[2018] FWC 1947
The attached document replaces the document previously issued with the above code on 4
April 2018.
Removes a typographical error at [93].
Associate to Commissioner McKinnon
Dated 23 April 2018
1
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
John Holland Pty Ltd T/A Territoria Civil
(AG2017/5497)
COMMISSIONER MCKINNON MELBOURNE, 4 APRIL 2018
Application for approval of the Territoria Collective Agreement 2017.
Introduction
[1] Application has been made for approval of a single enterprise agreement known as the
Territoria Collective Agreement 2017 (the Agreement). The application was made pursuant to
s.185 of the Fair Work Act 2009 (the Act). The Agreement was made by John Holland Pty
Ltd (John Holland) and its employees.
[2] On 16 November 2017, Lucio Matarazzo Pty Ltd (Matarazzo), bargaining
representative, lodged a Form F18A in the matter and sought to be heard.
[3] On 21 November 2017 the Construction, Forestry, Mining and Energy Union, Mining
and Energy Division (CFMEU) emailed the Commission requesting copies of the Form F16
and Form F17 filed in support of the application. These documents were provided to the
CFMEU on 4 December 2017, together with a request for it to advise whether it was a
bargaining representative for the Agreement. No further correspondence was received from
the CFMEU.
[4] On 27 March 2018, John Holland filed proposed undertakings to address concerns
identified by the Commission in relation to the Agreement.
[5] A conference was held in the matter on 29 March 2018. No bargaining representative
participating in the conference objected to the undertakings proposed by John Holland.
[6] This decision deals with the Commission’s preliminary findings in relation to the
Agreement.
National Employment Standards
Overtime
[7] There is a concern about whether clause 6.3 of the Agreement might require
employees to work additional hours with no right of refusal in a way that excludes the NES
(section 62).
[2018] FWC 1947
DECISION
E AUSTRALIA FairWork Commission
[2018] FWC 1947
2
[8] John Holland has given an undertaking in relation to the concern.
[9] Matarazzo submits that the absence of any clear mechanism for calculating overtime
worked on any day, week, month, quarter or 6 or 12 month period means the Agreement is
less beneficial than the NES, including because of terms dealing with:
the averaging of hours over 52 weeks under clause 29.1 of the Agreement;
the absence of any minimum or maximum hours of work per day except for casual
employees;
clause 31 of the Agreement, which deals with rostered days off, but does not apply to
work patterns other than the system of 8 hour days and does not set daily minimum
or maximum hours of work;
the absence of more than 0.4 hours accrued toward an RDO for longer working days;
the absence of any guarantee of accrued hours toward an RDO on shorter working
days;
the absence of any requirement to roster RDOs or pay them out other than yearly or
on termination of employment, and the limit on payment on termination where the
accrual was 10 days or less.
[10] In my view, these are not concerns in relation to the NES. While the NES deals with
averaging of hours, it does not specify a maximum or minimum averaging period for
employees covered by a modern award and nor does it provide for minimum or maximum
hours of work per day or rostered days off. The issues are more properly characterised as
concerns in relation to the better off overall test (BOOT) and I have treated them accordingly.
Request for flexible working arrangements
[11] Matarazzo submits that the Agreement is less beneficial than the NES because it does
not give employees a right to request flexible working arrangements.
[12] The NES has effect according to its terms. It is not a requirement that enterprise
agreements replicate each and every term of the NES, or even any of its parts. No concern
arises in relation to the interaction between the Agreement and the NES in this respect.
Public Holidays
[13] Matarazzo submits that clause 43.3 of the Agreement is less beneficial than the NES
because it excludes casual employees from the benefit of sections 114, 115 and 116 of the
Act in relation to public holidays.
[14] While clause 43.3 of the Agreement excludes casual employees from the entitlement
to be paid for public holidays, this must be read in the context of the Agreement as a whole.
Under clause 9 of the Agreement, casual employees are engaged on an hourly basis. By
definition, they will not have ordinary hours of work on public holidays and will have no
entitled to payment for them under the NES, unless they are rostered to work on public
holidays. In that event, clauses 43.1 and 43.4 of the Agreement provide for payment for hours
worked. I am not satisfied that clause 43.3 of the Agreement excludes the NES.
