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[2013] FWC 4409
DECISION
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument
Mark Badman
v
Altus Traffic Pty Ltd
(AG2013/634)
SENIOR DEPUTY PRESIDENT
O'CALLAGHAN ADELAIDE, 5 JULY 2013
Application to terminate the Altus Traffic (SA) Employees Collective Agreement 2009 - s.226
- employment regulation in the event of termination of the agreement - public interest
consideration.
[1] On 15 March 2013 Mr Badman, an employee of Altus Traffic Pty Ltd (Altus), lodged
an application, pursuant to Items 15 and 16 of Schedule 3 of the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009 (the Transitional Provisions Act),
through which he sought the termination of the Altus Traffic (SA) Employee Collective
Agreement 2009 (the Agreement).
[2] The application was the subject of hearings on 3 and 10 April and 22 May 2013. Altus
was represented in these hearings by Ms Schreier-Joffe of counsel. Whilst Mr Badman was
generally represented by the Construction, Forestry, Mining and Energy Union (CFMEU), at
the hearing on 22 May 2013, he was represented by Mr Ats, of counsel. In each case a grant
of permission was made on the basis that I was satisfied that this would enable the matter to
be dealt with more efficiently, considering the complexity of the issues. Following the hearing
on 22 May 2013 both parties have provided written submissions with final submissions in
reply provided to me on 21 June 2013.
[3] On 19 March 2013, and again on 5 April 2013 I issued Directions which required
Altus to alert its employees to the application and ensure that employees were made aware
that they could express a view about it to my office or participate in proceedings. The only
response to these invitations was advice from the CFMEU on 29 March 2013, to the effect
that it was representing Mr Badman and four other employees.
[4] Altus provide traffic management services in the building and construction industry,
relative to road and roadside maintenance and vegetation work, major events, such as the
Tour Down Under and private and household traffic control situations.
[5] The Agreement was approved by the former Workplace Authority under the
Workplace Relations Act 1996 (the WR Act).1 The Agreement achieved its nominal expiry
AUSTRALIA FAIR WORK COMMISSION
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date in June 2012. Altus, the CFMEU and a number of employee bargaining representatives
have been unable to reach agreement on the terms of a replacement agreement since that time.
[6] Mr Badman's application is made on the basis that the Building and Construction
General On-site Award 2010 (the Building and Construction Award) will operate to regulate
the employment of Altus employees if the Agreement is terminated. The Altus position is
outlined in greater detail later in this decision.
[7] In a number of the proceedings in relation to this application I have suggested to the
parties that they may consider requesting assistance from the Fair Work Commission (FWC)
pursuant to s.240 of the Fair Work Act 2009 (the FW Act) in the negotiation of a new
agreement. Whilst the CFMEU was prepared to seek this assistance, Altus has indicated that it
does not agree with this proposal. As a consequence, the Commission's involvement has been
confined to consideration of this application. I have, however, noted that both parties agree
that negotiations directed at achieving a new Agreement are continuing.
The legislative basis for the application
[8] Item 15 of Schedule 3 of the Transitional Provisions Act refers to termination, by
agreement, of a collective agreement based transitional instrument. There is no agreement
here about the termination application made by Mr Badman.
[9] Item 16 of Schedule 3 of the Transitional Provisions Act states:
“16 Collective agreement-based transitional instruments: termination by FWA
(1) Subdivision D of Division 7 of Part 2-4 of the FW Act (which deals with
termination of enterprise agreements after their nominal expiry date) applies in
relation to a collective agreement-based transitional instrument as if a reference to an
enterprise agreement included a reference to a collective agreement-based transitional
instrument.
(2) For the purpose of the application of Subdivision D to an old IR agreement, the
agreement’s nominal expiry date is taken to be the end of the period of the
agreement.”
[10] Subdivision D of Division 7 of Part 2-4 of the FW Act states:
“Subdivision D—Termination of enterprise agreements after nominal expiry date
225 Application for termination of an enterprise agreement after its nominal expiry
date
If an enterprise agreement has passed its nominal expiry date, any of the following
may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
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(c) an employee organisation covered by the agreement.
226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section
225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so;
and
(b) the FWC considers that it is appropriate to terminate the agreement taking
into account all the circumstances including:
(i) the views of the employees, each employer, and each employee
organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and organisations
including the likely effect that the termination will have on each of
them.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates
from the day specified in the decision to terminate the agreement.”
