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An agreement that is not a greenfields agreement passes the better off overall test (BOOT) when the Fair Work Commission is satisfied that each present and prospective award covered employee would be better off overall if the agreement applied rather than the relevant modern award.[1]
The Commission needs to be satisfied that, weighing the agreement provisions as a whole with those in the award, an employee is better off overall.[2]
Re Solar Systems Pty Ltd [2012] FWAFB 6397 (Watson VP, Sams DP, Deegan C, 24 August 2012).
At first instance, the Commission refused to approve the Solar Systems Pty Ltd Enterprise Agreement 2011 on the basis that the agreement did not pass the BOOT.
The employer appealed the decision, asserting that the Commission erred in approaching and applying the BOOT and in determining that the agreement did not pass the BOOT.
In granting permission to appeal and quashing the first instance decision, the Full Bench affirmed the approach to the BOOT taken by the Full Bench in Re Armacell Australia Pty Ltd and stated that the task of applying the BOOT is best expressed as applying the words in s.193.
The Full Bench stated that, for the purposes of the BOOT, 'a matter needs to be advantageous or disadvantageous. It is then a matter of balancing the items that fall within the two categories to come to an overall view.' The Full Bench was not satisfied that the first instance decision had done this. The Full Bench concluded that the Commission did not adequately or fairly apply the terms of the BOOT to the agreement, and placed little weight on the higher wages or further wage increases provided for in the agreement.
The Full Bench remitted the approval application to the Commission and the agreement was subsequently approved.
Re Datatech Australia Pty Ltd [2013] FWCA 2313 (Bull C, 16 April 2013).
An application was made for the approval of the Datatech Australia Pty Ltd (NSW) Enterprise Agreement 2013–2017. The agreement provided for an ordinary span of hours between 5:00 am and 7:00 pm. The relevant modern award provides for an ordinary span of hours from 6:00 am to 6:00 pm.
The Commission questioned the increase in the spread of hours compared to the relevant modern award and how employees covered by this agreement were better off overall. The applicant advised that the rates of pay in the agreement were significantly higher, and consequently compensate for the increase in the span of ordinary working hours.
The Commission was satisfied that the increase in the span of ordinary hours satisfied the better off overall test, the agreement was approved.
An application was made seeking the approval of a single-enterprise agreement to be known as the Ace Buses Enterprise Agreement 2014. The agreement was to cover 69 casual employees, engaged as Bus Drivers (who transported school aged children with physical and intellectual disability between their homes and their school), Bus Supervisors (one of whom must accompany the Bus Driver on all trips) and administration staff.
At first instance, the Commission was satisfied that the agreement met the BOOT, and approved the agreement.
The TWU appealed, claiming that the Commission had erred in considering the benefits said to flow from the agreement and therefore had failed to apply the BOOT correctly. Specifically, the TWU was concerned about the Commission's characterisation of the following arrangements as 'non-monetary benefits':
In addition, the TWU contended that the split shift arrangements under the agreement were significantly less beneficial than those applying under the relevant modern award and that the Commission had not accounted for the situation of employees who did not receive the above benefits.
The Full Bench stated that the application of the BOOT is a matter that involves the exercise of discretion and a degree of subjectivity or value judgement.
The Full Bench determined that the TWU had not demonstrated any error in the first instance decision and accordingly, permission to appeal was refused.
An application was made for approval of The Andrew Crawford Group Pty Ltd Enterprise Agreement 2013. The agreement applied to employees who worked as static guards, crowd controllers or 'cash in transit escorts'.
The Commission did not consider that the agreement met the BOOT. Additional information provided by the employer addressed the concerns in relation to the agreement making process and the BOOT, with the exception of the Commission's concerns regarding pay rates for the crowd controller classification. For those employees, rates/penalties under the proposed agreement were higher than the award during the week but were lower for weekend and public holiday work. The majority of work for crowd controllers took place Thursday to Saturday.
