Note: An appeal pursuant to s.604 (C2011/2507) was lodged against this decision - refer to Full Bench decision dated 10 August 2011 [[2011] FWAFB 5163] for result of appeal.

[2010] FWAA 9588

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

University of New South Wales
(AG2010/14910)

UNIVERSITY OF NEW SOUTH WALES (PROFESSIONAL STAFF) ENTERPRISE AGREEMENT 2010

Educational services

VICE PRESIDENT LAWLER

MELBOURNE, 16 DECEMBER 2010

Application for approval of the University of New South Wales (Professional Staff) Enterprise Agreement 2010.

[1] This is an application pursuant to s.185 of the Fair Work Act 2009 (Cth) (FW Act) by the University of New South Wales (UNSW) for approval of an enterprise agreement to be known as the University of New South Wales (Professional Staff) Enterprise Agreement 2010 (Agreement).

Background

[2] For present purposes, UNSW divides its employees into two groups: academic staff and professional staff (professional staff were previously referred to as “general staff”).

[3] There is a long history of collective agreement making at UNSW. Until now those agreements have been statutory collective agreements made with unions under successive iterations of the Workplace Relations Act 1996.

[4] The current operative agreement covering professional (general) staff, the University of New South Wales (General Staff) Enterprise Agreement 2006 (2006 Agreement), reached its nominal expiry in mid 2009.

[5] Negotiations for a new agreement to cover professional staff, of whom there are some 5000, commenced in early 2009, that is, before the commencement of the FW Act and have continued since that time. That is, the negotiations have been protracted. Protected action has been taken.

[6] It is not disputed that there is a relatively high density of union membership among employees of UNSW and a history of employees acting collectively through their unions. In this case bargaining proceeded with three unions, the CPSU, the NTEU and the AMWU, who were bargaining representatives for the Agreement by virtue of s.176(1)(b). The three unions were the only employee bargaining representatives for the Agreement.

[7] The AMWU covers a relatively small number of maintenance employees. The CPSU and the NTEU have overlapping coverage of remaining professional staff. It seems that there has been a degree of competition between the CPSU and NTEU, at times hostile. UNSW eventually concluded terms for the Agreement with the CPSU and AMWU. Pursuant to s.181, UNSW put the Agreement to vote of employees. The NTEU was dissatisfied with the Agreement and actively campaigned amongst employees for a “no” vote. The CPSU actively campaigned for a “yes” vote.

[8] UNSW retained an independent third party, Elections Australia, to conduct the vote. A clear majority of voters voted to approve the Agreement.

[9] The application for approval is supported by the CPSU and the AMWU. It is opposed by the NTEU. It would be fair to say that the NTEU has taken every conceivable point in opposing the application for approval of the Agreement.

[10] Sections 186(1) of the FW Act provides:

“186 When FWA must approve an enterprise agreement—general requirements

[11] Relevant to the issues in this case, the requirements in s.186 of FW Act include the following:

[12] Section 188 of the FW Act provides:

[13] Provisions referred to in s.188(a) and (b) and relied upon by the NTEU are set out in the course of considering the NTEU’s objections.

[14] The NTEU’s objections may be summarised as follows:

Was the Agreement “genuinely agreed to” by the employees covered by the Agreement?

Were employees given notice of their representational rights in compliance with s.173 and s.174?

[15] It will be noted that compliance with s.173 and s.174 is not expressly or directly required by s.186 or s.187 as a precondition for approval. Compliance with sections 173 and 174 is an indirect requirement arising in the following fashion. Section 186(2)(a) imposes a requirement that the agreement has been “genuinely agreed to by the employees covered by the agreement.” Section 188 specifies the matters of which FWA must be satisfied before FWA can find that an agreement has been “genuinely agreed to by the employees covered by the agreement.” Section 188(a)(ii) specifies compliance by the employer with s.181(2). Section 181(2) requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given. These, then, directs attention to whether there was a representational rights notice given in compliance with s.173 and s.174.

[16] Section 173:

[17] Part 2-4 of the FW Act, in which s.173 appears, commenced on 1 July 2009. At that time, bargaining for an agreement to replace the 2006 Agreement had already been proceeding for some months. UNSW took the view, correctly, that the commencement of Part 2-4 meant that UNSW had an obligation to give employees notice of their representational rights as required by s.173.

[18] It is not disputed that all employees covered by the Agreement had a UNSW email address and access to a computer or that UNSW has a history of communicating with its employees electronically.

