ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) T/A ALDI Stores
[2019] FWCA 6633
•30 OCTOBER 2019
| [2019] FWCA 6633 |
| 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
(AG2018/7411)
ALDI JANDAKOT AGREEMENT 2018
Retail industry | |
COMMISSIONER JOHNS | MELBOURNE, 30 OCTOBER 2019 |
Application for approval of the ALDI Jandakot Agreement 2018.
[1] An application has been made for approval of an enterprise agreement (Application) known as the ALDI Jandakot Agreement 2018 (2018 Agreement). The Application was made pursuant to s.185 of the Fair Work Act 2009 (Cth) (FW Act). It has been made by ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) T/A ALDI Stores (the Applicant). The 2018 Agreement is a single enterprise agreement.
History of the Application
[2] The history of the Application for approval is as follows:
a) On 27 December 2018:
i. the Applicant lodged its F16 application for approval of the 2018 Agreement with the Fair Work Commission (Commission).
ii. a statutory declaration in support of the Application was lodged by Caroline MacPhail, Managing Director of ALDI Stores, Jandakot Region.
b) On 8 January 2019 the Commission received correspondence from the Shop, Distributive and Allied Employees Association (SDA) seeking to be heard in relation to the Application.
c) On 14 January 2019 Julia Fox, National Assistant Secretary of the SDA, on its behalf, filed an F18 statutory declaration with supporting materials indicating that the SDA did not support approval of the 2018 Agreement. The SDA requested that the Application not proceed until the final determination of the other ALDI matters then before the Commission.
d) On 3 April 2019 the present Application was allocated to Commissioner Lee.
e) At a mention hearing on 9 April 2019 Commissioner Lee directed the parties to file submissions in relation to how and when the matter before him would proceed. 1
f) The parties filed submissions and consented to the procedural issues being determined on the papers.
g) On 24 May 2019 Commissioner Lee issued his decision. 2 He held that the matter “should proceed in the usual manner”.3 The Commissioner also decided it was appropriate for the matter be dealt with by a Member of the Commission based in New South Wales as the Applicant’s witnesses were based in New South Wales.4
h) On 27 May 2019 the matter was reallocated to me. On that same day I issued directions for the filing of materials and programmed the matter for hearing.
i) Although the Transport Workers’ Union of Australia (TWU) were identified on the Applicant’s F16 as a bargaining representative for the 2018 Agreement it filed no submissions or F18.
j) On 9 July 2019 the hearing of the matter took place before me at the Commission in Sydney.
k) On 23 July 2019 the Applicant filed materials in accordance with the directions issued at the conclusion of the hearing.
l) On 6 and 13 August 2019 the SDA and the Applicant filed final submissions respectively.
m) On 18 October 2019 ALDI filed consolidated undertakings.
The Hearing
[3] At the hearing:
a) The Applicant was represented by Mr G Hatcher SC, assisted by Ms A Perigo.
b) The SDA was represented by Mr E White.
c) The TWU made no appearance.
d) Only Caroline Chivers, Finance and Administration Director, ALDI Stores, was required to give evidence.
[4] Following the hearing on 9 July 2019 I issued directions for the filing of materials in relation to any further submissions and undertakings the Applicant was prepared to provide in support of the approval of the 2018 Agreement. The bargaining representatives were also invited to file any further submissions in opposition to the approval of the 2018 Agreement. The matter was then listed to resume on 11 September 2019. However, after compliance with the post-hearing directions the parties consented to me determining the matter without the need for a further hearing.
[5] In coming to this decision, the Commission, as presently constituted, has had regard to the following:
Exhibit No. | Description |
1. | Agreement Checklist prepared 3 April 2019 |
2. | ALDI Jandakot Agreement 2018 |
3. | Form F16 |
4. | Form F17 |
5. | Impact Statements: a. Retail Employees |
6. | Applicant’s BOOT Comparisons: a. General Retail Industry Award 2010 |
7. | Form F18 - Shop, Distributive and Allied Employees Association (SDA) a. Attachment A – BOOT Comparison – General Retail Industry Award 2010 |
8. | Applicant – outline of submissions dated 18 June 2019 |
9. | Applicant – Statement of Margaret McNaughton dated 18 June 2019 |
10. | Applicant – Statement of Caroline Chivers dated 18 June 2019 |
11. | Applicant – Undertakings dated 18 June 2019 |
12. | Shop, Distributive and Allied Employees Association – outline of submissions filed 28 June 2019 |
13. | Applicant – Submissions in Reply dated 5 July 2019 |
Post hearing materials | |
N/A | Transcript of 9 July 2019 proceedings |
N/A | Applicant’s outline of submissions dated 23 July 2019 |
N/A | Applicant – Undertakings dated 23 July 2019 |
N/A | Applicant – Supplementary statement of Margaret McNaughton dated 23 July 2019 |
N/A | Shop, Distributive and Allied Employees Association – Submissions in Reply dated 6 August 2019 |
N/A | Applicant – Undertakings dated 4 September 2019 |
N/A | Applicant – outline of submissions in reply dated 13 August 2019 |
N/A | Applicant – final consolidated undertakings dated 18 October 2019 |
Legislative scheme – genuine agreement
[6] Section 186(2)(a) provides as follows:
“(2) The FWC must be satisfied that:
if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement.”
