2023 WAIRC 00172
ENTERPRISE ORDER PURSUANT TO S.42I
WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00172

CORAM
: SENIOR COMMISSIONER R COSENTINO

HEARD
:
WEDNESDAY, 1 FEBRUARY 2023

WRITTEN SUBMISSIONS RECEIVED
:
WEDNESDAY, 15 FEBRUARY 2023; FRIDAY, 10 MARCH 2023 AND THURSDAY, 16 MARCH 2023

DELIVERED : THURSDAY, 30 MARCH 2023

FILE NO. : APPL 43 OF 2022

BETWEEN
:
GEORGE KOURTESIS AS TRUSTEE FOR THE KOURTESIS FAMILY TRUST
Applicant

AND

UNITED WORKERS UNION
Respondent

CatchWords : Industrial Law (WA) – Enterprise Order pursuant to s 42I – Meaning of ‘employer’ in s 42 – Whether the applicant was an employer entitled to initiate bargaining at relevant time – Consideration of relevant factors – Higher base rate as tradeoff for shift penalties and overtime – Whether proposed Enterprise Order is fair and reasonable in all of the circumstances
Legislation : Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)
Industrial Relations Amendment Act 2021 (WA)
Interpretation Act 1984 (WA)
Result : Application dismissed
REPRESENTATION:

APPLICANT : MR J MARZEC OF COUNSEL
RESPONDENT : MR Z DOHERTY OF COUNSEL

Case(s) referred to in reasons:
Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 6951
Australian Unity Property Ltd v City of Busselton [2018] WASCA 38; (2018) 237 LGERA 333
Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435
Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130; (1988) 26 IR 411
Brew v Whitlock (No 2) [1967] VicRp 102; [1967] VR 803
Cleaning Security and Allied Employees Union v AntiCrime Security Service & Ors (1982) 62 WAIG 2504
Coles Myer Ltd v Coppin & Ors (1993) 73 WAIG 1754
COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED WORKERS’ UNION OF AUSTRALIA, ENGINEERING & ELECTRICAL DIVISION, WA BRANCH V MILLENNIUM INORGANIC CHEMICALS [2005] WAIRC 02859; (2005) 85 WAIG 3877
CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION V PERSONNEL CONTRACTING PTY LTD [2022] HCA 1
Esso Australia Resources Pty Ltd v Commissioner of Taxation [2011] FCAFC 154; (2011) 199 FCR 226
Hanssen Pty Ltd v Construction, Forestry, Mining and Energy Union (Western Australian Branch) [2004] WAIRC 10828; (2004) 84 WAIG 694
Kounis Metal Industries Pty Ltd v Transport Workers' Union of Australia (1992) 73 WAIG 14
Laing O’Rourke v Transport Infrastructure [2007] NSWSC 723
Lau v Bob Jane TMarts Pty Ltd [2004] VSC 69
Liquor, Hospitality and Miscellaneous Union, Western Australian Branch v Unions WA & Ors [2007] WAIRC 00397; (2007) 87 WAIG 757
Public Transport Authority of Western Australia v The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch [2015] WASCA 150; (2015) 95 WAIG 1593
Re 4 Yearly Review of Modern Awards  Penalty Rates [2017] FWCFB 1001; (2017) 265 IR 1
RGC Mineral Sands Ltd & Anor v Construction, Mining, Energy, Timberyards, Sawmills, and Woodworkers Union of Australia WA Branch & Ors [2000] WASCA 162; (2000) 80 WAIG 2437
Rural Bank (a Division of Bendigo and Adelaide Bank Ltd) v McCagh [2022] WASC 339
Siagian v Sanel Pty Ltd [1994] IRCA 2; (1994) 1 IRCR 1
The Federated Miscellaneous Workers Union of Australia WA Branch v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493
Whitlock v Brew [1968] HCA 71; (1968) 118 CLR 445

Table of Contents

The Trust’s Business 5
The security services industry 6
The Trust’s proposed enterprise order 7
Was the Trust an ‘employer’? 8
Meaning of ‘employer’ 8
Was the Trust party to at least one employment contract as at September 2022? 12
The Trust’s interests/Needs of enterprise 18
Flexibility 18
Greater confidence in forecasting labour costs 19
Competition 19
Employees’ interests/Fairness to employees 21
Take home pay 22
Transparency and certainty in employment terms and conditions 22
Fair compensation for working unsociable hours 23
Does the ‘safety net provision’ protect employee interests? 24
UWU’s interests 25
Interests of community as a whole 25
Efficient organisation and performance of work 26
Needs of industry 26
Encouraging employers, employees and organisations to reach agreements 26
Disposition and Orders 26
Schedule 1 – The Trust’s proposed enterprise order 27
Schedule 2 – Comparison of the rates of pay for Level 1 and Level 4 security officers 50
Table 1: Fulltime security officer Level 1 50
Table 2: Casual security officer Level 1 51
Table 3: Fulltime security officer Level 4 52
Table 4: Casual security officer Level 4 53


