1
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional
instruments
Drilled Foundations Contracting Pty Ltd
(AG2023/1693)
Piled Foundations Contracting Pty Ltd
(AG2023/1695)
DRILLED FOUNDATIONS CONTRACTING PTY LTD AND CFMEU
UNION COLLECTIVE AGREEMENT 2007
PILED FOUNDATIONS CONTRACTING PTY LTD AND CFMEU
COLLECTIVE UNION AGREEMENT 2007
Building, metal and civil construction industries
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 18 SEPTEMBER 2023
Application to extend the default period for the Drilled Foundations Contracting Pty Ltd and
CFMEU Collective Union Agreement 2007 and the Piled Foundations Contracting Pty Ltd and
CFMEU Collective Union Agreement 2007
Introduction
[1] Drilled Foundations Contracting Pty Ltd and Piled Foundations Contracting Pty Ltd
(together, the Applicants) have applied under item 20A(4) of Schedule 3 of the Fair Work
(Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act)
to extend the default period for the Drilled Foundations Contracting Pty Ltd and CFMEU
Collective Union Agreement 2007 and the Piled Foundations Contracting Pty Ltd and CFMEU
Collective Union Agreement 2007 (together, the Agreements) for a period of four years. The
applications were initially made under item 30(4) of Schedule 7 to the Transitional Act which
deals with applications to extend the default period for an enterprise agreement made during
the bridging period, but this was later corrected to item 20A(4) of Schedule 3 by the Applicants.
[2] The Agreements are in almost identical terms and cover daily hire and casual employees
working in Queensland in foundation and related construction work and engaged in
classifications now covered by the Building and Construction General On-site Award 2020
(Award). The Agreements commenced in 2007 and have identical nominal expiry dates of 1
[2023] FWCA 3011
DECISION
AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwca3011.pdf
[2023] FWCA 3011
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June 2009. The Agreements also cover the Construction, Forestry, Mining and Energy Union,
now the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU).
[3] The applications to extend the Agreements were made on 1 June 2023.
[4] The Agreements are collective agreement-based transitional instruments within the
meaning of item 2(5)(c) of Schedule 3 of the Transitional Act which continue to apply to
employees of Drilled Foundations and Piled Foundations because of item 3 of Schedule 3.
[5] The Transitional Act was amended by the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Act 2022 to provide for the automatic termination of all remaining transitional
instruments. Pursuant to item 20A(1) and (2) of Sch 3 of the Transitional Act, the Agreements
will terminate on 6 December 2023 unless they are extended under items 20A(6) or (11)(e).
The main features of item 20A of Sch 3 of the Transitional Act are described in detail in the
Full Bench decision in Suncoast Scaffold Pty Ltd1 and we rely upon what is said in that decision.
[6] The applications are made under item 20A(4)(a). Under item 20A(6), the Commission
is required to extend the default period for an Agreement for a period of no more than 4 years
if the Commission is satisfied that:
(a) subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances
to do so; or
(b) it is reasonable in the circumstances to do so.
[7] Subitem (7) applies to an application which is made at or after the notification time for
a proposed enterprise agreement. Subitem (8) applies to an individual agreement-based
transitional instrument. The Applicants do not contend that subitem (7) and subitem (8) apply
to the applications.
[8] The Applicants rely on subitem (9) which applies if:
(a) the application relates to a collective agreement-based transitional instrument; and
(b) it is likely that, as at the time the application is made, the award covered employees
for the instrument under subitem (10), viewed as a group, would be better off overall
if the instrument applied to the employees than if the relevant modern award or
awards referred to in that subitem applied to the employees.
[9] For the purposes of paragraph (9)(b) the instrument under subitem (10) is the Award.
Background
[10] The matters were listed for directions on 16 June 2023. The CFMMEU appeared at the
directions hearing and advised that it opposed the applications. Later, on 16 June 2023, the
Applicants provided the Commission with the current pay rates which they pay to employees
covered by the Agreements.
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[11] With the consent of the Applicants, the Commission’s Agreements Team prepared an
analysis of the Agreements relative to the Award which was provided to the Applicants and the
CFMMEU on 5 July 2023.