[7] Section 188(1)(a)(i) provides as follows:
“(1) An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre approval steps).”
[8] Section 180(5) provides as follows:
“(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.”
Legislative scheme – BOOT
[9] Section 193 provides as follows:
“193 Passing the better off overall test
When a non greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.
…
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”
Submissions
[10] On 18 June 2019 ALDI submitted that:
“…Background
2. ALDI Foods Pty Ltd as General Partner of ALDI Stores (A Limited Partnership) (ALDI) made an application for approval of the ALDI Jandakot Agreement 2018 (the Jandakot Agreement 2018) on 31 December 2018.
3. Following an application by the Shop, Distributive and Allied Employees Association (the SDA) to have these proceedings adjourned, on 24 May 2019, Commissioner Lee issued a decision 5 that the ALDI application for approval of the Jandakot EA 2018 proceed in the usual manner. Commissioner Lee also stated that:
“The 2018 Agreement and the objections to it can be dealt with consistent with the prevailing law, including the application of the principles of the Loaded Rates decision to the BOOT considerations so far as they are relevant”.
4. It might be noted at this stage, that this is one of a series of Agreements to which ALDI is party. As a matter of experience rather than choice, ALDI does not tend to have heavy union participation amongst its workforce. Unions have tended to object to the approval of each ALDI Agreement, notwithstanding the express views of their membership employed by ALDI. These facts may be unrelated. Nonetheless, many of the provisions challenged in these proceedings have already been the subject of considered decisions by the Commission. This is rarely reflected in submissions filed by the unions. ALDI relies upon earlier decisions of the Commission and anticipates that they will be followed.
The Loaded Rates Case
5. A Full Bench of the Commission in the Loaded Rates in Agreements case 6 (the Loaded Rates case), set out a number of general propositions with respect to the application of the Better Off Overall Test (the BOOT). These propositions are set out in paragraph 115 of the Loaded Rates case.
6. In reaching these propositions, the Full Bench considered a number of previous decisions and made the following relevant observations:
(a) in considering potential employees to whom the agreement might apply in the future, “in the case of an agreement applying to a defined workplace or workplaces in a substantial and mature business – for example a major supermarket chain – the degree of conjecture may be small because it is safe to assume that any future employees will be employed on a type of roster pattern already applied in the business to an existing class of employees”; 7
(b) the Better Off Overall Test (the BOOT) 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. Where the terms required to be compared bear directly upon the remuneration of employees, the assessment is essentially a mathematical one. However, the position becomes more complex when an agreement contains provisions superior to or not contained in the reference award conferring entitlements to non-monetary benefits, benefits which are accessible at the employee’s choice or monetary benefits which are contingent upon specified events occurring. While it is necessary to take such entitlements into account in the BOOT assessment, ascertaining the value they are to be assigned may be a difficult task”. 8
7. As stated above, the BOOT requires an overall assessment. It is not a line by line analysis of each provision in an agreement against each provision in the relevant industrial award. 9
8. If this point needed any supplementation it might be noted that the duty of considering and reaching a state of satisfaction under the better off overall test is reposed in the Commission itself 10. It is not delegable to some other body established by the Commission. Further, the test requires the Commission to achieve a state of satisfaction as to an overall situation, prospectively as to future employees as well as to the parties agreeing. Plainly the legislation does not contemplate some simple analysis of award compliance.
9. In considering the two ALDI Agreements that were the subject of the proceedings, the Full Bench observed that, with respect to hourly rate employees, ALDI’s system of part time employment was inconsistent with the definition of part time employment under the Retail Award. 11 The Full Bench then found:
However it does not follow from this that ALDI’s part-time employment system is simply not permitted by the Retail Award and is for that reason alone to be regarded as failing the BOOT. Clause 12.6 of the award provides:
12.6 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. Thus the Retail Award allows an employer to pay as a casual employee any employee who is not a full-time employee and does not fit its definition of a part-time employee. It follows, we consider, that where an enterprise agreement in the retail sector provides a form of employment that does not constitute full-time or part-time employment as contemplated by the Retail Award, the appropriate point of comparison for the purpose of the BOOT is the catch-all of the casual employment under the award. Such a comparison would need to take into account, from a direct remuneration perspective, the rates of pay, casual loading and weekend and public holiday penalties payable under the Retail Award and the loaded rates of pay, Sunday work allowances, public holiday penalties and leave entitlements payable under the ALDI Agreements. 12
The Commission’s Checklist
10. In the present proceedings, the Commission has provided to the parties a detailed checklist (the Checklist) setting out a number of possible issues with the Jandakot EA 2018.
11. The Commission has invited ALDI to make submissions with respect to these matters.
12. The SDA have also provided two detailed documents which can be described as a line by line analysis of the provisions of the Jandakot EA 2018 against the General Retail Industry Award 2010 (the Retail Award) and a similar document with respect to the Storage Services and Wholesale Award 2010 (the Storage Services Award). There appears to be some overlap between the issues raised in the Checklist and the documents provided by the SDA.
13. These submissions address primarily the matters set out in the Checklist. Given the directions issued by the Commission, the SDA has the ability to file and serve any evidence and submissions it wishes to rely on to support its position. ALDI will specifically address matters raised by the SDA in reply submissions.
