Submission 167 Australian Council of Trade Unions Workplace Relations Framework Public inquiry

Road Transport and Distribution Award

The Road Transport and Distribution Award provides a similar level of flexibility around working time arrangements, but without reference to annualised salaries:

2.8. Facilitative provisions

8.1 Facilitative provisions

(a) Agreement to vary award provisions

(i) This award contains facilitative provisions that allow agreement between an employer and employees on how specific award provisions are to apply at the workplace or enterprise level.

(ii) The specific award provisions establish both the standard award conditions and the framework within which agreement can be reached as to how the particular provisions should be applied in practice. Facilitative provisions are not to be used as a device to avoid award obligations nor should they result in unfairness to an employee or employees covered by this award.

(b) Facilitation by individual agreement

(i) The following facilitative provisions can be utilised upon agreement between an employer and an employee:

• 
  clause 16.2(f)—Travelling allowance;
  

• 
  clause 22.2—Hours of work—ordinary hours, days of the week;
  

• 
  clause 22.3—Hours of work—spread of hours;
  

• 
  clause 22.5—Hours of work—normal rostered day off;
  

• 
  clause 23.3—Hours of work—ordinary hours, spread of hours;
  

• 
  clause 23.6—Hours of work—rostered days off; and
  

• 
  clause 24.6—Shiftwork—transfer to or from shiftwork.
  

(ii) The agreement reached must be recorded in writing and kept as a time and wages record.

(c) Facilitation by majority agreement

(i) The following facilitative provisions can be utilised upon agreement between the employer and the majority of employees in the workplace or part of the workplace. Once such an agreement has been reached the particular form of flexibility agreed upon may be utilised by agreement between the employer and an individual employee without the need for the majority to be consulted:

• 
  clause 22.2—Hours of work—ordinary hours, days of week;
  

• 
  clause 22.3—Hours of work—maximum number of hours, spread of hours;
  

• 
  clause 23.3—Hours of work—ordinary hours, spread of hours;
  

• 
  clause 23.4—Hours of work—rural distribution operations;
  

• 
  clause 23.6—Hours of work—rostered days off; and
  

• 
  clause 24.2—Shiftwork—shiftwork hours and rosters.
  

(ii) The agreement reached must be recorded in writing and kept as a time and wages record.

These provisions are examples of just how flexible modern awards can be. There is great scope to change and adjust working conditions and requirements in the awards themselves.

Flexibility beyond the safety net

The well established rule of bargaining in all Australian jurisdictions, suspended only during the early period of WorkChoices, is that bargaining must occur above the safety net in an overall sense. This does not require that every condition in an award be maintained and improved upon, rather it requires a global assessment. For example, in a circumstance where all other compromises are equal - the loss of award overtime pay in exchange for employees being able to volunteer for additional hours rather than be directed – would lead to an agreement being not approved. If the agreement however contained some additional benefits in relation to other matters, such as higher meal allowances, gym membership and higher hourly wages, the assessment would be a different one. In our view, this is as it should be in collective negotiations. Further, the rule that the base level standards contained in the NES must remain intact if not improved upon, is a sensible step in ensuring that employment arrangements meet community standards.

The operation of the BOOT

We understand the PC is seeking views on the operation of the BOOT as it applies to “registered” agreements. We take this to be a reference both to collective agreements and individual flexibility agreements, notwithstanding the fact that the latter are not registered in any sense.

The view of the ACTU is that the BOOT is sufficiently clear and is generally operating in an effective and fair manner in relation to collective agreements. There is no evidence that the BOOT is being applied in a manner that is too ‘rigid’ that results in agreements being inappropriately rejected. The missing point from the PC issues paper dealing with this matter is that the FW Act, like the WR Act, gives the FW Commission (or gave the AIRC at the relevant time), the power and flexibility to adjourn an agreement approval matter into a private discussion, tell the parties why their agreement does not pass the test and offer an opinion as what types of “undertakings” could be made to fix the problem and get the agreement operating as soon as possible³⁵⁷. It’s the most reliable advice in town - and it’s free.

If it is the case (as the employers have argued in the past) that the BOOT is a deterrent for businesses to negotiate collective agreements, the figures simply do not support it.

Table below identifies the number of collective agreements lodged and approved in the relevant periods. It shows that whilst there is variation in the number of agreements that are lodged and approved in those periods, there is no overall trend that agreement making is disproportionately low under the FW Act (and hence the BOOT).

The number of agreements lodged in a relevant period will vary depending on a number of factors. These include:

• 
  The shifting legislative focus on collective bargaining as opposed to the award system.
  
• 
  The simplification, rationalisation and modernisation of awards, which will tend to increase the number of agreements made. For example, there was a marked increase in lodgements in 1998 post the Award Simplification Decision³⁵⁸ handed down in December 1997 and then again in 2011 after the commencement of the modern awards. As awards became less comprehensive, enterprise level bargaining becomes necessary in order to capture terms and conditions no longer dealt with by the award system.
  