Reasons for Decision

1 The applicant, Mr George Kourtesis in his capacity as trustee of the Kourtesis Family Trust has applied for an enterprise order under s 42I of the Industrial Relations Act 1979 (WA). The Trust can apply for an enterprise order if the respondent, United Workers Union (UWU), refused an invitation to bargain for an industrial agreement made under s 42 of the Act.
2 The Trust is establishing a new security services business in Western Australia. This new business will trade as Applied Security Force. It will employ security officers, and will operate within the state industrial relations system under the Act.
3 The Trust has not yet commenced trading. In anticipation of trading and engaging security officers, it gave notice to UWU of its desire to commence bargaining for an industrial agreement to cover it and its employees. UWU declined to bargain with the Trust, and so, naturally, bargaining did not occur, and no industrial agreement was made.
4 The Trust seeks an enterprise order to provide it with flexibilities that are not available under the Security Officers’ Award. Award. In particular, it seeks to ‘flatten out’ the rates of pay, that is, reduce the number of different rates of pay that apply under the Award. It says this will ease the administrative burden of applying multiple rates of pay, and enable it to more confidently forecast labour costs to tender for jobs.
5 While the Trust says it does not seek to pay its employees anything less than what they would receive under the Award, the Trust also seeks terms of an enterprise order that will ensure it can tender for work competitively. In this regard, it relies on the terms and conditions contained in a registered agreement made between Labourplus and UWU as indicative of the market it is competing in.
6 In short, it is seeking higher base rates of pay compared with the Award rates, as a tradeoff for reduced overtime rates and weekend penalty rates, and the removal of weekday penalty rates.
7 UWU opposes the application.
8 At the hearing of the application, both parties told me that the preconditions for making an enterprise order in ss 42I(1)(b), 42I(2) and 42I(3) have been met in this case. Nevertheless, I invited the parties to specifically address the question of whether the Trust was an ‘employer’ at the time that it says it gave notice to initiate bargaining under s 42 of the Act, and whether the condition that the Trust be ‘an employer’ as referred to in s 42 was satisfied.
9 What I must decide is:
(a) whether the Trust initiated bargaining for an industrial agreement prior to the application for an enterprise order. This turns on whether the Trust was an employer at the relevant time;
(b) if yes, whether to make an enterprise order; and
(c) if yes, in what terms:
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Workers’ Union of Australia, Engineering & Electrical Division, WA Branch v Millennium Inorganic Chemicals [2005] WAIRC 02859; (2005) 85 WAIG 3877 at [5].
10 The Commission’s power under s 42I is broad. If I decide to make an enterprise order, the Act requires only that:
(a) it provide for any matter that might otherwise be provided for in an industrial agreement between the Trust and UWU ‘irrespective of the provisions’ of the Award: s 42I(1)(c); and
(b) it be what I consider fair and reasonable in all of the circumstances: s 42I(1)(d).
11 In exercising my discretion, I must have regard to the factors set out in s 26 of the Act. Of particular relevance, I must:
(a) Have regard for the interests of the persons immediately concerned whether directly affected or not and, where appropriate, for the interests of the community as a whole: s 26(1)(c).
(b) Take into consideration the need to facilitate the efficient organisation and performance of work according to the needs of an industry and enterprises within it, balanced with fairness to the employees in the industry and enterprises: s 26(1)(d)(vi).
(c) Take into consideration the need to encourage employers, employees and organisations to reach agreements appropriate to the needs of enterprises and the employees in those enterprises: s 26(1)(d)(vii):
Hanssen Pty Ltd v Construction, Forestry, Mining and Energy Union (Western Australian Branch) [2004] WAIRC 10828; (2004) 84 WAIG 694 at [82], [95] and [96]; Public Transport Authority of Western Australia v The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch [2015] WASCA 150; (2015) 95 WAIG 1593 at [103][106].
12 In making an enterprise order, the Commission stands in the shoes of the parties and constructs, in lieu of an industrial agreement, orders which are in the same terms as such agreement were it reached, containing fair and reasonable conditions: Hanssen at [109].
13 The party who seeks an enterprise order carries the burden of establishing that the order should be made and in the terms which it is sought the order be made: Hanssen at [117][121] and Millennium Inorganic Chemicals at [7].
14 Applying the statutory criteria, and in accordance with these principles, I have decided not to issue an enterprise order.
The Trust’s Business
15 Although the Trust filed a total of six witness statements, four of which were statements by Mr Kourtesis, the evidence before the Commission concerning the Trust’s business was relatively scarce. As well as Mr Kourtesis’ witness statements, the Trust relied upon a witness statement of Ms Karen Shortland who is a security officer and potential future casual employee of the Trust, and a witness statement of Mr Peter McCallum, also a casual Security Officer and potential future employee of the Trust. None of the witnesses were crossexamined. Their witness statements were tendered without objection.
16 From this evidence, what the Commission knows of the Trust’s business is that:
(a) The Kourtesis Family Trust was settled in early 2021. Mr Kourtesis is the trustee of the Trust.
(b) The Trust is not yet trading as a security services business, but will commence trading immediately in the event that an enterprise order is made.
(c) In April 2021, the Trust entered into written employment contracts with Mr McCallum and Ms Shortland, but those individuals have not commenced ‘any significant work duties’ under the contracts.
(d) The Trust had income from bricklaying and manual labouring activities of $17,640 in the financial year ended 30 June 2022 and expenses of $3,180 in that financial year. The income was generated through Mr Kourtesis’ work.
(e) It is intended that the Trust will provide security services in future.
(f) It is likely to provide similar services to SMC IP Pty Ltd, which is a company of which Mr Kourtesis is a director.
(g) SMC has provided security and asset protection services in Western Australia since 2020.
(h) SMC has, in the past, quoted to provide security services for:
(i) music events, which generally involve work at night and on weekends;
(ii) sporting events, which generally involve work at night and on weekends;
(iii) family and cultural festivals, which may involve work over several days and at all hours;
(ix) food festivals, which usually involve work on weekends;
(x) concerts, which generally involve work at night and on weekends; and
(xi) agricultural shows, which may involve work over serval days and at all hours.
17 The Trust provided two specific examples of services provided by SMC:
(a) The first involved provision of security services for the duration of a particular project, involving 12 hours’ presence from Monday to Saturday, and 24 hours’ presence on Sunday. The Trust did not specify the duration of the project/contract.
(b) The second involved the provision of security services for a community carnival, requiring a 20 hour a day security presence 7 days a week over 3 weeks and totalling 787.5 hours. Some employees worked shifts commencing at 10.00 pm and concluding at 6.00 am from Monday to Friday.
18 The Trust frankly described the services it is likely to provide as diverse, and involving mostly weekend and shift work. I take it this means that the work will involve a number of different clients, and shortterm projects, rather than longterm ongoing and regular work.
The security services industry
19 The Trust provided the Commission with a copy of the Australian Security Association Ltd’s Industry Licensing Report 2022. This report draws on data provided by state and territory security regulators to provide a snapshot of the number of licensed security firms and individual security licence holders across Australia.
20 The Industry Licensing Report records that Western Australia had a total of 17,685 individual security license holders and 1,743 master license holders as at 31 December 2021.
21 The Trust relies on the Labourplus Security and United Voice (WA) Union Labour Hire Agreement 2020 (Labourplus Agreement) as indicative of terms and conditions that are paid in the security services industry in Western Australia. The Labourplus Agreement is an industrial instrument registered under the Act. UWU is party to it, and agreed to its terms. It was registered on 13 July 2020 and will reach its nominal expiry date on 13 July 2023. It expressly states that the estimated number of employees covered by it at the time of registration was 3000.
22 The Trust pointed out that if Labourplus continued to engage approximately 3000 employees as at 31 December 2021, then, as a proportion of the total number of individual security licence holders in Western Australia, Labourplus employs approximately 17% of the security officers working in WA. It says this is a substantial proportion of the labour market.
23 Other information about the industry before the Commission was:
(a) The evidence of Ms Shortland and Mr McCallum to the effect that casual employment is common in the industry.
(b) The evidence of Ms Shortland that in her other employment and years of experience in the security industry, she has always been paid a flat hourly rate of pay ranging from $25.00 to $27.00 per hour, except with higher rates on public holidays. The reliability of this evidence is questionable as Ms Shortland’s experience in the industry spans over 34 years, and includes current casual employment with SMC. The Trust’s Counsel advised the Commission that SMC operates under the terms of the Security Services Industry Award 2020, being a Modern Award under the Fair Work Act 2009 (Cth) (FWA). The base rate of pay for a Casual Security Officer Level 1 under the Modern Award is $29.86 per hour. The Modern Award also provides for penalty rates for night shifts and weekends that apply to casual employees. To accept Ms Shortland’s evidence would be to find that SMC has underpaid or is underpaying her in breach of the FWA.
(c) Vague evidence of Mr McCallum to the effect that security officers face high risks and have significant responsibilities, warranting ‘being paid a lot more than they are’.
(d) The Trust’s written submission that the workforce in the security industry is predominantly casual and that many employees enjoy the flexibility and lifestyle opportunities of casual employment. The Trust also submitted that for many employees, casual security work is secondary employment, supplementing income from other sources or whilst studying. This submission was based in part on Mr McCallum’s evidence, although Mr McCallum’s evidence did not go as far as the submission did.
24 Mr Kourtesis stated that clients in the security industry expect suppliers to be able to tender using ‘a fixed rate of pay’. As I have said, there was no objection taken to this evidence. However, the basis for this speculative assertion was not elaborated upon, nor corroborated by any client. It is so vague as to be meaningless. I give it no weight.
The Trust’s proposed enterprise order
25 The Trust’s proposed enterprise order is annexed to these reasons as Schedule 1.