[12] The Commission invited the Applicants to review and provide any comments they
wished to make on the analysis by 19 July 2023. On 19 July 2023, the Applicants provided
submissions in relation to the analysis and some payslips in relation to their employees.
[13] Following receipt of the material from the Applicants, the Commission’s Agreements
Team conducted further analysis which was sent to the Applicants on 31 July 2023. The
Applicants responded to the further analysis on 2 August 2023.
[14] The CFMMEU did not make any submissions.
Better Off Overall Analysis
Rates of Pay
[15] The rates of pay contained in the Agreements have been compared to the Award based
on the limited descriptions set out at clause 4.2 of the Agreements. The Agreements contain 10
classifications, the rates of pay for one of which falls below the Award rates. The rates of pay
for all other classifications are above the Award.
[16] Appendix 1 of each of the Agreements contains a rates of pay table with rates set at the
date of signing, 7 January 2008, 1 July 2008 and 7 January 2009. Clause 4.1 of the Agreements
provides that rates of pay will be increased by 4% in 2007 and 2008, with those increases being
paid as 2% increases in July 2007, January and July 2008 and January 2009.
[17] Clause 4.5.5 of the Agreements contains a site/piling allowance. It appears that this
allowance is akin to the industry allowance payable under clause 22 of the Award, although the
site/piling allowance is not paid for all purposes, unlike the industry allowance.
[18] The Agreements cover daily hire and casual employees. The pay rate comparison below
has been performed based upon pay rates under the Award as at 1 June 2023, the date that the
applications were made. It includes the industry and piling allowance, the follow-the-job
loading applicable under the Award, the casual loadings payable under both the Agreements
and the Award and the rates of pay contained in the 7 January 2009 column of the Agreements:
Modern Award
Classification
Agreement
Classification
Modern
Award Rate
Agreement
Rate
Percentage
Difference
Daily Hire
Employees
CW/ECW 7 Working Supervisor $30.21 $65.40 116.48%
CW/ECW 5
Senior Foundation
Operator
$28.69 $30.25 5.44%
CW/ECW 4 Foundation Operator $27.88 $29.38 5.38%
CW/ECW 3
Foundation Labourer
Skilled
$27.08 $29.38 8.49%
CW/ECW 1(d) Foundation Labourer 2 $25.87 $28.33 9.51%
CW/ECW 1(c) Foundation Labourer 1 $25.44 $27.37 7.59%
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CW/ECW 1(b) Foundation Labourer $25.12 $24.63 -1.95%
Casual Employees
CW/ECW 7 Working Supervisor $36.60 $81.00 121.31%
CW/ECW 5
Senior Foundation
Operator
$34.75 $37.06 6.65%
CW/ECW 4 Foundation Operator $33.79 $35.98 6.48%
CW/ECW 3
Foundation Labourer
Skilled
$32.81 $35.98 9.66%
CW/ECW 1(d) Foundation Labourer 2 $31.34 $34.66 10.59%
CW/ECW 1(c) Foundation Labourer 1 $30.83 $33.46 8.53%
CW/ECW 1(b) Foundation Labourer $30.44 $30.04 -1.31%
[19] Based on the classification matching conducted:
(a) the Foundation Labourer classification falls 1.95% to 1.31% below the Award,
both as a Daily Hire and Casual employee. The rates of pay for this classification
are deemed to be equivalent to the Award in accordance with Item 13 schedule 9
of the Transitional Act which provides that if a transitional instrument rate is less
than the Award rate, the transitional instrument has effect in relation to the
employee as if the instrument rate were equal to the Award rate.
(b) the Working Supervisor classification is at least 116.8% above the Award;
(c) all other classifications range between 5.38% to 10.59% above the Award.
[20] Employees engaged as Working Supervisors under the Agreements are paid a higher
rate which compensates employees for all rates, penalties and allowances contained in clauses
4.5.1 to 4.5.4 and 7.1 of the Agreements. These employees are engaged to work an average of
8 hours per day plus two reasonable additional hours. Rates of the Working Supervisor
classification, according to the classification matching above are at least 116.8% above the
Award. Having regard to the average hours worked by such employees set out in Appendix 1
of the Agreements, the Working Supervisor rate of pay is likely to be high enough to
compensate employees for the lack of penalties and allowances not provided to such employees.