[2018] FWC 1947
3
[15] Matarazzo also submits that clause 43.3.2 of the Agreement is less beneficial than
the NES because it can exclude a full-time or a part-time employee from the benefits of the
NES in relation to public holidays where the employer asks the employee if they would like
to take the public holiday off and the employee agrees.
[16] The submission does not make sense, and not only because there is no clause 43.3.2 in
the Agreement. Considering clause 43 of the Agreement as a whole, it does not do what
Matarazzo submits. In any event, the scenario put forward would not be inconsistent with the
NES.
Fair Work Information Statement
[17] Matarazzo submits that the Agreement is less beneficial than the NES because it does
not require the employer to give each employee the Fair Work Information Statement.
[18] As noted above, enterprise agreements do not need to replicate the NES, in whole or in part.
There is no requirement for enterprise agreements to deal with the Fair Work Information
Statement. No concern arises on this basis.
Abandonment of employment
[19] Clause 44 of the Agreement may be less beneficial than the NES (section 117) to the
extent that it excludes an entitlement to notice of termination in circumstances where an
employee is deemed to have abandoned their employment after absence of more than 3 days,
having regard to the decision of a Full Bench of the Commission in Bienias v Iplex Pipelines
Australia Pty Limited [2017] FWCFB 38.
[20] The concern has not previously been identified in relation to the Agreement and it is
appropriate that John Holland be given an opportunity to respond to the concern and give any
undertaking it wishes to make.
Better Off Overall Test
[21] It is not contested that for the purposes of the better off overall test (BOOT), the
relevant modern award in relation to the Agreement is the Building and Construction General
On-Site Award 20101 (the Award).
Rates of pay and allowances
[22] Rates of pay in the Agreement are generally significantly higher than the Award rates
of pay by a range of approximately 28% to 66% and there are additional guaranteed wage
increases over the life of the Agreement. Apprentice rates of pay are also generally above
Award rates of pay by a lower margin of 7.56% to 37.9%. However, rates of pay for first and
second year adult apprentices appear to be below the Award, as do the rates of pay for third
year adult apprentices if required to work night shift.
1 MA000020
[2018] FWC 1947
4
[23] Matarazzo submits that the Agreement may not pass the BOOT having regard to
clause 14.1 of the Agreement, which provides for the absorption of Award entitlements or
allowances into over-Agreement payments. Matarazzo says the clause would not have the
effect of including or buying out all allowances in the Award because the Agreement does not
incorporate the Award. However, the effect of section 57 of the Act is that enterprise
agreements displace otherwise applicable modern awards. Agreement parties are free to agree
about whether to incorporate award terms into their enterprise agreement, either in whole or
in part. As long as employees are better off overall, an enterprise agreement can displace
some or all award allowances that might otherwise apply. I am not persuaded that the concern
identified by Matarazzo is valid.
[24] The rates of pay in the Agreement are intended to compensate for a range of
allowances in the Award, including reimbursement of apprentice training costs, provision of
clothing, tool allowance, in charge of plant, industry and special allowance, asbestos related
allowances, confined space and dirty work allowance, living away from home on distant work
allowances and fares and travel patterns and transport allowances. The Agreement separately
provides for camp accommodation and meals, commute travel to remote sites, first aid
allowance, leading hand allowance, multi-skilled allowance, service recognition payment, site
allowance, shoal bay waste management and field service allowances, on call allowance, meal
allowance, provision of clothing and personal protective equipment and access to the John
Holland income protection scheme.
[25] On balance, I am satisfied that except in relation to adult apprentices, the rates of pay
together with the various allowances provided under the Agreement are adequate to
compensate for Award allowances that might otherwise apply.
[26] The concern in relation to rates of pay for adult apprentices has not previously been
identified in relation to the Agreement and it is appropriate that John Holland be given an
opportunity to respond to the concern and give any undertakings it wishes to make.
Classifications
[27] A concern has been identified in relation to how the BOOT could be assessed in
circumstances where the Agreement permits inclusion of future unspecified classifications at
the employer’s discretion.2
[28] John Holland has given an undertaking that classifications in the Agreement will be
limited to the classifications in the Award. The undertaking resolves the concern about how
the BOOT can be assessed because the classifications in the Agreement are now known with
certainty.
[29] It is not contested that the Agreement contains all of the Award classification levels,
although there is a difference of view about the descriptions within each classification for the
purposes of the Agreement.
