Aldi Foods Pty Limited
[2024] FWCA 3774
•29 OCTOBER 2024
| [2024] FWCA 3774 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Aldi Foods Pty Limited
(AG2024/3190)
ALDI DANGENONG AGREEMENT 2024
| Retail industry | |
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 29 OCTOBER 2024 |
Application for approval of the ALDI Dandenong Agreement 2024
Aldi Foods Pty Limited (Aldi) has made an application under s 185 of the Fair Work Act 2009 (Act) for approval of the ALDI Dandenong Agreement 2024 (Agreement). The Shop, Distributive and Allied Employees Association (SDA) was a bargaining representative for employees covered by the Agreement. In a form F18 declaration filed in the Commission, the SDA submitted that the Agreement did not pass the ‘better off overall test’ (BOOT) when measured against the General Retail Industry Award 2020 (Retail Award) or the Storage Services and Wholesale Award 2020 (Storage Award), and that it could not be approved without undertakings (see ss 186(2)(d), 190 and 193 of the Act).
The parties filed submissions and evidence in accordance with my directions. I then heard the application on 15 and 23 October 2024. Following the first day of hearing, the parties filed further materials, and the scope of the SDA’s objection narrowed as a result of certain contentions no longer being pressed.
Store managers, assistant store managers and duty store managers
The SDA initially contended that the Agreement did not pass the BOOT in relation to employees employed under the Agreement as store managers, assistant store managers and duty store managers because their rate of pay under the Agreement was lower than the corresponding rate under the Retail Award. It said that the classification matching provided by Aldi in its F17 was incorrect. This had indicated that a store manager equated to award level 6, that an assistant store manager was equivalent to award level 4, and that a duty store manager corresponded to award level 3. The SDA contended that the appropriate classifications for these roles under the Retail Award were levels 8, 6 and 6 respectively. The SDA later advised the Commission that, while it did not accept that store managers and assistant store managers were properly matched to levels 6 and 4 of the Retail Award, it no longer pressed its contention that they should be matched to levels 8 and 6 as the Commission could be satisfied that their pay under the Agreement was sufficient to meet these levels in most foreseeable scenarios. The SDA pressed its contention that duty store managers should be compared to the award level 6, or at least the award level 4. I will proceed to consider the correct classification of all store managers because the appropriate classification matching for duty store managers should be undertaken in the context of the relevant classification structures as a whole.
The evidence of Ali Amin, SDA industrial officer, was that in his experience Aldi stores were more complex than small independent supermarkets and that many had discrete sections for the sale of alcohol or other types of products for sale. He said that in his experience most supermarkets, even those much smaller than Aldi, classified their store managers, assistant store managers and duty managers at levels 8, 6 and 6 of the Retail Award. Mr Amin said that major supermarkets generally employed a duty manager to oversee daily operations, open and close stores, ensure employee productivity, and to monitor efficiency of processes. He said that their duties also included training and onboarding new team members, and ordinary retail duties such as customer service and checkout operations. He said that they were often primarily used to work in the evenings or on weekends and public holidays as these were times that store managers and assistant store managers were generally not working. Mr Amin said that in his experience, because clause A.6.2 of the Retail Award states that a level 6 employee includes a ‘manager or duty manager in a shop without departments or sections’, supermarket employers classify their duty managers at level 6. He said that duty store managers would be paid less under the Agreement than they would receive at level 6 or 4 of the Retail Award, and that this detriment would be magnified if they held a liquor licence, for which the Award would entitle them to a $32.00 weekly allowance.
Aldi submitted that the SDA had been a bargaining representative for many Aldi enterprise agreements, all of which had been presented to the Commission for approval based on the classification matching for the Agreement, whereby store managers, assistant store managers, and duty store managers are matched to levels 6, 4 and 3 of the Retail Award. Only once, in 2017, had the SDA objected to this classification matching, and that objection was later withdrawn. Aldi maintained that this classification matching was correct. It relied on the evidence of Nicholas Magdalani, director of store operations for its Dandenong region, who described the duties and responsibilities of store managers, assistant store managers and duty store managers. Mr Magdalani stated that store managers have direct responsibility for all day to day store functions, including rostering staff, signing off the payroll each fortnight, completing store ordering and ensuring stock availability. He said that they are also responsible for personnel management, including providing feedback to store employees, and that they are responsible for resolving customer complaints. Mr Magdalani said that assistant store managers provide direct support to the store manager in relation to the above functions. They may also be delegated such duties and will perform them in the store manager’s absence, but they do not have responsibility for these functions. Mr Magdalani said that the duty store managers have significantly less responsibility than the assistant store managers. He said that they do not have responsibility for providing feedback to employees and are not responsible for any performance indicators for the store. He said that they ‘support the day-to-day functions of the store’ and may open or close the store or supervise employees in the absence of more senior store managers. Mr Magdalani also said that Aldi stores display products in groups on shelves, pallets, in cases and in chiller and freezer units, and that there are no departments. In particular, liquor is displayed on store shelves like all other products and anyone can access them in the store, although only adults can purchase them.