Agreement conditions that are more beneficial than the Award
[21] The following entitlements are more beneficial under the Agreements compared to the
Award:
(a) The Agreements contain an 8-hour minimum engagement for casual employees,
compared to 4 hours under the Award;
(b) Clause 4.5.4 of the Agreements includes a Workplace Health and Safety
Representative allowance of 5% more than their calling, when appointed by the
employer. This allowance is not otherwise provided for in the Award;
(c) The definition of early afternoon shift at clause 5.4.1 of the Agreements is slightly
broader, and therefore more beneficial, compared to clause 17.1 of the Award;
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(d) The Agreements provide 12 days paid personal leave, compared to 10 under the
Award and the Act;
(e) The Agreements provide a greater fares and travel allowance of $29 for the
metropolitan radial area, compared to $20.32 under the Award.
Agreement conditions that are less beneficial than the Award
[22] The following entitlements were initially identified as less beneficial under the
Agreements compared to the Award, however on closer analysis not all of these result in
employees being worse off under the Agreements:
(a) Span of Hours (Clause 5.1)
[23] The Agreements provide a broader span of hours compared to the Award. Under clause
5.1 of the Agreements, hours of work are Monday to Friday between 5am and 6pm with the
ability to agree with employees for the finishing time to be later, but no later than 9pm. Under
the Award, hours of work are Monday to Friday between 7am (or 6am by agreement) and 6pm.
[24] While the rates of pay are not high enough to compensate employees for the earlier start
provided for in the Agreements, the higher fares and travel allowance (in particular, the
Metropolitan radial area allowance) may result in employees’ pay under the Agreements being
above the Award. Further, with respect to the extended finish time, a shift concluding at 9pm
would be deemed an afternoon shift, and would attract shift penalties under both the
Agreements and Award. Therefore, the extended span of hours does not result in employees
being worse off under the Agreements.
(b) Public Holidays (Clause 6.5)
[25] Clause 6.5.4 of the Agreements provides that all time worked on a public holiday outside
the ordinary start and ceasing times contained within the Agreements is paid at 200%, rather
than the 250% penalty applicable for work engaged in during ordinary hours on a public holiday
provided by clause 30.1(e) of the Award. Taking this into consideration over an averaging
period, this is unlikely to result in employees failing the better off overall test, given the rates
of pay under the Agreements.
(c) Shift Work (Clause 5.4)
[26] The Agreements do not contain a definition for morning shift, as otherwise set out at
clause 17.1 of the Award. However, clause 5.4 of the Agreements define early morning shift as
any shift starting after 11pm, and at or before 5am. Under the Award, a morning shift is defined
as a shift commencing at or after 4:30am and before 6am. Therefore, a morning shift under the
Award commencing after 5am would be deemed ordinary hours under the Agreements and paid
as such.
[27] Further, an early morning shift worked under the Award is paid at 150% compared to
the Agreements under which it is paid at 125%.
[28] In our view, the rates of pay in the Agreements are not high enough to compensate
employees for these reductions in entitlements.
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(d) All-In Payment (Clause 4.1)
[29] Clause 4.1 of each of the Agreements allows, by agreement, for casual employees to
receive an all-in payment which is defined as an ‘hourly rate or piece work rate which is meant
to cover wages and/or allowances and/or conditions, such as annual leave, sick leave etc’. The
all-in payment is calculated based on the hourly rate of pay contained in the agreement, plus
site allowances (if applicable), plus multi-storey allowance and an additional 68% loading to
cover entitlements other than Building Unions Superannuation Scheme (BUSS), the Building
Employees Redundancy Trust (BERT), Construction Income Protection (CIPS) and Building
Employees Welfare Trust (BEWT). Clause 19.6 of the Award allows for payment of piece rates;
however the Award provides a requirement that an employee must be paid no less than the
amount which the employee would have been entitled to receive under the rates and allowances
prescribed by the Award. The Award piece work rate does not compensate for the NES
entitlements. No similar minimum guarantee is set out within the Agreements.