[11] I have considered the application in the context of s.226.
The Submissions
[12] The CFMEU submissions, put on behalf of Mr Badman, were that the Agreement
contains terms and conditions inferior to the relevant Modern Award and the National
Employment Standards under the FW Act. The CFMEU asserts that the Agreement contains a
clause governing its unilateral termination and that a proper application of this provision in
the context of the FW Act supports the termination application. Further, the CFMEU position
is that the material before the Commission confirms that there are no public interest
considerations that weigh against the termination of the Agreement. The CFMEU asserts:
“Whilst the NES will prevail over any inferior provisions in a pre-FW Act agreement
(transitional instrument), a transitional instrument will oust the operation of a modern
award for as long as the former continues to apply. Thus in this case, in the absence of
an order terminating the operation of the existing agreement, bargaining will have to
proceed not on the basis of the safety net generally mandated by the FW Act, but based
on provisions which on the Respondent’s own case, include terms which are inferior to
those set out in the Award.”2
(references removed)
[13] The CFMEU asserts that there can be no question that it has been bargaining in good
faith and that the making of this application cannot be construed as an act of bad faith in the
bargaining process.
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[14] The CFMEU asserts that the overwhelming preponderance of the company's work is in
the on-site building, engineering and civil construction industry, which industry includes
maintenance and repair work.3 The CFMEU asserts that the effect of the termination of the
Agreement is that the Building and Construction Award will apply and that this award
provides for employment terms and conditions which are superior to those contained in the
Agreement. The CFMEU position is that Altus is an employer in the on-site building,
engineering and civil construction industry4 and, as such, clause 4.10 of the Building in
Construction Award establishes coverage of that award in that the nature of traffic control is
integral to the construction process.5 In this respect the CFMEU notes that the classification
of traffic controller is contained within the Building and Construction Award.
[15] The CFMEU asserts that Altus and its competitors have traditionally relied upon the
Building and Construction Award as the underpinning award for the purposes of the "better
off overall test" and the derivation of agreement conditions.
[16] The CFMEU asserts that the two separate opportunities that the Commission gave
employees to be involved in, and express views about the application, meant that the
requirements of s.226(b)(1) had been met such that there were no employee objections to the
termination application. Further, that the views of the CFMEU, as the representative of the
employees, should be taken into account. Finally, in this respect, the CFMEU provided me
with a petition, signed by 21 employees in support of the termination application. This
petition6 was admitted on a confidential basis and the identities of the signatory employees
were not disclosed to Altus.
[17] In terms of the circumstance and likely effect of the termination which the
Commission is required to take into account pursuant to s.226(b)(ii), the CFMEU submitted
that termination of the Agreement would be appropriate so that employees could receive the
more beneficial statutory safety net conditions and pay rates which should form the basis for
ongoing agreement negotiations. Further, that termination of the Agreement would provide
for greater stability and consistency in the ongoing bargaining process.
[18] The CFMEU referred to a number of authorities and other Altus and traffic control
agreements in support of its position, and provided an assessment of the Building and
Construction Award terms and conditions with those in the Agreement.
[19] The Altus position is that clause 1.4 of the Agreement specifies the Agreement
termination arrangements which, when read in concert with the now repealed provisions of
the Workplace Relations Act mean that there is no jurisdiction for the Commission to
terminate the Agreement. In the alternative, Altus argue that a proper application of s.226 of
the FW Act requires the Commission to take account of the views of the employees, and the
employer about termination of the Agreement and to take account of the circumstances of
these groups including the likely effect that termination of the agreement would have on them.
[20] Altus asserts that a proper application of the public interest test requires consideration
of a circumstance where termination of the Agreement could result in the absence of, or
uncertainty about Award coverage. Further, in terms of its operations, Altus asserts that
termination of the Agreement would lead to additional costs and inefficiencies in that Altus
would need to reconfigure its payroll system to accommodate uncertain award coverage
requirements.
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[21] Altus asserts that the application to terminate the existing Agreement is a step taken in
bad faith7 and impedes the agreement negotiation process. Altus submits that a number of
decisions of the Commission have emphasised the undesirability of termination of an existing
agreement.8 Further, Altus asserts that uncertainty about award coverage would potentially
disadvantage employees and substantially disrupt the bargaining process.