[30] While the Agreement classifications are described in a less precise way than in the
Award, they are sufficiently broad to capture the range of roles within relevant comparable
2 Agreement, clause 12.3; see also Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18
[2018] FWC 1947
5
Award classifications. If there is a dispute in the future about the particular level in the
classification structure that applies to a particular job or person, the dispute resolution
procedure at clause 48 can be used to resolve the dispute, including by application to the
Commission.
Classification Matching
[31] Matarazzo submits that John Holland’s answer at Question 3.3 of the Form F17 filed
with the application is inadequate in that it does not:
quote the Award hourly rate calculation for Civil construction employees (the
Agreement covers civil construction employees (Agreement clause 1.2 and definition
of "Civil Works");
limit Level 4 ·excavator and forklift use, for example, to match corresponding
Award classification definitions; or
provide definitions or descriptors relative to work beyond base trades, and
machinery, plant and vehicle operation and supervision.
[32] As noted above, while the Agreement classifications are described in a less precise
way than in the Award, in my view they are sufficiently broad to capture the range of roles
within relevant comparable Award classifications. The BOOT has been assessed based on the
classification matching provided and I am satisfied that the respective classifications in the
Agreement and the Award are fairly comparable in each case.
Hours of work
[33] Clause 29.1 of the Agreement provides for averaging of ordinary hours over a 52 week
period. A concern was identified about whether, given the long averaging period compared to
the Award, the Agreement passes the BOOT.
[34] John Holland has given an undertaking to address the concern by limiting the
averaging period to 4 weeks, consistent with the Award.
[35] Matarazzo submits that the hours of work in the Agreement are generally less
beneficial to employees than the hours of work in clause 33 of the Award. It also submits that,
except for casual employees, the Agreement does not provide for minimum or maximum
daily hours of work.
[36] The Award provides a minimum engagement of four hours for casual employees, as
does the Agreement. The Award sets a limit on the number of ordinary hours that can be
worked per week or average weekly cycle, but does not set minimum or maximum daily
hours of work for permanent employees. The Award also provides for daily hire on the basis
of a minimum 8 hour day.
[37] While the Agreement does not expressly provide for daily hire employment, casual
employees are entitled to a minimum 8 hours’ notice of termination under the Agreement.
This is analogous to the entitlement for daily hire employees under the Award.
[38] There are differences between the Agreement and the Award in relation to hours of
work. The span of ordinary hours under the Agreement commences at 5.00am rather than
6.00am which is the earliest ordinary hours can commence (except for night shift workers)
[2018] FWC 1947
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under the Award. There are fewer restrictions on shift work under the Agreement compared to
the Award. The RDO system is the default system of working in the Agreement, but after
consultation with employees, John Holland can implement arrangements for working more
than 8 ordinary hours per day. As noted above, John Holland has given an undertaking to
align the averaging of ordinary hours in the Agreement with the Award, with the result that a
maximum 152 ordinary hours can be worked over a four week period.
[39] The effect of the changes is that the hours of work for employees are more flexible
than under the Award. This may at times operate in a way that is less beneficial to employees,
although as the Agreement rates of pay are significantly higher than the rates of pay under the
Award, they appear to compensate for the additional flexibility of hours.
Overtime
[40] As noted above, Matarazzo submits that the Agreement does not provide a clear
mechanism for calculating overtime worked per day, week, month, quarter, 6 months or
year, and does not provide for breaks during overtime on weekdays, while the Award
provides for overtime on:
weekdays (time and a half for the first two hours and double time thereafter);
call-backs (minimum of 3 hours unless customary);
missed meal breaks (double time until the break is taken);
late finish (reimbursement of cost of, or transport to, employee's home or nearest
public transport, if reasonable means of transport not available);
breaks before and during overtime (paid 20 minute break prior, plus a paid 30 minute
break per 4 hours overtime worked; on weekends, different breaks apply).
[41] Matarazzo also submits that under the Award, employees under 18 years and trainees
cannot be required to work overtime except, in the case of trainees, where it does not prevent
their attendance at class or in an emergency.
[42] John Holland submits that overtime is calculated on significantly higher rates of pay
than would apply under the Award and that junior employees and trainees are paid as adults
under the Agreement, which is more beneficial than their entitlement under the Award.
