Anglicare Tasmania Inc. T/A Anglicare Tasmania [2021] FWC 1275

1 Fair Work Act 2009 s.185—Enterprise agreement Anglicare Tasmania Inc. T/A Anglicare Tasmania (AG2020/4216) COMMISSIONER LEE MELBOURNE, 17 MARCH 2021 Application for approval of the Anglicare Tasmania Inc. Collective Agreement 2020. [1] An application has been made for approval of an enterprise agreement known as the Anglicare Tasmania Inc. Collective Agreement 2020 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Anglicare Tasmania Inc. T/A Anglicare Tasmania (the Applicant). The Agreement is a single enterprise agreement. Background [2] The Health Services Union (HSU) is a bargaining representative for the Agreement. They provided a Form F18 - Declaration of an employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement) (Form F18) indicating that they seek to be covered by the Agreement and that it supported approval of the Agreement by the Commission “conditional on less beneficial matters mentioned in this form being addressed”. [3] In reviewing the Agreement for approval, on 3 February 2021, my Chambers wrote to the Applicant identifying numerous concerns in relation to the Agreement and supporting documentation. These concerns included the following: Agreement explanation – s. 180(5) of the Act: There was insufficient information to be satisfied that all reasonable steps had been taken to explain the agreement as required by s.180(5) of the Act. National Employment Standards (NES): Clause 44(e)(i) and 44(f)(iii) of the Agreement are likely to be inconsistent with the NES. Shiftworker for the purposes of the NES – s.196 of the Act: The shiftworker definition in the Agreement did not apply for the purposes of the National Employment Standards. [2021] FWC 1275 DECISION -- 1 of 9 -- [2021] FWC 1275 2 Better Off Overall Test (BOOT): Concerns relating to the Social, Community, Home Care and Disability Services Award 2010 (SCHADS Award). [4] The Applicant was provided with an opportunity to respond to the concerns outlined in the email by 10 February 2021. [5] The email also noted that the HSU had indicated on the Form F18 that it supports approval, “conditional on less beneficial matters mentioned in this form being addressed”. The HSU was asked to provide any views by no later than two business days after the Applicant provided their response. [6] The Applicant provided their response to the issues identified on 10 February 2021. The HSU provided their views on 15 February 2021 after being granted a short extension to do so. Both the Applicant and HSU made numerous submissions regarding the issues raised. The Applicant also provided written undertakings. [7] Due to the number of issues, I listed the matter for hearing on 25 February 2021. During the hearing, I advised that I was satisfied that the concerns regarding s.180(5), the NES, and s.196 had been resolved by way of submissions and/or undertakings. The remainder of the hearing focused on the BOOT issues and whether they had been addressed. I deal with this matter below. Better Off Overall Test (BOOT) [8] There were numerous BOOT concerns in the Agreement. However, these concerns related to only one of the relevant modern awards, being the SCHADS Award. Broadly, the concerns related to the following entitlements:  Rates of pay  Span of hours  Part-time employment  Shiftwork  Sleepovers  Broken shifts  Allowances  Excursions  Meal break  Rest break during overtime  Rest period after overtime  Rest break between rostered work  Job search entitlement  Excessive leave accruals [9] During the hearing, after going through each of the issues while considering both the submissions of the Applicant and the HSU, as well as the undertakings, I indicated which concerns remained outstanding. -- 2 of 9 -- [2021] FWC 1275 3 [10] By the end of the hearing, the Applicant was aware of the remaining concerns, and had until 1 March 2021 to provide further undertakings to address these concerns. The HSU was instructed to provide their views after the Applicant had provided their response. Rates of Pay [11] One of the outstanding concerns related to the rates of pay for Social and Community Services employees. Appendix B of the Agreement contains wage rates effective 9 July 2020. These rates are below the relevant rates under the SCHADS Award at test time. However, Appendix B also states that there will be further increases to the Agreement wage rates as follow: “In addition to the above increases Anglicare Tasmania will make payable to Social and Community Services employees supplementation funding instalments received from the State and Commonwealth Governments for the Equal Remuneration Order. … Instalment 9 from the first full pay period commencing on or after l December 2020 - A percentage based on fully utilizing any supplementation funding instalments provided using a weighted average across relevant classification levels to create a single percentage increase across all applicable classification levels.” [12] In light of the increase as outlined above, the Applicant was invited to provide undertakings containing the specific rates of pay for Social and Community Services employees at test time. [13] In their initial response provided on 10 February 2021, the Applicant provided submissions as follows: “Please refer to Undertaking No.3 and the attached