I accept the evidence of Mr Magdalani and generally prefer it to that of Mr Amin where the two conflict because it was more detailed and focused specifically on the working arrangements at Aldi. Mr Amin spoke of his understanding of the organisation and working arrangements of duty managers in supermarkets generally. Much of his evidence was in the nature of an opinion or a conclusion, rather than a statement of fact. This was the case, for example, in relation to his remark that supermarkets classify duty managers at level 6 because of clause A.6.2 of the Retail Award. There was no detail about the work of managers of particular supermarket employers. But even if the SDA were right to say that most other employers adopt a certain approach to the classification of managers, that does not mean it is the correct one. Mr Amin stated generally that duty managers ‘ensure employee productivity’, but did not say how they do this, or how he knows that they are required to do this. Mr Magdalani stated specifically that it is store managers who have responsibility for personnel management; the assistant store managers do not have responsibility for this, although they perform store manager functions in the absence of the store manager. I find that duty managers are not required to ensure employee productivity.
Mr Amin stated that duty managers supervise other workers. In its oral submissions, Aldi disputed this. But Mr Magdalani said in his statement that duty store managers may supervise employees in the absence of a more senior manager. He said that in the context of his statement that duty store managers support the day-to-day functions of the store. This may be contrasted with the role of the assistant store manager whose job is to provide direct support to the store manager. I note also that the job advertisement for the duty store manager position produced by the SDA states, in its introduction, that the duty store manager role involves ‘serving customers and supervising staff’; however the words emphasised by Aldi are also important – the advertisement states that the role is one of ‘supporting and guiding team members … and working collaboratively as part of the store management team.’ I find that this is low level supervision within a framework where more senior managers are responsible for the supervisory function. In my view it is significant that supervision is not referred to under the list of duties set out in the advertisement. On the other hand the list does include ‘offering feedback to the team’, whereas Mr Magdalani said in his statement that duty store managers do not have responsibility for providing feedback to staff. It appears that offering feedback is something duty store managers are required to do but have no particular accountability for.
The SDA submitted that in all the circumstances duty store managers were level 6 employees under the Retail Award. It emphasised that the indicative job titles for a level 6 worker in clause A.6.2(b) of the Retail Award included ‘manager or duty manager in a shop without departments’. I accept that duty store managers have a title that matches an indicative title at level 6. But it is clear that they are not level 6 workers. Their skills and duties do not match the indicative typical duties set out in clause A.6.4. The SDA’s further submissions, and Mr Amin’s second statement, put forward an alternative contention that if duty store managers were not level 6 workers under the Retail Award, they were at least level 4. This is a more arguable contention, but one that must nevertheless be rejected based on the evidence and information that has been put before the Commission in this particular case.
The SDA contended that duty store managers perform the indicative task of a level 4 employee found in clause A.4.2(b) of the Retail Award, which is ‘supervising up to 4 sales staff (including self)’, and that in fact they supervised more staff. But as I have explained above, any supervision conducted by duty store managers is of a lower order. It must be seen in the broader context of the management structure at Aldi, in which store managers have responsibility for personnel matters and providing feedback to staff, and assistant store managers provide direct support to them. But even if duty store managers satisfy clause A.4.2(b), that is not enough in my view to bring them within the level 4 classification. They do not perform the other indicative tasks in that classification. Moreover, clause A.4.1 states that a retail employee level 4 means an employee performing work at a level higher than level 3. I do not consider, based on what is before me, that duty store managers do perform work at a level higher than level 3. Further, none of the indicative job titles in level 4 align with that of duty store managers; arguably they could be regarded as ‘assistant, deputy or second in charge shop manager of a shop without departments’, but those titles are more apt to describe the assistant store manager.
Clause A.3.1 of the Retail Award states that a retail employee level 3 means an employee performing work at a retail establishment at a level higher than a level 2 retail employee. I am comfortably satisfied that duty store managers meet this requirement. As to indicative tasks that can be required at level 3 of the Retail Award, duty store managers open and close the premises (see A.3.2(b)). They also provide ‘supervisory assistance’ (see A.3.2(a)), although arguably not ‘to a designated section manager or team leader’. In this regard, the SDA suggested that duty store managers provided supervisory assistance to a much higher level manager, namely the assistant store manager, but in fact it appears that their role is to support the day to day functions of the store, rather than any particular person.
