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Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 20A(4) - Application to extend default period for agreement-based transitional
instruments
Allseasons Carpet Cleaning & Pest Control
(AG2023/1788)
ALL SEASONS CARPET CLEANING COLLECTIVE AGREEMENT
2009
[AC324856]
Industries not otherwise assigned
DEPUTY PRESIDENT WRIGHT
DEPUTY PRESIDENT ROBERTS
DEPUTY PRESIDENT SLEVIN
SYDNEY, 23 AUGUST 2023
Application to extend the default period for the All Seasons Carpet Cleaning Collective
Agreement 2009
Introduction
[1] Penny Lane SSC Pty Ltd trading as Allseasons Carpet Cleaning and Pest Control (the
Employer Applicant) has applied under item 20A(4) of Sch 3 to the Fair Work (Transitional
Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) to extend the
default period for the All Seasons Carpet Cleaning Collective Agreement 2009 (Agreement)
for a period of four years.
[2] Additional applications to extend the Agreement by the same period have been made by
Brett Sandars, Christopher Kunsek, Daniel Smyth, Jack McKay, Joe Cosimi, Kane Eggleston,
Shane Chemello, Travis Ball, Travis Garufi, and Wayne Musson who are employees of the
employer Applicant (collectively, the Employee Applicants).
[3] The Agreement is a collective agreement-based transitional instrument within the
meaning of item 2(5)(c) of Sch 3 to the Transitional Act. Such instruments continue to apply to
employees of the Employer Applicant because of item 3 of Sch 3 of that Act.
[4] The Agreement is expressed as applying to Welford Peak Pty Ltd. It appears that the
Employer Applicant is covered by it as a result of either one or more transmissions of business
or a change or changes of company name.
[2023] FWCFB 146
DECISION
AUSTRALIA FairWork Commission
http://www.austlii.edu.au/au/legis/cth/consol_act/fwpacaa2009656/
http://www.austlii.edu.au/au/legis/cth/consol_act/fwpacaa2009656/
http://www.austlii.edu.au/au/legis/cth/consol_act/fwpacaa2009656/
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[5] The Transitional Act was amended by the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Act 2022 (Cth) to provide for the automatic termination of all remaining
transitional instruments. Pursuant to subitems 20A(1) and (2) of Sch 3 to the Transitional Act,
the Agreement will terminate on 6 December 2023 unless it is extended by the Commission.
The main features of item 20A of Sch 3 to the Transitional Act are described in detail in the
Full Bench decision in Suncoast Scaffold Pty Ltd1 and we rely upon what is said in that decision.
[6] The applications are made under subitem (4) of item 20A of Sch 3 to the Transitional
Act. Under subitem (6) of that item, upon application, the Commission is required to extend the
default period for an agreement for a period of no more than four years if the Commission is
satisfied that:
(a) Subitem (7), (8) or (9) applies and it is otherwise appropriate in the circumstances to
do so; or
(b) it is reasonable in the circumstances to do so.
[7] The applications do not, in terms, identify whether they are advanced under paragraph
(a) or (b) of subitem (6) of item 20A, nor in respect of paragraph (a) do they contend in terms
that subitem (7), (8) or (9) is applicable.
[8] Subitem (7) applies to an application which is made at or after the notification time for
a proposed enterprise agreement. There is no evidence that there is a notification time for any
proposed enterprise agreement relating to the Employer Applicant and its employees. Subitem
(8) applies only to an individual agreement-based transitional instrument. Neither of those
subitems are applicable to the present applications.
[9] Subitem (9) applies if:
(a) the application relates to a collective agreement-based transitional instrument and;
(b) it is likely that, as at the time the application is made, the award covered employees
for the instrument under subitem (10), viewed as a group, would be better off overall if
the instrument applied to the employees than if the relevant modern award or awards
referred to in that subitem applied to the employees.
[10] Under subitem (10) of item 20A, ‘award covered employees’ for a collective agreement-
based transitional instrument are those employees covered by the instrument who, at the time
an extension application is made under subitem (4), are covered by one or more modern awards
that are in operation in relation to the work to be performed under the instrument, and are
employed at that time by an employer who is covered by the instrument and the modern
award(s).
