns I had with the application and an opportunity was given to put in writing some submissions, and to that end I received from your company, Mr Houlihan, an email dated 2 February and it provided two undertakings: one in relation to the dispute settlement procedure and one in relation to - well, it was not so much an undertaking but it's the correction of a definition in clause 8.8, Night Span, and the remainder of the document were submissions about why I should be satisfied that the no-disadvantage test was met. I've read all of those documents. What else did you want to say, Mr Houlihan?

PN8

MR HOULIHAN: Your Honour, I really only want to speak to the issue in relation to the no-disadvantage test and I'm proceeding on the basis that you accept the undertaking in relation to the settlement of disputes so that the agreement does not fail for failing to have that requirement and having a dispute settlement procedure in accordance with section 186(6).

PN9

THE SENIOR DEPUTY PRESIDENT: Yes.

PN10

MR HOULIHAN: Is that correct.

PN11

THE SENIOR DEPUTY PRESIDENT: That is, insofar as that DSPS is concerned, yes, I agree with that, that is the case.

PN12

MR HOULIHAN: And the issue in terms of clause 8.8 of the agreement, the clarification of the correct night span is also accepted and that our understanding is that that leaves the issues of the no-disadvantage test and substantially in relation to the issue of the preferred hours arrangement as contained in appendix A of that agreement.

PN13

THE SENIOR DEPUTY PRESIDENT: That's certainly the major issue, it is not the only problem with this agreement but it is certainly the major issue.

PN14

MR HOULIHAN: Your Honour, in relation to the preferred hours agreement - and I will not rehash what we've put to you in writing - it is our position that the preferred hours arrangement such as that contained in appendix A is capable of being contained in the agreement as being a written expression of the individual flexibility arrangement which is contained in clause 4 of this agreement, which is that the modern clause as provided for in the regulations and that all that appendix A does is to formalise in a document exactly what the flexibility term enables.

PN15

We say that the appendix A arrangements aren't a matter that impact on the no-disadvantage test, in that they aren't a matter that are actually in the document or enforceable in the document until the agreement is approved and comes into effect seven days after such approval. The issue is that no employee can be compelled to enter into a preferred hours arrangement or to enter into an individual flexibility arrangement, and that the safeguards for an employee with respect to the better off overall test in clause 4 of the agreement mean that at that point in time any arrangement would need to be tested and including all the obligations that go on the employer to inform the employee at the time as to how the employee would be better off.

PN16

So we say that that's the fundamental point. We say that it's an issue that does not concern you in terms of the no-disadvantage test also because of the requirements contained in the Transitional and Consequential Amendments Act with respect to schedule 7, Part 2, item 6, which is the timing of when an agreement is tested for the no-disadvantage test. We say that because of the nature of the flexibility term that's expressed in appendix A, that at the time the agreement is to be tested for the no-disadvantage test, there is no appendix A or individual flexibility arrangement in place and that the facts construction is not farcical or a made-up construction and that it is repeated for agreements that were lodged post 1 January with respect to the requirement that the tribunal is required to disregard any individual arrangement which is made under the terms of a modern award.

PN17

THE SENIOR DEPUTY PRESIDENT: I don't see the comparison. The section you refer to in relation to the application of the BOOT indicates that:

PN18

Fair Work Australia does not take into account any flexibility arrangement that's reached between an employer and an employee in relation to the modern award. Any such flexibility arrangement could only be one which results in the employee being better off overall by comparison to the modern award provisions.

PN19

So I don't really see the analogy there, Mr Houlihan. I have real difficulty in ignoring a key component of this agreement. There would be no agreement that contains any sort of preferred hours or indeed any sort of arrangement whereby an employer and employee may enter into an agreement after the enterprise agreement is approved which undercuts provisions in it or the underlying modern award. If your construction is correct, none of those matters would be relevant to a member when applying the BOOT and I have some real difficulty with that construction but I certainly understand how it is put. I should just alert you that it does not thus far persuade me.

PN20

MR HOULIHAN: I understand, your Honour. I mean, it's a submission that's put forward and clearly it's within your power to reject that submission and we don't quibble about that. But I don't have any other submission to make, other than that now. I note that we've submitted that with the exception of the preferred hours arrangement, that this agreement would in fact pass the no-disadvantage test itself. Now, we're not aware of any other matters contained in the agreement that would concern the tribunal as to whether or not the agreement does pass the no-disadvantage test.