The SDA submitted that Ms McNaughton’s evidence had established that duty store managers could supervise at least 6 store workers (there are 6 tills in a store), or as many as 9 employees in a larger store, and taking into account shift changes, that could mean that duty store managers supervise 12 or more individual workers. But the supervisory work of duty store managers is the limited one I have described above. The SDA argued that Aldi stores had departments or sections because their products are arranged by categories on the shelves. I reject this. A section or department for the purposes of the Retail Award is something more than a group of products on a particular shelf. As for the alcohol, there are no separate checkouts, as there are in some supermarkets. I note that duty store managers do not hold liquor licences.
Aldi contended that many other enterprise agreements covering its store and management employees had been submitted to the Commission for approval under s 185 on the basis of the same classification matching that it had presented in this case, and that the union had not pointed to any circumstance that had now changed. Aldi said that the Commission’s acceptance of the correctness of its classification matching in other matters should persuade me to accept it in this matter. The SDA submitted that its support for or acquiescence in other Aldi enterprise agreement did not create some kind of estoppel or otherwise prevent it from raising a concern about the BOOT in respect of similar or even identical agreements. I agree with the SDA on this point. Further, the fact that a member of the Commission has approved an enterprise agreement does not mean that another member must approve a second agreement in the same terms. The Commission might take note of the approval of similar agreements. But in each application under s 185, the Commission can approve an agreement only if it is satisfied that the relevant approval requirements have been met. Whether that state of satisfaction is reached will depend on the evidence and information before the Commission in that matter.
My conclusion in this case is that duty store managers are correctly matched to a retail worker level 3 under the Retail Award. I reach this conclusion based on what is before me not just in respect of the role of duty store manager, but also that of store manager and assistant store manager. I have concluded in this matter that store managers equate to a level 6 role under the Retail Award. I do not propose to set out the relevant analysis, however I will note that it does not appear to me that store managers apply knowledge of projected areas of growth, product trends and general industry conditions, nor are they managers of shops ‘with departments or sections’. More generally, I do not consider that they are at the top of the award classification structure. Further, in my opinion assistant store managers are a level 4 role under the Retail Award. These employees provide support to the store manager but do not have responsibilities for achieving any of the functions of the store. This role aligns with the ‘assistant, deputy, or second-in-charge shop manager’ at level 4 under the Award. (see A.4.3).
I conclude that Aldi’s classification matching in respect of store managers, assistant store managers and duty store managers is correct. Their rates of pay comfortably exceed those in the Retail Award. In light of my conclusions further below, I am satisfied that the Agreement passes the BOOT in relation to these employees. Further, it is my overall evaluative conclusion that even if duty store managers were to be matched to the level 4 classification under the Retail Award, it would still be the case that they would be better off overall under the Agreement. It should be noted in this regard that duty managers receive a fifth week of annual leave under the Agreement that they would not receive under the Retail Award.
Part-time hourly store assistants and duty store managers
The SDA submitted that the Commission could not be satisfied that the Agreement passed the BOOT in relation to part-time ‘hourly rate’ employees who are engaged by Aldi under the Agreement as flexible store assistants, limited roster store assistants and fixed roster store assistants, as well as part-time duty store managers. Under the Agreement, flexible store assistants work up to 10 shifts a fortnight and can be rostered to work at any time on any day of the week (see clause 3 of Schedule 2). Limited roster store assistants work according to a schedule of availability that is agreed on commencement of employment (clause 4 of Schedule 2). Fixed roster store assistants work agreed hours on agreed days of the week, with agreed start and finish times; days and times of work may be changed unilaterally on notice, but not the number of weekly hours (clause 5 of Schedule 2). Duty store managers work an average of fewer than 76 hours per fortnight on up to 10 of 14 days, and subject to various arrangements in clause 22 of the Agreement, including in respect of agreed contract hours. The part-time arrangements under the Agreement are to be contrasted with those in clause 10 of the Retail Award. Clause 10.1 states that a part-time employee is one who is engaged to work for fewer than 38 hours per week and whose hours of work are reasonably predictable. Clause 10.5 states that the employer and employee must agree in writing on a regular pattern of work, including the number of hours to be worked on each day of the week (clause 10.5(a)), and the times at which the employee will start work and finish work each day (clause 10.5(b)). The employer and employee may agree to vary the regular pattern of work on a temporary or ongoing basis (clause 10.6).