[19] UNSW operates a very extensive intranet site called “myUNSW”. There is a web address that acts as a portal to that website. All students and staff have an account on “myUNSW”. A person logging on to the “myUNSW” is directed to a different home page depending upon whether they are logging on as a student or as a member of staff. The middle column on the staff home page has a heading “My Announcements”.

[20] UNSW posted an announcement under immediately under the heading “My Announcements” as follows:

[21] Pursuant to the common convention on websites “more...” was a highlighted hypertext link which the user could click to continue reading. Upon the clicking of that link, the user was taken to a webpage that repeated the text set out above and then continued with the text of the notice of representation rights.

[22] UNSW has a broadcast email facility that allows it to send a single email to all email users or to a particular groups of users. There is no dispute that UNSW had the capacity to send the notice of representational rights to all relevant employees directly as a broadcast email. Mr David Ward is the head of human resources for UNSW. He had overall responsibility for negotiating the Agreement and was UNSW’s lead negotiator. Mr Ward was the only witness to give evidence. He gave careful and considered evidence which I accept without reservation. Mr Ward admitted that, with the benefit of hindsight, it would have been better if UNSW had sent the notice of representational rights direct to employees. Of course that candid admission must be seen in the context of new legislation coming into effect during a course of bargaining that was already well underway.

[23] The NTEU contends in effect that the requirement in s.173(1) that an employer “must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee” should be approached on the basis of identifying all of the steps to give notice that could be taken and that are “reasonable” and, then, if one of those steps was not taken, FWA must find that mandatory requirement in s.173(1) has not been satisfied with the result that the application for approval must be refused. The NTEU argues that because the sending of the notice direct to employees by broadcast email was an available and obviously reasonable step that was not taken the requirement in s.173(1) was not satisfied and therefore the application for approval of the Agreement must fail.

[24] Of course, what is a “reasonable” step will depend upon the circumstances of the particular employer and employees. It may be noted that s.173(1) does not impose an obligation to give notice to each employee but, rather, to take “all reasonable steps” to give notice. This distinction ought be seen as recognising that, in many circumstances, and inevitably in the case of a very large employer like UNSW, it will be practically impossible to ensure that every single employee receives the notice. Assessing whether “all reasonable steps” have been taken must take account of this reality. For example, employees on extended leave who are travelling abroad will often be almost impossible to notify. Some steps which will typically be obviously reasonable, such as by post or email to an address supplied by the employee, may fail in relation to some employees. Giving notice by post or email to a private address supplied by the employee may fail if the employee has changed their address without notifying the employer of that change.

[25] I do not agree that s.173(1), on its proper construction, requires the approach for which the NTEU contends. Such an approach attributes a meaning to the word “all” that is at odds with the overall object and purpose of the regime for the making of enterprise agreements created by Part 2-4.

[26] In my view, s.173(1), on its proper construction, requires that reasonable steps be taken to give the requisite notice to all employees and the requirement that “all” reasonable steps be taken merely underscores that it may be necessary in particular circumstances for the employer to take multiple steps rather than a single step to notify employees because a given step may be “reasonable” in the sense of likely to be effective in respect of one group of employees but not in respect of another group of employees. For example, an employer may have a workforce some of whom have access to a computer and routinely communicate by email and others who do not and who instead rely on communication via notice boards, meetings or the like. Notification by email would be “reasonable step” for the first group but not for the second: an additional step or steps would be needed in relation to the second group.

[27] This construction is confirmed by the explanatory memorandum for s.173(1) which states:

[28] Resort to the explanatory memorandum for this purpose is authorised by s.15AB of the Acts Interpretation Act 1901 (Cth).

[29] Adopting that approach to the requirement in s.173(1) in this case, I am satisfied that UNSW did take all reasonable steps to give notice to each employee. On Mr Ward’s evidence, the “myUNSW” website is used as the primary mechanism for staff to interact with the university in relation to a range of employment related matters. It was a “forum or site that is known by and accessible to the relevant employees” and therefore a mechanism that the explanatory memorandum recognised “could” be a reasonable step. I am satisfied in the circumstances of this case that the giving of notice on the “myUNSW” website in the manner that occurred was a reasonable step for employees who were not on leave. Employees who were recorded as being on leave had the notice posted to their private address in the UNSW records. That was also a reasonable step in relation to such employees. I am satisfied that the requirement in s.173(1) was met.