26 There is no dispute that the proposed enterprise order provides for matters that might otherwise be provided for in an industrial agreement between the Trust and UWU. The topics covered by the proposed enterprise order are commonly contained in industrial agreements registered under the Act, and are topics with respect to ‘industrial matters’ as defined in s 7 of the Act.
27 The Trust arrived at the pay rates contained in the proposed enterprise order by lifting the Award base rates of pay by 10% and then:
(a) applying a single weekend rate of time and a quarter in lieu of the Award rates of time and a half for Saturday and double time for Sunday;
(b) substituting a lower rate of pay for work performed on public holidays;
(c) removing afternoon and night shift penalties; and
(d) applying a single rate of time and a half for all overtime worked.
28 The Trust also included in its proposed enterprise order a ‘safety net’ clause: cl 11. The intention of this clause is to guarantee that payments made to employees under the proposed enterprise order are at least equivalent to what they would receive if the Award applied. The Trust’s Counsel argued that cl 11 would make it impossible that any employee would be worse off compared with the Award.
Was the Trust an ‘employer’?
29 On 15 September 2022, the Trust purported to serve UWU with a Notice to Initiate Bargaining.
30 Section 42(1) of the Act provides:
Bargaining for an industrial agreement may be initiated by an organisation or association of employees, an employer or an organisation or association of employers giving to an intended party to the agreement a written notice that complies with subsection (3).
31 Accordingly, for a Notice to Initiate Bargaining to be validly made under that section, the person giving the notice must be an ‘employer’ as defined by the Act.
Meaning of ‘employer’
32 The issue between the parties relates to the correct construction of the definition of ‘employer’ in the Act. This construction point was addressed fairly superficially in the parties’ written submissions.
33 ‘Employer’ is defined in s 7 of the Act as, relevantly ‘a person or public authority employing 1 or more employees’.
34 The Trust says that it was an employer when the Notice to Initiate Bargaining was issued because:
(a) it had written employment contracts with Mr McCallum and Ms Shortland; and
(b) Mr Kourtesis was also an employee.
35 It argued that the Act contains no threshold in terms of the quantity or quality of work to be performed by the employees referred to in the definition of employer. It submits that the definition adopts a ‘common sense’ approach as to who is an employer.
36 UWU, on the other hand, contends that the Trust is not an ‘employer’ because it had not ‘actively’ engaged any employees in a substantive way to perform work as employees. In other words, the existence of a contract of employment was insufficient if it was not shown that the employees were actually performing services under that contract at the relevant time.
37 Construing the definition of ‘employer’ is essentially an exercise aimed at ensuring the meaning given is consistent with the language and purpose of all the provisions of the Act. The applicable principles are wellknown, and were summarised in Australian Unity Property Ltd v City of Busselton [2018] WASCA 38; (2018) 237 LGERA 333 as follows (citations omitted):
The first aspect is the imperative to give primacy to the language which the legislating body has chosen to use. As the plurality observed in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.
This focus on the statutory text may be seen as an aspect of the rule of law. It recognises and preserves the role of the legislature, acting within constitutional constraints, in identifying the policy which legislation is to pursue by requiring that effect be given to the chosen text. This point was noted by Gibbs CJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation:
The danger that lies in departing from the ordinary meaning of unambiguous provisions is that ‘it may degrade into mere judicial criticism of the propriety of the acts of the Legislature’ ... it may lead judges to put their own ideas of justice or social policy in place of the words of the statute.
Additionally, focus on the statutory text facilitates the comprehension of the meaning of legislation by persons whose conduct it regulates. As French CJ observed in Alcan:
The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill at [340] as: ‘dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.’ In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy.
38 To the extent that UWU submits that the use of the word ‘employing’ in the definition imports a requirement that the employees be actively engaged in a work activity at the relevant time, I do not accept that the definition is so confined. While the simplicity if this argument is appealing, the word ‘employing’ does not necessarily have this effect. The definition uses no verb tense with the present participle ‘employing’. There is no ‘is’, ‘was’ or ‘will be’ before the word. There are at least three alternative grammatical functions that the present participle can play in this form: as an adjective, as a noun with verblike properties, or in a present continuous verb tense.
39 I also reject the Trust’s submission that ‘employer’ carries its common sense meaning. The Trust has not articulated what the common sense meaning is. In any event, as s 7 of the Act provides what the word employer means, the statutory definition is exhaustive. The ordinary or common sense meaning’, whatever that is said to be, is not available as an aid to interpreting the meaning used in the definition: see D Pearce, Statutory Interpretation in Australia, (9th ed, 2019) at [6.36] and Esso Australia Resources Pty Ltd v Commissioner of Taxation [2011] FCAFC 154; (2011) 199 FCR 226.
40 The real departure point between the parties may lie in the distinction between the existence of an employment contract and the existence of an employment relationship. Does ‘employing’ mean being the nonemployee party to an employment contract? Or does it mean being the nonemployee party to an employment relationship?
41 While ordinarily, the relationship of employer and employee coexists with the contract of employment, the contract and the relationship are distinct: the employment is the continual relationship, not the engagement or contracting to employ and to serve: Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 per Gageler and Gleeson JJ at [110][111]. See also Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435 per Latham CJ at [454] and Dixon J at [465][466] and Siagian v Sanel Pty Ltd [1994] IRCA 2; (1994) 1 IRCR 1. In Sappideen et al, Macken’s Law of Employment (Lawbook, 8th ed, 2016) at [4.30], this distinction is illustrated by the example of a contract of employment existing without an employeremployee relationship commencing.
42 The use of numbers in the definition: ‘…1 or more employees’ indicates that a practical, real and actual state must exist whereby it can be determined that a number (whether one or more) people are employees. ‘Employing’ cannot, in this context, be used to describe what a person does from time to time. Rather, it must be what the person is, or is doing.
43 The definition of employer is in contrast to the definition of employee, because the definition of employee has two limbs:
(a) a person who is employed by an employer to do work for hire or reward, including as an apprentice; or
(b) a person whose usual status is that of an employee.
44 The ‘employee’ definition more clearly contemplates the possibility of having the status of an ‘employee’ outside a current, subsisting employment relationship. This might indicate that Parliament had turned its mind to the distinction between an existing employment relationship, and one that is not currently existing but might be a past or a future relationship.
45 However, the most telling contextual matter is the Commission’s jurisdiction under the Act. The breadth of the Commission’s jurisdiction turns on the definition of ‘industrial matter’. Section 23(1) of the Act is fundamental:
23. Jurisdiction of Commission
(1) Subject to this Act, the Commission has cognizance of and authority to enquire into and deal with any industrial matter.
46 ‘Industrial matter’ is defined in s 7 of the Act. The definition is extensive. It is not necessary to set it out in full here. But it in turn, variously refers to ‘employees’ and ‘employers’.
47 Before s 7(1a) of the Act was inserted, the prevailing view, was that unless at the time an application was made to the Commission there was a present or future existence of an employer and employee relationship, there was no industrial matter and the Commission was without jurisdiction. The position is encapsulated in the following from Owen J’s reasons in Kounis Metal Industries Pty Lt’ v Transport Workers' Union of Australia (1992) 73 WAIG 14 at 19:
In my view, the judgments in Pepler suggest that the decision rests upon a point of principle, namely, that jurisdiction depends on the present or future existence of the employer/employee relationship. Unless, at the time when the application is made, the relationship actually exists, or is expected to come into existence in the future, or did exist and is to be restored, the key element of an “industrial matter” is missing…
48 The Industrial Appeal Court applied the principle as stated in Kounis in Coles Myer Ltd v Coppin & Ors (1993) 73 WAIG 1754:
What this line of authority indicates is that there must be a continuation of an industrial relationship between the parties to constitute an industrial matter. The interpretation provisions of the Act speak in terms of an existing employer employee relationship….
The provision in paragraph (c) of the interpretation section “industrial matter” which gives power to deal with any matter relating to “the dismissal…of any person…” should also be read in the context of the opening words of the definition, and thereby limited in the same way to an existing or prospective continuing relationship of employer and employee.”
49 Later cases have emphasised that the Pepler line of cases should not be viewed as constraining the Commission’s jurisdiction because an employment relationship has ceased. In The Federated Miscellaneous Workers Union of Australia WA Branch v Nappy Happy Hire Pty Ltd T/A Nappy Happy Service (1993) 74 WAIG 1493 Anderson J observed ‘it is not easy to see why the continued existence of the industrial matter should necessarily depend on the continuation of the contract of service’. Rather, an industrial matter may continue, and the jurisdiction of the Commission survive, notwithstanding the relevant employee’s dismissal.
50 In RGC Mineral Sands Ltd & Anor v Construction, Mining, Energy, Timberyards, Sawmills, and Woodworkers Union of Australia WA Branch & Ors [2000] WASCA 162; (2000) 80 WAIG 2437 at [79] Parker J concluded that the definition of ‘industrial matter’ excludes the view that there must always be an existing or continuing contract of employment for there to be an industrial matter. His Honour further stated that the preferences in the cases His Honour cited denies the need for there to be an ‘immediately or directly contemplated employment relationship for there to be an industrial matter’.
51 This was the state of the law concerning the breadth of what is an ‘industrial matter’ when the definition of ‘employer’ was recently amended: Industrial Relations Amendment Act 2021 (WA). The effect of the 2021 amendments did not alter the first limb definition of ‘employer’, preserving in its previous form the core elements of ‘employing one or more employees’.
52 That ‘industrial matter’ extends to an employment relationship that is not presently in existence, but expected to exist in the future is consistent with the fact that an employment contract vests rights and obligations on parties at the time of their agreement, even if those rights and obligations concern a contemplated future employment relationship.
