Classes of employees

The better off overall test does not require the Fair Work Commission to enquire into each employee's individual circumstances.[1] The Commission may assume, in the absence of any evidence to the contrary, that where a class of employees to which an employee belongs is better off overall under the agreement, then the particular employee will be better off.[2]

Class of employees – NOT better off overall

Hours of work

Re Turn Key Distribution Pty Ltd [2010] FWA 6987 (McKenna C, 21 September 2010).

Application for approval of an enterprise agreement titled the Turn Key Distribution Pty Ltd Enterprise Agreement 2010. The applicant traded as a tavern, restaurant and motel. The agreement included loaded rates of pay. The applicant provided modelling to illustrate how employees would be better off overall under the agreement compared to the modern award.

The Commission found that although the calculations in the spreadsheets were said to demonstrate the BOOT had been met for all classes of employees, modelling and analyses of the indicative rosters did not support that conclusion. While some employees identified as working the indicative rosters would be advantaged by the agreement at the test time, other employees would receive wages lower than they otherwise would be entitled to be paid were it not for the agreement.

Employees who did not work, on average, around 72 per cent of their hours between 7.00 am to 7.00 pm, Monday to Friday, were found to constitute a class of employees for whom the BOOT was not necessarily met in relation to the loaded rates. The Commission found that overall, each employee would not be better off under the agreement than under the award, the agreement was not approved.

Part-time employees

Roseneath Aged Care Centre v NSW Nurses & Midwives’ Association; Australian Nursing Federation – New South Wales Branch; Health Services Union [2013] FWC 4969 (Gooley DP, 24 July 2013).

Roseneath Aged Care Centre v NSW Nurses & Midwives’ Association; Australian Nursing Federation – New South Wales Branch; Health Services Union – New South Wales Branch [2013] FWCFB 7430 (Hatcher VP, Booth DP, Bull C, 25 September 2013).

Re Roseneath Aged Care Centre [2013] FWCA 7456 (Gooley DP, 26 September 2013).

An application was made for approval of the Roseneath Aged Care Centre NSWNMA & HSU NSW Branch Enterprise Agreement 2012. The agreement did not provide for part-time aged care and health professional employees to be paid overtime if directed to work outside of their agreed hours and that may mean that the agreement would not pass the better off overall test.

The agreement provides that part-time aged care and health professional employees can be directed to work outside of their agreed hours at ordinary time until they have either worked 10 hours in a day or 38 hours in a week or 76 hours in a fortnight. The terms of the agreement are not consistent with the awards which provide that an employee directed to work outside his or her agreed hours is paid overtime at overtime rates. The agreement provision is clearly less beneficial to part-time employees.

The benefits for a part-time employee include a guaranteed minimum hours of work of 3 hours, higher severance payments, higher wages, service allowance payable for employees who have had more than 10 years' service and long service leave benefits. However, the Commission was not satisfied that the benefits in the agreement and other non-monetary benefits provided in the agreement compensate part-time employees who are required to work outside of their ordinary hours. In relation to part-time employees the agreement did not to pass the better off overall test.

Note: After subsequent proceedings the employer offered an undertaking in terms which would resolve the issue which gave rise to the Commission's decision to reject the application for approval of the agreement at first instance. The undertaking was accepted and as a result the agreement was approved.