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

[2017] FWC 6958

[2017] FWC 6958 [Note: An appeal pursuant to s.604 (C2018/166) was lodged against this decision.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

ALDI Foods Pty Limited as General Partner of ALDI Stores (a Limited Partnership)
(AG2015/6335)

Retail industry
DEPUTY PRESIDENT BULL	PERTH, 22 DECEMBER 2017

Application for approval of the ALDI Minchinbury Agreement 2016. NERR compliance considered, application dismissed, non-compliance 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 Minchinbury 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 Shop Distributive and Allied Employees Association (SDA), the National Union of Workers’ (NUW) and the Transport Workers’ Union (TWU) were union bargaining representatives in the negotiation of the Agreement. Each Union filed a Form F18 statutory declaration in relation to the approval of the Agreement. The NUW and TWU statutory declarations stated that they supported the approval of 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 in support of the application. The SDA canvassed a number of issues that it said prevented the better off overall test (BOOT) being satisfied.

[4] Following the disposition of some interlocutory matters, the matter was listed for a hearing on 22 April 2016.

[5] At the hearingALDI sought leave to be represented by Mr Hatcher SC and Ms Perigo, and the SDA sought leave to be represented by Ms Duffy of counsel, assisted by Ms Fox. Leave was granted under s.596(2)(a) of the FW Act for the parties to be represented.

[6] The application was subject to an interim decision issued by the Commission on 11 January 2017. 1

[7] The interim decision concluded that the Agreement could not be approved as a valid Notice of Employee Representational Rights (NERR) had not been has been issued to employees. The decision was interim in nature as the Commission was advised that there were impending legal proceedings in respect of NERR compliance that may impact on the Commission’s finding that a valid NERR had not issued.

[8] There have been various requests from the SDA and the applicant 2 in the intervening period since the interim decision regarding the disposition of this application. On 18 December 2017, the SDA submitted that the reasons for issuing the interim decision no longer exist and that a final decision should issue.

[9] It has been nearly 12 months since the interim decision was issued and there has been no decision from a superior court which would indicate that the interim conclusion concerning the NERR compliance was in error. I am therefore of the view that a final decision should now issue as the reasons for an ‘interim’ decision have not materialised.

[10] As stated in the interim decision, the Agreement approval application was deficient and could not be approved as it was non-compliant with the FW Act’s NERR requirements. The reasons provided in the interim decision in respect of the NERR non-compliance remain relevant and are repeated below:

NERR Non-compliance

[11] Section 173 of the FW Act, provides that an employer that will be covered by a proposed enterprise agreement must take all reasonable steps to give a notice of the right to be represented by a bargaining representative (NERR) to each employee who will be covered by the Agreement and is employed at the notification time.

[12] Section 174(1A) states that the 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.

[13] In Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (Peabody), 3 a Full Bench of the Commission held that compliance with the form prescribed for the purposes of s.174(1A) of the FW Act was mandatory, and that a failure to comply would invalidate the notice.

[14] On 24 May 2016, the applicant’s representative advised the Commission that the word ‘employer’, where it appeared in the last paragraph of the prescribed NERR provided to employees, had been substituted with the word ‘leader’ as it best represented ALDI’s individual circumstances.

[15] Following an invitation from the Commission to comment on the applicant’s NERR, the SDA wrote to the Commission on 27 May 2016, and in summary, described the word substitution as an incurable jurisdictional impediment to the approval of the Agreement. The SDA referred to a number of Commission decisions to support their contention.

[16] On 31 May 2016, the applicant responded, arguing that the word substitution was not an impediment to the Agreement’s approval, and stated that it would strain credulity to contend that the change in words, from ‘employer’ to ‘leader’, is a change that Parliament intended would render the NERR invalid.

[17] On 29 November 2016 the Federal Full Court in Shop, Distributive & Allied Employees Association v ALDI Foods Pty Ltd [2016] 4 (ALDI Regency Park) considered the issue of NERR compliance under s.174(1A) of the FW Act and referred to the decision of the Full Bench in Peabody.

[18] In ALDI Regency Park an identical issue in regard to the alleged non-compliance with s.174(1A) was agitated. That being, the word ‘employer’ had been substituted with the word ‘leader’. The decision of Katzmann J stated that strict compliance was required, whereas Jessup J was not like minded. White J indicated that the views of Katzmann J on the subject appeared to have some force. The views of the Full Court on the topic were obiter as the Court determined that there was no need to reach a final view about whether the defective notice caused the Commission to fall into jurisdictional error. 5

[19] Both ALDI and the SDA provided comment on the Federal Full Court decision.

[20] The SDA submitted 6 that the Full Federal Court, despite having the opportunity to do so, did not overturn the decision of the Full Bench in Peabody, which remains binding on Commission members. On that basis, any deviation from the prescribed statutory contents of the NERR must result in the Agreement approval application being dismissed. The applicant stated that the decision does not provide clear guidance to the Commission.

[21] I am of the view that the Full Bench decision in Peabody remains binding on individual members of the Commission, which an individual member should follow. 7 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 Ltd⁸ held that the Full Court decision in ALDI Regency Park had not found the decision in Peabody to be incorrect.

[22] As a valid notice has not been issued by the employer I am not satisfied that s.188(a)(ii) of the FW Act has been complied with, hence the Commission cannot be satisfied that the Agreement was genuinely agreed to for the purposes of s.186(2)(a).

[23] The interim decision traversed other matters relating to the approval of an enterprise agreement which no longer need to be considered in view of this decision.

[24] As the NERR issued by the applicant did not contain the content prescribed by the Regulations, the Commission cannot approve the Agreement.
[25] The application for approval of the Agreement is dismissed.

DEPUTY PRESIDENT

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Appearances:

G Hatcher SC and A Perigo for ALDI
A Duffy Counsel and Ms J Fox for the SDA

Hearing details:
2016.
Sydney,
April 22.

Further written submissions and correspondence:

ALDI:
2016
13, 24, 31 May, 21 December
2017

16 March, 8 May 14 July

SDA:
2016
28 April, 27 May, 14 December
2017
17 January, 3 February, 17 May 6 July 22 September 18 December

 1   [2017] FWC 2188

 2   See 22 September 2017 ccorrespondence from solicitors for the SDA and 14 July 2017 correspondence from solicitors for the applicant

 3 (2014) 242 IR 210

 4   FCAFC 161

 5   Ibid at [71]

 6   Correspondence dated 14 December 2016

 7   Cetin v Ripon Pty Ltd (T/as Parkview Hotel) (2003) 127 IR 205 at paragraph [48].

8 [2017] FWCFB 660 at [98] – This decision was issued in respect of both matters

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