ALDI Foods Pty Limited as General Partner of ALDI Stores (a Limited Partnership)

[2017] FWC 6956

[2017] FWC 6956

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

ALDI Foods Pty Limited as General Partner of ALDI Stores (a Limited Partnership)
(AG2016/1058)

Retail industry
DEPUTY PRESIDENT BULL	PERTH, 22 DECEMBER 2017

Application for approval of the ALDI Derrimut Agreement 2016 - opposed by SDA - NERR compliance considered – application dismissed, application not in accordance with s.174(1A)

[1] ALDI Foods Pty Limited, as General Partner of ALDI Stores (a Limited Partnership) (the applicant/ALDI) has made an application for the approval of an enterprise agreement known as the ALDI Derrimut Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the FW Act). The Agreement is a single enterprise agreement.

[2] The applicant’s Form F16 stated that the Shop Distributive and Allied Employees Association (SDA), the National Union of Workers’ Victoria Branch (NUW) and the Transport Workers’ Union Victoria Branch (TWU) were union bargaining representatives in the negotiation of the Agreement. Each union filed a Form 18 statutory declaration in relation to the approval of the Agreement. The NUW and TWU statutory declarations stated that the unions supported the approval of the Agreement and wished to be covered by the Agreement.

[3] The F18 filed by the SDA stated that the union did not support the approval of the Agreement and disagreed with the applicant’s statutory declaration made in support of the application. The SDA, while wishing to be covered by the Agreement, stated that in its view the Better Off Overall Test (BOOT) had not been met.

[4] In addition to the three F18’s received, the Commission also received written comments from three employees who appeared to be employed in the Transport and Distribution section of the applicant’s business (and who did not wish to be identified to ALDI), raising concerns with the Agreement. These concerns were forwarded (in redacted form) to ALDI for response.

[5] The application for approval of the Agreement was listed for hearing on 4 August 2016. ALDI sought and was granted leave (which was not objected to) under s.596(2)(a) of the Act to be represented by Mr G Hatcher SC and with him, Ms A Perigo of Counsel. The SDA was represented by Ms J Fox and Ms R Patena. Mr W Commerford, for the TWU, sought and was granted leave to appear for the unnamed employees who had provided written comment to the Commission, and advised that they did not support the Commission approving the Agreement. 1

[6] On 24 January 2017, the Commission issued an interim decision which concluded that the Agreement could not be approved as a valid NERR had not been issued to employees. 2

[7] The decision was interim on the basis that there were impending legal actions including an application for special leave to appeal to the High Court 3 in respect to the Full Court decision of the Federal Court in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd4.

Notice of Employee Representational Rights

[8] In the interim decision it was determined that the application could not be approved as the Notice of Employee Representational Rights (NERR) was not completed in conformity with the legislative requirements, and as such the Commission could not be satisfied that the Agreement was genuinely agreed. The reasons for this conclusion are restated below.

[9] Section 174(1A) of the FW Act states that the NERR notice must contain the content prescribed by the regulations, and not contain any other content, and be in the form prescribed by the regulations. The regulations set out the content and form of the notice at Schedule 2.1.

[10] The application for approval of the Agreement was filed with the Commission on 29 April 2016, and contained a copy of the NERR which was provided to each employee by being attached to the noticeboard in each ALDI store in the Derrimut region, and at the Derrimut Region Distribution Warehouse.

[11] On 25 May 2016, the applicant’s legal representative, Enterprise Law, forwarded advice, via email, that the NERR had substituted the word ‘employer’ with the word ‘leader’ in the final paragraph of the NERR. This was presumably raised by ALDI because alterations to the content or form of the NERR notice template provided in Schedule 2.1 of the Regulations has resulted in the non-approval of enterprise agreements by some members of the Commission, relying on the reasons expressed in the Full Bench decision of Peabody Morevale Pty Ltd v Construction, Forestry, Mining and Energy Union 5 (Peabody).

[12] In Peabody, a Full Bench of the Commission held that compliance with the form prescribed for the purposes of s.174(1A) of the Act was mandatory, and that a failure to comply would invalidate the notice.

[13] Insubmissions dated 31 May 2016, ALDI submitted that the change in words from ‘employer’ to ‘leader’ could not possibly render the NERR invalid.

