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

[2016] FWCA 2028

[2016] FWCA 2028 [Note: An appeal pursuant to s.604 (C2016/1264) was lodged against this decision.]

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)
(AG2015/4917)

ALDI JANDAKOT AGREEMENT 2015

Retail industry
DEPUTY PRESIDENT BULL	SYDNEY, 5 APRIL 2016

Application for approval of the ALDI Jandakot Agreement 2015

[1] An application has been made by ALDI Foods Pty Limited, as General Partner of ALDI Stores (A Limited Partnership) (ALDI/ the applicant) for the approval of an enterprise agreement known as the ALDI Jandakot Agreement 2015 (the Jandakot Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is a single enterprise agreement.

Background

[2] On 13 October 2015, the Transport Workers’ Union of Australia (TWU) and the Shop, Distributive and Allied Employees Association (SDA) filed an appeal against a previously approved agreement; the ALDI Regency Park Agreement 2015 (the Regency Park Agreement) which contains similar or identical terms to this agreement. The grounds of appeal advanced was threefold:

1. The Agreement should have been made as a greenfields agreement;

2. The group of employees who approved the agreement was not fairly chosen; and

3. The agreement did not pass the better off overall test (BOOT).

[3] By virtue of the similarities between this Agreement and the Regency Park Agreement; on 28 October 2015, the Commission issued an Interim Decision [2016] FWC 7457. The Interim Decision concluded that the approval decision for the Jandakot Agreement should not be determined until after the appeal of the Regency Park Agreement was known.

[4] On 22 February 2016, the Full Bench dismissed the appeal of the approval of the Regency Park Agreement in Transport Workers’ Union of Australia and Another v Aldi 1 (TWU v Aldi).

On this basis, approval of the Jandakot Agreement is now to be considered. There is no opposition to its approval by any persons.

Coverage

[5] The Jandakot Agreement is proposed to cover all employees working in Aldi’s Jandakot distribution centre and all stores operating in Western Australia 2. The Agreement covers the following classifications of employees:

1. retail store employees engaged at Aldi’s Jandakot store;

2. warehouse employees engaged at the Aldi’s Jandakot distribution centre; and

3. transport operators engaged at Aldi’s Jandakot distribution centre.

[6] Employees who voted on the Jandakot Agreement are currently employed by Aldi in its various stores and distribution centres. Each employee who voted on the Jandakot Agreement has requested a transfer to one of the operations which will be covered by the proposed Jandakot Agreement upon approval and the relevant establishment becoming operational.

[7] The Full Bench in TWU v Aldi confirmed that the test under s.186(3) as to whether the group of employees covered by the agreement is fairly chosen requires consideration of the employees covered by the agreement. In the current matter, the employees who voted on the Jandakot Agreement have requested a transfer to the applicant’s Jandakot stores or distribution centres, and accordingly will be covered by the proposed agreement.

[8] As per s.186(3) of the Act and in accordance with the Full Bench decision in TWU v Aldi, I am satisfied that the group of employees covered by the Agreement was fairly chosen based on the operational and geographical distinction of the employees.

Minchinbury Agreement (AG2015/6335)

[9] On 28 November 2015, Aldi filed a s.185 application for the approval of the ALDI Minchinbury Agreement 2015 (the Minchinbury Agreement), the matter is listed for hearing on 22 April 2016. The Minchinbury Agreement contains similar terms and identical classification matching to the Jandakot Agreement.

[10] The SDA has filed a statutory declaration (F18) and submissions opposing the approval of the Minchinbury Agreement. Of relevance to this application are the SDA’s submissions that the corresponding classification matching between the Agreement and the Award are incorrect.

[11] Under the Minchinbury Agreement and the Jandakot Agreement, Store Managers are classified as being equivalent to a Retail Employee Level 6 under the General Retail Industry Award 2010 (the Award) being the relevant reference instrument for the purposes of the BOOT. SDA submit that Store Managers should be equated to a Retail Employee Level 8 under the Award. Also, under the Minchinbury and Jandakot Agreements, Assistant Store Managers are classified as being equivalent to Retail Employee Level 4, which the SDA submit should be equated to a Retail Employee Level 6.
Better Off Overall Test

[12] The Agreement covers full time, part time and casual adult and junior employees, and incorporates most Award allowances for all employees. There are 4 remuneration schedules under the Agreement being for:

1. Salaried store employees;

2. Hourly rate store employees;

3. Warehouse employees; and

4. Transport and Distribution employees.

[13] The applicant submits that the rates of pay under the Agreement are high enough to compensate for any entitlements that would otherwise be offered under the Award. Aldi further rely on the reconciliation clause provided under the Agreement to ensure that no employees would be worse off under the Agreement. Under cl.13 of the Agreement-Remuneration and Salary Sacrifice Arrangements, employees may request reconciliation at any time if they feel they have been paid less than the Award, and any shortfall in total remuneration otherwise payable under the Award is to be paid to the employee in the next pay period after the review is complete.