• 
  Substantial reform to the system, for example, there is a significant increase in lodgements in 2005, prior to the introduction of Work Choices. There is another spike prior to the commencement of the FW Act. A lack of familiarity with changes or concern about the legislative amendments will drive parties to negotiate and settle agreement making before the commencement of statutory reform.
  
• 
  The agreement making cycle of major industries (typically three years) will have an impact on the lodgement figures year to year. For example, Trends in Federal Enterprise Bargaining June Quarter 2014 notes that:
  

“A total of 1310 agreements were approved in the June quarter 2014, covering 142,000 employees, which is low relative to an average of 1782 agreements approved each quarter since the Fair Work Act commenced on 1 July 2009. Seasonality is one factor behind this drop with June quarters since the Fair Work Act commenced recording around 60 agreements on average less than the All Quarters average of 1781 agreements, but this factor only explains a small portion of the fall in approved agreements in the June quarter 2014. The more significant explanation in the low level of agreement making in the June quarter 2014 is the cyclical downturn in agreement making in certain industries, particularly construction – this industry alone accounts for over 200 of the difference between the 1310 agreements approved in the June quarter 2014 and the 1781 All Quarters average.”

Table : Collective Agreements Lodged and Approved

PERIOD (Fin/Year)	Assessment Test	Lodged	Approved
1997	No disadvantage test Workplace Relations Act 1996	5849	5540
1998	No disadvantage test Workplace Relations Act 1996	7413	7532
1999	No disadvantage test Workplace Relations Act 1996	5738	5539
2000	No disadvantage test Workplace Relations Act 1996	8409	7316
2001	No disadvantage test Workplace Relations Act 1996	6495	6738
2002	No disadvantage test Workplace Relations Act 1996	7812	6514
2003	No disadvantage test Workplace Relations Act 1996	8709	8549
2004	No disadvantage test Workplace Relations Act 1996	6173	5197
2005	No disadvantage test Workplace Relations Act 1996	8198	8265
2006	No test Workplace Relations Amendment (Work Choices) Act 2006	7100	N/A
2007	Fairness test Workplace Relations Amendment (A Stronger Safety Net) Act 2007	7896	N/A
2008	No disadvantage test Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008	7771	N/A
2009	Better off overall test Fair Work Act 2009	7420	5154
2010	Better off overall test Fair Work Act 2009	7081	7282
2011	Better off overall test Fair Work Act 2009	8565	8149
2012	Better off overall test Fair Work Act 2009	7087	6772
2013	Better off overall test Fair Work Act 2009	6754	6403

We also dispute that there is any conclusive evidence that the number of collective agreements ‘failing approval’ has risen since the introduction of the BOOT. Table below is reproduced from the General Manager’s Report into enterprise agreement making in Australia under the Fair Work Act 2009 (Cth) 2009-2012³⁵⁹.

Table : Collective Agreements Not Approved


Relative to the large number of agreements lodged in the relevant periods, the average number of agreements ‘not approved’ remains a small percentage of the total figure (less than 5%).

Table : Proportion of agreements not approved

	Lodged	Not approved	%
2009-2010	7420	242	3.26%
2010-2011	7081	494	6.98%
2011-2012	8565	410	4.79%
TOTAL	23066	1146	4.97%

This is even less significant in consideration of the broad number of matters which might be categorised as ‘not approved’, such as applications for approval that are withdrawn or indefinitely adjourned. In fact, the overwhelming majority of matters that make up the ‘not approved’ category are matters that are withdrawn. The table below shows the proportionate number of applications that are ‘not approved’ and those that were ‘withdrawn’.

Table : Agreements not approved v. applications withdrawn

	Not approved	Withdrawn
2009-2010	231	550
2010-2011	123	329
2011-2012	83	294
2012-2013	63	314
2013-2014	103	294

Even stripping out those applications that are withdrawn, the reason why an agreement is not approved by the FW Commission could relate to a number of other deficiencies, other than non-compliance with the BOOT. These include:

• 
  The agreement has not been made with the genuine approval of those involved
  
• 
  The agreement includes unlawful terms
  
• 
  That the group of employees covered by the agreement was not fairly chosen
  
• 
  The agreement specifies an expiry date greater than 4 years
  
• 
  The agreement does not contain a compliant dispute settlement procedure
  
• 
  The agreement does not contain a compliant flexibility or consultation clause
  

Table below (reproduced from the FWC Report 2009-2012) includes the reasons for the approval applications not being approved:

Table : Reasons for approval applications not being approved 2009/10 to 2011/12

Table demonstrates that the most common reason for an agreement not being approved is that the application is withdrawn (681), followed by the agreement not being genuinely agreed to (192) and then failing to comply with the BOOT (67).

It is also notable that there is a similar non-approval figure under both the no-disadvantage test for agreements lodged prior to 31 December 2009 (86) and the BOOT (67). If it was the case that there were issues with the BOOT more so than previous agreement assessment tests, this figure would be higher. In any event, the mere fact that only 67 out of 23,066 agreements lodged fail test (0.29%) seems to indicate that the requirements of the test are in fact well understood by bargaining parties and not as nebulous as some might seek to portray.