[30] Section 174 of the FW Act relevantly provides:

[31] Regulation 2.05 of the Fair Work Regulations 2009 (FW Regulations) prescribes a form for the notice of representation rights, which form is found at Schedule 2.1 to the FW Regulations.

[32] The form of notice in Schedule 2.1 includes the following:

[33] The text of the notice posted on the “myUNSW” website is identical to the notice in Schedule 2.1 of the FW Regulations save that the underlined words were omitted. Mr Ward was unable to explain that omission other than to say that it must have been accidental. I am satisfied that the omission was not deliberate and occurred in some accidental fashion.

[34] The notice posted on the “myUNSW” website complied with the requirements in s.173(2), (3) and (5). The only defect relied upon by the NTEU is the omission of the underlined words which the NTEU submitted meant that the requirement in s.173(6) and reg. 2.05 was not met.

[35] In the practical circumstances surrounding the bargaining for the Agreement that I have set out above, this is an arid technical objection. As a practical matter in this case, bargaining for a replacement agreement was always going to be determined by the course of negotiations with the three unions who together were always going to be representing the overwhelming majority of employees - irrespective of the content of the notice of representational rights. Moreover, the content affirmatively prescribed in s.174(2), (3) and (5) - the subsections applicable to the Agreement - does not in any way include or even directly relate to the omitted words.

[36] The NTEU’s objection is answered by s.25C of the Acts Interpretation Act 1901 which, by virtue of 13 of the Legislative Instruments Act 2003, applies to regulations as if they were Acts. Section 25C provides:

[37] There was, on any reasonable view, substantial compliance in this case. It follows that the NTEU objection based on the form of the notice is rejected.

Agreement not “genuinely agreed to” because employees not provided with access to material incorporated by reference?

[38] Again, s.186(2)(a) imposes a requirement that the agreement has been “genuinely agreed to by the employees covered by the agreement.” Section 188(a)(i) makes compliance with s.180(2) a precondition for FWA to be satisfied that the agreement was “genuinely agreed to” by employees. The requirement in s.180(2) is as follows:

[39] Clauses 38.3 and 38.4(a) of the Agreement provide:

[40] The NTEU contends that the Long Service Leave Act 1955 (NSW) (LSL Act) and the material referred to in clause 38.4(a) is incorporated by reference into the Agreement by virtue of those provisions. Copies of that Act and material were not provided to employees. The NTEU submits that, accordingly, the requirement in s.180(2)(a)(ii) has not been satisfied.

[41] Clause 9(c) provides:

[42] I agree with the submission of the NTEU that, generally speaking, if a particular provision explicitly incorporates another document by reference then the presence of a general provision such as clause 9(c) cannot take effect to prevent that incorporation by reference. However, clause 9(c) may be relevant in determining whether a particular provision, on its proper construction, has the effect of incorporating material by reference.

[43] In any event, to the extent that clause 38.3 incorporates the LSL Act into the Agreement by reference, I consider myself bound by the decision of the Full Bench in Re McDonald’s Australia Enterprise Agreement 2009 1 which made it clear that there is no need to take further steps to provide access to materials, like legislation, that is freely available in the public domain.2

[44] However, I disagree with the NTEU that the material referred to in clause 38.4(a) is properly to be regarded as being incorporated into the Agreement. Rather, that paragraph does no more than identify that, in particular circumstances, an entitlement will be as it was immediately prior to the commencement of the Agreement, noting that the documents specifying that entitlement will be available on UNSW’s website. That is not incorporation by reference.

Agreement not “genuinely agreed to” because of failure to explain the terms of the Agreement and the effect of those terms?

[45] Again, s.186(2)(a) imposes a requirement that the agreement has been “genuinely agreed to by the employees covered by the agreement.” Section 188(a)(i) makes compliance with s.180(5) a precondition for FWA to be satisfied that the agreement was “genuinely agreed to” by employees. The requirement in s.180(5) is as follows:

[46] The NTEU contends that the University failed to adequately explain the terms of the Agreement, and the effect of those terms, as required by s.180(5)(a) because it failed to identify certain disadvantageous changes from the 2006 Agreement. Having regard to the evidence of Mr Ward 3, which I accept, none of the matters relied upon by the NTEU were matters of any great moment. UNSW provided substantial explanatory material. A practical approach needs to be adopted in relation to the obligation in s.180(5)(a). Obviously, the nature of the explanation provided to employees who will be covered by an agreement, and the steps that will constitute “all reasonably steps” will vary according to the circumstances of the employer and employees covered by the agreement and the complexity of the agreement.