[30] The 68% loading paid in addition to the hourly rate of pay and relevant allowances, is
likely to compensate employees for a significant amount of time worked. However, in the
absence of information as to work performed, this 68% loading may not be high enough where
significant overtime, shift or weekend work is worked by an employee. Further, the clause lacks
the required safeguards needed to ensure employees remain better off overall under such an
arrangement.
(e) Allowances (Clause 4.5)
[31] The Agreements provide increases to allowances up until January 2009, but do not
specify how any future increases, if any, are to be calculated. For the purposes of this
comparison, allowances under the Agreements as at January 2009 have been compared to
allowances under the Award as at 1 June 2023, the date that the applications were made.
[32] The Agreements provide the following allowances at a rate lower than the Award:
(i) Clause 4.5.2: First aid allowance of $2.42 or $3.81 per pay (depending on
qualifications) compared to $3.39 and $5.36 per day under the Award;
(ii) Clause 4.5.3: Reduced leading hand allowance (varies depending on the
number of persons am employee is in charge of);
(iii) Clause 5.6: Meal allowance at $15 compared to $16.37 under the Award;
(iv) Clause 7.1.1: Fares and travel allowance (for outside 50 kilometres radial
area) at $0.47 per kilometre, compared to $0.55 per kilometre under the
Award;
(v) Clause 7.1.1: Fares and travel allowance (travel between sites in employees
own vehicle) at $0.84 per kilometre compared to $0.91 per kilometre under
the Award;
(vi) Clause 7.2.1: Forward journey meal allowance of $11.85 per meal compared
to $16.37 per meal under the Award;
[2023] FWCA 3011
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(vii) Clause 7.2.1: Return journey meal allowance of $19.24 per journey compared
to $24.27 per journey for daily hire employees;
(viii) Clause 7.2.3: Weekend return home allowance of $32.44 per occasion
compared to $41.13 per occasion under the Award;
(ix) Clause 7.3.3: Living away from home allowance of $60 per day compared to
$80.19 per day under the Award;
[33] The Agreements do not contain a number of allowances otherwise provided in the
Award, including:
(i) industry allowance otherwise provided under clause 22 of the Award,
however there is an entitlement to a site/piling allowance under clause 4.5.5
of the Agreements set out above;
(ii) underground allowance;
(iii) lift allowance;
(iv) multistorey allowance;
(v) tool allowance.
[34] It is likely that some of these allowances are not applicable to the work performed by
employees covered by the Agreements.
(f) Overtime – Crib time
[35] In accordance with Clause 18.3(b) of the Award, employees engaged to work overtime
for 2 hours or more after their usual finish time are entitled to a 20-minute paid crib break after
their finishing time, and after each 4 hours of continuous work, a paid crib break of 30 minutes.
While the Agreements contain similar crib entitlements for weekends worked and where 3
continuous and consecutive shifts of 8 hours per day are worked (ordinary hours), the
Agreements do not appear to contain the same overtime crib entitlement as provided at clause
18.3(b) of the Award. This may result in classifications becoming worse off compared to the
Award for classifications that are the closest in margin but only in very specific rostering
circumstances having regard to the other reductions in the Agreements.
Applicants’ Case
[36] In response to the analysis conducted by the Commission, the Applicants submitted that
the pay rates and allowances in the Agreements have been increased since 2009, including the
piling allowance which has increased from $3 to $4, and the travel allowance which has
increased from $29 to $40. The Applicants also submitted that there are no all-in payments
arrangements in place under section 4.1 of the Agreements.
[37] On 2 August 2023, the Applicants sent the following email to the Commission:
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We agree that the EBA does not provide for percentage increase post 2009, however the
EBA is still current and we have increased rates on a percentage basis since 2009. This
is as shown on previously submitted pay slips. Even using the highest rates in the EBA
from Jan 2009 as per Commission table, plus superannuation etc. our employees are
better off under the existing EBA rather than the modern award.
Taking in to account other points, we pay $40 per day travel allowance which is $11
more than the award and our piling allowance is a higher figure.