It will be apparent that the Agreement provides for a part-time employment structure that affords Aldi greater rostering flexibility than the Retail Award, and that part-time employees have less certainty about their working arrangements. The differences between some of Aldi’s part-time arrangements and those in the Award have previously been found by the Commission to have the consequence that an enterprise agreement covering such employees should be measured, for the purposes of the BOOT, against casual employment under the Retail Award. In the Loaded Rates Agreements decision ([2018] FWCFB 3610), a Full Bench of the Commission considered applications for approval of a number of enterprise agreements, including two that had been submitted for approval by Aldi. At that time, clause 12.6 of the General Retail Industry Award 2010 (Retail Award 2010) stated that ‘an employee who does not meet the definition of a part-time employee and who is not a full-time employee will be paid as a casual employee in accordance with clause 13’. This clause was, in effect, a casual deeming provision. The Full Bench concluded that Aldi’s system of part-time employment was not consistent with various part-time requirements of the Retail Award 2010: it did not involve reasonably predictable hours of work; it did not require agreement on a regular pattern of work specifying the days of work or the hours to be worked on each day; and it did not require that any change occur by agreement of the parties (at [136]). The Full Bench stated that where an enterprise agreement in the retail sector provided for a form of employment that did not constitute full-time employment or part-time employment as contemplated by the award, the ‘appropriate point of comparison for the purpose of the BOOT’ was the ‘catch-all of casual employment under the award’ (at [137]).
Some years later, in Aldi Brendale Agreement 2023 [2023] FWCA 3892, Masson DP considered an application for approval of another Aldi enterprise agreement. In its F18 declaration in that case, the SDA submitted that flexible store employees were not better off overall under the agreement than under the Retail Award. The SDA contended that because clause 12.6 had been removed from the Retail Award in 2020, the question of whether the agreement passed the BOOT in respect of part-time store employees should now be assessed against the part-time conditions of the Retail Award, not the casual conditions. The SDA further submitted that the Loaded Rates Agreement decision had been relevantly superseded by a recent Full Bench decision in Apple Australia National Enterprise Agreement 2023 [2023] FWCFB 185 (Apple), in which the Full Bench had referred to the passage at [137] in the Loaded Rates Agreement decision and remarked that this had been based on the operation of clause 12.6 of the Retail Award 2010, which had since been removed (Apple, at [36]). The SDA contended that, in applying the BOOT now to part-time store employees covered by the Brendale agreement, it was necessary to consider the many award provisions pertaining to permanent part-time employment that were not included in the agreement, and that the Commission should conclude that the agreement did not pass the BOOT.
In the proceedings before Masson DP, Aldi contended that the appropriate BOOT comparison for part-time store employees covered by the Brendale agreement remained the casual conditions in the Retail Award, as per the Loaded Rates Agreement decision. It did not agree that this decision had been superseded by Apple. Aldi produced tables showing rates of pay for flexible store assistants under the Brendale agreement compared to both the casual and permanent rates of pay under the Retail Award. The agreement’s permanent rates were lower than the casual rates in the award by up to 6%, however Aldi submitted that the Brendale agreement easily passed the BOOT in respect of flexible store assistants because under the Agreement they received the benefits of permanent employment, such as paid leave, which they would not receive as deemed casuals under the award. Alternatively, Aldi submitted that if the BOOT were to be measured against the permanent part-time provisions in the Retail Award, the Brendale agreement still passed the BOOT, including because its rates of pay were higher than the permanent rates of pay in the Retail Award.
Masson DP found that flexible store employees did not have hours of work that were ‘reasonably predictable’ (at [28]), and that they did not meet the definition of part-time employment in clause 10 of the Retail Award (at [29]). He stated that it was therefore more appropriate for the BOOT analysis for such employees to be undertaken by reference to casual rates of pay under the Retail Award. The Deputy President then stated that although the casual award rates were between 0.2% and 6% higher than the agreement’s permanent rates, flexible store employees employed under the Brendale agreement would enjoy job security, as well as an assurance of receiving their contracted hours, neither of which was the case under the casual provisions of the Retail Award. The Deputy President also noted that under the Brendale agreement, part-time flexible store employees would receive paid annual leave, leave loading, personal carers leave and other benefits of permanent employment that they would not receive as casuals under the award (at [30]). The Deputy President concluded that these benefits were sufficient to ‘more than offset the identified remuneration detriment’, and that he was comfortably satisfied that the Brendale agreement passed the BOOT in respect of flexible store assistants (at [31]).