14. ALDI relies on the statement of Caroline Chivers dated 18 June 2019 and the statement of Margaret McNaughton dated 18 June 2019.
The Checklist - National Employment Standards (NES)
15. Casual Employees. The only employees who may be engaged as casual employees under the Jandakot EA 2018 are store assistants (Clause 13). The Checklist suggests that as the Jandakot EA 2018 does not provide casual employees with notice periods or paid leave entitlements, the provisions may be inconsistent with the NES in light of the decision of the Full Court of the Federal Court in Workpac Pty Ltd v Skene. 13 The decision in Workpac v Skene is not authority for the proposition that all casual employees are to receive such benefits under the NES. In short compass, the Full Court upheld the primary judge’s decision that as Mr Skene worked regular and systematic hours, he could be seen as other than a casual employee for the purposes of section 86 of the Fair Work Act 2009 (the FW Act).
16. In further answer, clause 5 of the Agreement states that where there is an inconsistency between the Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.
17. It should also be noted that in the Checklist where the rates of pay for casual employees are compared, the Commission’s calculations show that there is a -18.28% difference between the rate for casual employees working Monday to Saturday from 11.00pm to 7.00am (after the first three hours) and Monday 12.00am to 7.00am (after first three hours). Ms Chivers in her statement addresses this point at paragraphs 12 and 13 of her statement. Ms Chivers, in both cases, states that that given the trading hours in the Jandakot Region finish no later than 9.00pm, the likelihood of an employee working this work pattern is remote.
18. Public holidays. Clause 18, Public Holidays includes the words:
Typically, ALDI will be operating on public holidays and Employees will be requested to work on such public holidays. Employees should expect that they will be requested by ALDI to work on a public holiday. Subject to this, s 114 of the Act will apply.
19. This wording also appeared in the public holidays clause of the ALDI Minchinbury Agreement 2012 which was approved by Boulton J on 3 June 2013. 14 The ALDI Minchinbury Agreement 2012 had a number of objections raised with respect to its approval. The National Union of Workers (the NUW) objected to the provision on the basis that it was inconsistent with the NES. In considering the objection, His Honour found:
There is no substance to the objection made by the NUW-NSW in relation to the public holiday provisions in the agreement. The submission is based on a misreading of both the relevant legislative provisions and the agreement. In particular, clause 17 of the Minchinbury Agreement indicates that employees should expect that they will be requested to work on public holidays and refers to the application of s 114 of the Act. The need for a request for employees to work public holidays, the indication as to the likelihood of such requests being made and the reference to s 114 in the public holidays clause in the agreement are consistent with the provisions of the NES relating to the entitlement to be absent from work on public holidays. In particular, it is clear that an employee may refuse a request to work on a public holiday in circumstances contemplated by s 114(4) of the Act. 15
20. Annual leave for shift workers. Clause 20 provides an entitlement to annual leave for all non-casual employees. The accrual and payment arrangements are set out in the relevant schedules. In addition, the clause sets out the entitlement to the additional week of leave for shift workers, as defined, for the purposes of section 87(1)(b) of the FW Act.
21. The shift work provision in clause 20 only applies to employees engaged in accordance with Schedule 3 Warehouse Employees and Schedule 4 Transport and Distribution Employees. The Loaded Rates case found that the hourly rate employees engaged in stores could be treated as casuals for the purposes of the BOOT as they did not meet the award definition of part time employees. The same situation arises with respect to the hourly rate warehouse employees under the Agreement. That is, clause 11.3(i) of the Storage Services Award states 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.
22. All employees in Schedule 3 are hourly rate employees. As they do not meet the definition of a part time employee under the Storage Services Award, they can be assessed as casual employees for the purposes of the BOOT. The issue of the extra week of annual leave is therefore irrelevant.
23. All Transport and Distribution employees in Schedule 4 receive a maximum of five weeks paid annual leave (page 44 of the Agreement).
24. Personal Leave. Clause 21 of the Jandakot EA 2018 expresses the entitlement to carers’ leave as follows:
Accrued Personal/Carer’s leave may be taken to care for a member of the Employee’s immediate family or household where such care is necessary and the Employee is responsible for the care of the other person.
25. Section 97 of the FW Act sets out the entitlement to take paid carers leave if the leave is taken to provide care or support to a member of the employee’ immediate family or household who requires care and support because of a personal illness or injury or unexpected emergency.
26. The provisions of the Agreement are not inconsistent with the provisions of the NES.
27. In the event the Commission determines there is an inconsistency, which is not accepted, clause 5 of the Agreement provides that where there is an inconsistency between the Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.
28. The notice requirements in the NES require that the employee must give notice as soon as practicable (which may be a time after the leave has occurred).
29. Clause 20 does not detract from the NES as it does not burden employees with a more onerous obligation to consult their employer. A requirement to notify prior to a rostered shift can be seen as less onerous that the NES provision of as soon as practicable.