Consideration
[38] As noted above, the applications relate to collective agreement-based transitional
instruments which satisfies the requirements of subitem 9(a).
[39] In relation to the better off overall criterion in subitem 9(b), the Full Bench in Suncoast
Scaffold said:2
[15] The requirement for the better off overall criterion in subitem 9(b) to be assessed
by reference to the award covered employees ‘viewed as a group’ appears to allow for
the possibility that the criterion may be satisfied, notwithstanding that some individual
employees are not better off overall than under the relevant award, as long as there is a
discernible advantage for the employees considered as a collective. Further, there only
needs to be satisfaction as to the ‘likelihood’ of such a discernible collective advantage;
that is, it only needs to be probable rather than certain. Taking these matters together, it
is apparent that the better off overall criterion is less stringent that the BOOT in s 193
of the FW Act. However, beyond these broad observations, subitem 9(b) discloses no
methodology as to how the criterion is to be applied. All that can be said is that a broad
evaluative judgment is required based upon an overall comparison of the terms of the
transitional instrument and the relevant award(s) in their application to the cohort of
award covered employees.
[40] The Applicants did not disagree with any specific aspect of the Commission’s analysis
of the BOOT, so it is not clear to us the basis upon which the Applicants assert that employees
are better off under the existing Agreements rather than the Award. In responding to the
analysis, the Applicants have pointed to increases they have applied to the rates of pay and
allowances in the Agreements since 2009. It is likely that many of the ‘better off overall’
concerns would fall away if these higher rates of pay were relevant to our consideration of the
matter. However, the analysis is based on the question of whether employees would be better
off overall if the Agreements continued to apply to them than if the relevant modern award
applied, and therefore the better off overall analysis is limited to the terms of the Agreements,
and not those that sit outside those instruments.
[41] Having regard to an overall comparison of the terms of the Agreements and the Award,
including the lack of morning shift and a reduced early morning shift penalty, the all-in payment
arrangement, and the majority of allowances being less than the Award, we are not satisfied
that there is likely to be a discernible advantage for the employees considered as a collective to
be covered by the Agreements rather than the Award. We therefore do not accept that it is likely
that, as at the time the applications were made, the award covered employees viewed as a group,
would be better off overall if the Agreements applied to the employees than if the relevant
modern award applied to the employees.
[2023] FWCA 3011
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[42] Having decided that item 20A(9) does not apply, we do not need to consider whether it
is otherwise appropriate to extend the default period of the Agreements under item 20A(6)(a).
[43] We will, however, consider whether it is reasonable in the circumstances to do so under
item 20A(6)(b). As observed by the Full Bench in Applications to extend the default period for
the One HPA Certified Agreement 2004-2007, the EDS People Agreement 2002 and the Alcatel-
Lucent Employment Partnership Agreement 20093, the default position of the statutory scheme
to automatically terminate transitional instruments on 6 December 2023 suggests a policy
preference for employees covered by transitional instruments to be regulated by instruments
made under the Fair Work Act 2009 (FW Act).
[44] The current arrangements referred to in the Applicants’ submissions with respect to pay
rates and allowances do not rely upon the existence of the Agreements to continue. They are
arrangements made outside of the Agreements. There is no reason advanced by the Applicants
as to why they cannot continue or be the subject of bargaining for new Agreements. There is
no basis for us to conclude that termination of the Agreements will create harsh consequences
or otherwise leave employees worse off. Indeed, the fact that the current pay and allowances
are not codified in an instrument made under the FW Act potentially disadvantages employees
in the event of a dispute arising in relation to such entitlements. For these reasons, and in the
absence of any evidence or submissions from or on behalf of employees covered by the
Agreements that they wish the Agreements to continue, we do not consider it reasonable to
extend the default period of the Agreements.
Conclusion
[45] Accordingly, we decline to grant the applications to extend the default period of the
Agreements.
[46] The applications are dismissed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AC311176, AC311178 PR766333
OF THE FAIR WORK L MISSION THE SEA
[2023] FWCA 3011
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1 [2023] FWCFB 105.
2 Ibid, [15].
3 [2023] FWCFB137, [34]
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