[22] Altus asserts that some employee entitlements under the existing Agreement are
superior to alternative award average conditions. Altus submits that, at best, the Building and
Construction Award has very limited application to its employees in South Australia. It
asserts that the other Modern Awards apply, depending on the work undertaken.
The Evidence
[23] A witness statement made out by Mr D Roberts, the Assistant Secretary of the
CFMEU in South Australia was admitted without challenge. In this statement9 Mr Roberts
reported his recollection of various of his discussions with Altus management over a number
of years. Mr Roberts’ statement went to the negotiations directed at achieving a new
agreement, to his preparation of a petition10 and to his understanding of the nature of the work
undertaken by Altus employees in South Australia.
[24] Mr King, the Altus National Senior HR & IR Business Partner provided extensive
evidence in this matter. I have noted that Mr King's evidence was inherently limited by virtue
of the fact that he has only been engaged by Altus since 14 September 2012.
[25] Mr King's evidence was that:
“There are 143 Altus employees covered by the Agreement. These employees service a
number of different industries in SA. The following list sets out how many employees
in SA service each relevant industry:
(a) Civil construction building projects - 35%;
(b) Maintenance and repair work - 35%;
(c) Community/sporting events - 20% - (eg: The Tour Down Under sport bicycle
ride); and
(d) Private property closure/protection - 10%.”11
[26] Mr King subsequently clarified this evidence by advising that he understood that this
description of the nature of the work undertaken was based on an estimate of overall
employee work hours. Mr King's evidence went to clarify the nature of the work in various of
these categories.
[27] Mr King's evidence went to the bargaining process directed at achieving a new
agreement and the extent to which the CFMEU had consistently demanded that the Building
and Construction Award be used as the foundation for agreement discussions.
[28] Mr King's evidence was that termination of the Agreement would be detrimental to
Altus employees in a number of specified respects. Further, he asserted that Altus would, in
the event of termination of the Agreement, need to implement a new payroll system in order
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to apply award wages and conditions and that this would involve substantial cost and potential
disruption.
[29] Altus also provided comparisons of the Agreement rates of pay with those applicable
under the Building and Construction Award. This indicated that full-time weekly hire new
entrant employees earned marginally more per hour than would be the case under the
Building and Construction Award. Employees classified under the TC1 classification,
engaged on a weekly hire basis would earn marginally less than would be the case under that
Award. TC2 classified employees engaged on a weekly hire basis would earn marginally
more than a CW2 classified employee under the Building and Construction Award.12 In each
case, when the 25% casual loading under the Building and Construction Award is applied
instead of the 20% casual loading in the Agreement, the Award rates are superior to the
Agreement rates.
Findings
[30] Clause 1.4 of the Agreement13 states:
“1.4 DURATION
The Agreement’s nominal expiry date is 3 years from the date it is passed by the office
of the Workplace Authority.
After the nominal expiry date, the Agreement will continue to operate unless it is:
a. replaced by a new agreement;
b. terminated by agreement between the parties; or
c. terminated by one of the parties by that party giving 14 days notice in
writing to the other party and a termination notice being filed with the
Office of the Employment Advocate.”
[31] That termination provision reflects the legislative regime then in operation. The advent
of the FW Act and the transitional provisions set out in the Transitional Provisions Act
abolished the previous legislative structure and replaced it with the provisions in Part 2-4 of
the FW Act. I do not accept that these changes had the effect of removing the capacity for the
Fair Work Commission to terminate this Agreement consistent with s.226. It is clear that the
current legislation sets out the preconditions necessary for the termination of an agreement
and the adoption of a narrow and pedantic approach to that jurisdiction would have the
improper effect of depriving the parties to a transitional agreement of the capacity to access
termination provisions specifically prescribed in the current legislation. Had the current
legislation intended to make agreements approved under the WR Act immune from
termination, I think it would have specified this.
[32] Consequently, I consider that Item 16 of Schedule 3 of the Transitional Provisions Act
and s.226 of the FW Act establishes the jurisdiction for the Commission to terminate an
agreement of this nature.
Section 226
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[33] Section 226 establishes a positive obligation on the Commission to terminate an
agreement if the circumstances set out in paragraphs (a) and (b) are met.
