1
Fair Work Act 2009
s.185—Enterprise agreement
Moolarben Coal Operations Pty Ltd
(AG2017/212)
COMMISSIONER SAUNDERS NEWCASTLE, 10 APRIL 2017
Application for approval of the Moolarben Coal Operations Pty Limited – Moolarben
Underground Mine Enterprise Agreement 2017. BOOT satisfied. Agreement approved.
[1] Moolarben Coal Operations Pty Ltd (the Employer) has applied to the Fair Work
Commission (Commission) for approval of an enterprise agreement known as the Moolarben
Coal Operations Pty Limited – Moolarben Underground Mine Enterprise Agreement 2017
(Enterprise Agreement). The application was made pursuant to s.185 of the Fair Work Act
2009 (Cth) (Act).
[2] The Enterprise Agreement is a single enterprise agreement and is not a greenfields
agreement. It covers employees of the Employer engaged at the Moolarben underground mine
(the Underground Mine) “who would otherwise be covered by Schedule A of the Black Coal
Mining Industry Award 2010”1 (Black Coal Award).
[3] Employees engaged in the Moolarben open cut mine are covered by the Moolarben
Coal Operations Pty Ltd – Moolarben Open Cut Mine Enterprise Agreement 2015.
Employees engaged in the Moolarben coal handling preparation plant are covered by the
Moolarben Coal Operations Pty Ltd – Moolarben Coal Handling and Preparation Plant
(CHPP) Enterprise Agreement 2015.
[4] The Enterprise Agreement was made with three employees who are covered by it (the
Employees). They each voted on 25 January 2017 to approve the Enterprise Agreement. Each
of those Employees appointed himself as an employee bargaining representative in connection
with the negotiation of the Enterprise Agreement. The Employer intends to employ other
employees to work at the Underground Mine once the Enterprise Agreement is approved.
[5] The CFMEU is not a bargaining representative in relation to the Enterprise
Agreement. For reasons given on transcript on 22 March 2017, I exercised my discretion
pursuant to s.590 of the Act to give the CFMEU an opportunity to be heard in relation to the
Employer’s application for approval of the Enterprise Agreement. The CFMEU filed detailed
written submissions opposing the application for approval of the Enterprise Agreement and
appeared at the hearing held on 3 April 2017.
1 Clause 1.2(b) of the Enterprise Agreement
[2017] FWCA 2010
DECISION
E AUSTRALIA FairWork Commission
2
[6] Each of the Employees gave evidence at the hearing on 3 April 2017, as did Mr Grant
Arnold, Human Resources and Health, Safety and Training Manager for the Employer.
Genuinely agreed?
[7] One of the necessary preconditions for approval of the Enterprise Agreement is a
requirement that I be satisfied that the Enterprise Agreement has been genuinely agreed to by
the employees covered by it.2
[8] Section 188 of the Act governs when an enterprise agreement has been genuinely
agreed to by the employees covered by it.
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by
the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied
with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to
approve an enterprise agreement until 21 days after the last notice of
employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1)
or (2) applies (those subsections deal with the making of different kinds of
enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has
not been genuinely agreed to by the employees.”
[9] Section 180(5) of the Act requires the employer to take all reasonable steps to ensure
that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant
employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular
circumstances and needs of the relevant employees.
[10] The CFMEU contends that the Commission cannot be satisfied that the Employer
complied with s.180(5) of the Act, with the result that the Enterprise Agreement was not
genuinely agreed to by the Employees and the application for approval must be refused. The
basis for the CFMEU’s contention that the Employer did not comply with its obligations
under s.180(5) of the Act is that it did not explain to the Employees that they could be
prosecuted for a breach of the Enterprise Agreement if they failed to comply with their
2 s.186(2)(a) of the Act
http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s198.html#subsection
http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s198.html#subsection
http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s198.html#subsection
http://www.austlii.edu.au/au/legis/cth/consol_act/fwa2009114/s198.html#subsection
3
obligations under it, including their obligation to comply with all of their Employer’s safety
policies and procedures.3 I do not accept this argument. In my view, taking reasonable steps to
ensure that the terms of an enterprise agreement, and the effect of those terms, are explained
to the relevant employees does not extend to explaining to those employees the potential
consequences of a failure by a person to whom the enterprise agreement applies to comply
with their obligations under the enterprise agreement. That is, there is a distinction between
explaining the terms and their effect, on the one hand, and explaining possible consequences
of failing to comply with a term, on the other hand. The former task falls within the scope of
the obligation imposed by s.180(5), but the latter does not.
[11] I am satisfied on the basis of the evidence given by Mr Arnold that the Employer took
all reasonable steps to ensure that the terms of the Enterprise Agreement, and the effect of
those terms, were explained to the Employees and the explanation was provided in an
appropriate manner taking into account the particular circumstances and needs of the
Employees. Those steps included holding six bargaining meetings with the Employees,
explaining the draft terms and conditions, together with their effect, to the Employees on 9
December 2016, and explaining the final version of the terms and conditions, together with
their effect, to the Employees on 16 January 2017.
[12] The CFMEU also contends that the Employer failed to comply with its obligation
under s.180(2) of the Act to take all reasonable steps to ensure that, during the access period,
the Employees are either given a copy of the written text of the Enterprise Agreement and any
other material incorporated by reference in the Enterprise Agreement or the Employees have
access, throughout the access period, to a copy of those materials.
[13] There is no dispute and I am satisfied on the evidence that the Employees were, during
the access period, given a copy of the written text of the Enterprise Agreement. The issue in
this case concerns material incorporated by reference in the Enterprise Agreement.
[14] Clause 4.1(f) of the Enterprise Agreement imposes an obligation on employees to
comply with “all MCO safety policies and procedures”. I accept that this clause incorporates
by reference in the Enterprise Agreement the Employer’s safety policies and procedures.4 The
Employer accepts that copies of such policies and procedures were not provided to the
Employees during the access period.