[43] The Agreement provides for overtime at time and one half for the first two hours and
double time thereafter, with double time on Sundays (clause 30). A minimum payment of four
hours applies per call out (clause 24). Meal and rest breaks are provided, including on
weekends (clause 34). A site allowance of $1.50 per hour is paid in recognition of the various
disabilities associated with working more than 60 kilometres from Darwin.
[44] As can be seen, there are differences between the Award and the Agreement in
relation to overtime and breaks. Some terms of the Agreement are more beneficial in this
respect (for example, longer minimum call out) and some are less beneficial (for example, no
provision for late finishes). The overtime penalties are equivalent (time and one half for the
first two hours and double time thereafter).
[45] On balance I am not persuaded that employees will be worse off under the Agreement
than the Award having regard to the overtime and meal break provisions of the Agreement.
[2018] FWC 1947
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Rostered Days Off
[46] Clause 31.6 of the Agreement deals with the accrual of rostered days off (RDOs).
[47] Matarazzo submits that clause 31 of the Agreement is less beneficial because:
rostered days off do not apply to work patterns other than the system of 8 hour days
and does not set daily minimum or maximum hours of work;
no more than 0.4 hours accrues toward an RDO on longer working days;
there is no guarantee of accrued hours toward an RDO on shorter working days;
there is no requirement to roster RDOs or pay them out other than yearly or on
termination of employment;
there is a limit on payment on termination for accruals of 10 days or less.
[48] These concerns are premised on a misunderstanding of the RDO provisions of the
Award. RDOs rely on a system of 8 hour days for their accrual, which includes 7.6 hours
work and 0.4 hours accrual toward a day off every 19 days. The working of longer days does
not affect the accrual of RDOs. Instead, an employee may become entitled to payment of
overtime for working additional hours.
[49] The Agreement provides for the taking of scheduled RDOs at clauses 31.4 and 31.5
and for pay out of all accrued RDOs on request of the employee. While clause 31 is less rigid
than the Award in relation to RDOs, I am not satisfied that it is less beneficial for employees
when compared with the Award.
[50] However, to the extent that clause 31.4 permits employees to agree not to have their
accrued but untaken RDOs paid out on termination of employment, a concern arises. John
Holland has given an undertaking to address the concern.
Shift Work
[51] Matarazzo submits that the shift work terms of the Agreement are less beneficial than
the shift work terms of clauses 34 and 35.2 of the Award. Matarazzo provides no elaboration
for its concern or any monetary analysis of the Agreement compared to the Award in relation
to shift work. It simply asserts that the Agreement is less beneficial because:
In relation to building work:
it has lower or no shift penalties for morning, early afternoon, afternoon and night
shift;
there is no payment of shift loading for time worked where a job finishes after shift
work for more than 5 consecutive days or where an employee is dismissed during
the week;
it does not provide for broken shifts to be paid at time and a half for the first two
hours and double time thereafter; and
there is no requirement for at least 48 hours' notice of the requirement to work shift
work.
[2018] FWC 1947
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In relation to civil work:
it has lower or no shift penalties for certain morning, early afternoon, afternoon,
night and weekend shifts;
it does not provide for shifts that fall mostly on a Sunday or a holiday to be regarded
as time worked on the Sunday or holiday; and
it has less beneficial terms dealing with permanent night shift.
[52] Under the Agreement, a shift worker is defined as “an Employee engaged on Night
Shift (that is, starting at or after 5pm and before 5am) for five or more continuous shifts”
(clause 2). This explains why the Agreement does not provide for shift loadings for morning
or afternoon shifts. The night shift penalty is 125% under the Agreement compared to 115%
(Civil construction) and 150% (building construction) under the Award. However, the base
rate for calculating shift loadings is significantly higher under the Agreement than the Award.
[53] Analysis undertaken by the Commission for a level 5 classification indicates that the
minimum rate of pay for 38 hours of night shift under the Agreement is $1687.97 gross
(factoring for night shift penalty, leave and leave loading accruals but no other allowances),
compared to an Award minimum rate of pay of $1545.02 gross (factoring for a 150% night
shift penalty, special and industry allowance, fares and travel, tool allowance, annual leave
and leave loading). That is, the rates of pay in the Agreement are high enough to compensate
for shift work entitlements that would otherwise apply under the Award.
