Assessing the better off overall test for enterprise bargaining should focus on objectively verifiable matters and not descend into speculation about subjective or unquantifiable matters the FWC has said when rejecting union objections to a proposed agreement.
The agreement had a fixed 43 hour week which the union contended eliminated the employees’ opportunities to accrue and take rostered days off (RDOs) like they would be able to do under the award. This, the union argued, meant that they were not better off, because they were foregoing a lifestyle benefit.
But the FWC said the salary arrangements for the employees took into consideration those extra hours. The loss of the possibility of accruing RDOs had to be balanced against other, measurable benefits which clearly the employees had taken into account when voting in favour of the agreement’s set-up. Some might like the extra money, some might like the days off, it was up to the employees to decide. And they had voted.
The FWC went on to say that “(i)f the personal preferences of each employee covered by an agreement had to be taken into account the ‘better off overall test’ would become mired in speculation on subjective and unquantifiable matters.”. And in doing so the decision reiterates that the test for approval is an overall assessment, not a line by line itemised account. Crucially, the FWC said “(t)rading off award conditions, such as those relating to accrual of RDOs and time off in lieu, is plainly permissible under the Act.”.
The union also argued that the National Employment Standard (NES) relating to the basic 38 hour week was offended by the provision to work a 43 hour week. But the FWC dismissed this also, saying any employee could invoke the unreasonableness criteria that is part of that Standard. Care must be taken in setting up mandatory longer working weeks, because of the NES, but drafted properly, it can work.
This case reminds bargaining parties that award conditions can be significantly adapted to an enterprise’s needs and that the assessment of an agreement must objectively view the overall result.