[15] I accept Mr Arnold’s evidence that the Employees had access, throughout the access
period, to a copy of the Employer’s safety policies and procedures. The Employees were
trained in those policies and procedures during their induction in the Underground Mine and
they were accessible to the Employees, throughout the access period, in the following ways:
(a) the Employees could access such documents on the Employer’s intranet at any time;
(b) the Employees could ask the control room for copies of such documents; and
(c) the Employees could ask their supervisor or any manager for copies of such
documents.
3 Clause 4.1(f)(ii) of the Enterprise Agreement
4 CFMEU v Sparta Mining Services Pty Ltd [2016] FWCFB 7057 at [8] & [16]
4
[16] I do not accept the CFMEU’s argument that the Employees did not have access, or
reasonable steps were not taken to ensure they had access, to the safety policies and
procedures because the Employees work underground most of the time and no computers are
located underground. The Employees could have accessed the Employer’s computers located
on the surface of the mine, including during work hours. The Employees commence and
finish work at the surface of the mine, where they participate in meetings and attend to other
matters. They could have accessed the work computers at those times. Each of the Employees
is literate and can use a computer. The Employees could also have contacted the control room,
their supervisor or manager during work hours and asked for copies of the safety policies and
procedures. I am further satisfied that the Employees had access at the relevant time to the
legislation referred to in the Enterprise Agreement,5 for such legislation is publicly available
on the internet and literate persons who can use computers, including the Employees, can
readily obtain copies of the legislation.
[17] I asked the three Employees who voted on the Enterprise Agreement a number of
questions at the hearing to satisfy myself that they genuinely agreed to it. The answers to my
questions revealed that each of the three Employees was employed by the Employer to work
at the Underground Mine in early to mid 2016; they were each employed by the Employer
during negotiations for the Enterprise Agreement, at the time it was voted on, and remain so
employed; the Enterprise Agreement will cover and apply to each of them if it is approved;
each of the Employees works in a classification covered by the Enterprise Agreement and will
have their rate of pay and terms and conditions governed by the Enterprise Agreement if it is
approved, with the result that they had, and continue to have, a “stake” in the Enterprise
Agreement;6 they each understand that they are the only three non-staff employees employed
by the Employer at the Underground Mine, and they were selected for employment at the time
when the Enterprise Agreement was made because they are good workers and live locally and
therefore have an interest in the success of the Underground Mine. At the time of the hearing
the Employer was using contractors and staff employees to work with the three Employees in
the Underground Mine. The Employer intends to employ other non-staff employees to work
in the Underground Mine once it has an approved enterprise agreement applying at the
Underground Mine.
[18] On the basis of the evidence adduced in support of the application for approval of the
Enterprise Agreement from Mr Arnold and the three Employees, I am satisfied that the
Enterprise Agreement was genuinely agreed to by the Employees.
Better off overall test (BOOT)
Legal principles
[19] I must be satisfied that the Enterprise Agreement passes the BOOT before I can
approve it.7 Section 193(1) of the Act provides that an enterprise agreement passes the BOOT
if the Commission is satisfied, as at the test time, that each award covered employee, and each
prospective award covered employee, for the enterprise agreement would be better off overall
if the enterprise agreement applied to the employee than if the relevant modern award applied
5 For example, the NSW Workers Compensation Act 1997 (see clause 2.3.1 of the Enterprise Agreement)
6 cf KCL Industries Pty Ltd [2016] FWCFB 3048
7 s.186(2)(d) of the Act
5
to the employee. The “test time” is when the application for approval of the enterprise
agreement is made.8
[20] In Armacell Australia Pty and Others9 the application of the BOOT was explained by
the Full Bench in the following manner:
“The BOOT, as the name implies, requires an overall assessment to be made. This
requires 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.”
[21] The BOOT is not applied as a line by line analysis. It is a global test requiring
consideration of advantages and disadvantages to award covered employees and prospective
award covered employees. An enterprise agreement may pass the test even if some award
benefits have been reduced, as long as overall those reductions are more than offset by the
benefits of the enterprise agreement.10
[22] The application of the BOOT is a matter that involves the exercise of discretion, and it
involves a degree of subjectivity or value judgement.11
Relevant facts
[23] The “test time” for the Enterprise Agreement is 27 January 2017.
[24] The Black Coal Award covers the employees covered by the Enterprise Agreement
and is the relevant modern award to be considered for the purpose of determining whether the
Enterprise Agreement passes the BOOT.
Employer BOOT submissions
[25] The Employer’s statutory declaration (Form F17) made in support of its application
for approval of the Enterprise Agreement identifies terms and conditions of the Enterprise
Agreement which it contends are (a) more and (b) less beneficial to employees than the Black
Coal Award. The Employer also made detailed written and oral BOOT submissions at the
hearing of this matter. I have had regard to those submissions and the Employer’s Form F17
in deciding this matter.