[34] In Tahmoor Coal Pty Ltd14 Lawler VP detailed a useful historical context in relation to
the Commission’s power to terminate agreements, before considering the operation of this
section of the FW Act. His Honour concluded:15
“[55] It seems to me that under the scheme of the FW Act, generally speaking, it will
not be appropriate to terminate an agreement that has passed its nominal expiry date if
bargaining for a replacement agreement is ongoing such that there remains a
reasonable prospect that bargaining (in conjunction with protected industrial action and
or employer response action) will result in a new agreement. This will be so even
where the bargaining has become protracted because a party is advancing claims for
changes that are particularly unpalatable to the other party. While every case will turn
on its own circumstances, the precedence assigned to achieving productivity benefits
through bargaining, evident in the objects of the FW Act, suggests that it will generally
be inappropriate for FWA to interfere in the bargaining process so as to substantially
alter the status quo in relation to the balance of bargaining between the parties so as to
deliver to one of the bargaining parties effectively all that it seeks from the
bargaining.”
[35] In Royal Automotive Club of Victoria16 Roe C addressed an application for termination
of an agreement which had exceeded its nominal expiry date and which applied to a small
proportion of the employer's workforce. The Commissioner observed:
“[20] Firstly, the WR Act provided that the Tribunal must terminate an agreement in
these circumstances unless it was contrary to the public interest. The FW Act retains
the public interest requirement in s 226(a) and it is expressed in similar terms to the
previous s 170MH(3) of the WR Act. However, the FW Act provides that, in addition
to the public interest requirement, the Tribunal must only terminate the agreement if it
considers it appropriate after considering all the circumstances, including the views of
the parties and the likely effect of the termination on each of them (s 226(b)). This is
significant since it is precisely these considerations which the AIRC previously found
were distinguishable from the public interest. The AIRC previously found that
evidence that termination of an agreement was opposed by employees and or would be
likely to have an adverse impact on employees was not necessarily sufficient to
activate the public interest. However, it is clear that the legislators have now decided
that such matters are relevant considerations in their own right and may lead to a
decision to refuse to terminate an agreement.
[21] Secondly, Section 226 concerning the termination of agreements is found in Part
2-4 of the FW Act which deals with Enterprise Agreements. The legislative scheme
and objects of the Act and the objects of Part 2-4 in particular in this respect are quite
different from the WR Act. Part 8 of the WR Act which dealt with Workplace
Agreements did not have separate objects. The FW Act places a strong emphasis on
the objective of facilitating and enabling collective bargaining, bargaining in good
faith and the making of enterprise agreements. The termination of an agreement
without the agreement of all parties covered by the agreement must now be considered
in this context. It is clearly a public interest consideration under s 226(a) if the
termination of an agreement would be contrary to the objectives and scheme of the
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legislation in respect to facilitating and encouraging bargaining and agreements. It is
also a context within which the interests of and effects on the parties should be
considered as required by Section 226(b).”
[36] In Energy Resources of Australia Ltd v LHMU17 Watson VP again reviewed s.226.
The Vice President stated:
“[15] Section 226(b) is a new requirement for termination of agreements enacted in the
FW Act. It has not as yet been subject to any Tribunal consideration. In my view the
requirement calls for an overall consideration of the context and all of the relevant
circumstances involved and the exercise of an overall judgment based on those
circumstances.
[16] As with other broad judgements under the Act there will often be competing
considerations which will need to be balanced. The specific matters raised in s 226
will need to be given full consideration. Taking into account the views and
circumstances of the parties involves far more than the expression of their views in
support or opposition to termination. It should involve a consideration of the reasons
for their views and the validity of their concerns.”
[37] I have taken each of these matters into account.
Termination of the Agreement and the public interest
[38] The parties have both acknowledged that negotiations toward a new agreement are
continuing. I think it unlikely that the termination of the Agreement will be a matter of such
moment that it will impact on the public at large or have economic or commercial
consequences going beyond Altus.
[39] The CFMEU has the capacity to represent employees engaged in the building and
construction industry. Altus has asserted that, to the extent that the CFMEU is expressing
views in this matter or representing employees it can only do so relative to members who
"perform work ancillary to the construction, forestry, mining and energy industries".18 In this
respect there is no evidence before me that indicates that the CFMEU is acting outside of its
coverage.
