1
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
Allstyle Concrete
(C2017/7091)
VICE PRESIDENT HATCHER
VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER LEE
COMMISSIONER HARPER-GREENWELL
SYDNEY, 28 JUNE 2018
Appeal against decision [2017] FWCA 6595 of Commissioner McKinnon at Melbourne on 11
December 2017 in matter number AG2017/3489.
Introduction
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has
lodged an appeal, for which permission to appeal is required, against a decision issued by
Commissioner McKinnon on 11 December 20171 (Decision). In the Decision, the
Commissioner approved the Allstyle Concrete Pumping Pty Ltd Enterprise Agreement 2017
(Agreement). The CFMMEU contends that the Commissioner erred in approving the
Agreement because it did not pass the better off overall test (BOOT) as required by s
186(2)(d) of the Fair Work Act 2009 (FW Act), and because the Commissioner approved the
Agreement with undertakings that resulted in substantial changes to the Agreement contrary
to s 190(3)(b) of the FW Act.
The Agreement
[2] The relevant features of the Agreement are as follows:
(1) The Agreement is expressed as applying to Allstyle Concrete Pumping Pty Ltd
(Allstyle) and its employees in the classifications described in Appendix A,
and to apply to “all works undertaken by the Employer on Commercial,
Industrial and Civil Construction Projects on which the Employees are
engaged” (cl 3).
(2) The nominal term is a period of 4 years (cl 4.3).
1 [2017] FWCA 6595
[2018] FWCFB 3823
DECISION
E AUSTRALIA FairWork Commission
[2018] FWCFB 3823
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(3) The Agreement is to operate throughout Western Australia (cl 5.1).
(4) The Agreement is to be read in conjunction with, and apply the terms and
conditions of the Building and Construction General On-site Award 2010
(Award), provided that the Agreement would prevail to the extent of any
inconsistency (cls 5.2, 5.3).
(5) The modes of employment are daily hire and casual employment (cl 6).
(6) The span of ordinary hours is 8 hours to be worked between 5.00am to 6.00pm
Monday to Friday, with the “usual starting time” to be 7.00am and the “usual
finishing time” to be 3.30pm but alterable by agreement between the parties to
suit operational and client site requirements from time to time (cl 7.1).
(7) Employees would generally be required to work up to 45 hours per week
Monday to Saturday to meet the business requirements of the employer, and
would be paid the base rate set out in Appendix A, Wages & Classification
Structure in this Agreement (cl 7.2), but special consideration would be given
to employees who would be personally disadvantaged through family
responsibilities or other extenuating circumstances as agreed by the employer
by a change to the usual start and finish times (cl 7.3).
(8) Employees are required to work reasonable overtime, and work in excess of
the spread of hours in cl 7.2 would be paid at the rate of “time + 50%” of the
base rate in Appendix A (cls 8.2, 8.3).
(9) Employees are entitled to an unpaid meal break of not less than 30 minutes,
and a morning paid rest period of 10 minutes (cl 9).
(10) Daily hire employees would be paid the base wage rate in Appendix A for all
hours worked up to 45 hours per week Monday to Saturday, and casual
employees would be paid the base rate plus casual loading. The wage rates in
Appendix A were to compensate employees for all site disabilities and
included allowances set out in cls 20 and 21 of the Award as well as the annual
leave loading in cl 38 of the award (cl 10.3).
(11) In respect of redundancy, clause 19 provides that “The parties agree to apply
the provisions of Subdivision B – Redundancy Pay of the FW Act 2009 in
circumstances where an Employee is to be made redundant for the purposes of
eligibility for redundancy pay as prescribed by the Act, and Subdivision C –
Limits on the scope of that Division”.
(12) Appendix A provides for the following rates of pay (by reference to the Award
classification designations:
Classification Level Wage rate Casual loading
Line hand
No experience CW1a $24.00/hr $4.70/hr
CW1b $24.50/hr $.70/hr [sic]
[2018] FWCFB 3823
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CW1c $25.00/hr [blank]
Line hand
experienced CW1d $26.00/hr $4.00/hr
Concrete Pumper CW 4 $27.00/hr $5.00/hr
[3] The Decision does not give detailed reasons for the approval of the Agreement, noting
that the CFMMEU was not involved in the proceedings at first instance and there was no
other contradictor. In its entirety the Decision was as follows:
“[1] An application has been made for approval of an enterprise agreement known as
the Allstyle Concrete Pumping Pty Ltd Enterprise Agreement 2017 (the Agreement).
The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It
has been made by Allstyle Concrete Pumping Pty Ltd. The Agreement is a single
enterprise agreement.