CFMEU BOOT submissions
[26] In summary, the CFMEU submits that the following provisions in the Enterprise
Agreement are less beneficial for an employee compared to the relevant provision in the
Black Coal Award:
8 s.193(6) of the Act
9 [2010] FWAFB 9985 at [41]
10 Re Australia Western Railroad Pty Ltd T/A ARG – A QR Company [2011] FWAA 8555 at [8]; NTEIU v University of New
South Wales [2011] FWAFB 5163 at [47]
11 TWU v Jarman Ace Pty Ltd [2014] FWCFB 7097 at [28]
6
(a) the CFMEU submits that the individual flexibility agreement clause in the Enterprise
Agreement (clause 1.5) is less beneficial to employees than clause 7 of the Black Coal
Award because:
(i) the Black Coal Award limits the making of an individual flexibility agreement
to 5 items, whereas there is no limitation on the terms of the Enterprise
Agreement that may be the subject of an individual flexibility agreement. The
narrower scope for making an individual flexibility agreement under the Black
Coal Award means, so it is contended, less potential for abuse;
(ii) under the Enterprise Agreement, there is no prohibition on the making of an
individual flexibility agreement prior to the commencement of employment,
whereas the Black Coal Award limits the making of an individual flexibility
agreement to an employee who has commenced employment. The CFMEU
contends that the prescription on making an individual flexibility agreement
prior to the commencement of employment under the Black Coal Award adds
a critical safeguard for employees; and
(iii) under the Enterprise Agreement, an individual flexibility agreement can be
terminated on 28 days’ notice or as otherwise agreed, whereas the Black Coal
Award requires 13 weeks’ notice unless there is a written agreement to
terminate. The CFMEU submits that under the Black Coal Award provision an
employee retains the benefits of an individual flexibility agreement for longer
than would otherwise be the case;
(b) the CFMEU submits that the hours, overtime and rosters provisions in the Enterprise
Agreement (clause 3.1) are less beneficial to employees than the relevant clauses in
the Black Coal Award (clauses 17, 21 and 22) because:
(i) under the Enterprise Agreement, the Employer has total discretion over the
setting of rosters of shifts up to 12.5 hours per day, including the start and
finish times (clause 3.1.1(d) and (e)), whereas under the Black Coal Award
shifts in excess of 10 ordinary hours can only be worked by agreement and the
starting and finishing times of shifts in excess of 10 ordinary hours must be
fixed by agreement (clause 23.1(b) and 23.2). The CFMEU contends that
where employees do not agree to shifts in excess of 10 ordinary hours, they
would be entitled to overtime for any hours worked in excess of 10 hours per
shift under the Black Coal Award, but they are not so entitled under the
provisions of the Enterprise Agreement. Further, the CFMEU submits that
employees have control over the establishment of start and finish times on
shifts with ordinary hours in excess of 10 under the Black Coal Award, but
they do not have any such control under the Enterprise Agreement;
(ii) under the Enterprise Agreement, the start and finish place for a shift is the
“allocated muster point” as determined by the Employer (clause 3.1.6(a)),
whereas the start and finish place for a shift for Underground Workers under
the Black Coal Award must be on the “surface” (clause 23.4(b)). The CFMEU
submits that the Black Coal Award requires the start and finish place for a shift
to be on the “surface”, but under the Enterprise Agreement the Employer could
determine the start and finish place to be underground, at the coalface or
7
elsewhere, with the result that the time taken for the employees to get from the
surface to the commencement and finishing place of work would not be part of
the employees’ ordinary hours of work;
(iii) an employee working a shift of between 10 and 10.5 hours in duration is
entitled to two 30 minute paid meal breaks under the Black Coal Award
(clause 24.1), whereas they are only entitled to one 30 minute paid meal break
under the Enterprise Agreement (clause 3.1.7(e));
(iv) under the Black Coal Award, where an employee works non-rostered overtime
of more than 1.5 hours past their rostered shift then the employee will, unless
agreed otherwise, before starting this overtime be allowed at least 30 minutes
for a meal without deduction of pay (clause 17.8(a)). No such benefit is
provided under the Enterprise Agreement;
(v) under the Black Coal Award, where an employee works non-rostered overtime
they are entitled to be supplied with a meal or paid a meal allowance (clause
17.8(b) and (c)). No such benefit is provided under the Enterprise Agreement;
(vi) under the Black Coal Award, an employee’s place in a roster will not be
changed, except where one week’s notice of any change is given to the
employee or where less than one week’s notice is given, the employee is paid
at overtime rates for all work from the time of change of shift until a week’s
notice would have expired (clause 23.5). No such benefit is provided under the
Enterprise Agreement;
(vii) under the Black Coal Award, where permanent day workers are required to
work shift work for at least three consecutive days, they are entitled to
overtime rates for the first shift. Where such employees are required to work
shift work for a period less than three consecutive days, they are entitled to
overtime rates for each shift (clause 22.3). No such benefit is provided under
the Enterprise Agreement;
(viii) under the Black Coal Award, where overtime is a worked on a Saturday or
Sunday, the employee must be paid a minimum of three hours at the
appropriate rate (clause 17.3). No such benefit is provided under the Enterprise
Agreement; and
(ix) under the Black Coal Award, provision is made for call backs (clause 17.7).
No such benefit is provided under the Enterprise Agreement;
(c) the CFMEU submits that the redundancy provision in the Enterprise Agreement is less
beneficial than the Black Coal Award because:
(i) under the Enterprise Agreement, employees with less than one year’s service
are not entitled to any redundancy pay (clause 3.2), whereas under the Black
Coal Award employees with less than one year’s service are entitled to a
minimum payment of two weeks ordinary pay (clause 14.4(b)); and
8
(ii) under the Enterprise Agreement, there is no minimum notice provision for an
employee who has been made redundant, whereas under the Black Coal Award
redundant employees are entitled to a minimum of four weeks’ notice of
termination (clause 13.4);
(d) the CFMEU submits that the stand down provision (clause 3.3) of the Enterprise
Agreement is less beneficial to employees than the Black Coal Award because the
Enterprise Agreement entitles the Employer to stand down an employee in certain
circumstances, whereas there is no counterpart clause in the Black Coal Award;
(e) the CFMEU submits that the Enterprise Agreement is less beneficial to employees
than the Black Coal Award because the Enterprise Agreement makes compliance by
employees with the relevant directions, policies and procedures a term liable to a
penalty for a breach (clause 4.1), whereas the Black Coal Award has no such
provision;
(f) the CFMEU submits that the Enterprise Agreement is less beneficial to employees
than the Black Coal Award because the Enterprise Agreement establishes a six-month
probationary period (clause 4.2.2), whereas the Black Coal Award has no such
provision;
(g) the CFMEU submits that the part-time employment provisions of the Enterprise
Agreement are less beneficial to employees than the Black Coal Award because:
(i) the Enterprise Agreement permits a part-time employee’s hours of work per
week to be greater than 35 as long as the average is less than 35 (clause
4.2.3(a)), whereas the Black Coal Award stipulates that a part-time employee’s
ordinary hours must be less than 35 per week (clause 10.3(a)(i));
(ii) the Black Coal Award requires the hours that are worked for a part-time
employee to be reasonably predictable (clause 10.3(a)(ii)), agreed at the time
of commencing employment and a specified list the hours worked each day,
which days of the week the hours are to be worked and the actual start and
finish times (clause 10.3(b)), and any variation to part-time hours to be by
agreement (clause 10.3(c)). In contrast, the Enterprise Agreement permits great
variation in hours of work as determined by the Employer (clause 4.2.3(a));
and
(iii) the Black Coal Award provides that all time worked in excess of the hours
mutually agreed will be overtime and paid for at overtime rates (clause 10.3
(d));
(h) the CFMEU submits that the casual employment provisions of the Enterprise
Agreement are less beneficial to employees than the Black Coal Award because the
Enterprise Agreement permits employees to be engaged as casual employees and be
paid a 25% loading for ordinary hours (clause 4.2.2), whereas there is no counterpart
provision for production and engineering employees under the Black Coal Award. The
CFMEU submits that casual employment is a form of employment with less job
security for employees than the available forms of employment under the Black Coal
Award;
9
(i) the CFMEU submits that the abandonment of employment clause in the Enterprise
Agreement (clause 4.5) is less beneficial to employees than the Black Coal Award.