[40] Notwithstanding that there may be uncertainties about the circumstances under which
it was sought, I have accepted that the petition19 indicates that at least 21 of the 143 Altus
employees support the termination application. Consideration of the public interest involves
something distinct from the interests of the direct parties. In considering the issue of the
public interest I have had regard to the position of the remaining substantial majority of the
Altus employees. Notwithstanding invitations to do so, I have not had the benefit of hearing
from those employees. Altus has advised that the vast majority of its employees are casuals.
Accordingly, I am unsure of exactly how many of those employees are actually aware of these
proceedings. I have concluded that the termination of the Agreement has a substantial
potential to create real uncertainties about what employment obligations actually apply to
those employees. In reaching this conclusion I have had regard to the following factors.
[41] The evidence of Mr King is to the extent that, in terms of overall employee time
commitments, around one third of the Altus work in South Australia involves traffic
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management on civil construction and building projects, one third on maintenance and repair
work and approximately one third on community and sporting events and private property
closures. The CFMEU disputes this and relies on the limited observations of its Assistant
Secretary, Mr Roberts. I accept that there is some uncertainty about the exact basis of Mr
King's assessment. Nonetheless I prefer his evidence on the basis that it reflects matters more
properly within the knowledge of Altus and its management. Mr Roberts’ evidence does not
establish a basis upon which he could understand the full scope of work undertaken by Altus.
Irrespective of this, there remain significant uncertainties. These include, for example, the
exact nature of the "maintenance and repair work" and the exact purposes of the private
property closure or protection.20
[42] I have considered the issue of award coverage in this context.
[43] The coverage of the Building and Construction Award is set out in clause 4 which
states:
“4. Coverage
4.1 This industry award covers employers throughout Australia in the on-site building,
engineering and civil construction industry and their employees in the classifications
within Schedule B—Classification Definitions to the exclusion of any other modern
award.
4.2 Without limiting the generality of the exclusion, this award does not cover
employers covered by:
(a) the Manufacturing and Associated Industries and Occupations Award 2010;
(b) the Joinery and Building Trades Award 2010;
(c) the Electrical, Electronic and Communications Contracting Award 2010;
(d) the Plumbing and Fire Sprinklers Award 2010;
(e) the Black Coal Mining Industry Award 2010;
(f) the Mining Industry Award 2010; or
(g) the Quarrying Award 2010.
4.3 The award does not cover an employee excluded from award coverage by the Act.
4.4 The award does not cover employees who are covered by a modern enterprise
award, or an enterprise instrument (within the meaning of the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation
to those employees.
4.5 The award does not cover employees who are covered by a State reference public
sector modern award, or a State reference public sector transitional award (within the
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meaning of the Fair Work (Transitional Provisions and Consequential Amendments)
Act 2009 (Cth)), or employers in relation to those employees.
4.6 This award covers any employer which supplies labour on an on-hire basis in the
industry set out in clause 4.1 in respect of on-hire employees in classifications covered
by this award, and those on-hire employees, while engaged in the performance of
work for a business in that industry. This subclause operates subject to the exclusions
from coverage in this award.
4.7 This award covers employers which provide group training services for
apprentices and/or trainees engaged in the industry and/or parts of industry set out at
clause 4.1 and those apprentices and/or trainees engaged by a group training service
hosted by a company to perform work at a location where the activities described
herein are being performed. This subclause operates subject to the exclusions from
coverage in this award.
4.8 Where an employer is covered by more than one award, an employee of that
employer is covered by the award classification which is most appropriate to the work
performed by the employee and to the environment in which the employee normally
performs the work.
NOTE: Where there is no classification for a particular employee in this award it is
possible that the employer and that employee are covered by an award with
occupational coverage.
4.9 For the purpose of clause 4.1, on-site building, engineering and civil construction
industry means the industry of general building and construction, civil construction
and metal and engineering construction, in all cases undertaken on-site.