[11] It is not in dispute that the Employer Applicant is covered by the Cleaning Services
Award 2020 (Cleaning Award) and the Pest Control Industry Award 2020 (Pest Award) and
that the employees of the Employer Applicant are covered by one or other of those awards.
Grounds for the Applications
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
http://www.austlii.edu.au/au/legis/cth/num_act/fwlajbpa2022516/
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[12] The Employer Applicant advances the following grounds in support of its application:
(i) The company believes that all employees covered by the Agreement are
substantially better off being paid under this agreement rather than the relevant
modern award.
(ii) Employees currently enjoy the benefits of a happy work life balance and more
opportunity to earn above the award under the current agreement and be
rewarded for their hard work.
(iii) Further to discussions with staff, the company believes that if the collective
agreement were to be replaced by the modern award, employees’ wages would
be affected in a negative way and the benefits they currently enjoy under the
collective agreement would make employees worse off overall.
[13] The Employee Applicants each advance identical grounds in support of their
applications in the following terms:
(i) I believe that myself and all other staff covered by the All Seasons Carpet
Cleaning Collective Agreement are substantially better off being paid under this
agreement rather than the relevant modern award.
(ii) I believe that if the collective agreement were to be replaced by the modern
award my wages would be greatly affected and I would be worse off overall.
(iii) I consider the collective agreement to be more beneficial for myself and my
fellow colleges (sic) and request for the agreement to be extended as requested.
[14] Having regard to the grounds advanced in the applications, we propose to deal with all
of the applications on the basis that they are advanced under both subitem 6(a) and subitem 6(b)
of subitem 20A of Sch 3 of the Transitional Act. That is, we will determine firstly whether
subitem 6(a) applies by reference to subitem (9). As is noted above, the Agreement is a
collective agreement-based transitional instrument, which satisfies the requirements of subitem
9(a). The remaining requirement under subitem 9(b) will involve an assessment of the
Agreement as against the relevant modern awards and the application of the better off overall
test referred to in that subitem. If we conclude that the award covered employees, viewed as a
group, would be better off overall if the Agreement applied to them, we will then consider
whether it would also be otherwise appropriate to extend the default period for the Agreement.
If we decide the requirements of subitem 6(a) are not satisfied, we will consider whether it
would be ‘reasonable in the circumstances’ within the meaning of subitem 6(b) to extend the
default period.
[2023] FWCFB 146
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The ‘Better Off Overall Test’
The Agreement
[15] The Agreement applies to employees of the Employer Applicant engaged in any of the
four job classifications specified in clause 3.2.1.2 It operates to the exclusion of all other
industrial instruments, unless otherwise specified.3
[16] The rates of pay provided by the Agreement are set out in clause 3.2. That clause
provides a pay table that specifies an hourly rate for each of the four classifications whether
engaged on a full-time, part-time or casual basis. Those rates are described as the ‘guaranteed
minimum ordinary hourly rate of pay’ by clause 3.2.1. Perhaps not surprisingly for an
agreement that was made in 2009, the hourly rates set out in clause 3.2 are all below the current
modern award rates for each of the classifications in that clause.
[17] The Agreement does not provide for any specific wage increases. Instead, the
mechanism for wage adjustments appears at clause 3.5.1. That clause provides as follows:
WAGE ADJUSTMENTS AND GUARANTEE
The basic hourly rates contained in this Agreement are guaranteed never to fall below
the relevant basic award/pay scale rates for the respective job classifications as
prescribed by the Australian Fair Pay Commission (or subsequent authority responsible
for setting minimum wage rates). Therefore, the pay rates contained herein shall be
reviewed annually and adjusted accordingly.
[18] In our view, whilst not entirely beyond doubt, the effect of clause 3.5.1 is to adjust the
rates prescribed in the table at clause 3.2.1 of the Agreement such that the hourly rates of pay
for the classifications contained in that table do not fall below the hourly rate prescribed from
time to time for the corresponding classification by either of the relevant modern awards.