[2] The Applicant has provided written undertakings. A copy of the undertakings is
attached in Annexure A. I am satisfied that the undertakings will not cause financial
detriment to any employee covered by the Agreement and that the undertakings will
not result in substantial changes to the Agreement.
[3] Subject to the undertakings referred to above, 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.
[4] Pursuant to s.202(4) of the Act, the model flexibility term prescribed by the Fair
Work Regulations 2009 is taken to be a term of the Agreement.
[5] The Agreement is approved and, in accordance with s.54 of the Act, will operate
from 18 December 2017. The nominal expiry date of the Agreement is 10 December
2021.”
[4] The undertakings accepted by the Commissioner were to the following effect:
“For reasons of clarity” casual employees would work an average of 38 ordinary
hours per week, and might be required to work additional overtime to meet the
operational requirements of the employer.
Employees other than casual employees would be entitled to annual leave as per s 88
of the FW Act consistent with the employer’s current practice.
“For the purposes of certainty”, employees could access paid personal/carer’s leave as
per s 97(a) of the FW Act.
Employees would be entitled to have access to unpaid carer’s leave as prescribed
under ss 102 and 103 of the FW Act.
It was confirmed that the industry-specific redundancy scheme in cl 17 of the Award
applied to employees covered by the Award.
[2018] FWCFB 3823
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Employees would be entitled to the Towers Allowance in cl 22.3(a) of the Award if
and when they were directed to work on a site which met the criteria set out in that
provision.
Employees who worked beyond noon on Saturday would be paid double time for all
hours worked at the rates in Appendix A as per cl 37 of the Award.
Submissions
[5] In its appeal submissions the CFMMEU modelled a work scenario to demonstrate that
the Agreement did not pass the BOOT. The first was for a daily hire employee classified as
CW1(a) who worked a 50 hour week between 5.00am and 3.00pm Monday to Friday on a
project with a multi-story building of between 16 and 30 storeys. The second was a daily hire
employee classified as CW4 employed to work the same pattern of hours on the same project.
The CFMMEU’s modelling (which is attached to this decision) showed that the employee
classified as CWI(a) would be $462.32 per week worse off under the Agreement than under
the Award, and the employee classified as CW4 would be $574.68 per week worse off. The
CFMMEU also compared the terms of the Agreement and those of the Award, and identified
that there were 40 provisions in the Agreement that were less beneficial than under the
Award.
[6] In relation to the undertakings, the CFMMEU submitted that the fifth undertaking
replaced the redundancy provision in the Agreement, which was aligned to the NES general
redundancy standard in s 119 of the FW Act, with the industry-specific scheme contained in
cl 17 of the Award. It submitted that this altered the redundancy entitlements which had been
voted upon and constituted a substantial change to the Agreement for the purpose of s
190(3)(b).
[7] On these bases the CFMMEU submitted that the Commissioner erred in approving the
Agreement.
[8] Allstyle submitted in response that the CFMMEU’s BOOT analysis was flawed
because it was based on patterns of work which were not applicable to its business. In this
respect it submitted that:
it was a small employer which had four employees covered by the Agreement, two of
whom were concrete pump operators and the other two line hands for each truck, with
all of them sharing the truck driving duties;
it provided concrete pumping services to new single residential home construction and
lower tier commercial construction projects;
the scenario of working 10 hours per day was applicable to specialist sub-contractors
on major commercial construction sites but not to Allstyle’s business;
the wages comparison which accompanied the application for approval of the
Agreement was based upon 40 working hours per week, Monday-Friday, was
consistent with the hours provision of the Agreement and showed that employees were
better off overall;
[2018] FWCFB 3823
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the Western Australian building and construction sector had suffered a serious
downturn in recent years, and in the lower tier residential sector work levels were
reduced and margins were tight;
the issue of working hours had been resolved at first instance when concerns raised by
the Commissioner had been answered by the provision of an undertaking concerning
overtime on Saturdays;
the modelling done by the CFMMEU was in error, in that it wrongly applied the tools
allowance to employees below the CW3 tradesperson classification; applied the meal
allowance when the prerequisite for 1½ hours overtime would not be met under the
Agreement; and the fares allowance was also applied in circumstances where
employees attended Allstyle’s yard to commence work and travelled to and from sites
in the concrete pumping trucks in working time;
the undertaking concerning redundancy was to clarify a concern that clause 17 of the
Award was intended to apply in lieu of the NES provisions consistent with s 121(3) of
the FW Act, and did not add any new obligation; and
likewise the undertakings concerning annual leave, personal leave and unpaid carer’s
leave were merely intended to clarify the existing provisions.
