Commission looks into parties' enterprise agreement to settle dispute
The Fair Work Commission (FWC) recently dealt with a dispute between a worker and his employer, a security company, under s.739 of the Fair Work Act 2009. The worker sought to resolve the matter through the Commission after internal attempts to settle the issue were unsuccessful.
In this case, the FWC was tasked with determining whether the employer had breached the terms of an Individual Flexibility Agreement (IFA) and the company's Enterprise Agreement by failing to provide the worker with the agreed minimum number of ordinary hours and paying overtime rates instead.
The dispute centred around the worker's entitlement to a minimum of 24 ordinary hours each week, which would accrue leave and superannuation, as per the IFA signed by both parties on 29 October 2021.
Agreement between parties
According to records, the worker contended that if he was not provided with at least 7 days' notice of his roster, the employer was required to pay overtime rates in addition to the 24 ordinary hours.
The employer, on the other hand, argued that the IFA was not validly made under the flexibility clause in the Enterprise Agreement and, therefore, they were not obligated to provide the worker with 24 ordinary hours per week.
Alternatively, the employer claimed that if the IFA was partly or wholly valid, the construction of the agreement would allow the conversion of ordinary hours to overtime when the roster was provided with less than 7 days' notice.
Arbitration issues
The FWC identified two key questions to be determined through arbitration:
1. Between May 2021 and November 2022, was the employer required to give the worker at least 24 ordinary hours each week he had been ready, willing, and able to work (excluding periods of leave)?
2. Would the employer have breached the terms of the IFA and the Enterprise Agreement if:
a. it paid the worker at overtime rates for any of his 24 ordinary hours per week; or
b. from time to time, it provided the worker his roster with less than 7 days' notice?
FWC’s consideration
The FWC carefully examined the terms of the Enterprise Agreement and the IFA, noting that the IFA stated, "Your roster will be provided to you seven [7] days in advance wherever possible and will include a minimum of 24 ordinary hours per week plus any allowances and loadings you may be entitled to in accordance with the Enterprise Agreement."
The Commission found that the IFA was evidence of a written agreement between the parties, as required by the Enterprise Agreement, and that it had never been varied or terminated. As a result, the worker was entitled to expect at least a minimum of 24 ordinary hours per week.
"The Respondent would be in breach of clause 2.1.3(e) if the [worker] was not offered the minimum ordinary hours of 24 hours per work if some of these hours were substituted as overtime," the decision stated.
The FWC also noted that the employer had the discretion to change the roster requirements based on operational needs, provided they gave the worker seven days' written notice.
Overtime triggers and the agreement’s effect
The Commission determined that the IFA dispensed with the stricter notice requirement for overtime triggers in clause 4.2.1 of the Enterprise Agreement, providing the employer with more flexibility in securing the worker's minimum 24 ordinary hours.
"It appears that there is a substitution. The [worker] should receive more consistent working hours within the week compared to the status quo and is reflected in the purposes of the IFA Agreement which would guarantee the [worker] 'guaranteed minimum hours which would otherwise not be available to them,'" the decision explained.
The FWC concluded that the payment of overtime would be inconsistent with the agreement, given the purpose of the IFA.
In its determination, the FWC answered the key questions as follows:
- The employer breached clause 2.1.3(e) of the Enterprise Agreement by substituting overtime instead of ordinary hours, as there was a written agreement made on 29 October 2021 regarding the minimum ordinary hours the worker was entitled to.
- The employer breached the terms of the agreement by paying the worker overtime rates instead of ordinary hours, as there was no basis for overtime rates to be paid.
- The employer did not breach the agreement by providing the worker with less than 7 days' notice of his roster, as the phrase "wherever possible" in the IFA appeared to substitute notice and provide the employer with additional time to secure the minimum shifts for the worker.
The decision recommended that the employer review the weeks where the worker was not paid ordinary hours and was paid overtime, stating, "The Respondent is to recalculate what the [worker] should have received in payment and accruals, offset the financial benefits of the overtime paid and provide any reconciled amount and adjust accruals appropriately."
Furthermore, the FWC suggested that if the worker was unhappy with the current arrangement, the IFA should be terminated by mutual agreement.
"The Respondent should undertake a review of other IFAs to ensure that they have been properly made. Any improper IFAs should be terminated," the decision concluded.