[19] The Agreement also includes a provision for a form of a commission-based pay
arrangement in clause 3.2.2. That clause provides:
3.2.2 Commission/incentive Pay Arrangement
Under a flexible workplace arrangement, an employee may request and the employer
may agree in writing on a commission/incentive based pay arrangement; provided that
the employee is guaranteed to receive at least the equivalent amount that they would
have received for each hour worked as per clause 3.2.1. The guarantee for payment of
wages for hours worked by employees under such an arrangement may be complied
with and averaged over a period of 13 weeks.
[20] Other than clause 3.2.2 above there are no other references to the commission/incentive
pay arrangement in the Agreement. In response to a ‘better off overall’ analysis provided by
the Fair Work Commission’s Agreements Team, the Employer Applicant provided a copy of a
document titled ‘AllSeasons Carpet Cleaning & Pest Management Collective Agreement Pay
& Performance Arrangements’ (the Performance Arrangements). This document sets out the
[2023] FWCFB 146
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various components of the commission arrangement that currently apply to employees of the
Employer Applicant. It is relied on by the Employer Applicant to demonstrate that employees,
viewed as a group, would be ‘better off’ if the Agreement applied to them than if the modern
awards applied.
Other Evidence and Submissions
[21] The Employer Applicant also provided other documentation and submissions relating
to the current operation in practice of the Performance Arrangements which were also directed
to satisfying the better off overall test.
[22] Aside from wages, various other conditions of employment were identified in the
Commission’s analysis as being relevant to the BOOT assessment. These included the
following:
(i) Overtime - Clause 4.4.1 of the Agreement provides a reduced overtime penalty
for overtime worked Monday to Saturday. Such overtime is paid at 150% for the
first 3 hours and 200% thereafter, compared to the Awards under which overtime
increases from 150% to 200% after two hours (Clause 19.3 of the Cleaning
Award and Clause 20 of the Pest Award).
(ii) Voluntary Additional Hours – Clause 4.3 of the Agreement provides that
employees may volunteer or request to work additional voluntary hours which
may include hours in excess of or outside the employee’s rostered or ordinary
hours of work, or at times when penalty rates or additional loadings may
otherwise apply. These additional hours will be paid at the employee’s ordinary
rate of pay. The Awards do not contemplate a similar type of arrangement.
(iii) Allowances – various allowances in the relevant awards were identified as not
appearing in the Agreement and there is no mechanism to increase those
allowances that do appear in the Agreement in line with increases to allowances
in the modern awards.
(iv) Rest and Meal Breaks - Clause 4.5 of the Agreement provides rest and meal
breaks similar to those set out in the Pest Award, however when compared to the
Pest Award, the entitlement to a second 10-minute paid break is, under clause
4.5.2 of the Agreement, subject to an employee working a minimum of 7.6 hours.
Clause 15.2 of the Pest Award entitles employees to two 10-minute paid rest
breaks where an employee works more than 6 hours on any day or shift. In
addition, clause 15.3 of the Pest Award provides employees with a 10-minute
washing time break before each meal break and a 10-minute washing time break
before finishing work each day which are counted as time worked. The
Agreement does not appear to provide washing time.
(v) Under the Cleaning Award, employees are entitled to a 30-minute unpaid meal
break under clause 14.2(b) after working 4.5 hours (or 5 hours in an emergency).
Under the Agreement, employees can work up to 5 hours before being required
to take a meal break. Further, clause 14.2(c) of the Cleaning Award provides, as
[2023] FWCFB 146
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a default, two paid 10-minute rest breaks, without imposing minimum
engagements and clause 14.3 of the Cleaning Award provides penalties payable
to employees when interrupted during a meal break. The Agreement is silent on
any such penalties in the same circumstance.
(vi) Other clauses in the Agreement were identified as being more beneficial than the
awards. These included clause 4.4.4, break between duty, which is more
beneficial than the Cleaning Award and Saturday penalty rates, which is more
beneficial than the Pest Award.
Consideration
[23] It is unnecessary to embark on a detailed analysis of the Performance Arrangements.