The Enterprise Agreement provides for termination of employment on the basis of
abandonment of employment, in which case no period of notice is required. The
CFMEU submits that this provision is less beneficial for employees because it
provides the Employer with an enforceable right that does not exist under the Black
Coal Award and the Enterprise Agreement removes the right on the part of an
employee to a period of notice or payment in lieu;
(j) the CFMEU submits that the annual leave provisions in the Enterprise Agreement
(clause 2.5) are less beneficial to employees than the Black Coal Award. In particular,
the CFMEU points to the fact that clause 2.5.1 of the Enterprise Agreement confines
the entitlement to six weeks’ annual leave to seven day shift workers, whereas clause
25.2 of the Black Coal Award provides that an employee who works a roster requiring
ordinary hours on public holidays and not less than 272 ordinary hours on a Sunday is
entitled to six weeks’ leave as well as seven day shift workers;
(k) the CFMEU submits that the personal leave provisions in the Enterprise Agreement
(clause 2.6) are less beneficial to employees than the Black Coal Award because
clause 26.4 of the Black Coal Award provides that where an employee is absent on
personal leave for less than half a day there is no deduction made, whereas there is no
equivalent clause in the Enterprise Agreement;
(l) the CFMEU submits that the Enterprise Agreement is less beneficial to employees
than the Black Coal Award because allowances may be payable to employees under
the Black Coal Award, such as a first aid attendance allowance of $3.50 per shift and
an incidence based dirty work allowance of $1.79 per shift, whereas the hourly rates
payable to employees under the Enterprise Agreement “represents compensation for
all ordinary time worked and are inclusive of all other payments with the exception of
Bonus Payments referred to at clause 2.2.1 and Allowances at clause 2.2.2 of this
Agreement” (clause 2.1.2(b)); and
(m)because the only extra payments with respect to ordinary hours of work for a non-
trades miner under the Enterprise Agreement are the bonus (if any) and a shift
allowance (if an employee works an afternoon or night shift), in certain circumstances
employees will receive less pay under the Enterprise Agreement than they would if
they were paid under the Black Coal Award. For example if an employee worked 12
hours a day on day shift from Friday to Sunday inclusive, under the agreement they
would be paid $1,18412, whereas under the Black Coal Award they would be paid
$1,377.50.13 The CFMEU contends that this gap becomes larger if one takes into
consideration the rates of pay in the Black Coal Award for a Mineworker – Advanced
and Mineworker – Specialised. In the “translating classifications” table in the
attachment to the form F17 declaration, the Employer states that both of these
classifications will be paid at the same rate as the Mineworker under the Black Coal
Award, yet they are on higher wages under the Black Coal Award. In that regard, a
12 This is calculated on the basis of 35 ordinary hours plus one hour at double time, being 37 paid hours x $32 = $1,184
13 This is calculated on the basis of a 12 ordinary hours on Friday, 22 paid hours on Saturday (4 x 1.5 = 6 + [8 x 2] = 16 =22)
and 24 hours on Sunday (12 hours x 2), giving a total of 58 paid hours. 58 x $23.75 (Level 3 Miner) = $1,377.50
10
Mineworker – Advanced is on an hourly rate of $24.89 under the Black Coal Award.
Applying the same formula as set out previously in this subparagraph, a Mineworker –
Advanced would be paid $1,443.62 and a Mineworker – Specialised would be paid
$1,564.65 under the Black Coal Award. The CFMEU submits that the Bonus Scheme
under the Enterprise Agreement cannot be taken into account for the purpose of
determining the BOOT because payments under that scheme are at the “absolute
discretion” of the Employer.
More beneficial terms
[27] The table below shows a comparison between the rates of pay under the Enterprise
Agreement compared to those under the Black Coal Award:
Enterprise
Agreement
Hourly
Rate
Black Coal Award Hourly
Rate
Percentage
increase
under EA
Level 1 –
Mineworker in
training
$25.60 Mineworker – Induction
Level 1
$21.79 17.5%
Mineworker – Induction
Level 2
$22.21 15.3%
Mineworker – Training $22.12 15.3%
Level 2 –
Mineworker
$32.00 Mineworker $23.74 34.8%
Mineworker Advanced $24.89 28.6%
Mineworker Specialised $27.45 16.6%
[28] Employees appointed as tradespersons will receive $50 per week “Tool/Trade
Allowance” under the Enterprise Agreement (clause 2.2.2(c)). For a 35 hour week this
equates to an additional $1.43 per hour. This would increase the percentage increase under the
Enterprise Agreement compared to the Black Coal Award to 40.8% (when using the
Mineworker classification for comparison purposes).