30. This issue was raised in the application by ALDI to vary the ALDI Prestons Agreement 2013 where the wording with respect to the notification requirements was identical to the wording in the Jandakot EA 2018. The issue of evidentiary requirements in the Agreement was also raised. In approving the variation to the Prestons Agreement, Deputy President Bull stated
Enterprise agreements are able to include terms that are ancillary or incidental to the NES provided they are not detrimental to an employee when compared to the NES. I am not convinced that the Personal /Carer’s Leave clause in the Agreement for the reasons advanced by ALDI is contrary to the NES. These provisions reflect those contained in the existing Prestons Agreement approved by the Commission on 21 June 2013. 16
31. It should also be noted that the provision exists in the current enterprise agreement that applies in the Jandakot Region, the ALDI Jandakot Agreement 2015. 17
32. Abandonment of Employment. The provision allows ALDI to treat the employment as terminated by the employee when the employee has been absent from work for a continuous period of three days or more without consent and notification. In these circumstances, there is no requirement for ALDI to provide the employee with notice in accordance with section 117 of the FW Act.
33. Redundancy. Section 123(1)(c) of the FW Act states that casual employees are not entitled to redundancy pay as set out in section 119. As stated above, the appropriate point of comparison for the ALDI’s hourly rate employees is the casual provision under either the Retail Award or the Storage Services Award. The redundancy clause of the Agreement provides an additional benefit to ALDI’s hourly rate employees that the NES does not contemplate. As such, the rate of pay used for the redundancy provision under the Agreement is not a matter that is required to mirror the NES. Further, the redundancy provisions are in excess of the minimum prescribed by the NES.
34. Annual leave/personal leave accrual. As found in the Loaded Rates case with respect to hourly rate store employees and by extension to hourly rate warehouse employees, the appropriate point of comparison for the ALDI’s hourly rate employees is the casual provision under either the Retail Award or the Storage Services Award. As the NES does not provide an entitlement to either annual or personal leave for casual employees, the basis of the leaves’ accrual is not a relevant consideration with respect to the Agreement’s conformity with the NES.
35. With respect to Transport and Distribution employees, Schedule 4 provides that leave accrues on a fortnightly basis based on ordinary time hours each fortnight. Clause 33 of the Jandakot EA 2018 defines ordinary time hours as all hours worked which do not attract overtime and include those which attract shift loadings and penalties. There is no inconsistency with the NES.
36. Notional Shift Hours. Section 55(1) of the FW Act provides that a modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards. Section 56 of the FW Act states that a term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55. It is obvious from these two sections of the FW Act that the NES will apply, as a minimum.
37. Clause 5 of the Jandakot EA 2018 states that this “Agreement is to be read in conjunction with the National Employment Standards …”. It does not exclude the operation of the NES. ALDI contends that the provisions for leave within the Agreement are considerably more generous than those applying under the NES. No employee covered by any of ALDI’s Agreements has contended to the contrary. Further, given the Full Bench determination that hourly rate stores employees and, applying the same logic, the hourly rate warehouse employees, should be regarded as casuals for the purposes of the BOOT, there are no relevant provisions of the NES, which would impact upon ALDI’s hourly rate stores and warehouse employees.
38. Taking the above submissions into account, the Commission should be satisfied that the Jandakot EA 2018 does not contravene any provision of the NES.
The Checklist – BOOT
39. Part time overtime. Hourly rate employees employed under Schedules 2 and 3 are treated as casual employees for the purposes of the BOOT, given the decision of the Full Bench in the Loaded Rates case. Employees engaged under Schedule 1 are engaged as full time employees. Transport and Distribution Employees work 80 hours per fortnight. 18
40. Review of pay rates. Clause 14 provides a mechanism for pay rates to be reviewed and if appropriate, increased. Clause 14 also states that the remuneration paid for each classification has been set to ensure employees are better off overall under the Agreement than under the relevant modern award. Rates could not be lower given the obligation on ALDI to pay the rates as set out in the Agreement.
41. Reconciliation. The decision in SDAEA v Beechworth Bakery 19was an appeal by the SDA following the approval of an enterprise agreement where the respondent employer had provided an undertaking in terms similar to the “make good” clause to address a concern of the Commission that the agreement did not meet the BOOT.
42. In finding that the undertaking could not satisfy any concern that the agreement did not pass the BOOT, the Full Bench stated:
First, and most obviously, paragraph 6 of the undertaking does not create an enforceable right to any payment, which if made, would mean that a relevant employee would be better off overall under the Agreement than under the applicable modern award. Rather, the undertaking operates only to allow an employee who “considers that . . . they are not better off overall under this agreement than the applicable award” to request a comparison, and thereafter if the comparison identifies a shortfall, the shortfall together with an additional 1.5% payment by reference to the shortfall amount would be paid in the next pay period after the review is completed.
Such obligation to “make good” any shortfall arises only if an employee makes a request for a review. If no such request is made, whether through ignorance or design, or perhaps because an affected employee simply lacks the time, information or ability to form a view, then no obligation to conduct a review, much less “make good” any shortfall, arises. Any concern that an employee or prospective employee would not be better off overall if the Agreement applied to the employee than if the relevant modern award applied to that employee cannot be met by such an undertaking.
In considering whether an undertaking should be accepted as satisfying a concern that an agreement may not pass the better off overall test, it is necessary to analyse the undertaking so as to ensure that it is expressed in a way which will allow it to be enforced as a term of the agreement. An undertaking that in its expression is uncertain, ambiguous, aspirational or perhaps conditional, with the result that it will not create an enforceable entitlement as a term of the agreement, will not likely meet the concern that an agreement does not pass the better off overall test.