Consideration
[9] We consider that the Decision was attended by appealable error in respect of the
conclusion that the Agreement passed the BOOT approval requirement in s 186(2)(d) of the
FW Act. The wages structure of the Agreement involves loaded rates which “roll up” award
allowances which would otherwise be payable and also partially incorporates overtime rates.
The undertakings ameliorate this position to some degree by restoring the Award towers
allowance and requiring the full overtime rate to be paid for work on Saturday afternoons, but
the basic concept remains the same. The issues involved in applying the BOOT, the
requirements of which are set out in s 193 of the FW Act, to an enterprise agreement
containing a rate structure such as the Agreement does, were discussed extensively in the
recent Full Bench Loaded Rates Decision.2 That decision pointed to the necessity, in applying
the BOOT, to start with an examination of the terms of the agreement in order to ascertain the
nature and characteristics of the employment which the agreement provides for or permits. In
the case of a loaded rates agreement, this will require a focus on the practices and
arrangements concerning the working of ordinary and overtime hours by existing and
prospective employees that flow from the terms of the agreement. However the Commission
may take into account objective evidence that a particular pattern of working hours or roster
pattern permitted by an enterprise agreement is not practicable, or cannot or is unlikely to be
worked.3
[10] In this appeal, the CFMMEU as earlier stated modelled a pattern of working hours
involving a 5.00am start and 50 hours worked Monday to Friday. There is no doubt that this
pattern of work is one permitted by the Agreement. Clause 7.1 provides for a span of hours of
5.00am to 6.00pm Monday to Friday, although the reference to there being a “usual” start
2 [2018] FWCFB 3610
3 Ibid at [115]
[2018] FWCFB 3823
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time of 7.00am alterable by agreement leaves it somewhat unclear whether a 5.00am start can
be directed by the employer or may only occur with the agreement of the employee. In either
case, we do not consider that we should simply ignore the fact that a 5.00am start is provided
for in the Agreement, and the proper inference is that it was intended to have operative effect
in some circumstances.
[11] In respect of overtime, clause 8.2 requires employees to work reasonable overtime,
and clauses 8.3-8.4 provide for a rate of overtime. The Agreement therefore (and not
surprisingly) specifically contemplates that overtime will be worked. We also note that clause
7.2 of the Agreement provides for a standard working week of 45 hours per week (albeit with
five hours worked on a Saturday), so a working week of 50 hours can hardly be said to be
outside the bounds of what was intended by the Agreement, and is consistent with building
and construction industry practices.
[12] There are some defects in the CFMMEU’s modelling. We accept that the fares
allowance would not be payable in circumstances where Allstyle’s employees start and finish
work at its yard and travel to and from worksites in Allstyle’s vehicles in paid time. We also
accept that the tools allowance would not be payable to employees performing concrete
pumping work. However the exclusion of these allowances does not displace the conclusion
that employees would not be better off overall under the Agreement than under the Award in
respect of this particular pattern of working hours.
[13] We do not accept Allstyle’s submissions that the nature of its work, and the conditions
of the building and construction sector in Western Australia, render the CFMMEU’s
modelling as simply inapplicable to its business. Whilst it may be accepted that Allstyle’s
business, which is currently small, is focussed on the residential sector, that by itself does not
preclude the conclusion that it may from time to time require its employees to work a 50 hour
week to meet the requirements of particular projects. Even if the multi-storey allowance is
excluded from the CFMMEU’s calculation of wages that would be owing under the Award,
that is not sufficient to render employees better off overall under the Agreement. Further, the
coverage of the Agreement as earlier noted encompasses work on commercial, industrial and
civil construction projects. This feature of the Agreement cannot simply be ignored and
demonstrates that it was intended to apply to work on larger-scale projects. Finally, while it
may be accepted that the Western Australian building and construction industry has suffered a
downturn after the end of the mining construction boom, the BOOT cannot be applied on the
basis that this will necessarily continue during the whole period of the Agreement’s operation
(which has a four-year nominal term) or limit the work opportunities of every small business
in the sector.
[14] We reject the CFMMEU’s other submission that the Agreement did not pass the
BOOT because the Agreement did not contain various beneficial provisions of the Award.
That submission is answered by clauses 5.2 and 5.3 of the Agreement, which provide in effect
that the Agreement incorporates the terms and conditions of the Award provided that the
Agreement prevails to the extent of any inconsistency.