[29] These higher rates of pay under the Enterprise Agreement compared to the Black Coal
Award flow through to all monetary entitlements based on the classification rate of pay under
the Enterprise Agreement, including annual leave, personal and long service leave, overtime,
casual loadings, and shift allowances. I have made specific reference to some of these items
individually below, but it is important to recognise and give weight in an overall BOOT
assessment to the flow on effects of higher rates of pay.14
[30] One of the major points of dispute between the Employer and the CFMEU on the
question of whether the Enterprise Agreement passes the BOOT relates to payment for work
undertaken on weekends and work in excess of ordinary hours. The CFMEU contends that in
certain circumstances employees would be paid less under the Enterprise Agreement
compared to the Black Coal Award.15 The CFMEU’s submission in this regard is focused on
clause 2.1.2(b) of the Enterprise Agreement, which provides that rates of pay in the Enterprise
Agreement “represent compensation for all ordinary time worked and are inclusive of all
14 Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery [2016] FWCA 8862 at [68]
15 See paragraphs [26(l) and (m)] above
11
other payments with the exception of Bonus Payments referred to at clause 2.2.1 and
Allowances at clause 2.2.2 of this Agreement.”
[31] The CFMEU submits that the effect of clause 2.1.2(b) is that the weekend penalty
rates in clause 3.1.3(b), the overtime rates in clauses 3.1.3(a), (c) and 3.1.4, and public holiday
penalties in clause 2.8.2 have no application. I reject this argument. Enterprise Agreements
must be read as a whole.16 The CFMEU’s construction would leave these other clauses with
no work to do. In my view, the reference in clause 2.1.2 of the Enterprise Agreement to the
rates being “compensation for all ordinary time worked ..” was objectively intended to
indicate that allowances such as a disability allowance under the Black Coal Award are not
payable under the Enterprise Agreement. I am satisfied that, on the proper construction of the
Enterprise Agreement, the weekend penalty rates in clause 3.1.3(b), the overtime rates in
clauses 3.1.3(a), (c) and 3.1.4, and public holiday penalties in clause 2.8.2 confer on
employees the right to receive payment in accordance with those clauses. Accordingly, the
comparison between Level 2 Mineworker working 12 hours of day work on each of Friday to
Sunday is as follows:
Enterprise Agreement Black Coal Award
Friday
11.66 ordinary hours x $32 per hour =
$373.12
0.33 hours overtime x 200% x $32 per hour =
$21.12
Friday
11.66 ordinary hours x $23.74 per hour =
$276.81
0.33 hours overtime x 150% x $23.74 per
hour = $11.75
Saturday
12 rostered hours x 200% x $32 = $768
Saturday
4 rostered hours x 150% x $23.74 = $142.44
8 rostered hours x 200% x $23.74 = $379.84
Sunday
12 rostered hours x 200% x $32 = $768
Sunday
12 rostered hours x 200% x $23.74 = $569.76
Total $1930.24 (71.5% increase over the
Black Coal Award)
Total $1,380.60
[32] As is apparent from the example set out in the table above, all work on a Saturday
under the Enterprise Agreement is paid at double time, whereas the first four hours of work on
a Saturday under the Black Coal Award is paid at time and a half, with double time applying
to any subsequent hours worked on a Saturday. Further, overtime rates under the Enterprise
Agreement are double time for rostered and un-rostered overtime (clauses 3.1.3(c) and 3.1.4),
which is higher than the Black Coal Award (clause 17.2(a)). The Enterprise Agreement is, in
these respects, more beneficial to employees than the Black Coal Award. Like many benefits
under an enterprise agreement or an award, these benefits are contingent in the sense that they
do not arise unless the employee works at the relevant times.
[33] The Enterprise Agreement provides for a 2% increase to rates of pay 16 months after
approval and a further 2% increase 32 months after approval. These increases in rates can be
taken into account in applying the BOOT.17 These increases were known at the “test time”;
they apply to classifications under the Enterprise Agreement. In contrast, it is not, and was not
at the “test time”, known what increase may be made to the rates of pay under the Black Coal
Award over the life of the Enterprise Agreement. Any increases arising from Annual Wage
16 AMIEU v Golden Cockerel Pty Ltd [2014] FWCFB 7447 at [19]-[22]
17 Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Ltd [2016] FWCFB 2887 at [18]
12
Reviews by the Commission’s Expert Panel would not be likely to significantly reduce the
margin of difference between pay rates under the Black Coal Award and the Enterprise
Agreement.
[34] Bonuses may be paid to employees under clause 2.2 of the Enterprise Agreement. I do
not accept the CFMEU’s contention that bonus payments under that scheme are at the
“absolute discretion” of the Employer. However, I accept that there is scope under the bonus
clause in the Enterprise Agreement for a bonus of much less than $28,000 per annum, or even
nil bonus, to be paid to employees in particular circumstances. In my view, the bonus
provisions in the Enterprise Agreement provide a contingent potential benefit to employees
which is not provided for in the Black Coal Award, and ought be given due weight in
applying the BOOT.
[35] The Enterprise Agreement provides for accident “make-up” pay (clause 2.3). This is a
contingent benefit in that it only applies if an employee is incapacitated and cannot work for
some period of time. The amount of make-up pay to be paid to employees under clause 2.3 of
the Enterprise Agreement for the first four weeks, and then the next seventy four weeks,
exceed the entitlements under the Black Coal Award (clause 18.2). In addition, any bonus
payments under clause 2.2 of the Enterprise Agreement are paid for the first 39 weeks of
accident pay. Accordingly, the make-up pay provisions of the Enterprise Agreement are more
beneficial to employees than the Black Coal Award.
[36] The Enterprise Agreement provides for employees on defence services leave to
receive “make-up” pay up to a maximum of four weeks (clause 2.13). There is no such benefit
under the Black Coal Award or any applicable legislation. The Enterprise Agreement is
therefore more beneficial to employees than the Black Coal Award in this respect.
[37] The provision of “Easter Tuesday” as a public holiday under the Enterprise Agreement
(clause 2.8.1(a)) is more beneficial to employees than the Black Coal Award (clause 27).
Less beneficial terms
[38] The casual employment provisions of the Enterprise Agreement are less beneficial to
employees than the Black Coal Award for the reasons set out in paragraph [26(h)] above.
[39] For the reasons set out in paragraph [26(b)(i)] above, the shift length and starting time
provisions of the Black Coal Award are more beneficial to employees than the Enterprise
Agreement.