53 So, it is well established that industrial matters extend to not only present employer/employee relationships, but those that are expected to come into existence in the future. A contract of employment will generally create such an expectation.
54 The definition of employer should be read harmoniously with the existing law in relation to what is an ‘industrial matter’.
55 This leads me to the conclusion that the definition of ‘employer’ does not require that the purported employer be in at least one employment relationship(s) that has commenced or is currently in existence. ‘Employer’ also includes a nonemployee party to an employment contract which creates an expectation that an employment relationship will exist in the future.
56 There may be other circumstances, short of an employment contract coming into existence, which create the necessary expectation that an employment relationship will exist in the future. The Trust did not rely upon circumstances beyond the existence of a valid employment contract, and so it is not necessary for me to determine what is required to meet the definition of ‘employer’ beyond the dichotomy presented by the present matter.
57 Whether an employment contract exists and whether it creates the necessary expectation will be questions of fact and degree.
Was the Trust party to at least one employment contract as at September 2022?
58 Given my conclusion about the meaning of ‘employer’, I must decide whether the Trust was either in an employment relationship as at 15 September 2022 or was, as at that date, party to at least one employment contract that created an expectation of a future employment relationship.
59 In my view, the evidence falls well short of establishing that the Trust employed Mr Kourtesis as an employee and was thereby an employer as at 15 September 2022. The evidence relied on comprised Mr Kourtesis’ statement ‘I myself have been employed by the Trust, carrying out various bricklaying and manual labour duties during the financial year ending 30 June 2022’ (emphasis added). He attached the Trust’s tax return for that year, ended 30 June 2022.
60 The tax return does not show any wages or salary paid to Mr Kourtesis. The total expenses of the Trust for the entire year is $3,180. Even if wages constituted the entirety of the Trust’s expenses, which is unlikely, this represents no more than 136 hours of work at the minimum rates of pay for a Bricklayer’s Labourer under the Building Trades (Construction) Award, or less than 4 weeks of fulltime work. This scant evidence, which relates to the year ended 30 June 2022, does not allow me to find that Mr Kourtesis was employed by the Trust as at 15 September 2022. Indeed, it creates significant doubt that he was.
61 The Notice to Initiate Bargaining was issued in the financial year after the year that the evidence relates to. I have no evidence to find that the Trust was employing Mr Kourtesis, that is, that it was either in an employment relationship with him or was party to an employment contract creating an expectation of future employment, as at September 2022. Mr Kourtesis’ statements were silent as to his own employment beyond the 30 June 2022 financial year.
62 The Trust produced written and signed employment contracts for Mr McCallum and Ms Shortland. These are in virtually identical terms. The contracts are dated 6 April 2021 and 27 April 2021, respectively, some 17 months prior to the Notice to Initiate Bargaining.
63 Neither contract specifies a commencement date. However, they do contain the following preamble:
…
BACKGROUND:
A. The Employer has agreed to employ the Employee under the final negotiated terms and conditions set out in the Security Force Agreement 2021 and the Employee has agreed to be employed by the Employer on those terms and conditions.
B. The Employer has agreed to employ the Employee on the terms and conditions set out in this Employment Agreement and the Employee has agreed to be employed by the Employer on those terms and conditions.
…
64 The contracts do not expressly state whether the employees are engaged on a fulltime, parttime, weekly hire, daily hire, or casual basis.
65 Under the heading ‘Engagement’ there is the following clause:
1.1 The Employee is employed by the Employer from time to time on an as required basis. The Employee is employed by the Employer. The Employee's employment commences and terminates as specified within each submitted and accepted employment period. The Employee must report for work in accordance with the job description details agreed to within each accepted employment position. In the course of employment the Employee's place of employment may change.
1.2 The Employee is employed in the position of Level 1, 2, 3, 4 Security Officer or Crowd Controller or in accordance with section 4 of the Security Force Agreement 2021.
…
66 Under cl 3 Wages, the contract provides:
’3.1 The Employee's hourly rate of pay shall be based on the applicable rate table provided in section 9 of the Security Force Agreement 2021. Wages are paid fortnightly by electronic funds transfer’.
…
3.5 The Employee's wages may be amended from time to time in accordance with section 9 of the Security Force Agreement 2021.
67 Finally, cl 12.1 provides:
12.1 This Employment Agreement is subject to the Security Force Agreement 2021 and collectively represents the whole agreement between the Employer and the Employee. Any prior representations by the Employer or any person on its behalf are not relied on by the Employee and the Employee expressly acknowledges having read this Agreement and satisfied himself/herself as to its terms.
68 Bizarrely, neither Ms Shortland nor Mr McCallum make any reference in their witness statements to these contracts or the circumstances of entering into them. They make no reference in their statements to a document described as the ‘Security Force Agreement 2021’. They do refer in their witness statements to a document called ‘Security Force Enterprise Order 2022’ but that document is not produced by them and its content is unknown.
69 Neither of these witnesses suggested that they are or have been employed by the Trust, although they do talk about being employed by SMC. The witnesses do say that around 11 months after the date of the contracts, in March 2022, Mr Kourtesis approached them about being employed by a new security business in the WA state system, and that they have been discussing terms and pay rates with Mr Kourtesis since March 2022, suggesting that they had not agreed any pay rates as at April 2021 or indeed as at March 2022.
70 These discrepancies in the evidence have not been explained. Given the gaps and discrepancies in the evidence, I am uncomfortable placing any reliance on the evidence of the contracts being entered into at all. However, it is not necessary for me to make findings about whether the contracts were entered into, because I find, in any event, that the contracts were void for uncertainty. They did not create an employment relationship and were incapable of creating a future employment relationship.
71 The relevant principles in relation to uncertainty of contracts were summarised in Rural Bank (a Division of Bendigo and Adelaide Bank Ltd) v McCagh [2022] WASC 339 with reference to Lewison K and Hughes D, The Interpretation of Contracts in Australia (2012) at [96] (citations omitted):
…
(a) A contract, or a provision in a contract, may be uncertain if it is unintelligible; if it is meaningless; if a court is unable to select between a variety of meanings fairly attributable to it, and the circumstances are not such that one or other party to the contract may elect between meanings; where the court is unable to discern the concept which the parties had in mind; or where the terms of the contract require further agreement between the parties in order to implement its terms (emphasis added).
(b) The task of the court is to construe the document according to the ordinary canons of construction and then to determine whether the document so construed is void for incompleteness or uncertainty.
(c) That which can be made certain is itself certain.
(d) Where parties have entered into what they believe to be a binding agreement the court is most reluctant to hold that their agreement is void for uncertainty and will only do as a last resort.
(e) The court's reluctance to hold a provision in a contract void for uncertainty is greater in a case where the agreement is no longer executory but has been partly performed.
(f) A provision in a contract will only be void for uncertainty if the court cannot reach a conclusion as to what was in the parties' minds or where it is not safe for the court to prefer one possible meaning to other equally possible meanings.
72 Because it is a first principle of contract law that there can be no binding and enforceable obligation unless the essential terms of the bargain have been agreed upon, there is no concluded contract where an essential term is expressly left be to be settled by future agreement of the parties: Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 6951 at 700.
73 This fundamental principle has been applied to employment contracts: see for example Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130; (1988) 26 IR 411 and Lau v Bob Jane TMarts Pty Ltd [2004] VSC 69.
74 In A Stewart, Stewart’s Guide to Employment Law (7th ed, 2021), the learned authors observe at [5.16] that:
In practice, however, employment agreements are hardly ever treated as incomplete. This is because the courts are generally willing to fill any ‘gaps’ left by the parties by implying certain terms, as explained in Chapter 6. This will be done even for matters that in other contracts would be regarded as essential.
Suppose for instance that parties agree that a worker will be paid for doing certain work but fail to specify how much. As will be explained in Chapter 10, there will generally be a minimum rate set by an award or by legislation for that work, so long as the contract is one of employment. But in any case, the common law will generally imply that the worker must be paid a reasonable sum, judged by the prevailing market for that type of work.
75 The Trust’s submissions and evidence make assertions as to Mr Kourtesis’ subjective beliefs about how the remuneration provisions of the contracts would operate. Mr Kourtesis says:
At the time, those contracts were prepared without the benefit of legal advice, and make erroneous reference to the ‘Security Force Agreement 2021’  at which point I believed that the process of bargaining with the respondent would swiftly validate and implement that document into those Employee Employment Contracts.
76 In supplementary written submissions, a different assertion is made about Mr Kourtesis’ subjective belief:
…that at the time the employment contracts were signed, in the absence of the Enterprise Agreement, the Applicant’s employees would be entitled to payment in accordance with the Award…
77 No objection was taken to Mr Kourtesis’ evidence, despite the fact it contains irrelevant statements about Mr Kourtesis’ subjective beliefs, its reference to a document that was not produced into evidence, its contradictory nature or its ambiguity. Because of these difficulties with the evidence, I give it no weight.
78 Another submission makes an assertion as to what Ms Shortland and Mr McCallum believed concerning their rates of pay being award rates of pay if an enterprise order was not made. Even if the evidence of such subjective beliefs or intentions was relevant, it is not open on the evidence to find they held such a belief, as neither witness refers in their evidence to the Award, nor to the contracts.