The BOOT assessment referred to in subitem 9 of item 20A of sch 3 involves a comparison
between the terms of the Agreement and the relevant modern awards. Clause 3.2.2 of the
Agreement simply allows for the establishment of an incentive or commission-based pay
scheme. It does not incorporate the terms of any such scheme and make those terms legally
binding on the employer and employees. Moreover, the terms of the scheme are entirely at the
discretion of the Employer Applicant. Those terms can change at any time. Alternatively, the
scheme can be withdrawn entirely. Clause 3.2.2 also makes clear that the employer can agree
or not agree to apply any incentive scheme to particular employees. In those circumstances the
Performance Arrangements cannot be taken into account in determining whether the BOOT
requirement has been satisfied.
[24] We turn now to the other conditions of employment set out in the Agreement to assess
those against the provisions of the modern awards.
[25] In relation to the Agreement conditions referred to at paragraph [22] above, the
Employer Applicant responded that any reduced benefit would only apply in circumstances
where an employee had not achieved minimum turnover requirements in the Performance
Arrangements (overtime), the provision was no longer used (voluntary hours), the provisions
were not applicable or if they were, they would be paid in accordance with the modern awards
(allowances) and the award requirements are met (rest breaks). In our view these submissions
do not adequately address the issue in a way that would allow us to conclude that employees,
viewed as a group, would be better off under the Agreement. Reliance on the Performance
Arrangements or other payments that may have developed as a matter of practice outside the
terms of the Agreement itself is of no relevance in the BOOT assessment.
[26] In accordance with the principles outlined in Suncoast Scaffolding we are required to
undertake a broad evaluative judgment based upon an overall comparison of the terms of the
transitional instrument and the relevant award(s) in their application to the cohort of award
covered employees. Taking into account each of the various differences that have been
identified between the Agreement and the relevant modern awards and the submissions that
have been provided in relation to those matters, and having regard our conclusion that the base
rates of pay provided for by the Agreement are the same as those contained in the relevant
modern awards, we are of the view that it is likely that, as at the time the applications were
[2023] FWCFB 146
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made, the employees, viewed as a group, would not be better off if the Agreement applied to
them than if the awards applied.
[27] Consequently, the requirement in subitem 9(b) has not been met, and it is unnecessary
to consider whether it is ‘otherwise appropriate’ to extend the default period under subitem 6(a).
[28] As to whether it would be ‘reasonable in the circumstances’ within the meaning of
subitem 6(b) to extend the default period we observe that there was no evidence to the effect
that the Employer Applicant and the employees had any intention to move to a contemporary
industrial instrument, including one that might include an incentive-based payment system.
There are of course avenues open for the parties to enter into such arrangements. Rather, it was
put that the current arrangements provided superior benefits, a happy work-life balance and an
opportunity to obtain benefits that exceeded the awards.
[29] The Full Bench in Henderson [2023] FWCFB 132 said:
It is apparent that that Ms Henderson and SSA have no plan to transition to a
contemporary employment arrangement but rather seek the extension of the AWA for
the maximum time available as a matter of convenience. As stated in the Full Bench
decision in Northern Inland Credit Union Limited, we do not consider that it is
consistent with the statutory intention to sunset transitional instruments as the default
position that an AWA should be allowed to continue to operate merely because the
parties agree that this should occur, absent any other relevant consideration which would
render it reasonable to do so.4
[30] Those observations apply with equal force in this case. We also note that the Agreement
includes a number of provisions which are inconsistent with the terms of the National
Employment Standards. The Employer Applicant did not argue to the contrary but asserted that
the company would refer to the modern award provisions where such inconsistency arose. In
our view having terms of this kind in an agreement is undesirable and may give rise to
uncertainty in the application of the Agreement if it were to continue to operate. That is a
relevant factor to take into account in the overall assessment as to whether it is reasonable in
the circumstances to extend the default period. We are not persuaded that there are any
considerations that weigh sufficiently in favour of a conclusion that it would be reasonable in
the circumstances to extend the default period here.
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb132.pdf
[2023] FWCFB 146
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Conclusion
[31] Each of the applications is dismissed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
AC324856 PR765492
1 [2023] FWCFB 105 (‘Suncoast Scaffolding’).
2 Clause 1.2.1.
3 Clause 1.2.2.
4 Application by Dilek Henderson [2023] FWCFB 132, [11].
OF THE FAIR WORK L MISSION THE SEA
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb105.pdf
https://www.fwc.gov.au/documents/decisionssigned/pdf/2023fwcfb132.pdf