The second obvious flaw in the undertaking is that since an employee’s consideration that he or she is not better off overall under the agreement compared to the applicable award arises by reference to a four month period, this necessarily means that any review as might be conducted would only occur three times a year in respect of each employee. The inevitable consequence is a delay in payment to an employee. Moreover, the potential length of the delay is unknown as disputes may arise about the quantum of payment due under the undertaking as is apparent from the dispute resolution mechanism established by the undertaking. In these circumstances it is by no means apparent that a 1.5% increase in payment might compensate an employee for that which could be a substantial difference in entitlements over a potentially lengthy and indeterminate period. 20
43. The distinction between the undertaking in SDAEA v Beechworth Bakery and the Jandakot EA 2018 is that the “make good” provision is an existing term of the Agreement. It was a provision inserted at the suggestion of the Commission at an earlier point in time. 21 It is a provision that exists in all ALDI agreements that have been approved by the Commission. Further, there is no requirement that such a clause have specific characteristics. The clause provides a benefit to employees and is one of the many matters that Commission must consider in determining whether employees are better off overall.
44. To disregard the clause in any assessment of the BOOT ignores the practical operation of the clause and the many benefits it provides, matters which the High Court has noted must be considered in the application of the BOOT. In considering the clause the High Court found that “no doubt, the benefit to employees of this updating provision is something that might properly be taken into account in assessing whether the BOOT is satisfied at test time”. 22
45. ALDI concedes that the make good clause is not a complete answer to any deficiencies which may arise in the operation of the BOOT. It does nonetheless confer substantial benefits upon employees.
46. For instance, where the relevant modern award moves as a result of some arbitrated review during the currency of the Agreement, the employees under the Agreement, as distinct from employees under agreements generally, do not have to await the negotiation of a new agreement to obtain the benefits of ensuring their terms and conditions of employment are better than the relevant modern award.
47. Further, an employee who contends that the work they are required to do in their agreement classification is more properly covered by a higher award classification can have that matter determined by the Commission in arbitration, instead of trying to argue for some change at the negotiation of the next agreement.
48. There is no evidence of any employee covered by any of the ALDI agreements utilising the provision, ever having approached ALDI, let alone the Commission or their union, to contend that they are not better off under the relevant agreement than the award which covered them.
49. The absence of any such complaint ought not be dismissed on the basis of assumptions that employees fail to complain “through ignorance or design, or perhaps because an affected employee simply lacks the time, information or ability to form a view”. 23 Given the time that these provisions have been in place, and the very public reliance ALDI has placed upon them, the overwhelming judicially determined inference is that employees do not feel that they would be better off under the relevant modern award.
50. Banked Hours. All overtime penalties and shift loadings are paid when worked. 24 Banked hours are paid at the Bankable Hourly Rate when taken. Employees are able to accrue as many Banked Hours are they wish but can also request that they be paid out whenever they want, including on termination. It is the employee’s choice as to whether they bank hours to use in successive fortnights. The maximum number of negative hours is limited to 20 hours unless an employee requests in writing to exceed this amount.
51. Allowances. Schedule 1 to ALDI’s Form F17 with respect to Store Managers, Assistant Store Managers and Store Management Trainees includes rates for a first aid allowance, laundry allowance and a meal allowance without 24 hours notice as part of the award calculations. Including the additional week of annual leave these employees receive, the employees under the ALDI Agreement receive remuneration in excess of what they would receive under the Retail Award.
52. Clause 20.8 of the Retail Award provides for “employees principally employed on any day to enter cold chambers and/or to stock and refill refrigerated storages such as dairy cases or freezer cabinets” to be paid an allowance. The employees engaged under Schedules 1 and 2 of the Jandakot EA 2018 are not principally employed to do such work and are therefore not entitled to the allowance.
53. Clause 20.11 of the Retail Award provides for an employee who holds a liquor licence to be paid an allowance. The employees engaged under Schedule 1 of the Jandakot EA 2018 are not required to hold a liquor licence. The relevant legislation, the Liquor Control Act 1988 (WA), does not require a liquor licence to be held by individual store managers. 25 Managers whose stores sell alcohol are required to have a Manager’s Approval.26
54. The Commission’s Checklist also makes reference to employees engaged as Section Leaders under Schedule 4 Transport and Distribution Employees. This matter is addressed at paragraphs 21 and 22 of the Statement of Ms Chivers. As set out in Ms Chivers’ statement, the maximum rate of pay for a leading hand under the Road Transport and Distribution Award 2010 is $25.46 per hour including the relevant leading hand allowance as set out in clause 16.2 of the Award. The rate of pay for a section leader under the Agreement is $35.05 per hour.
The Checklist – BOOT – Salaried Store Employees
55. Rates of pay for Store Management Trainees. Schedule 1 of the Jandakot EA 2018 at paragraph B3 sets out clearly that all employees commencing in the position of Store Management Trainee after the commencement of the Agreement will be paid at the Year 2 rate of pay. All existing Store Management Trainees are employed on either the Year 2 or Year 3 rate of pay, being the only two rates of pay for this classification in the Agreement.
56. TOIL. The provision for time off in lieu of overtime does not limit an employee’s entitlement to notice if ALDI dismisses the employee. In the case of a dismissal, ALDI either asks the employee to work out their notice, in which case, the employee is required to take time off in lieu if available. Alternatively, the employee may be paid in lieu of notice in accordance with clause 27 of the Agreement. This is not inconsistent with nor does it contravene the NES with respect to notice of termination.