4.10 For the purposes of clause 4.1:
(a) general building and construction means:
(i) the construction, alteration, extension, restoration, repair, demolition
or dismantling of buildings, structures or works that form, or are to
form, part of land, whether or not the buildings, structures or works are
permanent and maintenance undertaken by employees of employers
covered by clause 4.1 of such buildings, structures or works;
(ii) site clearance, earth-moving, excavation, site restoration,
landscaping and the provision of car parks and other access works
associated with the activities within clause 4.10(a)(i); and
(iii) the installation in any building, structure or works of fittings and
services;
(b) civil construction means:
(i) the construction, repair, maintenance or demolition of:
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civil and/or mechanical engineering projects;
power transmission, light, television, radio, communication,
radar, navigation, observation towers or structures;
power houses, chemical plants, hydrocarbons and/or oil
treatment plants or refineries;
silos; and/or
sports and/or entertainment complexes;
(ii) road making and the manufacture or preparation, applying, laying or
fixing of bitumen emulsion, asphalt emulsion, bitumen or asphalt
preparations, hot pre-mixed asphalt, cold paved asphalt and mastic
asphalt;
(iii) the prefabrication and installation of geomembranes, geotextiles
and appurtenances;
(iv) dredging or sluicing work for or at premises provided for persons
mentioned in or in connection with work under clause 4.10(b)(i);
(v) the testing of soil, concrete and aggregate when it is carried out at a
construction site in or in connection with work under clause 4.10(b)(i);
(vi) batch plants and precast yards at a construction site in or in
connection with work under clause 4.10(b)(i);
(vii) traffic management in or in connection with work under clause
4.10(b)(i);
(viii) construction and/or establishment of landscape gardens in or in
connection with work under clause 4.10(b)(i), provided that this award
does not apply to the:
maintenance or horticultural establishment work following
practical completion of work as specified under the terms of the
construction contract or project; and/or
laying-out, construction, cultivation or keeping in order of
gardens in connection with private houses;
(ix) the industry or calling of either or both catering and cleaning for or
at premises provided for persons mentioned in clause 4.10(b)(i);
(x) car parks excepting car park buildings and car parks within the
alignment of a building; and
(xi) railways, tramways, roads, freeways, causeways, aerodromes,
drains, dams, weirs, bridges, overpasses, underpasses, channels,
waterworks, pipe tracks, tunnels, water and sewerage works, conduits,
and all concrete work and preparation incidental thereto;
(c) metal and engineering construction means:
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(i) metal trades work performed in the work of construction, fabrication,
erection and/or installation work or work incidental thereto when it is
carried out at a construction site which is specifically established for the
purpose of constructing, fabricating, erecting and/or installing the
following:
power stations, oil refineries, terminals and depots; chemical,
petro-chemical and hydrocarbon plants; and associated plant,
plant facilities and equipment;
major industrial and commercial undertakings and associated
plant, plant facilities and equipment including undertakings for
the processing and/or smelting of ferrous and non-ferrous metals,
the processing of forest products and associated by-products, acid
and fertiliser plants, cement and lime works, and other major
industrial undertakings of a like nature;
plant, plant facilities and equipment in connection with the
extraction, refining and/or treatment of minerals, chemicals and
the like;
transmission and similar towers, transmission lines and associated
plant, plant facilities and equipment;
lifts and escalators as prescribed in clause 42—Lift industry;
facilities and equipment in other engineering projects; and
(ii) maintenance and/or repair and/or servicing work carried out on-site
by the employees of contractors or subcontractors in connection with
contracts for on-site construction work referred to in clause 4.10(c)(i).
This does not include any work which is incidental to or of a minor
nature in relation to the work normally performed by an employee of an
employer not engaged substantially in metal and engineering
construction.”
[44] Whilst the CW2 classification incorporates the classification of traffic controller, this
classification does not establish award coverage in a circumstance where the work involved is
clearly not encompassed by clause 4.
[45] In Kellogg Brown & Root Pty Ltd and Others and Esso Australia Pty Ltd21 a Full
Bench of the Commission stated:
“[23] The notion of public interest refers to matters that might affect the public as a
whole such as the achievement or otherwise of the various objects of the Act,
employment levels, inflation, and the maintenance of proper industrial standards. An
example of something in the last category may be a case in which there was no
applicable award and the termination of the agreement would lead to an absence of
award coverage for the employees. While the content of the notion of public interest
cannot be precisely defined, it is distinct in nature from the interests of the parties. And
although the public interest and the interests of the parties may be simultaneously
affected, that fact does not lessen the distinction between them.”