[47] In this case the Agreement is lengthy and complicated. The obligation in s.180(5)(a) did not require UNSW to explain every single feature or every single clause in the Agreement. I am not persuaded that UNSW failed to comply with s.180(5)(a).

Agreement not “genuinely agreed to” because employees were misled?

[48] There can be little doubt that if employees are sufficiently misled about the contents or effect of a proposed enterprise agreement this may form a proper basis for a finding that the agreement was not “genuinely agreed to” by employees as required by s.186(2)(a) notwithstanding that a majority of voting employees voted to approve the agreement. In a proper case s.188(c) would be engaged. Obviously, whether this is so will depend on all the circumstances. However, having regard to the object and purpose of FW Act as a whole and Part 2-4 in particular, it seems to me that a relatively heavy onus falls on a party opposing approval of an agreement on that basis. (I use the word “onus” in an evidentiary sense: I am not suggesting that there is a formal onus of proof on an objector.)

[49] The Agreement provides for a sign-on bonus of $1,000 for all ongoing employees and for all part-time employees on a pro-rata basis. The bonus is not payable to casual employees.

[50] The key matter relied upon by the NTEU in relation to this ground is that the CPSU, who actively campaigned in favour of the Agreement, produced and distributed campaign flyers and other material, including material on its website, that prominently suggested, as a reason for voting in favour of the Agreement that all employees would receive the $1,000 sign-on bonus. UNSW did not itself make that claim but included a link to the CPSU website on the “myUNSW” website. The NTEU contended that the CPSU material misled employees in relation to a material matter in failing to state that part-time employees would only receive a pro-rata bonus and casual employees would receive no bonus at all. It contended that UNSW compounded that misleading conduct by linking the relevant part of the “myUNSW” to the CPSU website. The NTEU then contended that that conduct may have misled employees into voting “yes” when they would otherwise have voted “no” such that FWA could not be satisfied that the Agreement was genuinely agreed to by employees.

[51] It is inevitable that in a hotly contested vote in which opposing parties actively campaign for or against support of an agreement that statements will be made that can be characterised as misleading. To the extent that reliance is placed on misleading statements to the voting employees as “a reasonable ground for believing that the Agreement has not been genuinely agreed to by the employees” within the meaning of s.188(c) a practical approach, that takes account of this reality, is called for. There needs to be some proper basis for supposing that the misleading statements may have been determinative in the vote getting over the line.

[52] I note that there was no evidence from any part-time or casual employee to the effect that a belief, engendered by the CPSU material, that they would receive a $1,000 bonus was determinative in causing them to vote in favour of the Agreement. More generally, I am far from persuaded that, in the circumstances of this case, employees were misled to the extent that I should be satisfied that conduct in question constituted a reasonable ground for believing that the Agreement has not been genuinely agreed to by the employees within the meaning of s.188(c).

Agreement not “genuinely agreed to” because persons not entitled to vote were allowed to vote

[53] The NETU tendered without objection a witness statement from a person who had a single casual engagement that had concluded well before the commencement of the access period. She had made no arrangement to work again and yet she received a ballot for the vote on the approval of the Agreement. This was evidence of at least one person who received a vote who was not entitled vote.

[54] The persons entitled to vote in a ballot to approve an agreement are specified, at least indirectly, in s.181:

[55] The time which is referred to by the expression “at the time” is not entirely clear. It could refer to the time of the request or the time of the vote (which may be a period of days). The Explanatory Memorandum provides no assistance.

[56] Section 172(1) defines an “enterprise agreement” by reference to the content of the agreement. Section 172 relevantly defines a “single-enterprise agreement” as follows:

[57] Section 182(1) defines when a single-enterprise agreement is made:

[58] The terms of s.172(2) and s.182(1) in combination suggest that the relevant “time” for the purposes of s.181 is the time that voting concludes. Ordinary parsing and analysis of the wording of s.181 suggests that the time is the time of the request. It is unnecessary to decide the point because, in the particular circumstances of this case, nothing turns on it.

[59] I will proceed on the basis that the expression “at the time” refers to the time of the request. That said, nothing in this case turns on that issue.

[60] Identifying “employees employed at the time” is relatively straight forward in relation to permanent or ongoing employees and employees on fixed term, outer limits or specified task contracts. However, that task becomes more problematic in relation to casual employees.