PN21

THE SENIOR DEPUTY PRESIDENT: Let's disregard the preferred hours provision. Clause 9 of the award, Additional Hours, provides that employees are entitled to time of in lieu. Where is the equivalent of the overtime provisions in this agreement?

PN22

MR HOULIHAN: It's immediately following - 9.3 is the reference. Immediately following (indistinct) on the top of page 9, it's clear that if it's not taken within the 13 weeks or if it's paid out, it's paid out at the rate of time and a half for the first two hours and double time thereafter.

PN23

THE SENIOR DEPUTY PRESIDENT: That's not an entitlement, it's just when the employer approves to do that. It's not an entitlement as per the entitlement under the underlying state award in this respect. It wouldn't matter if it's state award or - - -

PN24

MR HOULIHAN: Or federal award.

PN25

THE SENIOR DEPUTY PRESIDENT: - - - a federal award for this exchange.

PN26

MR HOULIHAN: The issue is, it is an entitlement once the 13 weeks are up.

PN27

THE SENIOR DEPUTY PRESIDENT: Right.

PN28

MR HOULIHAN: So it's the second sentence of 9.3, "must be taken within 13 weeks of the time being worked". Our construction of that is that if it's not taken, then it must be paid at that rate, at time and a half for the first two hours, double time thereafter.

PN29

THE SENIOR DEPUTY PRESIDENT: Yes.

PN30

MR HOULIHAN: And (indistinct) worked, which is an indication of each day.

PN31

THE SENIOR DEPUTY PRESIDENT: Yes, all right. I would weight that up against the entitlement to be paid, for the relevant pay period, overtime rates. Just one clarification here: I take it there's only one classification grade in this, security guard concierge, and you would equate that to grade 1 of either the federal award or the New South Wales NAPSA?

PN32

MR HOULIHAN: That's correct, your Honour. It's that entry level under the NAPSA. We would say that that's the appropriate grade.

PN33

THE SENIOR DEPUTY PRESIDENT: I assumed it was grade 1. I understand that. The preferred hours payment is 61 cents more an hour for all hours worked Monday to Sunday over and above the ordinary time rate. The casual amount is $1.05 over and above the casual rate for ordinary hours, and that is to apply again for all hours worked Monday to Sunday. So as I assess it, there's a loading in the first case of about 4 per cent and a loading in the second case of about 5 per cent.

PN34

MR HOULIHAN: I don't dispute that, your Honour. I accept that, sorry, rather than I don't dispute it.

PN35

THE SENIOR DEPUTY PRESIDENT: Yes. There's probably a percentage or a decimal point but it is 4 per cent, 5 per cent maximum for foregoing time and a half and thereafter double time. So I suppose that's one concern. That's a concern that the - Mr Houlihan, you and I go back to the times when we were having these exchanges many years ago in relation to the introduction - - -

PN36

MR HOULIHAN: (indistinct)

PN37

THE SENIOR DEPUTY PRESIDENT: That's right, but also the introduction of the concept of voluntary hours into awards and it occurred at a time that there was, in certain industries, union support. So the consideration then arises as to what the rate might be that an employee is to be paid. In a number of awards but this one I see - the underlying award - both federal award and state award do have a preferred hours arrangement but when those arrangements are entered into, the loading was 50 per cent.

PN38

MR HOULIHAN: That's correct, your Honour.

PN39

THE SENIOR DEPUTY PRESIDENT: So it rather suggests to me that if we're using those awards as the touchstone, even though it's a bit hard to apply them precisely, because in both cases they require the consent, I think, of the union - maybe not - but I suspect certainly some union involvement was - - -

PN40

MR HOULIHAN: Was a requirement.

PN41

THE SENIOR DEPUTY PRESIDENT: Yes. But then it was a 50 per cent payment and that's a fair bit more than 4 and 5 per cent. So that's concerning me. The public holiday clause seems that an employee isn't entitled to payment at public holiday rates may get time off in lieu on the basis of an hour for an hour. Again, it's the same arrangement that if it's not taken, the time off in lieu within 13 weeks, the manager may approve the employee be paid at - presuming they are paid it - they're paid it at the 150 per cent. So it just seems to me that's not the equivalent of the entitlement to be paid for working on a public holiday that's in each of the relevant awards.

