FWC scraps 9-year-old EBA, despite protestations of staff

A security worker, identified only as ‘Employee X’, has successfully lobbied the Fair Work Commission (FWC) to have the 2013 enterprise agreement that captured their employment cancelled, even though many of the employee’s nearly 500 co-workers argued they would end up considerably worse off if they were instead subject to the relevant modern award.

The lone employee, who was represented by the United Workers Union, explained to the FWC that they received a flat rate of $30.45 per hour for all hours worked, except for public holidays when the hourly rate doubled to $60.90. This resulted in the employee being around $5.00 per hour better off than the Security Services Industry Award 2020 (the award) for day work (Monday to Friday), but as the employee regularly worked weekends and performed overtime, they assessed they would be approx. $500 per fortnight better off under the award.

In weighing up termination of the agreement, Commissioner Hunt of the FWC invited the 493 employees captured by the agreement to provide their views regarding its potential cancellation directly to the Commission. After “a large number” of employees took the opportunity to do so, Commissioner Hunt summarised that Employee X’s co-workers ostensibly fell into three distinct groups.

The first group represented employees who perform day work and would be considerably worse off under the award; the second constituted employees in a position similar to that of Employee X, who “work weekends or a significant amount of overtime”; and, a third group who “prefer the sheer amount of hours they are offered and accept to work” – some of whom are working in the vicinity of 120 hours per fortnight – and “fear they will not be offered more than 36 hours per week on account of the Award overtime rates being too expensive for the Employer to pay”. Commissioner Hunt noted that it was unclear why numerous staff held the belief that they would be limited to 36 ordinary hours per week if the agreement was cancelled when the award provides for a standard 38-hour week.

Weighing the conflicting views of “a significant group” of employees captured by the agreement, Commissioner Hunt was ultimately satisfied that it would be appropriate to terminate the instrument, notwithstanding some employees would suffer a reduction of some “magnitude” by moving to the award. The Commissioner observed that employees performing day work would “suffer a significant decrease in their remuneration” but she was unable to overlook the “many employees working weekends and overtime without penalty rates” who were “significantly disadvantaged” as compared to the award, emphasising that “the disadvantage is enormous”.

In specifically addressing the views of employees who work “a large number of overtime hours”, and “wish to retain those hours at the base rate of pay because of the volume of the work they can perform, even at lower rates”, Commissioner Hunt stated, “regrettably, this is not a practice I can condone”. In exploring why such a practice – otherwise known as ‘voluntary overtime’ – could not be endorsed by the FWC, the Commissioner expressed:

…Employees requesting to work large numbers of overtime hours without penalty rates is not a social or economic answer to employees desiring more in their bank account on pay day. It provides the Employer with an unfair advantage over competitors, by significantly undercutting its cost of providing a service at those times of the day and week. An employee should not have to work 120 hours per fortnight to become entitled to a large fortnightly payment where there is no compensation on account of the unsociable or extraordinary hours performed by them.

After determining that it was appropriate to terminate the agreement, Commissioner Hunt settled on a date for termination of 22 August 2022 (being more than a month after the date of decision), saying, “this is a suitable period of time for the Employer to communicate to its workforce the rates it wishes to pay to its employees, noting that the Award is the minimum rate of pay, and it may elect, at its discretion, to make over-award payments to employees”. The Commissioner also encouraged employees to “turn their mind to the work they wish to perform for the Employer, having regard to their new entitlement to penalty rates for work performed at night, on weekends and when working overtime, against any reduction in remuneration that might apply when day work is performed”.

Employee X – Re SECUREmetro Employee Collective Agreement 2013 [2022] FWCA 2437 (20 July 2022)