[40] For the reasons set out in paragraphs [26(b)(iii), (iv) and (v)] above, the meal break
provisions of the Black Coal Award are more beneficial to employees than the Enterprise
Agreement.
[41] The Black Coal Award is more beneficial to employees than the Enterprise Agreement
in relation to the matters, and for the reasons, set out in paragraphs [26(b)(vi), (vii), (viii) and
(ix)] above.
[42] The Enterprise Agreement is less beneficial to employees than the Black Coal Award
insofar as allowances are payable to employees under the Black Coal Award in certain
circumstances, such as a first aid attendance allowance of $3.50 per shift and an incidence
13
based dirty work allowance of $1.79 per shift, whereas they are not payable to employees
under the Enterprise Agreement. The only allowances payable to employees under the
Enterprise Agreement are those set out in clause 2.2.2 of the Enterprise Agreement.
[43] The Enterprise Agreement imposes an obligation on employees to comply with a
range of the Employer’s directions, policies and procedures (clause 4.1); the Black Coal
Award has no such provision. Although the employees to whom the Enterprise Agreement
applies would be required to comply with lawful and reasonable directions of the Employer,
including lawful and reasonable policies and procedures, even if clause 4.1 were not included
in the Enterprise Agreement, the fact that such an obligation is included as a term of the
Enterprise Agreement means that employees are exposed to the possibility of being
prosecuted for a breach of clause 4.1 of the Enterprise Agreement, in respect of which a
penalty may be imposed or other relief granted against the employee’s interests.
Notwithstanding the fact that I do not consider it likely that employees to whom the
Enterprise Agreement applies will be prosecuted for a breach of clause 4.1, there remains the
possibility of such action. Given that employees are not exposed to the same risks under the
Black Coal Award, I am satisfied that the Enterprise Agreement is less beneficial to
employees than the Black Coal Award insofar as the Enterprise Agreement makes compliance
by employees with the relevant directions, policies and procedures a term liable to a penalty
for a breach (clause 4.1). I will place some weight, but not a significant amount, on this matter
when making my overall assessment of whether an employee would be better off under the
Enterprise Agreement compared to the Black Coal Award.
[44] The stand down provision (clause 3.3) of the Enterprise Agreement gives the
Employer a right to stand down employees without pay in certain circumstances. The rights
conferred on the Employer by this clause extend beyond the Employer’s statutory right to
stand down employees.18 There is no stand down clause in the Black Coal Award. It follows
that the Enterprise Agreement is less beneficial to employees than the Black Coal Award
insofar as it deals with the subject of standing down employees.
Partly more beneficial and partly less beneficial terms
[45] At the time the application for approval of the Enterprise Agreement was made, the
Black Coal Award provided for three weeks’ retrenchment/severance pay per year of service.
There is now a cap on such payments under the Black Coal Award for employees other than
those who have completed at least 15 years’ service.19 Because the “test time” for this
Enterprise Agreement is 27 January 2017, I will not take those amendments to the Black Coal
Award into account for the purpose of assessing the BOOT in this matter.
[46] The redundancy entitlement in the Enterprise Agreement of three weeks’ pay per year
of completed service reflects the entitlement under the Black Coal Award as at 27 January
2017. In that respect, the two instruments provide the same benefit in terms of “weeks’ pay”.
However, the Enterprise Agreement pays higher rates than the Black Coal Award, so the
redundancy benefits under the Enterprise Agreement are more beneficial to employees
compared to the Black Coal Award. The Black Coal Award provides for a minimum of four
weeks’ notice of termination on redundancy. There is no such minimum notice period in the
Enterprise Agreement (clause 4.3.2). Accordingly, the notice of termination on redundancy
18 Section 524 of the Act
19 Re Black Coal Mining Industry Award 2010 [2017] FWCFB 584
14
provisions are more beneficial under the Black Coal Award than under the Enterprise
Agreement for employees with less than five years’ service.
[47] The Employer has given an undertaking to pay an employee with less than two years
of completed service four weeks’ redundancy pay, in accordance with the National
Employment Standards of the Act. As a result of that undertaking, employees with less than
two years’ service receive a higher number of weeks’ redundancy pay under the Enterprise
Agreement, having regard to the undertaking, than they would under the Black Coal Award.
Once employees reach two years’ service or more, they would, as at the test time, receive the
same number of weeks’ redundancy pay under the Enterprise Agreement compared to the
Black Coal Award, but the payment under the Enterprise Agreement would be higher by
reason of the higher rates of pay under the Enterprise Agreement compared to the Black Coal
Award.
[48] The annual leave provisions in the Enterprise Agreement (clause 2.5) are less
beneficial to employees than the Black Coal Award insofar as clause 2.5.1 of the Enterprise
Agreement confines the entitlement to 6 weeks’ annual leave to seven day shift workers,
whereas clause 25.2 of the Black Coal Award provides that an employee who works a roster
requiring ordinary hours on public holidays and not less than 272 ordinary hours on a Sunday
is entitled to 6 weeks’ leave as well as seven day shift workers. Otherwise the annual leave
provisions of the Enterprise Agreement are more beneficial to employees than the Black Coal
Award because payments made to employees in respect of annual leave under the Enterprise
Agreement are at the higher rates of pay under the Enterprise Agreement compared to the
Black Coal Award.
[49] Personal/carer’s leave is another contingent benefit provided to employees under both
the Enterprise Agreement and the Black Coal Award. The personal leave provisions in the
Enterprise Agreement (clause 2.6) are less beneficial to employees than the Black Coal
Award insofar as clause 26.4 of the Black Coal Award provides that where an employee is
absent on personal leave for less than half a day there is no deduction made, whereas there is
no equivalent clause in the Enterprise Agreement. However, personal/carer’s leave is paid at
the higher rates of pay under the Enterprise Agreement compared to the Black Coal Award.