[46] The application of the Building and Construction Award to Altus employees other
than Mr Badman and the four represented employees in the event of termination of the
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Agreement is important in this matter in as much as it relates to other South Australian Altus
employees.
[47] Clause 4.10(b)(vii) establishes that traffic control work undertaken in connection with
civil construction work is covered by the Building and Construction Award. There is no
equivalent provision ensuring that traffic control work connected with general building and
construction referenced in clause 4.10(a) giving rise to a question about whether that traffic
control work is in fact covered by the Building and Construction Award. The parties have
predictably differing views on the issue of award coverage.
[48] I am inclined to the view that the Building and Construction Award provisions reflect
a drafting oversight and that to interpret the reference in clause 4.10(b)(vii) as meaning that
traffic control work is only covered by the award when it is connected to civil construction
work would simply not make practical sense in that the requirement for that traffic control
function operates in both sectors of the industry and the classification appears to have equal
relevance. Hence, I am inclined to the position that the traffic management classification can
apply to both building and civil work but does not describe, of itself, work which must be
building and/or civil work. Nevertheless, I accept that the provisions of the Award are open to
challenge in this respect and, absent the agreement, this could potentially affect around one
third of the work done by Altus employees.
[49] A separate issue relative to the average of the Building and Construction Award arises
with respect to certain of the work described by Mr King as "maintenance and repair work"
and "private property closure/protection".22 Altus asserts that this work is not covered by the
Building and Construction Award. On the limited evidence before me, I have adopted the
position that it is likely that a substantial component of this work involves civil construction
traffic control in as much as it is covered by clause 4.10(b) of the Building and Construction
Award. I am unclear about the extent to which all of the Altus work in this respect is covered
by that Award. For instance, if Altus undertakes traffic management work associated with
electricity line vegetation clearance functions, I doubt that this would be covered by the
Building and Construction Award.
[50] Additionally, the purpose for which traffic management work is undertaken for private
clients is relevant to the issue of award coverage. In this respect I am not satisfied that the
evidence establishes that the Building and Construction Award will invariably apply to traffic
management work undertaken for private clients.
[51] The evidence of Mr King23 confirms that Altus undertakes significant traffic
management work associated with community and sporting events. The "Tour Down Under"
was cited as an example. Further, that the "vast bulk"24 of Altus employees work across a
range of activities. Traffic control work of this nature is not covered by the Building and
Construction Award. Section 47 of the FW Act states:
“47 When a modern award applies to an employer, employee, organisation or outworker
entity
When a modern award applies to an employee, employer, organisation or outworker
entity
14
(1) A modern award applies to an employee, employer, organisation or
outworker entity if:
(a) the modern award covers the employee, employer, organisation or
outworker entity; and
(b) the modern award is in operation; and
(c) no other provision of this Act provides, or has the effect, that the
modern award does not apply to the employee, employer, organisation
or outworker entity.
Note 1: Section 57 provides that a modern award does not apply to an
employee (or to an employer, or an employee organisation, in relation to the
employee) in relation to particular employment at a time when an enterprise
agreement applies to the employee in relation to that employment.
Note 2: In a modern award, coverage of an outworker entity must be expressed
to relate only to outworker terms: see subsection 143(4).
Modern awards do not apply to high income employees
(2) However, a modern award does not apply to an employee (or to an
employer, or an employee organisation, in relation to the employee) at a time
when the employee is a high income employee.
Modern awards apply to employees in relation to particular employment
(3) A reference in this Act to a modern award applying to an employee is a
reference to the award applying to the employee in relation to particular
employment.”
[52] The fact that Altus is covered by the Building and Construction Award for certain
traffic control works does not then establish that this Award will have application to traffic
control work which is outside of the coverage of that Award.
[53] Traffic management work associated with community or sporting events may
potentially be covered by other modern awards, such as the Security Industry Award 2010 or
the Miscellaneous Award 2010. For the purposes of this matter it is sufficient only that I note
that both of these awards provide for different (and reduced) employee benefits than does the
Building and Construction Award. I note that this conclusion does not pre-empt advice which
might be provided to the Commission relative to a future application for approval of an
agreement and the appropriate modern award for the purposes of the "better off overall test".