[54] The Agreement does not deal with broken shifts and there is no material before me to
indicate that they are relevant to the Agreement. I also note that an employee called back to
work after working ordinary hours is entitled to the call back provisions of the Agreement,
which would leave them better off overall than if they were paid for working a broken shift
under the Award. I am not satisfied that the absence of broken shift terms in the Agreement is
either relevant or that it leaves employees worse off compared to the Agreement.
[55] As to the requirement for notice to work shift work, as a practical matter it can be
inferred that if John Holland wishes its employees to attend for shift work, it will advise them
of that fact in advance. However, there is no formal term in the Award requiring 48 hours’
notice to be given. Clause 32.1 of the Agreement provides for 24 hours’ notice for changes to
shift rosters, a matter to which I will return. On balance, I am not satisfied that the absence of
a formal 48 hour notice period for shift work leaves employees worse off overall.
Weekend and Easter Saturday Penalties
[56] Clause 29.1 of the Agreement provides for ordinary hours of work to be worked on
Monday to Friday. All time worked in excess of ordinary hours (including on weekends) is
overtime and paid at time and one half for the first two hours and double time thereafter. All
overtime on Sunday is paid at double time (clause 30). Payment for work on public holidays,
including Easter Saturday, is at double time and a half (clause 43.4).
[57] Despite these provisions, Matarazzo submits that the Agreement does not provide for
weekend penalties; minimum engagements on Saturday and Sunday as per clause 37 of the
Award; weekend penalties of time and a half for the first two hours and double time thereafter
[2018] FWC 1947
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(Saturday); double time for overtime after midday Saturday; double time (Sunday) and double
time and a half on Easter Saturday.
[58] Having regard to the provisions of the Agreement, I am not satisfied that Matarazzo
has established a concern in relation to weekend or Easter Saturday penalties and nor am I
satisfied that the Agreement is less beneficial in relation to weekend and public holiday
penalties than the Award. While there is no minimum engagement for work on weekends, the
rates of pay for working on weekends are significantly higher than the Award.
Annual Leave
[59] Matarazzo submits that the annual leave rate of pay in the Agreement is less than the
rate of pay provided in the Award because the rate of pay in the Agreement is the ‘base rate of
pay’ as defined in the NES.
[60] A concern might arise on this basis where the monetary value of the leave entitlement
in the Agreement was, as a result, less than the Award entitlement. However, analysis of the
entitlement to annual leave under the Agreement and the Award has been undertaken by the
Commission using the rate of pay for a night shift worker on the Level 5 classification in the
Agreement, which has the lowest over-Award margin. The analysis shows that over the
minimum period of employment required to accrue one week’s annual leave (13 weeks), the
employee will receive at least an average of $1619.64 gross per week under the Agreement
compared to $1491.51 gross per week under the Award.
[61] I am satisfied that in monetary terms, the annual leave entitlement under the
Agreement is greater than the comparable entitlement under the Award.
Restrictive Work Practices
[62] Clause 52 of the Agreement provides that employees may not pursue or make claims
in relation to matters including flexibility of roster arrangements and other limitations on the
Company’s operational requirements. A concern was expressed that this may be inconsistent
with the flexibility term in clause 7 of the Agreement as well as the NES dealing with
requests for flexible working arrangements. John Holland has given an undertaking to address
the concern.
Casual employment
[63] Matarazzo submits that because clause 14.4 of the Award is not reflected in the
Agreement in its entirety, casual employees may be in a less beneficial position under the
Agreement compared to the Award as there is:
no casual conversion rights after 6 months employment;
no requirement to inform employees of actual or likely hours of work;
the ability to engage casual employees by the hour and give 8 hours’ notice of
termination or payment or forfeiture in lieu.
[64] John Holland submits that casual conversion terms cannot be included in the
Agreement because they are inconsistent with the Code for the Tendering and Performance of
Building Work 2016 (Building Code). It submits that over-Award entitlements in the
[2018] FWC 1947
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Agreement are sufficient to compensate for the absence of casual conversion rights and other
casual employment terms and conditions in the Award.
[65] While there are important commercial and legal reasons why enterprise agreements
might need to comply with the Building Code, compliance with the Building Code is not of
itself a relevant consideration in relation to the approval of Agreements. The question is
whether the Agreement is capable of approval under the Act, including whether it passes the
BOOT.
[66] The analysis provided by John Holland shows that a casual level 5 employee working
56 hours over a 4 week period (the maximum proposed averaging period in the Agreement)
will earn $11,549.21 gross under the Agreement compared to $8452.92 gross under the
Award – an over-Award average of $774 gross per week. This differential will be higher for
classifications in the Agreement.