Further, the Black Coal Award provides that personal leave is paid in accordance with the
NES, namely at the base rate of pay for the ordinary hours of work.20 The Enterprise
Agreement is more beneficial to employees because it provides for payment at the “ordinary
time” rate for the “rostered shift length”, which includes payment for rostered overtime at the
“ordinary time rate” (clause 2.6.1(c)). The personal leave provisions of the Enterprise
Agreement are also more beneficial to employees compared to the Black Coal Award because
they give employees the option to salary sacrifice personal leave in certain circumstances
(clause 2.6.3); there is no equivalent provision in the Black Coal Award.
Neutral terms
[50] In my view, the individual flexibility term in the Enterprise Agreement is neither more
nor less beneficial to employees compared to the Black Coal Award. As to the submissions
made by the CFMEU in paragraph [26(a)] above:
20 Section 99 of the Act
15
(a) the fact that there is no limitation on the terms of the Enterprise Agreement that may
be the subject of an individual flexibility agreement, whereas the Black Coal Award
limits the making of an individual flexibility agreement to 5 items, does not, in my
view, make the Enterprise Agreement provision less beneficial to employees. It may
be beneficial for an employee to have an individual flexibility agreement with a wide
scope. I am satisfied that the safeguards built into subparagraph (c) of clause 1.5 of the
Enterprise Agreement protect employees against the risk of abuse of individual
flexibility agreements with a broad scope;
(b) unlike the Black Coal Award, there is no express prohibition in the Enterprise
Agreement on the making of an individual flexibility agreement prior to the
commencement of employment. However, on the proper construction of the Enterprise
Agreement, particularly the references to “employee” in clause 1.5 and clause 1.2, I
am of the view that a person must be an employee of the Employer to make an
individual flexibility agreement pursuant to clause 1.5 of the Enterprise Agreement.
Even if that were not the case, I would be satisfied that the safeguards built into
subparagraph (c) of clause 1.5 of the Enterprise Agreement protect prospective
employees against the risk of being pressured into making an individual flexibility
agreement; and
(c) under the Enterprise Agreement, an individual flexibility agreement can be terminated
on not more than 28 days’ notice or as otherwise agreed, whereas the Black Coal
Award requires 13 weeks’ notice unless there is a written agreement to terminate. A
clause in an enterprise agreement requiring a party to an individual flexibility
agreement to give more than 28 days’ notice of termination would be of no effect.21 In
any event, given that the notice period applies to termination by both employers and
employees, I do not consider that a period of not more than 28 days’ notice is less
beneficial to employees than 13 weeks’ notice.
[51] In light of the undertaking given by the Employer in relation to the muster point being
on the surface of the Underground Mine, clause 3.1.6(a) of the Enterprise Agreement is not
more or less beneficial to employees than clause 23.4(b) of the Award.
[52] In light of the undertakings given by the Employer in relation to part-time employees,
particularly those aspects of the undertakings which require agreement on the part of the part-
time employee, I am of the view that the part-time employment provisions of the Enterprise
Agreement are not more or less beneficial to employees than the part-time employment
provisions of the Black Coal Award.
[53] The Enterprise Agreement establishes a six-month probationary period (clause 4.2.2).
The notice period during the probationary period is consistent with the NES.22 The six month
duration of the probationary period is also consistent with the minimum employment period
in the unfair dismissal provisions of the Act.23 Although the Black Coal Award does not
include a probation clause, the probation clause in the Enterprise Agreement does not impose
any obligation on, or any detriment to, an employee over and above the Act. I therefore
consider the probation clause to be neutral for the purposes of the BOOT.
21 Section 202(4) of the Act
22 Section 117 of the Act
23 Section 383 of the Act
16
[54] As to the abandonment of employment clause in the Enterprise Agreement (clause
4.5), subclause 4.5(b) is of no effect as a result of the undertaking given by the Employer.
Subclause 4.5(a) provides that an absence for a continuous period exceeding three consecutive
working days without the consent of the Employer and without notification to the Employer is
prima facie evidence that the employee has abandoned their employment. Whether the
Employer acts on such prima facie evidence is a different question. The subclause does not
deem any such absence to be an abandonment of employment, nor does it, without more,
terminate the employment of the employee. The subclause imposes an obligation on the
Employer to make reasonable attempts to contact the employee before terminating their
employment. Having regard to these features of clause 4.5(a) of the Enterprise Agreement, I
do not consider it to be less or more beneficial to employees than the Black Coal Award,
which does not contain any abandonment of employment provisions.
[55] In my view, the step-up allowance in the Enterprise Agreement (clause 2.2.2(b)) is, on
balance, neutral. Depending on a range of circumstances, it may be more or less beneficial to
employees than the mixed function provision in the Black Coal Award (clause 16.2).
[56] I consider the clauses of the Enterprise Agreement and/or the Black Coal Award that I
have not specifically addressed in this decision to be either neutral or of little weight in my
assessment of the BOOT.
Conclusion on BOOT
[57] I have had regard and given due weight to the terms of the Enterprise Agreement
which are more beneficial for an employee and the terms which are less beneficial for an
employee compared to the Black Coal Award, as identified and summarised in paragraphs
[27] to [56] above. Having regard to those matters, my overall assessment is that, as at the test
time, each award covered employee, and each prospective award covered employee, for the
Enterprise Agreement would be better off overall if the Enterprise Agreement applied to the
employee than if the Black Coal Award applied to the employee.
Non-compliance with National Employment Standards (NES)
[58] The CFMEU submits that the Enterprise Agreement is inconsistent with the National
Employment Standards in the following respects:
(a) First, clause 2.5.2(a) of the Enterprise Agreement entitles an employee to annual leave
upon four weeks’ notice and subject to the Employer refusing to grant annual leave
where, in its opinion, the operations of the mine will be affected. The CFMEU
contends that this clause is inconsistent with s.88(2) of the Act, which provides that
“the employer must not unreasonably refuse to agree to a request by the employee to
take paid annual leave.” There is, so the CFMEU contends, a gap between the
Employer’s opinion as to operational requirements and what may, for the purpose of
the National Employment Standards, be “reasonable”. It is submitted that, in its
current form, the Enterprise Agreement applies an effective right of veto over a
reasonable request from an employee to take annual leave, and provides no avenue for
effective redress; and
17
(b) Secondly, clause 4.5 of the Enterprise Agreement is an abandonment of employment
provision. It defines the term and allows the Employer to terminate the employment of
an employee as from the last day of work or the last day upon which the authorised
leave was given. In Bienias v Iplex Pipelines Australia Pty Limited,24 the Full Bench
of the Commission held that an abandonment of employment clause in a modern
award which, inter alia, provided that termination operated from the last day of work
or approved absence was inconsistent with the National Employment Standards. The
Full Bench said:
“The effect of the clause operating this way would be to deprive an employee
of both written notice of the day of termination in s 117(2) and, except in the
case of serious misconduct, the receipt of notice or compensation in lieu is
required in ss 117(2) and (3).”
