Aldi Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) t/a Aldi Stores

[2020] FWCA 1278

[2020] FWCA 1278

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) t/a Aldi Stores
(AG2019/4784)

ALDI DERRIMUT ENTERPRISE AGREEMENT 2019

Retail industry
DEPUTY PRESIDENT MANSINI	MELBOURNE, 30 MARCH 2020

Application for approval of the ALDI Derrimut Enterprise Agreement 2019.

[1] ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) t/a ALDI Stores (Aldi Stores) has applied for approval of a single enterprise agreement known as the ALDI Derrimut Enterprise Agreement 2019 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (Cth) (the Act).

[2] The Shop, Distributive and Allied Employees’ Association (SDA), the Transport Workers’ Union of Australia (TWU), the United Workers’ Union (formerly the National Union of Workers (UWU)) and four individually appointed employees are the employee bargaining representatives for the Agreement. Ms McNaughton of Enterprise Law is the employer bargaining representative.

[3] Since the application was made, concerns were raised about the form of the application, whether the Agreement passes the better off overall test, contravenes s.55 of the Act, contains the mandatory terms and whether the pre-approval steps were met. Further information was provided in relation to these concerns.

[4] A hearing was ultimately required and took place on 27 February 2020, attended by Aldi Stores, the SDA and the TWU. Aldi Stores sought permission to be represented, which was not opposed and was granted having regard to the matters at s.596 of the Act.

Form of the application

[5] The application as filed included an Agreement which was not signed by a representative of employees as required by s.185(5) of the Act and Regulation 2.06. Aldi Stores, together with the SDA and the UWU, sought to amend the error pursuant to s.586 including by filing a completed signature page. The other bargaining representatives did not oppose. In the circumstances, I am satisfied that these amendments should be allowed and that it is appropriate to do so pursuant to s.586 of the Act.

Better off overall

[6] The application as filed included evidence and calculations in support of Aldi Stores’ contention that all employees and prospective employees are “better off overall” under the Agreement than if the relevant reference instruments applied.

[7] In response to concerns raised, further information, evidence and submissions (including additional calculations and methodology) were provided in relation to the identified concerns. There was an exchange of submissions and the unresolved concern was addressed at the hearing.

[8] In conducting the better off overall assessment, I have adopted the principles enunciated in the Loaded Rates Case. 1 The Agreement is a replacement agreement which covers an established business and a wide range of classifications. In all of the circumstances of this application, it is sensible to have regard to the evidence of Aldi Stores (of which there was no evidence to the contrary) about the basis on which employees are engaged including of established store operating hours and roster scenarios in conducting the better off overall assessment.

[9] On an overall assessment of the identified benefits and detriments of the Agreement, and having regard to the further information, evidence and calculations provided, I consider that the employees and prospective employees to be covered are better off overall under the Agreement than if the relevant reference instruments applied.

The National Employment Standards

[10] Noting clause 7.1 of the Agreement, I am satisfied that the more beneficial entitlements of the National Employment Standards in the Act (NES) will prevail where there is an inconsistency between the Agreement and the NES.

The mandatory terms

[11] Clause 39 of the Agreement incorporates but does not detail the model consultation term. The consultation term prescribed by the Fair Work Regulations 2009 (Cth) is taken to be a term of the Agreement pursuant to s.205(2) of the Act.

The pre-approval steps

[12] After the application was filed, two individual employees requested the Commission to receive details of their concerns about the bargaining process. One of those individuals, Mr Kinsmore, was appointed as an employee bargaining representative and did not object to his identity being disclosed along with his concerns. The other requested their identity be kept confidential which was not opposed and I considered appropriate subject to providing the substance of the concerns to the parties for a response.

[13] In summary, the employee concerns relate to:

a) The scope of the Agreement, whether the group of employees to be covered was “fairly chosen" because the transport and distribution workers are “in the minority”; and

b) Communication at the workplace, whether it was appropriate and/or prevented proper explanation of the Agreement and its terms because the employer did not allow discussion about the proposed agreement or bargaining during working hours.

[14] The TWU and Aldi Stores presented evidence and submissions at the hearing. I address each issue in turn below.

The group of employees was fairly chosen

[15] Although the TWU did not press the fairly chosen concern at the hearing, on the basis of the employee concerns before the Commission, Aldi Stores contended that the group of employees covered by the Agreement are operationally, organisationally and geographically distinct such that the Commission should conclude that the group was “fairly chosen” within the meaning of s.186(3) and (3A) of the Act. Ms McNaughton gave evidence that Aldi Stores operates eight regions in Australia. Each region has a Distribution Centre and number of stores within a set geographic footprint, each with a separate profit centre, Managing Director and Director team, each is a separate operational and geographic entity. This regional structure is the same as the previous enterprise agreement, for which this Agreement is a replacement, and consistent with the coverage and structure of Aldi Stores’ other enterprise agreements in Australia.

