So my name is Andrew Stirling. I’m a Managing Associate at the law firm Allens. I specialise in employment workplace relations law. So we really do everything from contract drafting through to enterprise bargaining, through to employee disputes and employment law compliance work.
So it might not necessarily be the employer who’s responsible, but the Fair Work Ombudsman also asking for the contractor, the head contractor, to ensure that the employees right down at the bottom of the supply chain are being paid appropriately. It really only takes one complaint from one employee and the Fair Work Ombudsman will start its investigation, and it has a broad range of powers to uncover the truth as part of that investigation. And if it gets to the end of the investigation, it can take you to court; it can pursue you for the underpayment, it can pursue you for the non-compliance, instead of the employee. When you get to the point of going to Court it won’t just be the underpayments that the Fair Work Ombudsman is asking you pay, he will be asking the Court to make you pay penalties on top of those underpayments.
An interesting development recently was with Coles enterprise bargaining. Coles bargained with its employees and it bargained with the relevant trade union, the SDA. They agreed to an Enterprise Agreement. One of Coles’ employees took that Enterprise Agreement appeal to the Fair Work Commission Full Bench after it had been approved. What that employee argued was, that even though the Enterprise Agreement made employees, (Coles employees) better off overall as a general proposition, for him in particular on the hours that he worked, he was actually worse off overall compared to the Modern Award. And it related to the fact that he worked mostly after hours and on weekends, so outside ordinary time under the Award. So even though the ordinary rate of pay under the Coles Enterprise Agreement was far better than the Award because the penalty rates were less, for the employees who are working those funny hours, they’re actually worse off overall. It really highlighted to me the importance of understanding where or what the Award requires before you get to the end of bargaining.
So you don’t want to be bargaining with your employees on one basis thinking that generally you’re doing better than the Award, but get to the Fair Work Commission and find that some of your employees will actually be worse off compared to the Award. As particularly noteworthy because they’re such a large employer. To some extent they’re setting the example for the small retail industry and other sectors, that certainly sets a legal precedent for how that will be analysed.
When we talk about the ‘Better Off Overall Test’ as lawyers , usually we’re talking about ensuring that your Enterprise Agreement will pass the test and be approved by the Fair Work Commission. So what that means is, “will my employees be, paid more under my Enterprise Agreement, then under the Modern Award, that would otherwise be applied to them. But it also has a broader meaning in layperson’s terms. So even if you don’t have an Enterprise Agreement and you’re complying with the Modern Award, a lot of employees will be paid contractually more than the Modern Award. And employers will seek to even out the ups and down so the ordinary rate , the penalty rates and overtime etc by paying one flat rate. And that’s permit-able, you can do that, so long as the employee’s paid more under the contract than under the Award.