[59] These matters have been addressed by the undertakings given by the Employer.25
Undertakings
[60] The Employer (MCO) has provided the following written undertakings (the
Undertakings) pursuant to s.190 of the Act in relation to the Enterprise Agreement:
(a) in respect of clause 1.5(c), MCO will give the individual employee a copy of the
flexibility agreement within 14 days after it is agreed;
(b) in respect of clause 2.2.2(a), the terms “afternoon shift” and “night shift” are taken
to have the meaning of those terms in clause 22 of the Black Coal Award as
amended from time to time;
(c) in respect of clause 2.5.2(a), the clause be taken to be amended to delete the last
sentence that reads: “The leave will be granted unless in MCO’s opinion the
operations at the Mine will be affected”, and a new sentence taken to be inserted in
its place to read as follows: “MCO must not unreasonably refuse to agree to a
request by the employee to take paid annual leave”, conformably with section
88(2) of the Act;
(d) in respect of clause 2.8.2(c), the last sentence that reads “if an employee fails to
provide such verification they are not entitled to payment for the public holiday”,
is of no effect and will not be relied upon by MCO;
(e) in respect of clause 3.1.6(a), the “allocated muster area” was located on the surface
of the Mine at the time of the vote for the Enterprise Agreement, and will remain
on the surface of the Mine while the Enterprise Agreement remains in operation;
(f) in respect of clause 3.2(a), the entitlement to redundancy pay for an employee with
less than two years of completed service is four weeks’ pay, in accordance with the
National Employment Standards of the Act;
24 [2017] FWCFB 38 at [58]; see also Waternish Engineering Pty Ltd [2017] FWC 153 at [9]
25 See paragraph [46] below
18
(g) in respect of clause 4.2.3:
(i) at the time of engagement, MCA and the part-time employee will agree on
the regular hours to be worked part-time;
(ii) the regular hours to be worked may be varied by agreement between MCO
and the part-time employee, from time to time; and
(iii) all time worked in excess of the mutually agreed hours by the part-time
employee will be overtime and paid at the rates under clauses 3.1.3(c) and
3.1.4 of the Enterprise Agreement; and
(h) in respect of clause 4.5(b), the text of the clause be taken to be deleted, and new
text taken to be inserted in its place to read as follows: “An employee whose
employment is terminated for abandonment of employment will be given written
notice of the day of the termination, and will be entitled to payment in lieu of
notice in accordance with clauses 4.3.2 and 4.3.3”, conformably with sections
117(1) and (2) of the Act.
[61] A signed copy of the Undertakings is attached in Annexure A to this decision.
[62] In accordance with s.190(3) of the Act, I may only accept the Undertakings if I am
satisfied that the effect of accepting the Undertakings is not likely to:
(a) cause financial detriment to any employee covered by the Enterprise Agreement; or
(b) result in substantial changes to the Enterprise Agreement.
[63] It is necessary to consider the number and breadth of the Undertakings in determining
whether they would result in substantial changes to the Enterprise Agreement.26
[64] There is no dispute in this case, and I am satisfied that, accepting the Undertakings
would not be likely to cause financial detriment to any employee covered by the Enterprise
Agreement. The dispute is whether the effect of accepting the Undertakings is likely to result
in substantial changes to the Enterprise Agreement.
[65] In my view, the undertakings in respect of clauses 1.5(c), 2.2.2(a), 3.1.6(a) and 4.2.3
clarify the intended operation of those clauses as agreed to by the Employer and the
Employees. They do not result in a significant change to the operations of those clauses, or
the Enterprise Agreement.
[66] The undertakings in respect of clauses 2.5.2(a), 2.8.2(c), 3.2(a) and 4.5(b) concern
potential inconsistency between those clauses and the NES. To the extent of any such
inconsistency, those clauses would not have been enforceable.27 For that reason, those
undertakings do not result in a significant change to the operation of those clauses, or the
Enterprise Agreement.
26 ALDI Foods Pty Ltd v TWU [2012] FWCFB 9298 at [54]
27 Section 56 of the FW Act
19
[67] The Undertakings provided by the Employer are not substantial either in number or
scope. In my view, they do not result in a “wholesale reshaping” of the Enterprise
Agreement.28
[68] For the reasons set out in the previous four paragraphs, I am satisfied that the effect of
accepting the Undertakings, whether considered individually or collectively, would not be
likely to cause financial detriment to any employee covered by the Enterprise Agreement or
result in substantial changes to the Enterprise Agreement.
[69] The views of each person who the Commission knows is a bargaining representative
for the Enterprise Agreement have been sought in relation to the Undertakings.
[70] Pursuant to subsection 190(3) of the Act, I accept the Undertakings.
Conclusion
[71] Subject to the Undertakings, I am satisfied that each of the requirements of ss.186,
187, 188 and 190 as are relevant to this application for approval have been met.
[72] The Enterprise Agreement is approved and, in accordance with s.54 of the Act, will
operate from 17 April 2017. The nominal expiry date of the Enterprise Agreement is 16
January 2021.
COMMISSIONER
Appearances:
Sebbens, T for the Applicant
Thomas, A on behalf of the Construction Forestry Mining and Energy Union
Hearing details:
2017.
Newcastle:
April 3.
Printed by authority of the Commonwealth Government Printer
Price code C
28 AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833
THE FAIR WORK AIR NORK C OMMISSION KLIA SEX THE SEAL OF THE