[67] While there is no express right to casual conversion in the Agreement, there is also
nothing to prevent casual employees from being employed on a permanent basis at any time
by agreement of the parties.
[68] There is no express provision in the Agreement requiring employees to be informed of
their actual or likely number of hours of work, although in a practical sense employees will
necessarily be informed of their actual hours of work for each engagement as a casual
employee. I am not satisfied that the absence of such a requirement in the Agreement is a
reason for the Agreement not to pass the BOOT.
[69] Casual employees under the Award are employees who are engaged and paid as such,
and daily hire employees are engaged by the day. Under the Agreement, casual employees are
engaged by the hour and are entitled to a minimum of 8 hours’ notice of termination, whether
engaged by the hour or the day. Consistent with the Award, the same period of notice of
termination applies to John Holland and casual employees under the Agreement.
[70] On balance, once rates of pay are taken into account, I am satisfied that casual
employees will be better off overall under the Agreement than the Award.
Redundancy
[71] Clause 46 of the Agreement deals with redundancy and adopts the definition of
redundancy in the Act rather than the definition of redundancy in the Award, which is much
wider and includes any cessation of employment other than misconduct or refusal of duty.
While in some respects, the Agreement is more beneficial than the Award in relation to
redundancy, on balance, it is likely to operate in a way that is less beneficial to employees.
[72] The concern in relation to rates of pay for adult apprentices has not previously been
identified in relation to the Agreement and it is appropriate that John Holland be given an
opportunity to respond to the concern and give any undertakings it wishes to make.
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Inclement weather
[73] Clause 35 of the Agreement deals with inclement weather and its provisions are
significantly truncated when compared to clause 23 of the Award. This may give rise to
concerns about whether the Agreement passes the BOOT.
[74] As the concern in relation to rates of pay for adult apprentices has not previously been
identified in relation to the Agreement, it is appropriate that John Holland be given an
opportunity to respond to the concern and give any undertakings it wishes to make.
Unlawful Terms
[75] Matarazzo submits that the Agreement includes a number of unlawful terms for the
purposes of section 194 of the Act relating to:
exclusion of employees from coverage if a greenfields project agreement
applies (clauses 1.3 and 6 of the Agreement) (alleged opt out term);
uncertainty of scope given unspecified classifications and potential for employees to
be excluded from coverage if directed to work in a classification not contained in the
Agreement) (clauses 1.2, 6 and 12.3-4) (alleged opt out term);
ability to engage contract or labour hire workers (clause 6.4) (not about matters
pertaining to the employment relationship);
restrictive work practices (clause 52.1) (not about matters pertaining to the
employment relationship);
overpayment reimbursement from employee (clause 53.1) (unreasonable deductions
from wages);
no provision of default superannuation fund (clause 28.1) (term requiring default
fund contributions to be paid to a fund that does not offer a MySuper product).
[76] I am not persuaded that any of the terms identified above are unlawful terms.
[77] Enterprise agreements commonly deal with the interaction between two or more
agreements, including in the building and construction sector where project agreements are
common. Section 58 of the Act deals with the interaction between enterprise agreements and
expressly provides for agreements to apply to employees in relation to particular employment.
Clause 1.3 of the Agreement, read together with clause 6, is not inconsistent with the Act and
cannot properly be construed as an opt out term for the purposes of section 194.
[78] The issues relating to uncertainty of scope have been addressed by an undertaking
given by John Holland. I am not satisfied that clauses 1.2, 6 and 12.3-4, read together with the
proposed undertaking, can be read as constituting unlawful terms.
[79] In dealing with applications for approval of enterprise agreements, the Commission is
not required to consider whether each term of the enterprise agreement is about permitted
matters (including matters pertaining to the employment relationship). To the extent that the
Agreement includes terms that are not about permitted matters, section 253 of the Act
operates to ensure they have no effect. The fact that a term may not be about permitted
matters does not mean that it is an unlawful term. I am not satisfied that either clauses 6.4 or
52.1 of the Agreement are unlawful terms.
[2018] FWC 1947
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[80] In a similar way, the Commission is not required to consider whether terms dealing
with deductions from wages are consistent with the Act when approving an enterprise
agreement. Section 326 of the Act operates independently to provide that certain enterprise
agreement terms dealing with deductions from wages are of no effect.