Pay Guide showing pay rates as at 10 December 2020.” [14] The undertakings provided as follows: “In relation to Appendix A -Anglicare Wage Rates, the attached table is provided to give greater clarity in relation to the wage rates under the Agreement compared with the relevant Award. The wage rates are applicable as at 10 December 2020.” I note that the reference to Appendix A in the undertaking above is clearly incorrect and it should instead refer to Appendix B. [15] The “table” referred to in the undertakings was a “Pay Guide” which contained rates “effective 10 December 2020” (the pay guide undertaking). As such, if these rates were accepted by way of the pay guide undertaking, they would represent the rates of pay at test time. However, the first pay guide undertaking proffered had the effect of reducing the rates of pay for Level 1 Social and Community Services employees when compared to the 9 July 2020 rates in the Agreement. During the hearing, I indicated that the Commission may only accept an undertaking if it is satisfied that the undertaking is not likely to cause financial detriment to any employee covered by the agreement. The Applicant indicated that they -- 3 of 9 -- [2021] FWC 1275 4 would revise the undertakings in a manner which did not reduce the rates for Level 1 employees, but which contained rates which were equivalent to the Award for the remaining employees (Level 2 to Level 8). [16] During the hearing, the HSU expressed a concern that the pay guide undertaking would not be consistent with the increase for the ninth and final Transitional Equal Remuneration Payment (TERP) payable under the Social, Community and Disability Services Industry Equal Remuneration Order 2012 (the ERO)1 as stipulated under Appendix B of the Agreement, and therefore I could not be satisfied that the increase was not likely to cause financial detriment to any employee covered by the Agreement. The HSU’s submission on this point is more fully articulated below. Final opportunity to address BOOT concerns [17] After a short extension was granted, the Applicant responded to the remaining concerns on 2 March 2021. The Applicant provided further/revised written undertakings to address the remaining BOOT concerns dated 4 March 2021 (the final undertakings). I note that the Applicant was subsequently asked by my Chambers to consolidate the previously accepted undertakings with the new undertakings, hence why the final undertakings document is dated 4 March 2021. The final undertakings include a revised undertaking to address the rates of pay (the revised pay guide undertaking). Namely, undertaking 13 which provides as follows: “Anglicare Tasmania Inc. agree to pay wages in the attached Pay Guide. The Pay Guide provides that all rates are the same as the Award except for Level 1.1 and 1.2, which are above the rates in the Award.” [18] On Tuesday, 2 March 2021, The HSU indicated via email that: “HSU, Tasmania Branch are content with the undertakings except for the pay guide. Our difficulty with the pay guide is what we raised in the Conference. The ERO decision [2012] FWAFB 1000 provided at [66] that Level 2 SACS employees would be paid 19%. And at [67] the percentage loadings will be introduced over 8 years, in nine equal instalments, commencing on 1 December 2012 and ending on 1 December 2020. This makes a calculation of 2.11% increases each year. Yet the increase made at Level 2 between July 2020 and December 2020 is .05%. The undertaking appears to be less than what is prescribed by the wage increase clause. Undertakings cannot cause a financial detriment – this appears to be a financial detriment.” [19] My Chambers wrote to the Applicant on 3 March 2020 indicating that the increase to the rates in the Pay Guide does not reflect the ERO. Namely, the 9 July 2019 rates when compared to the 10 December 2020 rate represent an increase which is lower when compared to the ninth and final TERP payable under the ERO. As such, the revised pay guide undertaking could not be accepted to satisfy the concern as it was likely to cause a financial detriment to employees. [20] The Applicant was provided with a final opportunity to address the issue articulated by 4 March 2021. The Applicant subsequently made submissions which included the following: 1 PR525485 -- 4 of 9 -- [2021] FWC 1275 5 “In regards to Anglicare Collective Agreement 2020 Appendix B – Wage Rate, respectfully Anglicare Tasmania holds a different view in the way Appendix B has been applied. As per the HSU submission the Equal Remuneration Order isn’t applied across the board to employees at the rate of 19% over nine years with a pay increase at the rate of 2.11% each year. Instead, Anglicare Tasmania, as per Appendix B – Wage Rates applies a weighted average of the additional funding supplied across all of our employees across the organisation which results in different weighted remuneration increases but as is made clear below, employees do not suffer a financial detriment. Anglicare Tasmania would also submit that the FWO Pay Guide includes the ninth instalment of the ERO, Anglicare Tasmania’s Updated Pay Guide is above these rates or identical, as such Anglicare would contend that our pay rates include the ERO.” (emphasis added) [21] The HSU emailed my Chambers on 5 March 2021 with its further views as follow: “The issue is whether the pay guide included by undertaking accurately represents the increase required by Appendix B – wage rates, which states the increase to be made on 1 December 2020 is ‘instalment 9 from the first full pay period commencing on or after 1 December 2020.’ On a plain reading the 9th instalment is what is described at 67 of the ERO decision. If the pay guide undertaking increase doesn’t reflect the ‘instalment 9’ then the undertaking will be a financial detriment. We are unable to identify whether the wages expressed in the Agreement as at July 2020 replicated the FWO’s pay guide as at July 2020 (as we do not have access to that pay guide). If they did, relying on the wages stated in the FWO’s current (December 2020) pay guide would be valid because the increase would be consistent. But if the Agreement wages as at July 2020 were higher than those expressed in the FWO’s pay guide as at July 2020 then we submit that the same relativity is to be maintained in December; ie. the FWO wages expressed in their guide may have included an increase consistent the ERO decision, in that case Anglicare would be obliged to pass on the same increase albeit the result being their wages would exceed the wages expressed in the Award. Historically Anglicare’s wage did exceed the Award wages – there is no licence to bring them back to the Award by providing a wage increase not consistent with the ERO decision. Appendix B does not dictate that wages are to increased to the Award level only - it dictates that the 9th ERO instalment is to be applied. In summary, the difference between the Agreement rates in July 2020 and the FWO pay guide rates in July 2020 should represent the difference by which wages should be increased by undertaking.” Consideration [22] As set out above, after being provided with another opportunity to rectify the issue, the Applicant provided the final undertakings. The final undertaking document includes a revised pay guide undertaking so that Social and Community Services employees Level 2 and above -- 5 of 9 -- [2021] FWC 1275 6 attract rates which are equivalent to the Award as of 10 December 2020. As outlined above, the revised pay guide undertaking is in the following terms: “Anglicare Tasmania Inc. agree to pay wages in the attached Pay Guide. The Pay Guide provides that all rates are the same as the Award except for Level 1.1 and 1.2, which are above the rates in the Award.’ [23] The pay guide that underpins the revised pay guide undertaking is attached to this decision as Annexure A. [24] Taking into account the other more beneficial terms of the Agreement, I am satisfied that employees and prospective employees will be better off overall if the revised pay guide undertaking is accepted, in combination with the other undertakings proffered in the final undertakings document. The HSU agrees that employees will be better off overall if the final undertaking is accepted. However, the HSU submit that the revised pay guide undertaking cannot be accepted because it will be detrimental, taking into account the wording of Appendix B as set out above. [25] Having considered the submissions, I have concluded that I cannot accept the revised pay guide undertaking proffered as I am not satisfied that the effect of accepting the undertaking is not likely to cause financial detriment to any employee covered by the Agreement. In the alternative, accepting the undertaking would result in substantial changes to the Agreement. My reasons for reaching this conclusion are as follows. [26] It is accepted, as the HSU point out, that the ERO provides for percentage increases for the ninth and final TERP that are higher than those in the revised pay guide undertaking. [27] The meaning of Appendix B as it pertains to the ninth and final TERP in the ERO, is that it should reflect the percentages that are reflective of instalment 9 of the ERO. In my view that is the correct construction. Looking at the totality of Appendix B, it says: “In addition to the above increases Anglicare Tasmania will make payable to Social and Community Services employees supplementation funding instalments received from the State and Commonwealth Governments for the Equal Remuneration Order. … Instalment 9 from the first full pay period commencing on or after l December 2020 - A percentage based on fully utilizing any supplementation funding instalments provided using a weighted average across relevant classification levels to create a single percentage increase across all applicable classification levels.” [28] The reference to the instalments and the ERO strongly suggests the parties were seeking to reflect an agreement to flow those particular increases to employees. On 9 July 2020, Social and Community Services employees Level 2 and above received rates of pay which were at least 1% above the SCHADS Award. The effect of the revised pay guide undertaking is that Social and Community Services classifications (except for Level 1) receive rates which are equivalent to the SCHADS Award at test time by implementing an increase which ranges from approximately 0.5% to 1.9%. This does not reflect an application -- 6 of 9 -- [2021] FWC 1275 7 of the ninth and final TERP in the ERO. As such, the revised pay guide undertaking cannot be accepted as an undertaking to satisfy the concern as it is