57. Where an employee accrues time in lieu, they are entitled to take such time at a later day. With respect to “safeguards” in the Award, the Agreement is not required to mirror the award or provide identical terms.
58. Overtime. Schedule 1 to the Form F17 filed by ALDI with the application for approval of the Jandakot EA 2018 sets out a comparison of the award provisions applicable to these classifications with the rates of pay in the Agreement. In all cases, with the addition of the extra week of annual leave, the employee is better off than the award.
59. With respect to the Business Review Payment, as stated in paragraph B1.2 of Schedule 1, the “method used by ALDI to calculate the Business Review Payment may vary at ALDI’s discretion”, however for the purposes of the Better Off Overall Test, each classification Salaried Store Employee has a minimum Business Review Payment. This matter is addressed at paragraphs 26 to 27 of Ms Chivers’ statement.
The Checklist – BOOT – Hourly Rate Store Employees
60. Rates of Pay for Store Assistants working any 5 out of 7 days. The comparison used in the Commission’s checklist for hourly rate store employees is the award rate for part time employees. As determined by the Full Bench in the Loaded Rates case, the appropriate point of comparison is the rate for a casual employee. ALDI relies on the statement of Ms Chivers at paragraph 9.
61. Overtime. The Commission’s checklist has proceeded on the basis that all Hourly Rate employees are to be considered, for the purposes of the BOOT, as part time employees under the Retail Award. From the determination in the Loaded Rates Case, they are not. ALDI relies on the statement of Ms Chivers at paragraph 9.
62. Transport and Distribution Employees. This issue was addressed at paragraph 54 above.
Conclusion re the BOOT
63. The Commission can be satisfied that all employees, each award covered employee and each prospective award covered employee, are better off overall than if the relevant modern award applied.
Other matters
64. In the documentation provided by the Commission, further information is sought with respect to the information provided to employees explaining the Agreement.
65. Section 180(5) of the FW Act provides that “the employer must take all reasonable steps to ensure that (a) the terms of an agreement and the effect of those terms, are explained to the relevant employees; and (b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees”.
66. The steps taken by ALDI are set out in the statement of Ms McNaughton.
67. The Commission has also raised an issue with respect to clause 31 Flexibility Provisions of the Agreement. ALDI proffers an undertaking which is annexed to these submissions.
Conclusion
68. The Commission can be satisfied that the Jandakot EA 2018 meets the statutory tests set out in the FW Act and accordingly the Agreement should be approved.” 27
[11] On 28 June 2019 the SDA submitted that:
“…Background
2. By its application dated 20 December 2018 the Applicant has applied for approval of an enterprise agreement titled “Enterprise Agreement ALDI Jandakot 2018”. The agreement for which approval is sought is attached to the application.
3. The application is supported by a statutory declaration made by Caroline MacPhail declared on 20 December 2018 which purports to satisfy the Commission of the jurisdictional prerequisites required for approval.
4. The Shop, Distributive and Allied Employees Association (the SDA) has a number of concerns concerning the application including:
(a) there is insufficient information for the Commission to be satisfied that the agreement passes the BOOT;
(b) that an incorrect comparator is used for the purposes of the BOOT;
(c) that there is insufficient information for the Commission to be satisfied that ALDI has taken all reasonable steps to explain the terms and the effect of the terms of the proposed Agreement to employees who will be covered by it.
The Commission’s task
5. In order to approve the Agreement the Commission must be satisfied of the jurisdictional matters including, in this case, whether or not the Agreement passes the BOOT and whether the Agreement has been genuinely agreed, included in which assessment is an assessment of the explanation given to the employees who are proposed to be covered by the Agreement.
6. The obligation to explain the effect of the terms of an agreement is an obligation of substance and not of form (One Key Workforce v CFMEU (2018) 277 IR 23 at [112]). In determining whether the Commission is satisfied that an appropriate explanation was given regard must be had to the explanation given.
BOOT
7. The obligation of the Commission in respect of the BOOT is to undertake an “evaluative exercise”. 28 See also the discussion of the role of the Commission in determining the BOOT in Loaded Rates Agreements [2018] FWCFB 3610 at [100], [112] summarised in [115].
8. In order to perform that exercise the Commission is obliged to undertake an evaluative comparative analysis.
9. As submitted to a Full Bench of the Commission in the matter of Applications by ALDI Foods Pty Ltd for approval of the: ALDI Stapleton Agreement – AG2017/1943 and ALDI Prestons Agreement – AG2017/1925 the SDA, (Copy attached on which the SDA relies generally) by way of formal submission, contest, as found by the Full Bench in the Loaded Rates case that the appropriate comparator as to the rights and entitlements of part-time employees under the ALDI Agreement is with the rights and entitlements of a casual employee under the General Retail Industry Award (GRIA). As submitted formally in that matter but pressed here, the SDA maintains its submission that the correct comparison is with part-time employees under the GRIA. This is relevant both in respect of the BOOT as well as the explanation given to the employees to be covered, as to which see below.
10. Regardless of the position of part-time employees compared with casual employees under the GRIA the SDA maintains for the reasons set out in attachments A and B to the Form F18, Statutory Declaration of Julia Fox declared 14 January 2019 that, in any event, the proposed agreement fails the BOOT.