It seems to me that, where employees are, or are likely to be engaged in work which is
covered by the Building and Construction Award, then that award will need to be specified
for the purposes of that test.
[54] In terms of the application of the Building and Construction Award to Altus, I have
concluded that this award clearly applies to certain traffic control functions, that it may apply
to some work and that it does not apply to other types of work. As a consequence, reliance on
15
the Building and Construction Award to determine rates of pay and conditions for all Altus
employees is problematic in that it may well lead to disputation or reduced and variable
remuneration arrangements.
[55] This potential is a public interest consideration which particularly applies to
employees of Altus who have not been heard in this matter and mitigates against the
termination of the Agreement. It runs counter to the objectives of the enterprise bargaining
provisions of the FW Act set out in s.171.
Is termination of the Agreement appropriate?
[56] Section 226(b)(i) requires that I have regard to the views of Altus and all of its
employees in reaching a conclusion about the termination of the Agreement. I have noted that
the employees represented by the CFMEU strongly support termination of the Agreement and
this is on the basis of their assessment that the Building and Construction Award will then
have application. As I have indicated, the vast majority of the Altus employees have not
expressed a view in this matter. I have considered whether some form of ballot to clarify these
employee views in this situation is appropriate but I am concerned that this may complicate
the agreement renegotiation process.
[57] I have considered the likely effect of termination of the Agreement on all of the Altus
employees consistent with s.226(b)(ii).
[58] As I have already indicated, there is uncertainty about future award coverage in the
event of termination of the Agreement. In this context, I do not consider that termination of
the Agreement will positively contribute to the negotiation process. Equally, the retention of
the Agreement does not inhibit the CFMEU or employee bargaining representatives from
seeking particular claims, some or all of which may be derived from the building and
construction industry.
[59] There are significant differences in wages and conditions depending on which award
has application. Consequently, I consider that, as the majority of the Altus employees are
engaged on a casual basis and the evidence indicates that they work on a cross-section of
different work types, employee pay may vary, the potential for confusion will increase and the
likelihood of pay errors is substantial. In reaching this conclusion, I have noted that the
Agreement is not so different from the provisions of the Building and Construction Award, or,
for that matter the standards which would be applied in the event that the Agreement was
terminated so as to outweigh the difficulties to which I have referred.
[60] In addition, I consider that the instability in terms of employment conditions is likely
to give rise to additional confusion and difficulty associated with reaching a replacement
agreement. The parties are involved in discussions about a new agreement and I am concerned
that the introduction of significant confusion associated with award coverage will be an
impediment to this process.
[61] I am not persuaded that payroll administration difficulties and additional costs which
Altus claim will arise from termination of the Agreement represent a significant factor in this
matter.
Conclusion
16
[62] For the reasons outlined above, I have concluded that the termination of the
Agreement would be contrary to the public interest and that, given all of the circumstances of
this matter it would be inappropriate to terminate the agreement. As a consequence the
positive obligation on the Commission to terminate the agreement does not apply. Having
taken all of the circumstances of this matter into account, I have concluded that the
application should be refused.
Appearances:
M Ats counsel for Mr Badman.
S Schreier-Joffe counsel for Altus Traffic Pty Ltd.
Hearing details:
2013.
Adelaide:
May 22.
Printed by authority of the Commonwealth Government Printer
Price code C, PR538588
1 Statement of Mr King, Exhibit A3, para 9
2 Exhibit B1, para 21
3 Ibid, para 35
4 CFMEU submissions of 12 June 2013
5 Ibid
6 Exhibit B3
7 Exhibit A1, para 2.6
8 Ibid, paras 2.10 and 2.11
9 Exhibit B2
10 Exhibit B3
11 Exhibit A3, para 7
12 Exhibit A6
13 AC322709
14 [2010] FWA 6468
15 Ibid, paras [17]-[55]
16 [2010] FWA 3483
OF FAIR WORK GOHIS 1 AUSTRALIA THE SEAL SENIOR DEPUTY PRESIDENT
17
17 [2010] FWA 2434
18 Altus Closing Submissions of 13 June 2013, para 50
19 Exhibit B3
20 See the evidence of Mr King Transcript, PN181-PN187)
21 PR955357
22 Exhibit A3, para 7
23 Exhibit A3 and Transcript PN185
24 Transcript PN185