[61] I regard it as obvious and incontestable that enterprise agreements were intended by the legislature to be capable of covering casual employees. There is no provision of the FW Act that provides direct guidance as to when a casual employee ought be regarded as an employee “employed at the time” within the meaning of s.181(1).

[62] Under the general law a casual employee is employed for the duration of each engagement: that is, their employment commences and finishes with the commencement and finish of each engagement. However, for the purposes of an unfair dismissal remedy, the FW Act and its predecessor conditioned a casual employee’s access to the remedy on whether the casual employee had been engaged on a “regular and systematic” basis for the required period. In the FW Act, s.384 defines an employee’s “period of employment”. That definition appears in Part 3-2 relating to unfair dismissal. However, in my view it provides appropriate guidance in relation to when a person who periodically works as a casual employee should be regarded as “employed at the time” for the purposes of s.181. Section 384 relevantly provides:

[63] There is a definition of “long term casual employee” in s.12 of the FW Act:

[64] That definition is obviously for the purposes of the National Employment Standards: it appears only in relation to the divisions of the NES relating to requests for flexible work arrangements (Div 4 of Part 2-2) and conditioning an entitlement for casual employees to parental leave (Div 5 of Part 2-2).

[65] These provisions evince an intention that casual employees who are employed on a “regular and systematic basis” are to be treated differently from what may be described as “mere” casuals engaged on a one-off or ad hoc basis.

[66] Having regard to the context and purpose of the FW Act as a whole, in my view, a casual employee will be entitled to participate in a vote for an enterprise agreement that will cover them if, at the time specified in s.181, they have been employed as a casual on a regular and systematic basis (and with no basis for supposing that this will not continue) or if their current engagement extends for a period beyond the close of voting such that, in either case, it could be said that they “will be covered by the agreement” within the meaning of s.181.

[67] Mr Ward gave evidence of grappling with the problem of how to include casual employees in the ballot. UNSW is divided into a large number of schools, departments, institutes and like that are independently administered to a significant degree, including in relation to the hiring of casuals. It would have been relatively difficult for Mr Ward to assemble a list of “current” casuals with any degree of accuracy. A decision was made to include all persons recorded in the UNSW pay system as casual employees who had received a pay within the last three months. This would ensure that all regular and systematic casuals would be included. Necessarily, it was likely that a number of persons who were not entitled to vote would have been given the vote (namely, casuals who were engaged on a one off basis in a three month period or a casual with regular and systematic engagements that came to an end in the three month period).

[68] I accept that where the persons who are allowed to participate in a vote on whether to approve an enterprise agreement include persons who are not entitled to vote then this fact may well lead to a finding that the Agreement was not “genuinely agreed to by the employees covered by [it]”, including by reference to whether FWA could be satisfied that a majority of employees entitled to vote approved the agreement or by the criterion in s.188(c). However, that will not invariably be so. There is no provision of the FW Act that expressly conditions the validity of a vote on whether votes were cast only by persons who had an entitlement to vote or otherwise makes this a prerequisite to approval. The issue remains whether the agreement “has been genuinely agreed to by the employees covered by the agreement”. The fact of votes being cast by persons who were not entitled to vote becomes particularly relevant in the context of s.188(c), which requires FWA to be satisfied, in addition to the matters specified in s.188(a) and (b), that “there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

[69] In my view, the fact of votes being cast by persons who were not entitled to vote would not constitute a reasonable ground within s.188(c) if it is clear on the evidence that such votes would have made no difference to the outcome.

[70] UNSW supplied Elections Australia with a separate of list of the “casual employees” who formed part of the electorate for the approval vote and asked it to provide a breakdown of voting by “casual employees”. The analysis by Elections Australia yields the following figures:

 

All Employees

Casual Employees

         

Yes

1142

60.14%

169

69.26%

No

747

39.34%

75

30.74%

Invalid

10

0.53%

0

0.00%

Total

1899

  

244

  
         

Yes votes exceeded No votes

395

      

[71] The numbers reported by UNSW in its F17 Employer’s Declaration vary slightly from these figures. This is because 15 voters delivered their votes direct to the Chancellery. Nine of those votes were “yes” votes and five were “no” votes. Mr Ward adjusted the numbers supplied by Elections Australia accordingly. There is no information on which, if any, of those employees were casuals.

[72] It is evident that even if all “yes” vote by casual employees are disregarded (including the 15 votes delivered direct to the Chancellery) there was still a clear majority of votes in favour of approving the agreement.