likely to cause financial detriment. [29] The other undertakings in the final undertakings document ensure that Social and Community Services employees attract entitlements which are equivalent to the SCHADS Award. In the event that I do not accept the revised pay guide undertaking, but accepted the other undertakings provided to address the other BOOT concerns, employees cannot be considered better off overall. This is because the rates of pay as of 9 July 2020 for Social and Community Services employees Level 2 and above are below the SCHADS Award at test time. While Appendix B indicates that those rates will be increased “from the first full pay period commencing on or after l December 2020”, it remains unclear the rates of pay for the employees pursuant to the increase. Even where coupled with entitlements which are equivalent to the SCHADS Award, and some contingent more beneficial terms, where the rates of pay remain unclear, I cannot be satisfied that each award covered employee and each prospective award covered employee would be better off overall if the Agreement applied to the employee than if the relevant modern award applied to the employee. [30] I note that the Applicant urges a construction of this term which is to the effect that Anglicare is required by the Agreement in providing instalment 9 of the ERO, to apply a “...weighted average of the additional funding supplied across all our employees which results in different remuneration increases…”.2 However, this ignores the further wording in the Agreement, which refers to the weighted average being used “to create a single percentage increase across all applicable classification levels.” [31] The revised pay guide undertaking increases the rates that are in the Agreement at Level 2 and above so that they are at least equivalent to the relevant modern award as of 10 December 2020. Taking into account the rates that are provided in the Agreement as of 9 July 2020, the effect of this is not a “single percentage increase across all applicable classification levels”. The increases resulting from the revised pay guide undertaking vary from approximately 0.5% through to approximately 1.9% for Levels 2 and above. There is no increase for Level 1 employees at all. This is not a “single percentage increase” across all classifications as required by the clear wording in the Agreement. [32] The revised pay guide undertaking therefore results in wage rate increases which are inconsistent with the wording in the Appendix B and for that reason represent a substantial change to the Agreement. Therefore, even where this alternative construction is adopted, I cannot accept the undertaking for that reason. Conclusion [33] I have provided the Applicant several opportunities to address the BOOT concerns by way of submissions and/or written undertakings. The Applicant provided both submissions and undertakings. The final undertakings provided would have satisfied the BOOT concerns raised. However, for the reasons outlined above, I cannot accept the revised pay guide undertaking. Namely, the revised pay guide undertaking is likely to cause financial detriment to employees covered by the Agreement or, on the alternative construction of Appendix B, results in substantial changes to the Agreement. This would be contrary to s.190(3) of the Act. 2 Email dated 4 March 2021. -- 7 of 9 -- [2021] FWC 1275 8 [34] As outlined above, in the event that I accepted the other undertakings provided and the Agreement contains entitlements which are equivalent to the SCHADS Award and a range of contingent more beneficial entitlements, the rates of pay for Social and Community Services employees at test time remain unclear. Therefore, I cannot be satisfied that the Agreement passes the BOOT in accordance with s.193. As such, the requirement under s.186(2)(d) has not been met, and I cannot approve the agreement. [35] I make the further observation that the foregoing consideration as to the way the Applicant seeks to construe the meaning of Appendix B raises a serious question as to whether the Agreement has been genuinely agreed to taking into account the requirements of s.188(1)(a)(i) of the Act. That is, in the event I am wrong about either construction of Appendix B, and consequently the effect of the final undertaking provided, there is a question to be asked as to whether the relevant employees understood that they were agreeing to adjust Social and Community Services employees (Level 2 and above) from rates which were at least 1% above the relevant modern award as of 9 July 2020, to rates which are equivalent to the modern award as of December 2020 and, that Level 1 employees were to receive no increase at all in that period. However, as I have dismissed the application for the foregoing reasons, it is not necessary for me to determine that question. [36] For the reasons outlined in the decision, I cannot approve the Agreement. The application for approval of the Agreement is therefore dismissed. COMMISSIONER Appearances: C Green, C Jones, B West and N Wright for the Applicant. J Eddington and R Moore for the Health Services Union. Hearing details: 2021. Melbourne (by telephone via Microsoft Teams): February 25. Printed by authority of the Commonwealth Government Printer <PR727624> -- 8 of 9 -- [2021] FWC 1275 9 Annexure A -- 9 of 9 --