Earlier this year, the Commission determined another application by Aldi for approval of an enterprise agreement, the terms of which were relevantly the same as those in the Brendale agreement (Aldi Minchinbury Agreement 2024 [2024] FWCA 2438). The SDA lodged an F18 declaration stating that the agreement did not pass the BOOT, for the same reasons it had advanced in Aldi Brendale Agreement. It said that, for relevant part-time store employees, the BOOT was to be assessed against the part-time award conditions rather than the casual ones. Aldi again responded that casual award conditions were the appropriate comparator. The SDA did not seek to be heard. In his decision, Masson DP concluded that he was satisfied that the approval requirements of the Act, including the BOOT, had been met.
In its F18 declaration in the present matter, the SDA again contended that the BOOT comparator for Aldi’s part-time employees must be the part-time conditions in the Retail Award, not the casual conditions. It submitted that the Loaded Rates Agreement decision was based on the casual deeming provision in clause 12.6 of the Retail Award 2010, which had since been removed, and that clause 10.1 of the Retail Award now states that a part-time employee is one who is ‘engaged to work for fewer than 38 ordinary hours per week and whose hours or work are reasonably predictable’. The SDA submitted that flexible store assistants and limited roster store assistants would have ‘reasonably predictable hours of work’ under the Agreement, albeit ones that were not as predictable as those in the Retail Award. However, in a submission filed on the evening before the second day of the hearing, the SDA advised the Commission that it no longer pressed its contention that part-time flexible store assistants, limited store assistants, and duty store managers should be compared to casual conditions under the Retail Award. For its part, Aldi maintained that the analysis of Masson DP in Brendale Aldi Agreement remained applicable and that the BOOT for these employees should be measured against the casual award conditions. Aldi said that accordingly, the Commission must take into account that the Agreement gives part-time store employees security of employment and guaranteed hours, as well as paid leave, whereas casuals under the Retail Award do not have these things. Aldi submitted that alternatively, if the BOOT is assessed against the part-time conditions in the Retail Award, the higher rates of pay in the Agreement more than offset the detriment associated with various permanent conditions of employment in the Retail Award not being reflected in the Agreement.
The SDA now agrees with Aldi that the award BOOT comparison for relevant part-time employees is the casual conditions in the Retail Award, however it maintains that the Agreement does not pass the BOOT in respect of these employees. Although the Agreement is in substantially the same terms as the Brendale and Minchinbury agreements, except with higher rates of pay, the fact that those agreements were approved by the Commission does not of itself mean that I must or should accept that the Agreement passes the BOOT. The SDA’s BOOT concerns must be determined. To do this properly, I must consider for myself the question of the correct award comparator for part-time employees.
I will start by determining the contention that was raised in the SDA’s F18 declaration in respect of the decision in Apple. In my view, it is clear that this decision did not supersede the Full Bench in the Loaded Rates Agreement decision. The passage in Apple that was referred to by the SDA was concerned with a contention by the Retail and Fast Food Workers Union (RAFFWU Inc) that the agreement in that case failed the BOOT in respect of part-time employees because it ‘abolished’ part-time employment and established a regime of ‘flexi-insecure employment’, and that the part-time structure under the agreement was alien to that in the award and was effectively prohibited by it (see [26] to [45]). RAFFWU Inc had relied on the Loaded Rates Agreement case in support of its contention that the part-time arrangements in the Apple agreement were not permissible. The Full Bench in Apple stated that this reliance was misconceived, because this was not what the Full Bench in the Loaded Rates Agreement decision had said; instead, it had concluded that the part-time arrangements under the Aldi agreements that did not meet the award requirements for part-time employment were to be compared to casual employment under the Retail Award 2010. The Full Bench in Apple then noted in passing that clause 12.6 of the Retail Award 2010 had since been removed. However, it did not reach any conclusion about the significance of this because it was not a matter at issue in those proceedings.
Nevertheless, the essential point that the SDA sought to raise in its F18 declaration is a good one: the conclusion of the Full Bench in the Loaded Rates Agreement decision at [137] concerning the award comparator was clearly based on the presence in the Retail Award 2010 of the ‘catch-all’ of casual employment found in clause 12.6. This deeming provision has since been removed. For this reason, it is necessary to revisit the question of whether part-time employees who do not meet the various requirements of part-time employment prescribed by the Retail Award should be compared for BOOT purposes with the casual conditions of the Retail Award. On one view, it might be said that the removal of clause 12.6 does not make any difference to the relevant analysis. Clause 10.1 of the Retail Award states that a person is a part-time employee engaged to work fewer than 38 hours a week and who has ‘reasonably predictable’ hours. If an employee’s hours are not reasonably predictable, as Masson DP found to be the case in Re Brendale Agreement, then arguably they are not a part-time employee and the part-time provisions of the Retail Award do not apply to them. If that were the case, those provisions could not be relevant for BOOT purposes.