79 Ultimately, the subjective understandings of Mr Kourtesis, Ms Shortland and Mr McCallum are not relevant. What is relevant is the objective intentions of the parties gleaned from the contracts.
80 Beyond the assertions about subjective intentions and beliefs, Mr Kourtesis also submitted:
(a) That events postdating the making of the contracts cure any incompleteness or uncertainty.
(b) The contracts refer to the Award and, therefore, expressly incorporate the terms of the Award in the event an enterprise order is not made therefore the contracts are complete and certain.
(c) As the Award would apply as a matter of law if any enterprise agreement did not, then the contracts should not be void for uncertainty.
81 The Trust made no real attempt to show how the contracts should be construed according to the ordinary canons of construction as a first step before determining that it was certain.
82 Nor did its submissions identify what events or conduct are said to cure any incompleteness, or how established principles allow a conclusion that postcontractual conduct can render an otherwise uncertain or incomplete contract complete.
83 Nor did its submissions identify which provisions of the contracts have the effect of incorporating the Award terms (or which Award terms) as a safety net.
84 Starting with the construction of the remuneration provisions, I find that the references in the employment contracts to the ‘Security Force Agreement 2021’ is reference to a registered industrial agreement negotiated between the Trust and a union party entitled to represent the interests of the Trust’s employees. That much is apparent from its title and the relevant context, being the provisions of the Act for registration of an industrial agreement. The recitals expressly refer to ‘negotiated terms’. A reasonable person in the position of the parties would understand this to be the meaning.
85 The contracts therefore expressly contemplate terms and conditions of employment being in accordance with a registered industrial agreement resulting from negotiation. However, no such agreement eventuated. That is why the present application was made.
86 In effect, the parties’ agreement required further agreement to be reached on matters that were left open at the time the contracts were entered into. The contracts simply did not embody an agreement as to essential terms and conditions of employment.
87 I find nothing in the words of the contract which reveal an intention that the Award terms should apply in the event an industrial agreement did not exist or was not registered. I note that if it was the true intent of the parties expressed in the contracts that the Award apply where no industrial agreement was made, then there would have been no need for the present application for an enterprise order to be made. Indeed, this application would be inconsistent with the contracts.
88 This also puts to rest the suggestion that subsequent events have cured any incompleteness or uncertainty, leaving aside the issue of whether subsequent conduct can do so. Clearly, the parties have not acted as if the contract has been completed. Not only has this application for an enterprise order been made, precisely because no industrial agreement was reached, but neither Ms Shortland nor Mr McCallum have commenced working under the contracts. The business has not commenced trading, and will not commence trading unless and until an enterprise order is made.
89 It does not assist the Trust to point to subsequent events anyway. Subsequent events cannot cure incompleteness or uncertainty, unless those subsequent events constitute a variation to the contract. It was not suggested that the contract was varied. The task of determining whether a contract is void for uncertainty starts with the construction of the contract. An employment contract must be construed according to ordinary contractual principles, at the time the contract was entered into. Recourse cannot be had to subsequent conduct: Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1 per Kiefel CJ, Keane and Edelman JJ at [60][61], Gageler & Gleeson JJ at [124] and per Gordon J at [162].
90 Although the Trust does not make this distinction, I am conscious that evidence of subsequent conduct may be admissible for purposes other than construction, including to establish whether a contract was actually formed and when it was formed. I also recognise that the question of uncertainty or incompleteness may be closely related to the question of an intention to form a binding contract. Even then, subsequent conduct has no role to play in ‘curing’ incompleteness or uncertainty, as the Trust suggests. As an aside, the Trust did not really articulate what cure subsequent conduct worked anyway.
91 As for the submission that the contract was complete because the Award operated as a safety net in the absence of an enterprise agreement, I do not consider such an intention is apparent from the contract. The only references in the contract to the Award are in cl 5.1 which refers to the Award definition of which days are public holidays and cl 10.2, which limits the employer’s obligation to pay any redundancy pay in a situation of transmission of business, ‘unless an Award or the Act provides otherwise’. Clause 12.1 provides the contract is the entire agreement between the parties.
92 In the present scenario, it is not open for the Commission to imply terms into the contract to fill the gap, as contemplated in the extract from Stewart’s Guide to Employment Law at par [75] of these reasons. Had the contracts been entirely silent on essential conditions like remuneration, then it might be possible to imply that the Award conditions, or the conditions of any other applicable industrial instrument would apply. However, the parties expressly contemplated that an industrial agreement would be made, which would override the Award. The express reference to a future industrial agreement leaves no scope for implying either minimum conditions, Award conditions or reasonable remuneration.
93 The imperative to imply terms to fill the gaps is also not present in this case, because the employment relationships had not commenced. No work was performed under the contracts and no obligation to pay arose.
94 As the terms of a future industrial agreement had not been negotiated, let alone agreed upon, the provisions of the contract, which purport to incorporate conditions of the future industrial agreement, including the remuneration provisions, are void for uncertainty.
95 The provisions are not severable. The test or severability depends on:
…whether the operation of the contract apart from the impugned part was to be conditional on the efficacy of that part, or whether it was to take effect notwithstanding the failure of that part. That intention is to be ascertained from the construction of the contract as a whole…
See Brew v Whitlock (No 2) [1967] VicRp 102; [1967] VR 803, affirmed in Whitlock v Brew [1968] HCA 71; (1968) 118 CLR 445 followed in Laing O’Rourke v Transport Infrastructure[2007] NSWSC 723.
96 The contracts’ recitals make it clear that the parties intended that the contract should not take effect unless and until an industrial agreement dealing with the conditions of employment came into effect. Absent such an agreement, the contract simply cannot take effect. The uncertain provisions are not severable. The contract as a whole fails.
97 Aside from the uncertainty created by the contract’s dependence on an industrial agreement being made, the contracts are also uncertain in that they designate the employees’ classifications as ‘Level 1, 2, 3, 4 Security Officer or Crowd Controller’. Not only are such classifications dependent the anticipated industrial agreement to define them, the holding of multiple classifications concurrently is nonsensical.
The Trust’s interests/Needs of enterprise
98 Because I have found that the Trust was not ‘an employer’ and therefore not a party able to initiate bargaining, the jurisdictional facts necessary for me to make an enterprise order are not present. It is therefore unnecessary for me to consider whether an enterprise order ought to be made. However, even if the Trust had been an ‘employer’ able to initiate bargaining, I would not have made an enterprise order. My reasons for reaching this position follow.
99 The Trust’s Counsel described the Trust’s interests which are sought to be advanced by an enterprise order to be the provision of a competitive basis for tendering in a predominantly casualised workforce context. Breaking this down, the Trust says (or hopes) its proposed enterprise order would achieve the following:
(a) flexibility;
(b) greater confidence in forecasting labour costs; and
(c) competitiveness with ‘larger security businesses’ in Western Australia
100 The Trust emphasised that it is not its intention to ‘chip into’ the Award’s benefits to employees, nor to disturb or undermine conceptually payment of a premium for overtime. However, it’s proposed enterprise order would displace some of the entitlements under the Award. Nevertheless, the Trust does not intend to disadvantage any employee by the proposed enterprise order. It says that the overaward base rates of pay mean that in many hypothetical scenarios, employees will be significantly better off under the proposed enterprise order compared with the Award.
Flexibility
101 The Trust does not suggest that the terms of its proposed enterprise order will improve productivity or efficiency in security officers’ performance of work. There is no suggestion that the terms of the proposed enterprise order are designed to suit the Trust’s genuine needs in terms of when work is performed, where it is performed or how it is performed. The ‘flexibility’ said to be achieved by the reduction or removal of various minimum Award entitlements is simply:
…[to] allow [the Trust] to simplify the rates of pay and ease the administrative burden of applying multiple different rates of pay…
102 In this regard, Mr Kourtesis says that the structure of the pay rates in the Award are very difficult and time consuming to administer. He wants to reduce the number of rates that apply.
103 I have no evidence from the Trust about its administrative systems. I do not know what resources it has, or will have, to administer payroll. No evidence was provided to enable me to assess what benefit there is to the Trust in simplifying the pay rates, or reducing the number of rates that apply. No attempt was made to quantify any time saving, or to suggest that the Trust does not have the technology, experience, skills or other resources or ability to administer the Award rates.
104 I was told that SMC pays its employees in accordance with the Modern Award. The Modern Award contains shift allowances/penalty rates for night shift, Saturdays, Sundays and Public Holidays. The Trust could have produced evidence if there were particular ‘difficulties’ for SMC in administering these different rates.
105 If simplifying rates was genuinely and meaningfully going to reduce administrative burden, I would expect there to be a commensurate cost saving to the Trust. However, the Trust did not attempt to quantify the savings to it of simplifying the rates either.
106 It may be obvious that having to apply fewer rates will be a simpler exercise than applying more rates. However, even this highly generalised proposition has limited bearing here because:
(a) The Trust’s workforce is likely to be predominantly casual.
(b) There are four rates of pay that apply to casual employees under the Award: the base hourly rate, time and half (nonsuccessive afternoon and night shifts, Saturday penalty rate and first 2 hours’ overtime),double time (Sunday penalty rate and overtime rate after first 2 hours) and double time and a half (public holidays).