PN42

MR HOULIHAN: Your Honour, our interpretation of clause 8.12 is this: it's 150 per cent, it's an additional 150 per cent.

PN43

THE SENIOR DEPUTY PRESIDENT: Yes, double time and a half.

PN44

MR HOULIHAN: Double time and a half.

PN45

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that but, in any event, there's still not an entitlement to be paid. Firstly, the employee is to take time off and after a period of time, with the manager's approval, they get paid what otherwise is an entitlement under the award to be paid.

PN46

So that concerned me. The use of the employee's motor vehicle, the kilometre rates, have you looked at the award and the weekly allowance entitlements to an employee who uses their own vehicle, Mr Houlihan - both awards in this respect.

PN47

MR HOULIHAN: I haven't, your Honour.

PN48

THE SENIOR DEPUTY PRESIDENT: They both appear to have a weekly allowance but I suppose we're getting now into the realms of - even though important, in that if that is right it is a higher amount or potentially a higher amount. I suppose it depends on how many kilometres you drive. We're now getting into the realms of the additional matters that concern me. We've moved on from principal matter.

PN49

MR HOULIHAN: Your Honour, with respect to the locomotion allowances, and the first one which is - and I'm looking at the matter with the New South Wales state award at 12.7.1 - we've provided, I believe, for the ATO provision rather than flat weekly amount, and your comments are correct, it really does depend on the number of kilometres driven. Perhaps Mr Gulan can confirm whether or not there is actually any kilometres driven. The second issue is in relation to the use of a bicycle as well. Now, the same issue applies, that either some concierge-type employees who are in a building rather than - a residential building or an office building and the requirements for locomotion are actually small.

PN50

THE SENIOR DEPUTY PRESIDENT: I understand that. You can let me know what the employees are likely to drive but it's obviously a matter that I'd take into account but it's certainly not going to result in a change in what I'm currently thinking about this agreement, Mr Houlihan. I am inclined to the view that I do take into account the manner in which the agreement will operate by reference to the underlying award or awards, and in that respect I'm referring to the New South Wales NAPSA and the federal New South Wales awards that the analogy with the section in the act that requires when applying the BOOT - which I know we're not applying here, we're applying the NDT - but when applying the BOOT, I (indistinct) existing flexibility is to be read in light of the fact that that flexibility is one that's in a modern award which in turn has to be read in light of the fact that any such flexibility must result in the employee being better off overall.

PN51

So one way or another we still haven't had to face the fact that an employee working penalty weekend and public holiday hours are paid significantly less than would be the payments due under either the state or the federal award. So I can go away and think again about the submissions you've made and those that have been placed in writing but I think I should foreshadow that I am not disposed to finding that this passes the no-disadvantage test. So do you want me to publish reasons for decision, Mr Houlihan?

PN52

MR HOULIHAN: I think so, your Honour. It will assist with - we have a serious of these type of arrangements and it would certainly assist in consulting with clients and giving advice about whether to proceed with hearings and those sort of things.

PN53

THE SENIOR DEPUTY PRESIDENT: These are agreements that have been made during the bridging period?

PN54

MR HOULIHAN: They are.

PN55

THE SENIOR DEPUTY PRESIDENT: All right. Yes, because obviously a number of the issues we're exchanging here - there will be different considerations when one is looking at the modern award and the straight application of the BOOT. No, I understand in relation to there being other ones that have been made during the bridging period and had not yet been either approved or refused. I am happy to do that. I understand that, and the utility there might be for you in advising for me to issue a decision.

PN56

Now, the other thing that I thought of, Mr Houlihan, when I had read the written submissions and was not at that stage inclined to accept that I should disregard the preferred hours arrangements, is what, if any, should be the relevance to the fact that I know there's an appeal against a finding in relation to an enterprise agreement that contained a preferred hours clause, which enterprise application for approval was refused, and whether there was some consideration that should be given to abiding the outcome of that full bench appeal or not. I don't know that I've come to any final view about that, Mr Houlihan. I can't bring to mind immediately the terms of the preferred hours clause that was in that enterprise agreement - I think it's called the - - -

PN57

MR HOULIHAN: The BEPA.