In my opinion the better view is that when clause 10.1 of the Retail Award states that a part-time employee is one who has reasonably predictable hours, this is a reference to the predictable hours generated by the requirements of clause 10.5, rather than an additional requirement that must be satisfied in order for a worker to be considered a part-time employee for the purposes of the Retail Award. I consider that clause 10.1 is descriptive, whereas clause 10.5 is prescriptive and sets requirements that an employer must meet in respect of part-time employment at times when the Retail Award applies. A failure by an employer to meet these requirements is a breach of the award, but it does not affect the application of the award to the affected employee. It does not mean that the employee ceases to be a part-time employee covered by the Retail Award. Unlike clause 12.6 of the Retail Award 2010, there is no provision in clause 10 of the Retail Award that deems non-satisfaction of any of its requirements to result in a worker no longer being a part-time employee for the purposes of the award.
Even if the part-time provisions of the Retail Award did not apply to part-time employees in cases where the part-time requirements of clause 10 were not met, it would not follow that the casual provisions of the award did apply for the purposes of the BOOT. Unlike the position that obtained under the Workplace Relations Act 1996, there is no mechanism for designating an award for the purpose of benchmarking an enterprise agreement. The BOOT only applies to award covered employees and reasonably foreseeable employees, the latter being persons who would be covered by an award (see s 193(5)(b)). It is not assessed against employees who are award free. There is no basis for the Commission to search for an award, or a stream of employment within an award, that might seem to be an appropriate one against which to measure the BOOT. Rather, the BOOT is measured against the terms of a particular award, and the particular award terms, that would actually apply to the employee absent the application to them of the enterprise agreement. I cannot identify how the casual provisions of the Retail Award could now be said to apply to part-time employees who did not meet the requirements of clause 10. There is no express or implied deeming provision of the kind that was found in the old clause 12.6 of the Retail Award 2010.
In my view therefore the BOOT, in respect of part-time Aldi employees working under the Agreement, must be assessed against part-time employment under the Retail Award. This is not entirely straightforward when it comes to comparing working arrangements, as we will see further below. What is very clear however is that the base rates of pay in the Agreement for flexible store assistants, limited roster assistants, fixed roster assistants and duty store managers exceed the rates of pay for permanent part-time employees under the Retail Award. Further, I have concluded that when those rates are applied to the various working scenarios and applicable loadings set out in the SDA’s materials, employees remain comfortably better off under the Agreement, with one exception: fixed roster employees earn less than under the Retail Award on a public holiday. However, it is unrealistic to suppose that an employee would work only or mainly on or around a public holiday, as the SDA’s materials appear to contemplate. Fixed roster employees will be better off overall under the Agreement because of the higher pay they receive at other times.
The SDA’s wage comparison tables showed part-time store employees worse off under the Agreement when working on evenings both during the week and on weekends. But it is important to note the effect of clause 15.2(c) of the Retail Award which states that ordinary hours can be worked until 11.00pm on all days of the week if trading hours extend beyond 9.00pm on weekdays or 6.00pm on Saturdays or Sundays. Aldi’s evidence, which the SDA accepted, was that its stores close after 6.00pm on Saturday and Sunday. Clause 15.2(c) of the Retail Award is therefore engaged and the extended span of hours applies. The SDA suggested that Aldi might in the future alter its opening hours and close earlier on the weekends, but it conceded that it had no information that this might occur. This is purely speculative. There is no reason to think that Aldi will alter these long standing working arrangements.
Of course, in conducting a BOOT assessment of part-time conditions under the Agreement as against the Award, various employee benefits that were previously credited to the ‘Agreement’ side of the BOOT ledger as against casual award employment – paid leave and security of employment – fall away, because they are enjoyed by employees under the award also. But employees are clearly still ahead under the Agreement because they receive more pay. It is also necessary to consider the SDA’s contentions about the various respects in which the Agreement was said to be less favourable than the Retail Award in relation to permanent employment or employment generally. The SDA also identified award provisions that were beneficial to employees and that had been omitted from the Agreement. I refer collectively to these matters as the other detriments as against the award. I now consider them.
Various employees: other detriments as against the award
The SDA contended that the other detriments as against the award resulted in the Agreement not passing the BOOT in relation to part-time hourly employees as well as other employees. It identified the following ‘disbenefits’.