(c) There are four rates of pay that apply to casual employees under the Trust’s proposed enterprise order: the base hourly rate, the public holiday penalty rate, time and a quarter (weekend penalty rate), and time and a half (overtime).
107 In other words, the proposed enterprise order does not reduce the number of rates that will apply to the Trust’s casual workforce.
108 The Trust carries the burden of persuading me that the order it seeks should be made. It has not persuaded me that there is any meaningful productivity or efficiency benefit to it that is achieved by reducing or removing the minimum Award entitlement to penalty rates for working afternoon shifts, night shifts, Saturdays and Sundays.
Greater confidence in forecasting labour costs
109 The Trust stated that it was seeking the proposed enterprise order to ‘enable me to more confidently forecast labour costs to tender for jobs’. However, the Trust produced no evidence about how labour costs might be forecast under the Award, how labour costs might be forecast under the proposed enterprise order, or how the latter would give greater confidence in forecasting. In short, its rationale was nothing more than a bare assertion.
110 Mr Kourtesis stated that clients in the security industry expect suppliers to be able to tender using ‘a fixed rate of pay’. As I have said, there was no objection taken to this evidence. However, the basis for this speculative and vague assertion was not elaborated upon, or corroborated by any ‘client’.
111 In the absence of evidence or elaboration of this type, I do not know what the Trust’s needs are, nor how the proposed enterprise order will facilitate the efficient organisation and performance of work according to those needs. Ultimately, I am far from persuaded that a reduction in or removal of Award minimums will result in more accurate or robust labour cost forecasting.
Competition
112 Mr Kourtesis says that the proposed enterprise order will allow the Trust to compete with larger security businesses in Western Australia. He does not say how the proposed enterprise order will do so; however, I infer that this assertion is based, at least in part, on the assumption that the proposed enterprise order will improve the Trust’s ability to confidently forecast labour costs when tendering for work. I have dealt with this rationale above. It is not made out.
113 If it is said that the proposed enterprise order will make the Trust competitive because tenderers require tenders to use a ‘fixed rate of pay’, no such requirement has been made out on the evidence. In any event, the proposed enterprise order does not involve a ‘fixed rate of pay’. It involves rates of pay for weekend work, public holidays and overtime that differ from the base rate of pay.
114 It was not suggested that the proposed enterprise order will make the Trust competitive because it will assist in the attraction and retention of skilled security officers.
115 It was suggested the proposed enterprise order will make the Trust competitive because Labourplus operated under the terms and conditions of the Labourplus Agreement. In particular, the Labourplus Agreement contained no penalty rates other than for work on public holidays. Under the Labourplus Agreement, both casual and permanent employees are paid a flat hourly rate of pay for all hours of work other than work on public holidays. That rate is above the Award minimum hourly rate for ordinary time.
116 Remarkably, despite relying on competitiveness as a reason for making the proposed enterprise order, the Trust did not refer me to the terms and conditions of any other industrial instruments that apply to its competitors operating in Western Australia.
117 I do not know the circumstances in which the Labourplus Agreement was made. I do not know anything about Labourplus’ business, its clients, or the services it provides. I do not know anything about its workforce’s patterns of work. However, it is glaringly clear that the Labourplus Agreement is, in UWU’s Counsel’s words, a ‘low water mark’ in relation to terms and conditions of employment. The current base hourly rates of pay exceed the current Award rates by between 6.8% to 8.3%. But those flat rates apply to all work performed, whether on weekends, nights or as overtime. It is highly probable that employees employed by Labourplus are worse off under the Labourplus Agreement compared with the terms they would be entitled to under the Award.
118 During the hearing of this matter, I advised the parties that I was inclined to have regard to the terms of the Modern Award as relevant to the market terms and conditions of employment. Neither party dissuaded me from doing so. Schedule 2 of these reasons sets out a comparison of the rates of pay for Level 1 and Level 4 Security Officers under the proposed enterprise order, the Award, the Modern Award and the Labourplus Agreement.
119 The comparison is rough and ready, and simplistic. It does not reflect the value of a variety of monetary and nonmonetary provisions of the respective industrial instruments. However, the focus in this matter has been the rates of pay. It has largely been taken for granted that the other terms and conditions of the proposed enterprise order are ‘standard’ or not a radical departure from the terms and conditions of the Award.
120 With that proviso, the comparison at least usefully illustrates how the Labourplus Agreement cannot be taken to be indicative of the market generally as to terms and conditions of employment. The Modern Award sets minimum conditions for national system employers and national system employees: FWA, s 43. In the national system, any industrial agreements must meet the better off overall test for registration meaning that each award covered employee and each prospective award covered employee must be better off under an industrial agreement than if the Modern Award applied to them: FWA, ss 186(2) and 192.
121 I accept that Labourplus is a business that operates in Western Australia and, as at July 2020, employed an estimated 3000 security officers. However, these facts alone say nothing as to the volume of work Labourplus performs, or its proportion of the security services market. If, as the Trust concedes, the security industry workforce is highly casualised, it is likely that security officers may work for multiple security firms in a particular period.
122 The Trust’s Counsel submitted that Labourplus is a business against whom the Trust wanted to compete in tender processes. However, that submission was not supported by any evidence that Labourplus did engage in competitive tender processes, or that it would tender for the same types of work that the Trust will tender for.
123 It may be that 17% of all licenced security officers in Western Australia have been covered by the Labourplus Agreement. But I do not know how much work they have done for Labourplus, nor what Labourplus’ market share is.
124 In these circumstances, and despite the Trust’s assurances that it is not seeking to undercut the Award, it is tempting to interpret the Trust’s competition rationale for the proposed enterprise order as tantamount to an admission that it hopes the proposed enterprise order will result in reduced labour costs compared to the Award; that the competitive advantage it is seeking is to undercut the minimum wages that other security firms must pay. Obviously, reduced labour costs come at the expense of employees. Reduced labour costs are no doubt in the Trust’s interests. It may make the Trust more competitive in the tendering process, but less competitive in attracting and retaining staff.
Employees’ interests/Fairness to employees
125 Other than estimating that the Trust will employ only two employees who will be covered by the proposed enterprise order at the time an order is made, the Trust told me nothing of the likely size or composition of its employed workforce during the term of the proposed enterprise order.
126 The Trust does not currently engage any employees in remunerative work. However, if an enterprise order is made, it will engage a workforce, including Mr McCallum and Ms Shortland in work under the terms of the proposed enterprise order.
127 The Trust says that its proposed enterprise order will not reduce the overall pay of employees compared with the Award, but rather, employees will be better off. It provided calculations of wages payable under several hypothetical case study scenarios demonstrating employees would receive more pay under the proposed enterprise order than they would under the Award.
128 UWU says that, because security officers often work outside standard business hours, and in particular that they commonly work on weekends, the lower penalty rates mean that many potential employees will be worse off compared with the Award.
129 Take home pay is squarely an issue.
130 In addition, any nonmonetary benefits to employees of having an enterprise order, and fairness in the context of security officer’s unsociable hours, are also relevant to my determination.
Take home pay
131 Because the proposed base rates of pay under the proposed enterprise order are above the Award minimum rates of pay, it is clear enough that an employee may be better off in terms of take home pay, in some circumstances. A permanent employee will be better off if they work between 9.00 am to 5.00 pm Monday to Friday (by about $86 a week for a Level 1 employee).
132 The Trust also demonstrated that a fulltime employee would be better off compared with the Award, were they to work fulltime between 9.00 am and 5.00 pm Monday to Friday, and also work an additional shift of 7.6 hours on a Saturday or Sunday (by $0.62 cents if the extra shift worked is a Sunday, or by $64 if it is worked on a Saturday, for a Level 1 employee).
133 The examples for fulltime permanent employees have marginal bearing on my assessment because the evidence overwhelmingly suggested that the workforce will be primarily casual.
134 The Trust did demonstrate that a casual employee will be better off compared with the Award if they work less than 40 hours in a week, during the days Monday to Friday, with no shift exceeding 10 hours in length. A casual employee would also be better off, compared with the Award, were they to work 38 hours of nights Monday to Friday, plus a further 7.6 hours on Saturday or Sunday, even though their rate of pay for weekend work is less than the Award weekend rate.
135 However, these hypothetical scenarios had no correlation to the evidence as to the reality of security officer’s likely work patterns. The reality is that most employees are likely to be engaged to perform work at night and on weekends. The Trust frankly conceded this was the case. By reference to the type of work SMC had performed in the past, all categories of work involved the provision of security services on weekends, both Saturday and Sunday. Indeed, some categories involved only nights and weekends (music events, concerts and sporting events) and some involved only weekends (food festivals). It is very likely, therefore, that there will be employees engaged by the Trust who regularly perform most of their work on weekends.
136 A Level 1 casual employee who is engaged to work, say, 6 hours on each of Thursday night, Saturday night and Sunday night will be worse off compared with the Award by $53.36 for the week. If that same employee works only on Saturday or Sunday, they are at an even greater disadvantage compared with the Award. The differences are greater at the higher classification levels.
137 An employee is only better off if they perform enough hours at the base rate between Monday to Friday to offset the lesser rates of pay for weekend work and overtime. The nature of casual employment is such that there can be no real assurance that this will be the reality for those employees.
138 Accordingly, I am not satisfied that the proposed enterprise order, is in the interests of employees by virtue of take home pay.