Greater entitlements

[14] In comparison to the Award, the rates of pay under the Agreement are:

○ Significantly higher for transport and warehouse employees

○ calculated using a higher percentage base rate for junior hourly rate store employees

○ 2.69% to 23.22% above the comparable Award rates of pay for hourly rate store employees

○ 17.97% to 42.92% above comparable rates of pay for salaried store employees if the SDA’s classification matching is accepted, or at least 25.49% above Award rates of pay based on Aldi’s classification matching.

Reduced entitlements

[15] The Agreement does not offer overtime, penalty rates or annual leave loading for salaried employees. For non- salaried employees, overtime rates are lower in comparison to the Award. The Agreement offers lower penalty rates for store assistants working any 5 out of 7 days.

BOOT

[16] Warehouse and Transport employee’s rates of pay being significantly higher than the comparable rates of pay under the Award will be better off under the Agreement. Hourly rate store employees are also sufficiently compensated for the reduction in Award entitlements.

[17] Assuming the below classification matching provided by Aldi is correct , salaried store managers and salaried assistant store managers would be better off under the Agreement provided they did not regularly work overtime 3 in conjunction with Sunday work:

○ Salaried store manager is equivalent to a level 6 Award classification; and

○ Salaried assistant/Trainee store managers are equivalent to a level 4 Award classification.

[18] As mentioned above, the classification matching contained in the Minchinbury Agreement is identical to the Jandakot Agreement. In the Minchinbury Agreement, the SDA disagrees with Aldi’s classification matching and submit the following classification matching:

○ Salaried store manager is equivalent to a level 8 Award classification; and

○ Salaried assistant/Trainee store managers are equivalent to a level 6 Award classification.

[19] If the SDA’s classification matching is accepted, then employees engaged as:

○ Salaried Assistant Store Managers (prior to being allocated a store to manage, working 45 hours per week) ; and

○ Salaried Store Manager (year 1 employees following allocation of a store, working 45 hours per week)

that regularly work on Sundays or who regularly work overtime may not be better off under the Agreement.

[20] In lodging the application, Aldi provided a number of indicative, typical rosters and calculations demonstrating that typical rosters worked by employees meant that they would be better off under the Agreement. In its submissions, Aldi also sought to rely on the reconciliation clause of the Agreement in the event that the SDA’s classification matching in the Minchinbury Agreement was accepted by the Commission.

Undertakings

[21] Section 190 of the Act allows the Commission to approve an enterprise agreement with undertakings if it has a concern that the agreement does not meet the requirements set out in s.186 with respect to the BOOT. In Re BUPA Care Services 4 , the Full Bench of the Commission noted that the employer must be given an opportunity, in light of s.190 to address any identified concerns.

[22] In addressing the Commission’s concerns, the applicant has provided a number of undertakings. The undertakings provided also address the practical relevance of the SDA’s submissions in its related Minchinbury Agreement.

[23] On 21 March 2016, Aldi provided increased rates of pay for store management employees covered by the Agreement. In addressing the potential impact of the related Minchinbury Agreement, Aldi has also provided an undertaking such that until the final determination of the Minchinbury Agreement, employees 5 will be entitled to receive each fortnight an amount no less than an employee employed as an equivalent level of supervisor engaged in a departments store would have received under the Award. Should the Commission determine that the relevant classification used by Aldi is inconsistent, Aldi undertakes to maintain this undertaking.

[24] A Full Bench of the Commission in Armacell Australia Pty Ltd 6 made the following observation with respect to the BOOT:

“The BOOT, as the name implies, requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement.”

[25] The application of the BOOT is an all-embracing and comprehensive test. The rates of pay are significantly higher for warehouse and transport employees. The only concern in relation to the BOOT is that certain salaried store employees who may perform overtime work in conjunction with Sunday work could potentially not be better off under the Agreement. The applicant has provided rosters to demonstrate that based on the typical pattern of work, salaried store employees will be better off under the Agreement. The undertakings provided by the applicant address concerns relating to the classification matching exercise.

Approval

[26] Taking into account the higher rates of pay under the Agreement as well as the undertakings and rosters provided by the applicant, I am satisfied that the Agreement results in employees being better off overall under the Agreement.

[27] The undertakings provided by the applicant addresses the Commission’s concerns in relation to salaried store employees. The undertakings are taken to be a term of the Agreement and are attached at Annexure A of this decision.

[28] The undertakings are not so substantial that if asked to vote again, the employees who voted would not approve the Agreement. I am therefore satisfied that the undertakings do not result in a substantial change to the Agreement, as per s.190(3)(b) of the Act.

[29] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[30] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 12 April 2016. The nominal expiry date of the Agreement is 4 years from the date of approval.

DEPUTY PRESIDENT

Annexure A

 1   [2016] FWCFB 91

 2   As confirmed in the applicant’s correspondence dated 22 October 2015

 3   Approximately 7 hours per fortnight.

 4   [2010] FWAFB 2762

 5   Engaged in the classifications of store manager 45 hours year 1 – prior to store allocation, assistant store manager 40 hours – prior to store allocation, assistant store manager 45 hours – prior to store allocation, and trainee store managers hours

 6   [2010] FWAFB 9985

Printed by authority of the Commonwealth Government Printer

<Price code A, AE418429  PR578569>