[73] It follows that the fact that some employees who were not entitled to vote were given a vote does not provide a proper basis for concluding that the requirement in s.186(2)(a) that the Agreement “has been genuinely agreed to by the employees covered by” the Agreement is not met. On the evidence before me I am satisfied that that requirement is met.

Group of employees not fairly chosen

[74] One of the requirements in s.186, of which FWA must be satisfied, is the requirement in s.186(3) and (3A):

[75] The NTEU contends that the group of employees covered by the agreement was not fairly chosen because of the way in which clause 5.2(a)(iv) of the Agreement operates. Clause 5.2 excludes certain employees from the coverage of the Agreement. The class excluded by clause 5.2(a)(iv) is:

[76] Nura Gili is an organisation created by UNSW to administer programs for indigenous persons. It operates under a policy entitled “UNSW Indigenous Employment Plan 2007-2010” which at one point refers to “trainees” and “traineeships” and then states:

[77] There is a long history of separate industrial arrangements for apprentices and trainees/cadets. The exclusion of trainees/cadets from the coverage of an agreement is not uncommon and such exclusion does not, of itself, lead to a conclusion that the group of employees covered by the agreement was not fairly chosen. The NTEU appears to accept that proposition. It makes a different point. The NTEU contends that non-indigenous full-time students who perform paid work for UNSW during the long second semester break will be covered by the Agreement but, by virtue of clause 5.2(a)(iv), indigenous full-time students who undertake work experience at UNSW during the long second semester break will not be covered by the Agreement leading to a situation where full-time students who perform work experience at UNSW as a paid employee during the long second semester break will be treated differently depending upon whether or not they are indigenous. Mr McAlpine for the NTEU did not press any contention that this involved adverse discrimination against indigenous persons. I accept without reservation that UNSW is strongly opposed to adverse discrimination on the basis race or ethnicity and did even conceive, let alone intend, that the exclusion in clause 5.2(a)(iv) would have an adverse discriminatory effect.

[78] As a matter of general law, mere “work experience” does not involve a contract of employment. That is, as a matter of general law, a full-time student who performs a period of “work experience” will not be an employee of the host employer unless there is there an agreement between the host employer and the student that constitutes a contract of employment. There can be no contract of employment unless there is the “mutuality of obligation” that is essential to existence of a contract of employment, including, relevantly, an obligation on the student to perform work during the period of work experience. 4 The approach of the High Court in Deitrich v Dare5 would suggest that, absent an express agreement to contrary, there is no contract of employment involved in period of “work experience”, even where some (modest) payment is agreed. Obviously, that position is subject to legislation regulating periods of “work experience” by full-time students. I can find no Federal or NSW legislation that would render a full-time student at UNSW performing “work experience” during the long semester break an employee.

[79] Thus, it would seem that, to the extent that a non-indigenous full-time student is performing work experience, they will not be an employee and therefore will not covered by the Agreement. To the extent that they are an employee this will only be because there is an express contract of employment. An indigenous full-time student is in exactly the same position. If such a student is engaged in mere work experience then the Agreement will not cover them. There is nothing to prevent UNSW entering an express contract of employment with an indigenous student in relation to a period that is described as “work experience” independently of any program run by Nura Gili in the exactly the same way that the UNSW may so engage a non-indigenous student.

[80] I am satisfied that the group of employees covered by the Agreement was fairly chosen.

Cashing out long service leave entitlements

[81] While my decision was reserved, the NTEU raised an additional objection to the Agreement because it contains a term, clause 38.8, purporting to authorise the cashing out of long service leave. That objection was based on the fact that the LSL Act contains a prohibition on the cashing out of long service leave entitlements arising under that Act and the fact that the Agreement confers long service leave entitlements by reference to the LSL Act. The objection relied on an analysis in a Statement issued by Commissioner McKenna 6 in which the Commissioner concluded that the cashing out of long service leave by an employer to whom the LSL Act applied was prohibited by the LSL Act and that an undertaking that that prohibition would be observed would be required before the Commissioner was prepared to approve the enterprise agreement.

[82] Division 9 of Part 2-2 is the division of the National Employment Standards that deals with long service leave. It specifies the long service leave entitlements for two classes of employees but those two classes do not cover the field. It is obvious from the terms of Div 9 of Part 2-2 that many employees do not have an entitlement to long service leave under that division.