The employer submitted that the agreement should be approved on the basis that the Commission had approved other agreements for its competitors with a similar discrepancy in rates.
The Commission was not satisfied that the agreement met the requirements of the BOOT with respect to the crowd controller classification. Following a conference, the employer offered an undertaking that the difference between the rates for weekend work under the relevant award and the agreement would not be more than the same difference under other agreements approved by the Commission.
Even with proposed undertaking, the Commission was not satisfied that the crowd controller employees received other benefits under the agreement to compensate for the lower weekend wages. Accordingly, the Commission was not satisfied that the agreement met the BOOT and the application for approval was refused.
An application was made for the approval of the Ray White Shailer Park Enterprise Agreement 2010. The application was opposed by the Property Sales Association of Queensland, Union of Employees (the PSAQ). The PSAQ submitted that the terms of certain provisions caused the agreement to fail the BOOT.
The Commission found that the agreement contained provisions usually found in common law contracts or implied into contracts by the common law (such as provisions dealing with restraint of trade, confidential information and intellectual property). Such provisions were not found in the award nominated for the purposes of establishing whether the agreement passed the BOOT. Generally, such provisions are not found in awards. In such cases the Commission can consider whether by including such terms in an enterprise agreement, employees are disadvantaged because the agreement imposes obligations or restrictions on them which are not imposed by a relevant award or under relevant common law principles.
The fact that agreement clauses involve contingent matters or discretion on the part of the employer that may or may not be exercised, should result in such clauses being viewed differently for the purposes of the BOOT. It must be assumed that contingent or discretionary clauses in agreements will be applied and they must be assessed against the terms of a relevant award on the same basis as other provisions of the agreement.
The Commission determined the inclusion of such terms was likely to result in a situation where award covered employees, both current and prospective, would not be better off overall if the agreement applied.
An application was made for approval of the Sentinel Traffic Control Services Enterprise Agreement 2011. The primary activity of the employer was traffic control and security services. The AWU sought to be heard in relation to the application for approval of the agreement. The AWU also sought that the Commission refuse to approve the agreement on grounds including that it did not pass the BOOT.
The Commission found the agreement contained a number of terms that would result in award covered employees and prospective award covered employees not being better off overall. The effect of these terms did not appear to be balanced by corresponding benefits in the agreement.
The wage rates in the agreement were marginally above or marginally below the wage rates for corresponding classifications in each of the relevant awards. In the event the agreement was approved, s.206 of the Fair Work Act would operate so that the base rates in the agreement would not be less than the relevant modern award rate. However, even allowing for the effect of s.206, the rates in the agreement were not sufficient to offset the removal of other benefits in the awards.
The Commission was not satisfied that the BOOT had been met. The application for approval of the agreement was refused.
A greenfields agreement passes the better off overall test if the Commission is satisfied, as at the test time, that each prospective award covered employee would be better off overall if the agreement applied than if the relevant modern award applied.[3]
Re Meales Concrete Pumping (Qld) Pty Ltd [2012] FWAA 6089 (Sams DP, 19 July 2012).
An application was made for approval of a greenfields agreement to be known as the Meales Concrete Pumping (QLD) Pty Ltd Ichthys Onshore Construction Greenfields Agreement. The agreement was proposed to cover craft and construction employees on the Ichtys Onshore Construction Project engaged in on site construction work, on site commissioning work and onshore marine construction work and related activities at the marine offloading facility at Blaydin Point, Northern Territory. The agreement was negotiated with the AWU, AMWU, CFMEU and CEPU.
The agreement provided for a number of conditions which either replicated current industry standards, or were significantly in excess of or more beneficial than the terms of the relevant award. The Commission was satisfied that the agreement passed the BOOT.
Upon reviewing the terms of the preapproval process documentation and the agreement itself, the Commission was satisfied that all of the requirements of the Fair Work Act had been met, and that it was in the public interest to approve the agreement.
[1] Fair Work Act s.193(1).
[3] Fair Work Act s.193(3).