[81] In relation to superannuation, section 194(h) does not mandate that enterprise
agreements provide for a “default superannuation fund”. Rather, if an enterprise agreement
requires or permits default fund contributions to be made to a fund specified in the agreement,
the fund must offer a MySuper product (unless the contributions are made to a defined benefit
or exempt public sector superannuation scheme).
[82] Clause 28 of the Agreement does not specify a superannuation fund. It provides for
employees to nominate their own fund and failing that, for contributions to be made into a
“complying superannuation fund” as determined by the Company. The term is no more than a
reflection of John Holland’s obligation to offer choice of superannuation fund to employees.3
I am not satisfied that clause 28 is an unlawful term.
Other requirements for approval
Right to legal representation
[83] Matarazzo submits that clause 48.1.5 is not a matter that can be included in the
Agreement because the right to legal representation is a matter for the Commission. Clause
48.1.5 provides:
“The Company reserves the right to be legally represented for all matters before FWC.”
[84] In my view, clause 48.1.5 of the Agreement does not, and could not, overcome the
requirement in section 596 of the Act for parties seeking to be represented by a lawyer or paid
agent to obtain permission from the Commission in relevant circumstances. The clause is not
a barrier to approval of the Agreement.
Dispute Resolution
[85] The dispute resolution term at clause 48.3 of the Agreement provides that safety issues
are isolated from industrial matters, and disputes relating to safety must be dealt with in
accordance with company policy and procedure. Section 186(6) of the Act requires the
Commission to be satisfied that agreements contain a dispute settlement procedure for matters
arising under the Agreement and the NES.
[86] There is a concern that clause 48.3 may prevent safety matters arising under the
Agreement from being dealt with under the dispute resolution term, noting that certain terms
of the Agreement deal with safety matters including the provision of personal protective
equipment. John Holland has given an undertaking to address the concern.
3
Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004
[2018] FWC 1947
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Consultation term
[87] The Agreement includes a consultation term at clause 8.
[88] Matarazzo submits that clause 32.1 of the Agreement, which permits the employer to
unilaterally change shifts on 24 hours’ notice, is inconsistent with the consultation term
requirements in section 205(1)(a)(ii) of the Act.
[89] In my view, clause 8 of the Agreement meets the requirements of the Act. While on its
terms, clause 32.1 is not inconsistent with clause 8, it could operate to prevent consultation,
representation and/or consideration of matters raised by employees in circumstances where
such short notice of shift change was provided.
[90] This concern has not previously been identified in relation to the Agreement and it is
appropriate that John Holland be given an opportunity to respond to the concern and give any
undertakings it wishes to make to ensure that clause 32.1 operates subject to clause 8.
Pre-approval issues
[91] Finally, Matarazzo submits that there are a number of other pre-approval issues in
relation to the Agreement, as follows:
Failure to identify the existence of the current enterprise agreement in answer to
the question at 1.3 of the Form F17 filed with the application;
Failure to provide the written text of the Building Code to employees;
Failure to explain specific legislative obligations under the Building Code or
legislative obligations to employees;
Failure to explain to eligible employees Matarazzo’s Notice of Concerns and
Single enterprise agreement legislative checklist dated 16 August 2017 to
employees (although I note that the says documents were not provided to the
Commission by Matarazzo and their contents are not known);
Failure to explain to eligible employees John Holland’s response to the Notice of
Concerns;
Failure to identify the extent to which the NES is excluded by the Agreement at
questions 2.11 and 2.12 of the Form F17 filed with the application;
Failure to identify unlawful terms included in the Agreement at question 2.14 of
the Form F17 filed with the application;
Citing clauses 26, 27 and 54 of the Agreement as more beneficial terms in answer
to question 3.4 of the Form F17;
Providing an incomplete answer to question 3.5 of the Form F17 in answer to
question 3.5 of the Form F17;
Failure to identify the ability to include unspecified classifications in the
Agreement or to provide any analysis as to how the rates of pay in the Agreement
compensate for those unspecified classifications’ pay rates and allowances in
answer to question 3.6 of the Form F17.
[92] Having sought to be heard in relation to the Agreement, Matarazzo provided no further
explanation as to why each of the matters identified above should operate as a barrier to
approval of the Agreement. All I have before me is an asserted list of failures with nothing to
support it. I will nonetheless attempt to address each in turn.