The SDA said that clause 14 of the Agreement contained an unusual and invasive provision in relation to medical examinations which requires employees to attend a doctor if the employer has a reasonable concern about their capacity to perform the inherent requirements of the job, and also to submit to unspecified forms of drug and alcohol testing, without any apparent link to the concern about capacity. The SDA said that the clause also had the effect of requiring employees to waive doctor-patient confidentiality and to provide written authorisation for the release of a report. It submitted that the clause was a serious detriment. Whether the clause is a detriment will depend on an employee’s point of view. Some employees may regard the arrangements as invasive, but others may not. The clause can be seen as beneficial, as it provides free medical services (Aldi confirmed that it must pay for them) which might detect medical concerns bearing on an employee’s ability to do their job and facilitate their successful treatment. Further, the clause must be read sensibly and in its entirety; contrary to the SDA’s submission, each of the subclauses is to be understood as being referrable to a reasonable concern about the employee’s capacity to perform the inherent requirements of the job.
The SDA submitted that the Agreement omitted a number of award benefits conferring rights on employees in relation to the scheduling of work, and that these matters needed to be considered in assessing whether the Agreement passed the BOOT. It noted that the Agreement did not contain an entitlement to 2 consecutive days off per week or 3 per fortnight (see clause 15.7(d)(i) of the Retail Award), nor did it provide employees with a right to work no more than 6 consecutive days (see clause 15.7(e) of the Retail Award). Further, the Agreement did not contain an equivalent of clause 15.8 of the Retail Award, which confers rights on employees who regularly work on Sundays to have 3 consecutive days off (including Saturday and Sunday) per 4 week cycle. In response to this, Aldi relied on the evidence of Ms McNaughton, who said in her statement that under clause 24 of the Agreement employees may nominate their rostering preferences each roster cycle, and that Aldi takes these into consideration when rosters are prepared. It also takes account of what would be a fair allocation of work and time off across the particular team, adequate breaks between shifts, safe transport home, and any special domestic circumstances, as well as business requirements. I agree with the SDA that the Agreement’s omission of these award rights are detriments, but in light of clause 24 of the Agreement, and the evidence of Ms McNaughton, I regard them as relatively minor matters.
The SDA said that the Agreement did not provide for overtime at 200% after the first three hours, but instead a flat 150% rate for all overtime hours, and that store managers and store employees would be worse off when working overtime beyond 3 hours under the Agreement, as compared to their position under the Retail Award. Storage workers were also said to be worse off under the Agreement as compared to the Storage Award, which prescribes overtime of 200% after 2 hours. Ms McNaughton said that overtime beyond 3 hours was unlikely to arise because this would require hourly rate store employees to work more than 12 hours on a shift and Aldi did not employ any full-time duty managers or store assistants; further most employees were employed on 40 to 60 contract hours per fortnight and it was unlikely that they would work more than 76 hours a fortnight (or 80 hours for storage workers). The SDA contended that this was not an improbable situation and that Ms McNaughton was not able to provide precise numerical data about the incidence or likelihood of excess overtime. It is possible that employees will work in ways that would have seen them trigger the higher rate of overtime under the award but I do not consider this is likely to occur frequently and in my view the detriment will be comfortably offset by the higher rates of pay applicable at other times. As I understand it, the SDA’s BOOT concern in respect of the overtime rate was not confined to part-time employees and applied also to full-time employees. Again, one would not reasonably expect the second pay tier of overtime to be triggered frequently. But I accept that there is a measure of disadvantage here.
The SDA submitted that the breaks provided to store managers under clause 9.2 of Schedule 1 of the Agreement give employees a 30 minute unpaid rest break, whereas clause 16 of the Retail Award provide for paid breaks. I note this difference. The SDA also said that clause 9.3 of Schedule 1 does not provide workers with a ‘break loading’ in cases where they are not provided with the 10-hour break between shifts that is found in clause 16 of the Retail Award. But this is a contingent and relatively minor matter. The union noted also that clause 6 of Schedule 1 allowed Aldi to change an employee’s additional hours of work, however the clause requires a commensurate adjustment to remuneration, and of course additional hours remain subject to the rules in the National Employment Standards (NES) surrounding the 38-hour week plus reasonable additional hours.
The SDA contended that the Agreement was less beneficial to part-time employees than the Retail Award in relation to the payment of ‘additional hours’. Clause 22 of the Agreement provides that employees other than casuals and fixed roster employees will be paid for any hours worked in excess of their ‘contract hours’ (agreed hours). The SDA said that it was not clear how additional hours would be paid, and unless they were paid at overtime rates, this would be less beneficial to employees than clause 10.8 of the Retail Award, under which part-time employees receive overtime for work in excess of the ‘guaranteed hours’ (the number of hours to be worked on each particular day of the week – see clause 10.5(a)). The SDA also said that it was unclear how additional hours would be agreed, and that this was less beneficial than clauses 10.6 and 10.7 of the Retail Award, which requires any agreement to the regular pattern of work for part-time employees to be in writing.
