Loopholes found in Australia’s Enterprising Bargaining Agreements

Image Source: The Conversation

By Rebecca Copeland | @beccopeland

Sandy* has been a part-time waitress at Restaurant A* for over four years.

According to the Restaurant Industry Award 2010 (MA000119), Sandy should be earning $20.91 per hour.

Common penalties for this award should increase Sandy’s hourly wage to $26.14 per hour on Saturdays, $31.37 per hour on Sundays, and $47.05 per hour on public holidays.

Since Sandy is contracted under an Enterprise Bargaining Agreement (EBA), she gets paid $23.13 per hour.

An Enterprise Bargaining Agreement (EBA) is an agreement between one or more employers and their employees.

EBAs enable both parties to negotiate conditions of employment, pay and leave entitlements, as well as disciplinary processes and the responsibilities of each party.

Earning above the Award rate means that Sandy does not earn paid penalty rates.

The Australian Retailers Association reported last year that many employees across Australia were not better off under an EBA compared to employees under Award rates.

In fact, earning penalty rates on weekends under the Modern Award would have been more beneficial than earning an increased hourly rate under their EBAs.

The Restaurant Industry Award requires part time workers to be rostered at least eight hours per week.

In addition, Clause 12.5 says that full-time and part-time workers shouldn’t be rostered to work for less than three hours per day.

But according to Sandy’s EBA, she only has to be rostered a minimum of six hours per week, and can be sent home after working a two-hour shift.

The Australian Financial Review has said that both employers and unions want to “repair” the EBA system.

Unions have accused employers of exploiting loopholes in the law to avoid negotiation, or to reduce conditions and pay.

EBAs override award provisions, but they must satisfy National Employment Standards (NES), and must satisfy the Better Off Overall Test (BOOT).

“The BOOT requires every existing and prospective award covered employee to be better off overall under the agreement,” the Fair Work Commission (FWC) told The Sydney Morning Herald.

“If any such employee is not better off overall, the agreement does not pass the BOOT.”

Sandy is questioning whether sacrificing penalty rates for a $2.22 increase in her standard hourly wage is leaving her “better off”, considering she works almost all weekends and public holidays.

She isn’t the only one.

The labour hire firm ‘Programmed’ is one example of this occurrence.

In 2016, the firm used an EBA to cut pay and reduce conditions of 55 unionised maintenance workers at the Carlton & United Breweries in Melbourne.

With support from across the nation, the EBA was overturned and the workers’ conditions and positions were not cut during an agency change.

Sometimes, the benefits of EBAs are not only questionable for employees, but also for the employers.

Not only have EBAs declined in popularity, but they are notoriously hard to get approval for.

Employers end up wasting time in negotiations, more often than not leaving the employee feeling underappreciated for their time and effort.

Coles and Woolworths have negotiated new EBAs with the FWC, while Domino’s simply reverted to paying award conditions.

The FWC gave firm guidance last year when rejecting Aldi’s initial EBA, highlighting the importance of the BOOT test when sacrificing penalty rates for loaded base rates.

Employment conditions and pay rates in the EBA must leave employees better off overall than the relevant award would.

For any work-related questions or issues, contact the Fair Work Ombudsman or your company’s union.


*Names of people and companies have been changed or omitted for privacy reasons.


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