[16] On the materials before the Commission I am satisfied that the group of employees covered by the Agreement is operationally, organisationally and geographically distinct and is “fairly chosen” in accordance with s.186(3) of the Act.

Genuine agreement

[17] The TWU characterised the communication issue as, in summary, that the limited ability of transport and distribution workers to be able to communicate about bargaining and the Agreement raised a question as to whether Aldi Stores had taken all reasonable steps to ensure the Agreement was properly explained as required by ss.186(2)(a), 188 and 180(5). Mr Kinsmore, a Section Leader, gave evidence at the hearing as follows:

a) he was appointed to represent himself and no other employees in bargaining;

b) he has daily interactions with drivers in the workplace;

c) drivers were aware of his role as bargaining representative however he was unable to respond to any questions from drivers in the workplace, about the progress of negotiations for fear of being reprimanded, a fear he held based on his knowledge of a previous warning given to another Section Leader for discussing the negotiations during a warm up meeting at work.

[18] The TWU submitted that the Commission should accept this as resulting in transport and distribution employees not being able to “inform themselves in an informal manner”. It said this is not a breach of the good faith bargaining obligations but is relevant to the question of whether there was “genuine agreement” for the purposes of ss.188(1)(a)(i) and 180(5). The TWU asked the Commission to find that the obligation to take all reasonable steps to explain the terms of an enterprise agreement pursuant to s.180(5) extends beyond the access period to the conduct of the negotiations prior to the vote on the terms of an enterprise agreement taking place.

[19] Aldi Stores accepted that it did not permit employees to discuss the bargaining during working hours, however contended that “genuine agreement” under the Act does not require that an employer facilitate employees to discuss bargaining matters amongst themselves during working hours. It gave evidence in its initial application and a further statement of Ms McNaughton about the steps taken to explain the Agreement and its terms to the relevant employees. Further, Aldi Stores contended that there is no evidence that Mr Kinsmore was appointed to represent anyone other than himself and, although it was not ultimately pressed and Aldi Stores submitted is not relevant to approval, there could be no basis to argue that Mr Kinsmore’s role as a bargaining representative was obstructed in breach of the good faith bargaining obligations.

[20] Section 180 sets out the “pre-approval requirements”, being the requirements with which an employer must comply before it makes a request under s.181(1) for employees to approve an enterprise agreement by voting for it. One such requirement is that the employer must take all reasonable steps to ensure that the terms and effect of an enterprise agreement are explained to the relevant employees, in a manner that is appropriate taking into account any particular circumstances and needs of the employees, under s.180(5). The obligation at s.180(5) arises in the context of the preparatory steps for the employee vote. It is the obligation of the employer to ensure the explanation is given before the request to vote. The purpose of the explanation being to enable the employees to cast an informed vote, so that they know what it is they are being asked to agree to, and to help them understand how their wages and conditions might be affected if they vote in favour of the agreement. 2 I do not consider that employer facilitation of discussions between employees amongst themselves, about bargaining or the terms and effect of the Agreement, during working hours or otherwise, is a reasonable step or one that Aldi Stores was required to take in satisfaction of s.180(5).

[21] On the materials before the Commission I am satisfied that Aldi Stores took all reasonable steps to ensure that the terms and effect of the Agreement were explained in an appropriate manner as required by s.180(5). Having regard to all of the materials, there are no other reasonable grounds for believing that the Agreement has not been genuinely agreed to by the relevant employees.

The Agreement is approved

[22] On the basis of the material contained in the application, further information, evidence and calculations provided on request of the Commission, I am satisfied that each of the requirements of ss.186, 187 and 188 as are relevant to this application for approval have been met.

[23] The SDA, TWU and UWU, being bargaining representatives for the Agreement, have respectively given notice under s.183 of the Act. In accordance with s.201(2) I note that the Agreement covers these organisations.

[24] The Agreement was approved on 30 March 2020 and, in accordance with s.54 and the Undertaking, will operate from 6 April 2020. The nominal expiry date of the Agreement is 30 March 2024.

DEPUTY PRESIDENT

Appearances:

Mr Hatcher and Ms Perigo on behalf of Aldi Stores, with Enterprise Law

Mr Burke on behalf of the SDA

Mr Cooney on behalf of the TWU

Hearing details:

2020

Melbourne

27 February

 1   Loaded Rates Agreements [2018] FWCFB 3610 at [100] and [115].

 2   One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (25 May 2018) at paragraph 115.

Printed by authority of the Commonwealth Government Printer

<AE507363 PR717366>