11. The SDA refers to and adopts the analysis done by the Commission staff concerning the BOOT provided in conjunction the directions issued on 27 May 2019.
ALDI Submissions
The checklist - National Employment Standards (NES)
12. As to [15] “casual employees” in the absence of the application of the principles in the Loaded Rates case the SDA refers to and relies on its F18 Question 5.5 but also notes that that decision creates ambiguity as to how the BOOT ought be applied in that it seems to implicitly require parties to disregard how a part-time employee is contracted and engaged. The decision appears to require the application of the BOOT dependent upon how a part-time employee works rather than the definition that as such any regular rostering in respect of the work to be performed by part-time employees has to be considered. In the SDA’s submission there is insufficient material before the Commission to undertake this exercise.
13. Whilst a degree of speculation is permitted in respect to determining future work patterns the degree of speculation and the certainty or otherwise of conclusion having regard to work patterns needs to be a matter on which the Commission can be satisfied.
14. The issues in relation to public holidays, redundancy, and annual leave/personal leave accrual are all complicated by the difficulties about the characterisation of part-time employees or the application of the comparator of casual employee under the GRIA.
The checklist – BOOT
15. Concerning limited roster part-time employees, to the extent that they may meet the GRIA part-time definition provision ought be made for overtime consistent with the GRIA.
16. As to paragraphs 40 and 41 of the Applicant’s submissions the SDA notes that the capacity to review and reconcile and in certain circumstances request a reconciliation are impermissible impositions on employees.
17. As to the question of bankable hours the SDA relies on F18 Question 5.9 and the submissions in the Applications by ALDI Foods Pty Ltd for approval of the: ALDI Stapleton Agreement – AG2017/1943 and ALDI Prestons Agreement – AG2017/1925.
The checklist – BOOT – salaried store employees
18. The Commission ought be cautious about being satisfied on the basis of mere indicative future rosters in the absence of specific information about the range of hours actually worked by store managers.
Adequate explanation
19. Section 180(5) obliges ALDI to take all reasonable steps to ensure that the terms of the agreement and the effect of those terms are explained to the relevant employees delivered in an appropriate manner having regard to the employees’ particular circumstances and needs.
20. The explanation of the terms of the agreement and the effect of those terms are attached to the Form F17 being the statutory declaration of Caroline McPhail as attachments in respect of warehouse transport and store employees respectively. The explanation in respect of store employees concerning the comparator of part-time employees with casual employees under the GRIA is contained only on the last page where reference is made to what Hourly Rate Stores employees would be paid in the event that the 2015 agreement was quashed and the 2018 agreement not approved. The explanation does not contain any other reference to casual employees under the GRIA being the appropriate comparator. As such the Commission cannot be satisfied that ALDI have taken all reasonable steps to explain the terms and the impact of the terms on the proposed agreement to the potentially impacted class of employee, namely ALDI part-time employees.
Lack of genuine agreement
21. In circumstances where there has been inappropriate or inadequate explanation of the terms or the meaning or the effect of the terms of the agreement the Commission cannot be satisfied that the employees who approved the agreement have done so genuinely. As formally submitted to the Full Bench of the Commission in the ALDI Stapleton and ALDI Prestons approval applications and pressed in the present proceeding:
[29] Further, the conclusion reached by the Commission necessarily raises a new question as to whether the voting cohort genuinely agreed to the ALDI agreements if it was not made clear to ALDI’s part-time employees at any relevant time that they were in fact to be treated as casual employees under the GRIA and that their rights and entitlements under the ALDI agreements were consequently required to be benchmarked for BOOT purposes against the rights and entitlements of a casual employee under the GRIA.”
22. The absence of such an explanation must necessarily create doubts as to whether or not the relevant employees were able to inform themselves and consequently genuinely agree to the agreement, particularly where it does not appear to be disputed that ALDI part-time employees under the current agreement were treated by ALDI as appropriately to be benchmarked against the GRIA part-time employment provisions and where the Commission itself presumably assessed BOOT compliance of the current agreement on that basis. An expectation of the same BOOT analysis of the agreement, not dispelled or corrected sufficiently by ALDI, may be reasonably inferred on the part of the same cohort of part-time employees who voted to endorse the new agreement. The Commission cannot be satisfied as to genuine agreement in such circumstances.
23. See for example the example given in [32] of the submissions in the Applications by ALDI Foods Pty Ltd for approval of the: ALDI Stapleton Agreement – AG2017/1943 and ALDI Prestons Agreement – AG2017/1925 relating to “make good provision”.
Submission
24. The Commission is unable to be satisfied of the jurisdictional pre-requisites.” 29
[12] In the Stapylton and Prestons matters 30 the SDA submitted on 6 September 2018 that:
“Introduction
1. These submissions are made in response to the submissions filed by ALDI on 9 August 2018. The SDA maintains the submissions that it made in the proceedings before the Full Bench.
The Commission’s Task
2. At paragraphs 4 to 7 of its submissions ALDI suggests that the Commission should give significant weight to the fact that employees voted in favour of the ALDI Agreements.
3. To do so would be an abrogation of the Commission’s function.
4. An agreement cannot even be submitted for approval until it has been made by a majority of employees voting in favour of it.