[83] I agree with the Commissioner that the effect of

is that the operation of the LSL Act is preserved by the FW Act other than for employees to whom it would otherwise apply who derive an entitlement to long service leave pursuant Division 9 of Part 2-2 of the FW Act. (Of course, to the extent that Div 9 of Part 2-2 specifies the LSL entitlement of the two classes and is truly inconsistent with a relevant State law then, by virtue of s.109 of the Constitution, it prevails over that State law to the extent of any such inconsistency.)

[84] Section 29(1) provides that, subject to s.29(2), an enterprise agreement prevails over a law of a State or Territory. This suggests a legislative intention that a law of a State or Territory referred to in s.29(2) can prevail over an enterprise agreement. Section 29(2)(b) specifies “any law of a State or Territory so far as it is covered by s.27(1)(b), (c) or (d)”. The LSL Act is a law of a State covered by s.27(1)(c) and (d). It follows that a cashing out provision in an enterprise agreement, to the extent that it covers employees who are not “entitled under Division 9 of Part 2-2 to long service leave” cannot prevail over the prohibition on cashing out long service leave in the LSL Act in relation to employees to whom the LSL Act applies.

[85] Obviously, in relation to employees “who [are] entitled under Division 9 of Part 2-2 to long service leave”, an enterprise agreement is subject to the usual constraints in relation to the NES (see s.55) and cannot reduce or exclude the entitlement - the only permissible terms are those that are reproduce the Div 9 Part 2-2 or are incidental or supplementary. Whether a cashing out provision is “incidental or supplementary” is a question on which a Full Bench has yet to speak.

[86] There are no employees covered by the Agreement “who [are] entitled under Division 9 of Part 2-2 to long service leave” because s.113 does not apply to any employee covered by the Agreement. This because:

[87] More importantly for present purposes, assuming that the LSL Act operates in relation to the UNSW and its employees covered by the Agreement, I part company with the Commissioner on the significance of that fact for the purposes of determining whether or not the enterprise agreement is to be approved. Section 186 does not confer any discretion on FWA: if the requirements of s.186 and 187 are met (and those sections call up other requirements in Part 2-4), then FWA must approve the agreement. By virtue of s.190(1)(b), s.190, which allows FWA to approve an enterprise agreement with undertakings, applies only if “FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187”. I can see no requirement in s.186 or s.187 (or in the other requirements in Part 2-4 called up by s.186 or s.187) that prohibits inconsistency with a State law such as the LSL Act. It seems to me that the presence in an enterprise agreement of a term providing for the cashing out of long service leave contrary to an applicable State Act is not a basis for refusing to approve the Agreement or for requiring an undertaking as a condition precedent to approval.

[88] The NTEU submitted that clause 38.8, “insofar as it purports to allow the cashing-out of LSL is of no effect as it is not a permitted matter under section 172(1)(a) of the FW Act”. Permitted matters are specified in s.172(1) which, omitting the notes to that subsection, provides:

[89] Long service leave is a matter that, on any view, pertains to the relationship between employer and employees. There is nothing in s.172 which deprives a matter of the status it would otherwise have as a permitted matter simply because the matter is subject to restrictions or prohibitions under State law. I reject the argument that clause 38.3 is not about a permitted matter. I respectfully disagree with Commissioner McKenna who observed in her Statement 7 that a clause allowing for the cashing out of long service leave contrary to the LSL Act could not, on that account, “properly be characterised as a permitted matter”. There is nothing in the language of s.172 that supports that conclusion. I do agree with the Commissioner that such a clause “would not displace the prohibition on cashing-out in the [LSL Act], nor the offence and penalty provisions arising under that legislation.”8

Better Off Overall Test

[90] The requirement in s.186(d) is that “the agreement passes the better off overall test.” Pursuant to s.189, FWA may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest but there was no argument in this case that the Agreement should be approved on that basis if it fails that test.

[91] The better off overall test (BOOT) is specified in s.193. The key provision is s.193(1) which provides:

[92] Where, as here, employees are covered by a enterprise award with continuing operation rather than a modern award, the test in s.193(1) is applied by reference to that enterprise award. 9

[93] There were two reference instruments for the purposes of the BOOT test:

[94] The NTEU contends that the Agreement disadvantages employees in several ways. The main matters identified by the NTEU in that regard are:

[95] The NTEU relied on several other matters that are relatively minor.