[2018] FWC 1947
14
[93] It may have assisted, but is not fatal to the application, for John Holland to identify its
current enterprise agreement as an agreement in identical terms to the one that is subject to
this Agreement. In any event, the Agreement makes express reference to the earlier enterprise
agreement in clause 12.5 and there is no material before me to demonstrate that the two
agreements are in fact identical, or substantially identical.
[94] Matarazzo did not point to any requirement in the Act for the written text of the
Building Code to be provided to employees and it is not apparent that the terms of the
Building Code are incorporated as terms of the Agreement. That being the case, it was not a
requirement on John Holland to explain the terms of the Building Code to employees. As to
“or other legislative obligations”, no further detail was provided on this aspect of the
submission. No issue arises in this respect.
[95] Matarazzo did not identify any obligation in the Act for correspondence sent from one
bargaining representative to another to be explained to employees before an enterprise
agreement is made. It is not apparent that either its’ Notice of Concerns, Single enterprise
agreement legislative checklist or John Holland’s response to its’ Notice of Concerns were
incorporated as terms of the Agreement. That being the case, John Holland was not required
to explain the terms of those documents to employees or to provide them to the Commission
in connection with the application. No issue arises.
[96] The Form F17 filed with the application did not identify elements of the Agreement
which I have identified as potentially excluding the NES. It is open to infer from that answer
that, consistent with the fact that it could not do so, John Holland had no intention to exclude
the NES and communicated as much to its employees. Subsequent analysis by the
Commission identified certain terms in the Agreement that may purport to exclude the NES
and undertakings have been given to address the concern. If employees were advised that the
Agreement did not exclude the NES, that was technically correct given the effect of section
56 of the Act. I am not satisfied that any concern arises in relation to whether the terms of the
Agreement and their effect were explained to employees.
[97] As noted earlier, I am not satisfied that the Agreement contains any unlawful terms
and it was accordingly unnecessary for John Holland to answer in the affirmative in response
to question 2.14 of the Form F17.
[98] The identification of clauses 26, 27 and 54 as more beneficial terms in the Form F17
filed with the application was, in my view, appropriate. As noted above, the shift work
provisions in the Agreement are more beneficial than the Award when rates of pay are taken
into account. A meal allowance is provided under the Agreement where reasonable board and
lodging is also provided and this is a benefit for employees compared to the Award. The
Agreement provides for income protection insurance where the Award does not. In each
respect, the answers given by John Holland in response to question 3.4 of the Form F17 filed
with the application were correct.
[99] I have dealt with the issue of uncertainty of classifications and monetary comparisons
between the Agreement and Award rates of pay above. In circumstances where John Holland
clearly thinks the Agreement passes the better off overall test, it answered question 3.6 as it
was required to do and no issue arises.
[2018] FWC 1947
15
[100] However, the incomplete answer to question 3.5 of the Form F17 (less beneficial
terms) is a concern. While the answer to the question correctly identifies that there are less
beneficial terms in the Agreement than the Award, the terms identified are limited to the
average of hours over a 52 week, rather than 4 week, period. Analysis by the Commission
since the application was filed has identified a number of other less beneficial terms in the
Agreement compared to the Award, notwithstanding that the overall effect of the Agreement
may be more beneficial to employees than the Award.
[101] While it is understandable that John Holland answered the question the way it did, it
was nevertheless an incomplete answer to the question. Recent decisions of both the Federal
Court and a Full Bench of this Commission have expressed concern about whether, in that
scenario, the effect of the Agreement was properly explained to employees.4
Conclusion
[102] The matter will be listed for further hearing to deal with whether the terms of the
Agreement, and the effect of those terms, were explained to employees as required by section
180(5) of the Act as well as any further undertakings John Holland wishes to give in relation
to the Agreement as it relates to:
1. Abandonment of employment (clause 44);
2. Adult apprentice rates of pay (clause 13);
3. Redundancy (clause 46);
4. Inclement weather (clause 35); and
5. Consultation (clause 32.1 and clause 8).
[103] Directions will issue separately to this Decision.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
PR601722
4 Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266;
Construction, Forestry, Mining and Energy Union v Shamrock Civil Pty Ltd [2018] FWCFB 1772
OF THE FAIR WORK OMMISSION AUSTRALIA THE SEAL