[14] On 29 November 2016 the Federal Full Court handed down its decision in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd 6 (ALDI Regency Park). The decision traversed compliance with s.174(1)(A) and addressed the decision of the Full Bench in Peabody.

[15] The Full Court decisiondealtwith a similar issue in regard to the alleged non-compliance with s.174(1A) concerning the word ‘employer’ being substituted with the words ‘team leader’ in the NERR notice.

[16] In respect of the NERR, Katzmann J stated that strict compliance was required, whereas Jessup J concluded otherwise. White J, while preferring not to express a conclusive view, indicated that the views of Katzmann J appeared to have some force. The views of the Full Court on this issue were obiter, as the matter was determined on other grounds with Katzmann and Jessup JJs holding that there was no need to reach a final view about whether the defective notice caused the Commissioner to fall into jurisdictional error. 7

[17] The SDA submitted that despite having the opportunity to do so, the decision did not overturn the decision of the Full Bench in Peabody and as such remains binding on Commission members in respect of NERR notice deviations. As the notice deviates from the prescribed form, the Agreement approval application must be dismissed.  8

[18] On 21 December 2016, ALDI submitted that in their view the ALDI Regency Park decision does not provide clear guidance to the Commission where the NERR departs from the prescribed form.

[19] I am of the view that the Full Bench decision in Peabody remains binding on individual members of the Commission, although it is appropriate to note that the actual NERR deviation in that matter is not the same as that raised in this matter, there being a word substitution variation.

[20] Since the decision in Peabody, the Full Bench in The Australian Maritime Officers’ Union v Harbour City Ferries Pty Ltd 9 has accepted that a non-trivial misdescription will render a NERR invalid, with the consequence that any subsequent enterprise agreement will be incapable of approval. A Full Bench in The Maritime Union of Australia v DOF Management Australia Pty Ltd and The Maritime Union of Australia, v Smit Lamnalco Australia Pty Ltd10 held that the Full Court decision in ALDI Regency Park did not overturn the decision in Peabody.

[21] Where a valid notice has not been issued by the employer, the Commission cannot be satisfied that s.188(a)(ii) has been met, with the result that the Commission cannot be satisfied that the Agreement was genuinely agreed to for the purposes of s 186(2)(a).

[22] Other matters discussed in the interim decision need not be further canvassed on the basis of the application being unable to proceed due to the NERR defect.

[23] As the NERR issued by the applicant did not contain the content prescribed by the Regulations, the Commission cannot be satisfied that the Agreement was genuinely agreed and is unable to approve the Agreement.

[24] The application for approval of the Agreement is dismissed.

DEPUTY PRESIDENT

Appearances:
G. Hatcher SC and A. Perigo of Counsel for ALDI
J. Fox and R. Patena for the SDA
W. Commerford on behalf ofunnamed employees

Hearing details:
2016.
Sydney, Video link to Melbourne
August 4.

Further written submissions and correspondence

SDA:
2016
17 August
2017
17 May, 6 July, 22 September, 18 December

ALDI:
2016
10, 30 August, 19, 22 December
2017
8 May, 14 July

 1   The TWU Victorian/Tasmanian Branch filed a F18 dated 6 July 2016 supporting the approval of the Agreement

 2   [2017] FWC 534

 3   In the correspondence of 16 December 2016, ALDI requested that a decision on the application to approve the Agreement be adjourned on the basis that a special leave application to the High Court was to be made. That application was subsequently made on 21 December 2016; the grounds of the application however did not address the NERR but other matters, being the ratio of the majority decision of the Full Court.

The ALDI correspondence to the Commission advised that “given the lack of conclusive determination of this issue, we advise that ALDI is now formulating the questions it would seek for the President of the Fair Work Commission to refer to the Federal Court …” On 19 January 2017, ALDI advised that it would be in a position to file a draft case by 23 January 2017.

 4 [2016] FCAFC 161

 5   [2014] FWCFB 2042

 6 [2016] FCAFC 161

 7   Ibid at [71]

 8   Correspondence dated 14 December 2016

 9   [2016] FWCFB 1151

 10   [2017] FWCFB 660 at [98] – This decision was issued in respect of both matters

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