Transparency and certainty in employment terms and conditions
139 Ms Shortland’s evidence was that she found it difficult to ascertain her terms and conditions of employment when she worked for other businesses in the security services industry. She said it was difficult to find out what agreement or award applied to her. The suggestion is that having an enterprise order will make it easier for employees to find the industrial instrument that applies to them, and to understand their entitlements under it.
140 I accept that employee interests may be advanced by the making of an enterprise order in this way. However, this factor weighs only nominally in favour of the making of an enterprise order. The ‘difficulties’ Ms Shortland refers to can easily be overcome or minimised by a clearly drafted employment contract which references the Award, or by the provision of information about the Award through other forums including via the employer’s intranet, welcome pack, or by email.
Fair compensation for working unsociable hours
141 The most significant aspects in which the terms of the proposed enterprise order depart from the conditions contained in the Award, are the removal of penalty rates for working afternoon shifts and night shifts, and the reduction in the penalty rates for weekend and public holiday work.
142 Penalty rates are designed to compensate employees for the disutility associated with working on particular days and hours: Re 4 Yearly Review of Modern Awards  Penalty Rates [2017] FWCFB 1001; (2017) 265 IR 1 (Penalty Rates Review) at [39] and [143]. The Fair Work Commission’s Penalty Rates Review made a number of observations relevant to penalty rates about established industrial standards, and contemporary trends based on extensive expert evidence presented to it:
(a) The number of employees working on weekends is still far below the number of employees that work on weekdays, and working on Saturdays is still more common than working on Sundays: Penalty Rates Review at [503].
(b) There is a disutility associated with weekend work, above that applicable to work performed from Monday to Friday. Generally speaking, for many workers Sunday work has a higher level of disutility than Saturday work, though the extent of the disutility is much less than in times past: Penalty Rates Review at [689].
(c) Public holidays, by their nature, are intended ‘to serve a special community role’ and the expectation is that the vast majority of employees will not work on public holidays. Employees should be compensated for the disutility associated with working on a day when the vast majority of other employees are enjoying a day of leisure: Penalty Rates Review at [41].
(d) The disutility considerations for weekend and public holiday work justify a proportional approach to penalty rates as set out in Print K7601, 6 May 1993. Under this approach, Sunday rates should be more than Saturday but less than overtime rates, and public holiday rates should be more than Sundays but not disproportionately so. Saturday rates should similarly be more than Monday to Friday rates but not punitively so.
143 The penalty rates provisions of the proposed enterprise order do not reflect the proportionate disutility of working Saturdays, Sundays and public holidays. To that extent, I do not regard it as providing for fair compensation to employees for working unsociable hours.
Does the ‘safety net provision’ protect employee interests?
144 The Trust relies on the inclusion of a clause in the proposed enterprise order it described as a ‘safety net provision’, which it said would guarantee that employees would be no worse off under the proposed enterprise order compared with the Award. The relevant clause is reproduced below:
11 SAFETY NET PROVISION
11.1 An employee may provide the Employer with a written notice accompanied with evidence, by way of calculation, that they would have received a higher rate of remuneration working for the Employer during a given financial year under the terms of the Award than under the terms of this Enterprise Order.
11.2 Upon receiving a written notice as referred to in clause 11.1 and verifying the accompanying calculations to be true and correct, the Employer shall pay to the employee the shortfall identified by the employee for that financial year as if they had paid the employee under the terms of the Award for that financial year.
145 Counsel for the Trust described the clause as entitling all employees to be paid any difference between their pay under the proposed enterprise order, and what they would have been paid under the Award, if the Award pay is greater than what they were in fact paid. The Trust argued that this was a complete answer to the concerns about any potential reduction in take home pay. It was described as operating as a guarantee that the rate of remuneration will be at least the Award minimum.
146 Bearing in mind that the workforce is likely to be primarily casual:
(a) There is a real risk that casual employees will be deterred from giving notice to the employer as required by the clause, for fear that they may be punished through a reduction or refusal of future work. As, by the nature of causal work, the employer gives no advance commitment in relation to future shifts or engagements, casual employees are particularly vulnerable to work being withheld in retaliation for the very kind of enquiries cl 11 contemplates.
(b) It is likely that employee hours will be variable from week to week. The clause places the onus on the employee to calculate their entitlements by reference to the Award. This is an onerous requirement on its face, made more onerous for a casual employees whose hours are variable.
(c) By referring to ‘during a given financial year’ and ‘for that financial year’ the clause implies that an employee can give notice only once for each financial year. This means that, if an employee has an entitlement to be paid under the clause early in a year, and gives notice of that fact promptly, they could be precluded from exercising the same right again later in the year. Conversely, if they wait until the end of the financial year, they may be missing out on pay for many months.
The Trust’s Counsel suggested that it was not intended that cl 11 restrict the timing or number of notices by employees, but rather reference to ‘financial year’ was to ‘encourage’ employees to exercise the right ‘in a holistic way’. Without making a finding about the correct construction of the clause, I merely note that this leads to a further problem with the clause, that is, that it’s meaning is not easy to glean. If I accepted Counsel’s submission, I would also find that the clause is insufficiently clear and that the lack of clarity may deter its use and diminish its utility.
(d) Finally, the clause does not require the employer to verify the calculations or make payment within a specified or reasonable time.
147 For these reasons, I do not consider cl 11 provides an adequate protection of employee interests.
UWU’s interests
148 No particular interests of UWU were advanced as being a reason for or against the making of an enterprise order. However, I note that UWU indicated it had no members who were employed by the Trust. That naturally follows if the Trust is not an employer. If UWU were party to an enterprise order, it would potentially be obliged to engage in negotiations for a replacement agreement at the end of the term of the enterprise order. This is a consideration against the making of an enterprise order. UWU should not be compelled to commit resources to negotiating or responding to proceedings that result from a failure to reach an agreement, in circumstances where there is no benefit to its members of it doing so.
149 Further, the incentive for UWU to make an agreement with terms that are fair to employees may be absent, if none of its members are employed by the employer party to the agreement. It is also unable to recruit members if the Trust is not an employer.
150 Although perhaps not a matter falling properly as ‘UWU’s interests’, the Trust placed some reliance on the fact that UWU had made, and was party to, the Labourplus Agreement. The Trust said, in effect, that UWU’s agreement to the terms in the Labourplus Agreement, including its base rates of pay and the replacement of all overtime and penalty rates with a base rate of pay, indicated that such terms were acceptable and supported by UWU, contrary to its position in these proceedings.
151 UWU described the Labourplus Agreement as a ‘low water mark’ of employment terms and conditions. I agree. If UWU are concerned that the Trust’s proposed enterprise order would result in employees being worse off compared with the Award, the employees engaged under the terms of the Labourplus Agreement are more so. And yet UWU made that industrial instrument.
152 I gave UWU the opportunity to produce evidence of any particular circumstances relevant to the making of Labourplus Agreement which would explain the otherwise inexplicable agreement to such terms, particularly the tradeoff of penalty rates. UWU declined this invitation.
153 It is a fact that UWU has accepted worse terms and conditions for security officers eligible for membership of UWU than the conditions offered by the Trust and embodied in its proposed enterprise order. But where does that sit in my considerations as to whether to make the enterprise order, or the terms of an enterprise order? At the end of the day, whatever criticism may be levelled against UWU for its past agreement, that does not impel me to revisit that decision on the Trust’s future workforce.
Interests of community as a whole
154 There was no reliance placed on matters concerning the interests of the community as a whole in support of, or in opposition to, the enterprise order.
Efficient organisation and performance of work
155 There was no reliance placed on matters concerning the efficient organisation and performance of work in support of, or in opposition to, the enterprise order.
Needs of industry
156 There was no reliance placed on matters concerning the needs of industry in support of, or in opposition to, the enterprise order.
Encouraging employers, employees and organisations to reach agreements
157 One of the objects of the Act is to promote collective bargaining and to establish the primacy of collective agreements over individual agreements: s 6(ad). Another is to encourage employers, employees and organisations (such as unions) to reach agreements appropriate to the needs of enterprises within industry and the employees in those enterprises: s 6(ag).
The Award was made in 1982: Cleaning Security and Allied Employees Union v AntiCrime Security Service & Ors (1982) 62 WAIG 2504. Aside from variations effected by the annual State Wage Case, and Location Allowances General Order, it has not been varied substantively since 2007: Liquor, Hospitality and Miscellaneous Union, Western Australian Branch v Unions WA & Ors [2007] WAIRC 00397; (2007) 87 WAIG 757. It is outdated in several respects. An obvious example is that it uses the wrong name for the union party to it: the Liquor, Hospitality and Miscellaneous Union, Western Australian Branch, is now known as United Workers Union (WA). It refers to sick leave rather than personal leave, and Foundation Day as a public holiday.
158 I do consider that the absence of a contemporary industrial instrument governing the terms and conditions of employment in the security industry is relevant to whether an order should be made: Millennium Inorganic Chemicals at [19]. This factor does weigh in favour of the making of an enterprise order. However, it does not tip the balance sufficiently to outweigh the considerations against making an enterprise order.
Disposition and Orders
159 Accordingly, the application will be dismissed.