The Agreement provides that hours are paid at overtime rates if they meet the overtime conditions in the relevant schedules. But are flexible and limited roster store workers worse off under the Agreement in relation to overtime than if the Retail Award were to apply to them? Such employees will have no ‘guaranteed hours’ as defined in clause 10 of the Retail Award, which would provide an additional overtime trigger in respect of hours of work for each day of the week (clauses 10.5(a) and 21.2 of the Retail Award). They are different kinds of part-time employee not contemplated by clause 10 of the Award. On one view, there is no detriment to employees under the Agreement, because the relevant provisions of the award will have no work to do in the absence of guaranteed hours. On the other hand, if the Retail Award applied to a part-time employee of Aldi, the company would need to align its working arrangements with clause 10 in order to comply with it, and part-time employees would then have guaranteed hours and the associated overtime trigger. I will proceed on the assumption that the latter perspective is the correct one. The fact that part-time employees could have an additional way to earn overtime under the Retail Award is a benefit that does not exist under the Agreement. A similar analysis can be applied in respect of the greater predictability of working arrangements that part-time employees would have under the Retail Award. As to this matter however, I agree with the SDA’s initial submission to the effect that the part-time employment arrangements under the Agreement are ‘reasonably predictable’, which moderates any BOOT detriment in respect of the predictability of working arrangements. Finally, the absence of a requirement for agreed work changes to be in writing may be regarded as a detriment, but a minor one.
The SDA submitted that clause 20.5 of Schedule 2 of the Agreement was less beneficial than the Retail Award in respect of annual leave loading. This is so but the difference is a small one and does not affect my overall conclusion. The SDA also noted that the Agreement contains less generous redundancy provisions than the Retail Award in respect of taking time off during the notice period. Further, the Storage Award provides for a job search entitlement. However, as the SDA acknowledged, severance benefits under the Agreement are more generous than those in the awards, which simply defer to the NES.
I have taken the other detriments as against the award into account. Nevertheless, my assessment is that they are outweighed by the higher rates of pay that employees will receive under the Agreement as compared to what they would receive if the awards applied to them. I have conducted a global assessment in relation to each employee in the manner required by s 193A. I am satisfied that each award covered employee, and each reasonably foreseeable employee for the Agreement would be better off overall if the Agreement applied to the employee that if the relevant modern award applied to the employee. The Agreement therefore passes the BOOT.
I would add that, on the alternative view that the casual award conditions are the correct comparator for relevant part-time employees, I consider that the Agreement would still easily pass the BOOT. As Masson DP explained in Aldi Brendale Agreement, the various benefits of permanent employment under the Agreement would outweigh the higher casual wages provided under the Retail Award. In this regard, I consider that the SDA’s submissions undervalued the significance of personal leave, which was said to be a mere contingent benefit akin to allowances that might or might not apply to all employees. In my view, the availability of personal leave confers a significant psychological benefit irrespective of whether it is ever taken because employees have the peace of mind that if they fall ill or must care for their family, they have a right to paid time off.
The SDA’s objection to the approval of the Agreement was focused on the contention that it did not pass the BOOT, but it also contended that the Agreement purported to exclude the NES (s 186(2)(c)). The SDA stated in its F18 that clauses 37, 25.1 and Schedule 1 clause 3.1 suggested that employees could be required to work on a public holiday, which is contrary to s 114, a provision of the NES which cannot be excluded. But even if these individual provisions were to be read in this way, the ‘NES precedence’ provision in clause 7.1 makes clear that if there is any conflict between the Agreement and the NES, the NES will apply as a minimum. I am satisfied that the Agreement does not exclude the NES (see s 186(2)(c)).
While the Agreement is otherwise in order, the notice of employee representational rights provided to employees was not in the prescribed form. However, I am satisfied that this was a minor procedural or technical error and that the employees are not likely to have been disadvantaged by the error, and that despite the error, the Agreement was genuinely agreed to by employees (see s 188(5)).
I am satisfied that the requirements of ss 186 and 187 of the Act have been met. I am therefore required to approve the Agreement, and I do so. The SDA has given notice under s 183 of the Act that it wants the Agreement to cover it. As required by s 201(2), I note that the Agreement covers the SDA.
DEPUTY PRESIDENT
Hearing details:
2024
Melbourne
15 and 23 October
Appearances:
A. Perigo of counsel for Aldi Foods Pty Limited
P. Dean of counsel for the Shop, Distributive and Allied Employees Association
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