PN58

THE SENIOR DEPUTY PRESIDENT: BEPA appeal, yes. I don't know if it was one that the preferred or voluntary hours - or call them what you will - were remunerated at ordinary time rates or whether there was some loading on them. I just do not recall.

PN59

MR HOULIHAN: I have a copy of that decision in front of me, your Honour.

PN60

THE SENIOR DEPUTY PRESIDENT: Yes, have a look at the clause, would you. I have it in my chambers but not here.

PN61

MR HOULIHAN: It's in relation to a single rate of pay for voluntary overtime.

PN62

THE SENIOR DEPUTY PRESIDENT: I see. So it's ordinary. It's not loaded at all.

PN63

MR HOULIHAN: It's not loaded at all.

PN64

THE SENIOR DEPUTY PRESIDENT: Well, that's a consideration. At the other extreme, there are of course enterprise agreements that have been made in the past and could be made now that would have a sufficient loading in both the ordinary time rate as well as a loading for preferred hours that would (indistinct) So all things considered, the member might be persuaded to pass the no-disadvantage test. Now, as I've mentioned earlier, the loading here, to the extent there is one, is only 4 or 5 per cent so it's probably a long way short of what I'd be inclined to be persuaded if one did all the unders and overs. So that's rather thinking aloud a bit there, Mr Houlihan, but I give you the opportunity to say what, if anything, you think I should do in light of the fact there is that full bench appeal pending. It has not been heard yet.

PN65

MR HOULIHAN: Your Honour, we would - and I haven't spoken to my client about this, obviously - I would imagine that they would seek that you reserve your decision until such time as that matter is determined but we're also conscious of the fact that if this application is on foot and my client takes your comments away and decides to negotiate a new agreement under the BOOT arrangement, that - I think if you reserve the decision and then seeking to discontinue it is discourteous, to say the least.

PN66

THE SENIOR DEPUTY PRESIDENT: You understand precisely these sort of things, Mr Houlihan. The fact that you have made that observation, you clearly know what is on the one hand the proper representation of your client but on the other what we would appreciate in relation to being required to write a decision that might not then - or the day before you're about to publish, it's not required. But you give your client some advice on that, Mr Houlihan. I'm not going to be able to write something in the next few days anyway.

PN67

MR HOULIHAN: Your Honour, if that's the case, I will come back to you within a couple of days with some instructions.

PN68

THE SENIOR DEPUTY PRESIDENT: Yes, that would be very useful. Do that, do that. I don't know whether there's much more we can say about this one. You see, just as a general observation: if it is so that your client maintains that the preferred hours arrangement is one that can be achieved consistent with the enterprise flexibility agreement, well so be it.

PN69

MR HOULIHAN: That's certainly our submission.

PN70

THE SENIOR DEPUTY PRESIDENT: Yes.

PN71

MR HOULIHAN: If that's the case and you're not satisfied that that schedule allows the agreement to pass the no-disadvantage test, I'm concerned that making an undertaking to remove that schedule is actually an undertaking that goes a step too far.

PN72

THE SENIOR DEPUTY PRESIDENT: Well, it probably might be seen as a substantial change.

PN73

MR HOULIHAN: Change to the agreement.

PN74

THE SENIOR DEPUTY PRESIDENT: That could be the way we're going, yes. As I say, I have real difficulty in accepting, by putting that clause in the agreement - really, either on the one hand I disregard it because there's no actual such arrangement and/or, in the alternative, it is just an example of what might be achieved through the operation of an individual flexibility term. Now, I'm not too sure about whether that's right or wrong but if it is right, well so be it. One does not need to have the - - -

PN75

MR HOULIHAN: (indistinct)

PN76

THE SENIOR DEPUTY PRESIDENT: Precisely. I think you understand all those things. You take some advice from your client. I wouldn't be able to return to this again this week anyway, Mr Houlihan. As of close of business next Monday, let me know whether you require me to publish reasons for decision. I'll adjourn pending the outcome of any full bench appeal in Hooper, with an opportunity, as a matter of urgency after that decision being published, you to say something about the relevance of it to this matter or the application's withdrawn. I think they're the possible - - -

PN77

MR HOULIHAN: The options.

PN78

THE SENIOR DEPUTY PRESIDENT: Yes. So let's leave it at that stage then. So, Madam Reporter, that is the end of the transcript for that matter of 2009/20080.

<ADJOURNED INDEFINITELY [3.32PM]