Schedule 1 – The Trust’s proposed enterprise order




Schedule 2 – Comparison of the rates of pay for Level 1 and Level 4 security officers
Table 1: Fulltime security officer Level 1

Proposed Enterprise Order
Security Officers Award
Security Services Industry Award 2020
Labourplus Security and United Voice (WA) Union Labour Hire Agreement 2020*
Base rate
$25.00
$22.74
$23.89
$24.63
Public Holiday rate
$37.50
$56.86
$59.72
$37.06
Afternoon shift allowance
n/a
115%
121.7%
n/a
Night Shift allowance
n/a
125%
121.7%
n/a
Nonrotating night shift allowance
n/a
130%
130%
n/a
Non successive afternoon and night shifts on 5 & 6 day work sites
n/a
150%
121.7%
n/a
Saturday ordinary time
125%
$31.25
150%
$34.11
150%
$35.84
n/a
$24.63
Sunday ordinary time
125%
$31.25
200%
$45.48
200%
$47.78
n/a
$24.63
Overtime first 2 hours
150%
$37.50
For hours exceeding 10 in a day or 38 in a week
150%
$34.11
For hours exceeding 10 in a day
150%
$35.84
For hours exceeding 10 in a day or 38 in a week
n/a
$24.63
Overtime > 2 hours
150%
$37.50
200%
$45.48
200%
$47.78
n/a
$24.63
Overtime Sunday
150%
$37.50
200%
$45.48
200%
$47.78
n/a
$24.63

Table 2: Casual security officer Level 1

Proposed Enterprise Order
Security Officers Award
Security Services Industry Award 2020
Labourplus Security and United Voice (WA) Union Labour Hire Agreement 2020*
Base rate – casual
30% casual loading
$32.50
20% casual loading
$27.24
25% casual loading
$29.86
$29.11
Public Holiday rate
$45.00
$68.10
$65.69
$43.68
Afternoon shift allowance
n/a
n/a
146.7%
n/a
Night Shift allowance
n/a
n/a
146.7%
n/a
Nonrotating night shift allowance
n/a
n/a
155%
n/a
Non successive afternoon and night shifts on 5 & 6 day work sites
n/a
150%
$35.04$37.03
n/a
Saturday rates
125%
$40.63
150%
$40.86
175%
$41.80
n/a
$29.11
Sunday rates
125%
$40.63
200%
$54.48
225%
$53.75
n/a
$29.11
Overtime first 2 hours
150%
$48.75
For hours exceeding 10 in a day or 38 in a week
150%
$40.86
For hours exceeding 10 in a day
150%
$35.83
For hours exceeding 10 in a day or 38 in a week
n/a
$29.11
Overtime > 2 hours
150%
$48.75
200%
$54.48
200%
$47.78
n/a
$29.11
Overtime Sunday
150%
$48.75
200%
200%
$47.78
n/a
$29.11

Table 3: Fulltime security officer Level 4

Proposed Enterprise Order
Security Officers Award
Security Services Industry Award 2020
Labourplus Security and United Voice (WA) Union Labour Hire Agreement 2020*
Base rate
$26.50
$23.81
$25.41
$25.51
Public Holiday rate
$39.75
X 2.5 =
$59.52
250% =
$50.82
$38.27
Afternoon shift allowance
n/a
$26.50
15% = $27.38
121.7%
n/a
Night Shift allowance
n/a
$26.50
25% =
$29.76
121.7%
n/a
Nonrotating night shift allowance
n/a
$26.50
30% =
$32.50
130%
n/a
Non successive afternoon and night shifts on 5 & 6 day work sites
n/a
$26.50
X 1.5 =
$35.72
121.7%
n/a
Saturday ordinary time
X 1.25 =
$33.13
X 1.5 =
$35.72
X 1.5 =
$38.12
n/a
$25.51
Sunday ordinary time
X 1.25 =
$33.13
X 2 =
$47.62
X 2 =
$50.82
n/a
Overtime first 2 hours
X 1.5 =
$39.75
For hours exceeding 10 in a day or 38 in a week
X 1.5 =
$35.72
For hours exceeding 10 in a day
X 1.5 =
$38.12
For hours exceeding 10 in a day or 38 in a week
n/a
$25.51
Overtime > 2 hours
X 1.5 =
$39.75
X 2 =
$47.62
X 2 =
$50.82
n/a
$25.51
Overtime Sunday
X 1.5 =
$ 39.75
X 2 =
$47.62
X 2 =
$50.82
n/a
$25.51

Table 4: Casual security officer Level 4

Proposed Enterprise Order
Security Officers Award
Security Services Industry Award 2020
Labourplus Security and United Voice (WA) Union Labour Hire Agreement 2020*
Base rate casual/daily hire
30% casual loading
$34.45
20% casual loading
$28.58
25% casual loading
$31.75
$30.55
Public Holiday rate
$47.70
$71.45
$69.87
$45.82
Afternoon shift allowance
n/a
n/a
146.7%
n/a
Night Shift allowance
n/a
n/a
146.7%
n/a
Nonrotating night shift allowance
n/a
n/a
155%
n/a
Non successive afternoon and night shifts on 5 & 6 day work sites
n/a
150%
n/a
n/a
Saturday rate
125%
$43.06
150%
$42.87
150%
$38.12
n/a
$30.55
Sunday rate
125%
$43.06
200%
$57.15
200%
$50.82
n/a
$30.55
Overtime first 2 hours
150%
$51.66
For hours exceeding 10 in a day or 38 in a week
150%
$42.87
For hours exceeding 10 in a day
150%
$38.12
For hours exceeding 10 in a day or 38 in a week
n/a
$30.55
Overtime > 2 hours
150%
$51.66
200%
$57.15
200%
$50.82
n/a
$30.55
Overtime Sunday
150%
$51.66
200%
$57.15
200%
$50.82
n/a
$30.55
*Includes increases based on State Wage Case increases of 3% as at 1 July 2021 and 4.65% as at 1 July 2022 in accordance with cl 9.2 of the Labourplus Agreement.