[15] We also reject the CFMMEU’s submission that the Commissioner erred in accepting
the undertaking concerning redundancy entitlements under the Agreement. The submission
was premised upon the contention that clause 19 of the Agreement incorporates the definition
of redundancy and the severance pay scale contained in s 119 of the FW Act. We do not
accept that premise. Although clause 19 is very poorly drafted, it appears that it attempts to
[2018] FWCFB 3823
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articulate the proposition that s 119 does not apply on the basis of the exemption from that
provision in s 123(4)(b) in respect of employees to whom an industry-specific redundancy
scheme in a modern award applies, and therefore that the industry-specific scheme in clause
17 of the Award applies. The undertaking accepted by the Commissioner clarifies that clause
17 of the Award is to apply, and therefore does not amount to a substantial change to the
Agreement. It was open to the Commissioner to accept the undertaking in those
circumstances.
[16] Permission to appeal should, we consider, be granted in the public interest. The
approval of the Agreement in circumstances where it did not pass the BOOT amounted to a
significant jurisdictional error which has the potential to disadvantage employees to whom the
Agreement applies. The appeal should be upheld on the basis of the error identified. However,
it does not follow that the application for approval of the Agreement should be dismissed,
since it appears to us that it would be open for Allstyle to propose undertakings to rectify the
BOOT deficiency which has been identified. Such undertakings might, subject to the
overriding limitations in s 190(3), involve a number of things including an enhanced overtime
rate, the introduction of an early morning shift allowance, a prohibition upon early starts, or
an increase to the base rate. We consider that Allstyle should be given an opportunity to
advance appropriate undertakings in a re-determination of its application for approval of the
Agreement.
[17] We also note that there appears to be a defect in the way in which casual loadings are
expressed in Appendix A to the Agreement for certain classifications. This may also be
rectified in undertakings at the re-hearing of the matter.
Orders
[18] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The Decision ([2017] FWCA 6595) is quashed.
(4) The application for approval of the Agreement (AG2017/3489) is remitted to
Commissioner McKinnon for re-determination in accordance with our reasons
for decision.
VICE PRESIDENT
Printed by authority of the Commonwealth Government Printer
OF THE FAIR WORK MISSION THE
[2018] FWCFB 3823
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Appearances
K. Singh on behalf of the Construction, Forestry, Maritime, Mining and Energy Union.
K. Richardson on behalf of Allstyle Concrete.
Hearing details:
2018.
Melbourne:
1 March.
Printed by authority of the Commonwealth Government Printer
PR608532
[2018] FWCFB 3823
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Attachment
(Agreement) and the Building and Construction General On-Site Award 2010 (Award) loyee under the Award Fares meal allowance Fares crib time amount allowance amount total hours multi-storey to be paid allowance Total $14.78 10 $6.60 $17.43 11111 $13.89 $344.46 1 $13.89 $14.78 10 $6.60 $17.43 $344.46 1 $13.89 $14.78 10 $6.60 $17.43 1 $344.46 $13.89 $14.78 10 $6.60 $17.43 $344.46 1 $13.89 $14.78 10 $6.60 $17.43 1 $344.46 1 5 $69.47 5 $73.90 50 $33.00 5 $87.15 $1,722.32 nder the Agreement Fares meal allowance Fares crib time amount allowance amount total hours Multi-storey to be paid allowance Total $0.00 0 $0.00 10 $0.00 $0.00 $240.00 0 $0.00 0 0 $0.00 $0.00 10 $0.00 $240.00 0 0 $0.00 0 $0.00 10 $0.00 $0.00 $240.00 0 $0.00 0 $0.00 10 $0.00 $0.00 $240.00 $300.00 0 $0.00 0 $0.00 10 $0.00 $0.00 0 $0.00 $0.00 50 $0.00 0 $0.00 $1,260.00 $69.47 $73.90 $33.00 $87.15 $462.32 ding of between 16 and 30 storeys is entitled to an hourly allowance of $0.66.