[96] It is trite to observe that awards typically contain both monetary and non-monetary terms and conditions. Obviously enough, the BOOT calls for an overall assessment. Comparing monetary terms and conditions is, at the end of the day, a matter of arithmetic. There is an obvious problem of comparing apples with oranges when it comes to including changes to non-monetary terms and conditions into the “overall” assessment that is required by the BOOT. In such circumstances the Tribunal must simply do its best and make what amounts to an impressionistic assessment, albeit by taking into account any evidence about the significance to particular classes of employees covered by the Agreement of changes to particular non-monetary terms that render them less beneficial than the equivalent non-monetary term in an award. In my view, it may also be relevant to consider the terms of any existing agreement and whether there is a relevant change of position when compared to that existing agreement.

[97] Exhibits H and I are lengthy tabular comparisons between the Agreement and the two awards which identify an extensive list of ways in which the Agreement is more beneficial than each of the relevant award. Those documents do not refer to any disadvantages in the Agreement and the F17 Employer’s Declaration indicates that there are no terms and conditions in the Agreement that are less beneficial than equivalent terms and conditions in the reference awards. While I have no doubt that Mr Ward made that declaration in good faith, the NTEU had identified a number of respects in which the Agreement is less advantageous than each of the relevant awards.

[98] Whether the removal of the restrictions on fixed term employment is properly to be regarded as rendering the Agreement less beneficial to the extent to which the NTEU contends is debatable. It is true that under the Agreement a fixed term employee can be made the subject of a probation period and there can be early termination for misconduct or poor performance and that this will involve a reduction in job security for employees engaged under new fixed term contracts during the life of the Agreement. On the other hand, there is a reasonable argument that these changes will lead to a decrease in the use of casual employment and an increase in the use of fixed term employment (a benefit for an employee who can secure a fixed term contract in circumstances where they would otherwise only be offered casual employment) and an enhanced chance of a fixed term contract being renewed.

[99] Be all that as it may, and subject to concerns that I have arising from differences in the span of hours and the removal of a minimum period of engagement for casuals, the contention that the Agreement fails the BOOT in relation to any employee is, in my view, unsustainable. I circulated to the parties a copy of a comparison prepared by the Agreements Team of FWA. That analysis correctly identifies that every employee is substantially better off in monetary terms under the Agreement. Subject to the concerns I have identified, I am satisfied that every employee is better off overall under the Agreement. While I am prepared to accept that the matters relied upon by the NTEU do represent a species of disadvantage to some employees my assessment is that any such disadvantage is substantially outweighed by the monetary and non-monetary benefits conferred by the Agreement.

[100] I was concerned that the greater span of ordinary hours under the Agreement has the potential to leave some employees worse off, notwithstanding the higher wage rates in the Agreement. This is because an employee who has the a large number of their ordinary hours rostered within the span in the Agreement but outside the span in the relevant award could end up being worse off through not receiving shift penalties that would be payable under the award.

[101] I was also concerned that the Agreement removes the award restriction on the minimum hours of engagement. The costs associated with travel to and from work can leave a casual employee disadvantaged if their engagement is for significantly less than the minimum period in the award.

[102] My concerns were met by an undertaking given by the UNSW, a copy of which is attached to the last page of the Agreement.

[103] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, the Community and Public Sector Union and the National Tertiary Education Union have given notice under s.183 of the FW Act that they want the Agreement to cover them. In accordance with s. 201(2) of the FW Act I note that the Agreement covers these organisations.

[104] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 23 December 2010. The nominal expiry date of the Agreement is 12 December 2013.

VICE PRESIDENT



Appearances:

J. De Flamingh, solicitor, for the University of New South Wales.

K. McAlpine for the National Tertiary Education Union.

M. Perica for the CPSU, Community and Public Sector Union.

C. Drane for the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries

Union" known as the Australian Manufacturing Workers' Union (AMWU).

D. Wedgwood for the Australian Higher Education Industrial Association (intervening).

Hearing Details:

2010.
Melbourne-Sydney (video hearing):
November 8, 16.

Sydney (telephone hearing):

November 5, 18.

 1   [2010] FWAFB 4602.

 2   Ibid at [43].

 3   Transcript, 16 November 2010, PN1045ff.

 4   Deitrich v Dare (1980) 30 ALR 407 at 411. See also Birkett v Tubbo Estate Co Pty Ltd (1997) 14 NSWCCR 369; Fogliano v Royal & Sun Alliance Workers Compensation (SA) Ltd (Quality Training Company) [1999] SAWCT 33.

 5   Ibid.

 6   [2010] FWA 8300.

 7   Ibid [34].

 8   Ibid.

 9   Item 18 of Schedule 7 to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.




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