Comparision between the Allstyle Concrete Pumping Pty Ltd Enterprise Agreement 201 CW1(a) daily-hire emp double ordinary time and double time and hours amount a half amount time amount a half amount Monday $208.40 $0.00 $83.36 0 $0.00 00 0 Tuesday $208.40 $0.00 $83.36 $0.00 0 2 0 Wednesday $208.40 $0.00 $83.36 $0.00 0 Thursday $208.40 $0.00 $83.36 0 $0.00 00 Friday $208.40 0 $0.00 $83.36 $0.00 00 0 Total 40 $1,042.00 0 $0.00 10 $416.80 0 $0.00 CW1(a) employee t Double ordinary time and Double time and hours amount a half amount time amount a half amount Monday 10 $240.00 0 $0.00 $0.00 $0.00 0 0 Tuesday 10 $240.00 $0.00 $0.00 $0.00 0 0 Wednesday 0 $240.00 $0.00 $0.00 $0.00 0 10 0 0 Thursday 10 $240.00 $0.00 0 $0.00 $0.00 Friday $120.00 $180.00 0 $0.00 $0.00 In 0 Total 45 $1,080.00 5 $180.00 0 $0.00 $0.00 Financial difference between the Award and the Agreement -$38.00 -$180.00 $416.80 $0.00 Notes This comparision is premised on a CW1(a) working a 50 hour week between 5:00am and 3:00 pm Monday to Friday The CW1(a) hourly rate under the Agreement outlined in Appendix A of the Agreement, namely $24.00 The CW1(a) hourly rate under the Award is the morning shift rate operative from 1 July 2017, namely $26.05. No multi-storey allowance is payable under the Agreement. An employee under the Award working on a multi-storey bui Under the Agreement there is no crib time payable between Monday and Friday. Under the Agreement there is no meal allowance or fares and travel allowance payable. Conclusion A CW1(a) employee is $462.32 worse off under the Agreement when compared to a CW1(a) employee under the Award
[2018] FWCFB 3823
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Agreement) and the Building and Construction General On-Site Award 2010 (Award) yee under the Award fares meal allowance fares crib time amount allowance amount total hours Multi-storey to be paid allowance Total $16.35 $14.78 10 $6.60 $17.43 $398.44 1 111 1 $16.35 $14.78 10 $6.60 $17.43 $398.44 1 $16.35 $14.78 10 $6.60 $17.43 $398.44 1 1 $16.35 $14.78 10 $6.60 $17.43 $398.44 $16.35 $14.78 10 $6.60 $17.43 $398.44 5 $81.73 5 $73.90 50 $33.00 5 $87.15 $1,992.18 ler the Agreement fares meal allowance fares crib time amount allowance amount total hours Multi-storey to be paid allowance Total $0.00 $0.00 10 $0.00 $0.00 $270.00 0 0 $0.00 $0.00 10 $0.00 $0.00 $270.00 $0.00 $0.00 10 0 0 $0.00 $0.00 $270.00 $270.00 0 $0.00 $0.00 10 $0.00 $0.00 O 0 $0.00 $0.00 10 $0.00 $0.00 $337.50 $0.00 $0.00 50 $0.00 $0.00 $1,417.50 $81.73 $73.90 $33.00 $87.15 $574.68 ding of between 16 and 30 storeys is entitled to an hourly allowance of $0.66.
Comparision between the Allstyle Concrete Pumping Pty Ltd Enterprise Agreement 2017 CW4 daily-hire empl double ordinary time and double time and hours amount a half amount time amount a half amount Monday $245.20 $0.00 $0.00 0 8 $98.08 0 Tuesday 8 $245.20 $0.00 $98.08 $0.00 0 Wednesday 8 $245.20 $0.00 $98.08 $0.00 0 Thursday $245.20 $0.00 $98.08 $0.00 0 00 Friday $245.20 $0.00 $98.08 $0.00 Total 40 $1,226.00 0 $0.00 10 $490.40 0 $0.00 CW4 employee un double ordinary time and double time and hours amount a half amount time amount a half amount Monday 0 0 0 10 $270.00 $0.00 $0.00 $0.00 0 Tuesday 10 $270.00 $0.00 $0.00 $0.00 Wednesday 10 $270.00 $0.00 0 $0.00 $0.00 0 Thursday 10 $270.00 0 $0.00 0 $0.00 $0.00 0 Friday 0 0 5 $135.00 $202.50 $0.00 $0.00 Total 45 $1,215.00 5 $202.50 $0.00 $0.00 Financial difference between the $11.00 -$202.50 $490.40 $0.00 Notes This comparision is premised on a CW4 working a 50 hour week between 5:00am and 3:00 pm Monday to Friday The CW4 hourly rate under the Agreement outlined in Appendix A of the Agreement, namely $27.00 The CW4 hourly rate under the Award is the morning shift rate operative from 1 July 2017, namely $30.65. No multi-storey allowance is payable under the Agreement. An employee under the Award working on a multi-storey buil Under the Agreement there is no crib time payable between Monday and Friday Under the Agreement there is no meal allowance or fares and travel allowance payable. Conclusion A CW4 employee is $574.68 worse off under the Agreement when compared to a CW4 employee under the Award.