5. The fact that they do so is not a significant factor in relation to the Commission’s function, it is a pre-condition to the Commission exercising its function.
6. The role of the Commission under s.186(2) is to independently assess whether or not the agreement passes the “better off overall test” (the BOOT).
7. This obviously involves assessing on an industrial basis the weight of various benefits as against potential detriments under any agreement. It may be that in certain circumstances the views of employees can be taken to account, particularly if there is direct evidence of such views which is not anecdotal or impressionistic but instead well founded. However, a mere vote in favour of an agreement is not relevant to that task.
Comparative Analysis – Part-time employment under the ALDI Agreements ought not to be equated to casual engagement under the General Retail Industry Award (GRIA) for BOOT purposes
8. The Commission has determined (as paras [135] – [137] of its preliminary statement) that some part-time employment under the ALDI Agreements is not to be considered as part-time employment within the meaning of the GRIA and on that basis the default comparator for those employees for BOOT purposes is with the rights and entitlements of a casual employee under GRIA.
9. Even if only by way of formal submission, the SDA, with respect, does not accept that the appropriate point of comparison as to the rights and entitlements of part-time employees under the ALDI Agreements is with the rights and entitlements of a casual employee under the GRIA, either at the test time or any time. It formally maintains its submission (and the BOOT analysis flowing from it) that the correct comparison is with part-time employees under GRIA and on that basis, it submits that the ALDI Agreements in each case clearly fail the BOOT and cannot be approved.
10. The basis upon which the Commission so finds is based on two conclusions.
Reasonable Predictable Hours of Work
11. First, it is contended that some part-time employees under the ALDI Agreements cannot be considered part-time employees within the meaning of the GRIA because they do not have reasonably predictable hours of work.
12. It may be readily conceded that this is a necessary pre-requisite (together with a requirement that the employees work less than 38 hours per week) to being accorded the status of a part-time employee under the GRIA.
13. That conclusion is identified as having been reached upon a consideration of the relevant provisions of the ALDI Agreements and the evidence, such as it was, of Paul Joyner who was not a witness called by the SDA (or ALDI) and whose particular circumstances as a distribution centre employee are arguably properly distinguishable from the circumstances of ALDI’s part-time retail cohort of employees. It is submitted to be unsafe to conclude from the evidence of Mr Joyner that no ALDI part-time employees work reasonably predictable hours of employment.
14. The conclusion, however, is respectfully submitted to have additionally overlooked the following considerations.
15. First, clause 10.1 of the GRIA mandates that all employees must be employed in one of the alternative (and mutually exclusive) categories of full-time, parttime or casual employment. Employees at any one time can only be engaged in one particular category. Further, clause 10.2 of the GRIA imposes a consequential obligation on the employer at the time of engagement to “inform each employee of the terms of their engagement and, in particular, whether they are to be full-time, part-time or casual”.
16. Here, the evidence identifies that ALDI employees working less than 38 hours a week are only informed by ALDI that they are part-time employees, not casuals. Indeed, the GRIA for its part defines a casual employee as an employee “engaged as such”. ALDI employees working less than full-time hours who are advised on commencement that they are engaged as “part-time employees” are not, and cannot be, casual employees as defined under the GRIA and yet the Commission has determined that their rights and entitlements under the ALDI Agreements must fall to be weighed for BOOT purposes as if they were. This cannot be an intended consequence of either the Act or the GRIA.
17. As to the finding that some ALDI part-time employees do not have reasonably predictable hours of employment, the evidence, such as it is, is that they do, or at least some do. That evidence consists of the indicative rosters provided by ALDI itself for each region. These rosters show an indicative (predictable) pattern of work, admittedly over only one fortnightly period but indicative nonetheless. These rosters do not provide any insight into the operation of the bankable hours scheme, that is the system that prima facie enables ALDI to roster employees for more or less than their contracted hours, and effectively ‘bank’ any surplus or deficit hours.
18. Contrary to the preliminary finding by the Commission, it is submitted that the indicative rosters provide evidence that ALDI’s part-time employees are regularly rostered to work and are indeed paid to work for their contracted hours.
19. Even if it be the fact that some ALDI part-time employees do not have reasonably predictable hours of work, the SDA would submit the majority of ALDI’s part-time retail employees do have such “reasonably predictable hours” of work. The present finding by the Commission creates the situation in which it may be incumbent for BOOT purposes to now separate ALDI part-time employees into those who do not have reasonably predictable hours of engagement (to whom a GRIA casual BOOT analysis might apply) with those ALDI part-time employees who do have reasonably predictable hours of engagement (to whom a GRIA part-time employee BOOT analysis will apply). The Commission cannot assume on the evidence before it (certainly not simply on the evidence of Mr Joyner, a worker in the ALDI Distribution Centre) that all ALDI part-time employees do not have reasonably predictable hours of work. This is a question of fact to be measured by reference to the hours regularly worked by this cohort.
20. The SDA is not advocating for such a division to be drawn in respect of ALDI’s part-time employees. But ALDI must demonstrate that all relevant employees meet the BOOT and if some ALDI part-time employees must be comparatively assessed for BOOT purposes as if they were GRIA casual employees (even though they are not engaged as such), then that cohort of ALDI part-time employees who are indeed part-time employees for GRIA purposes (because they were engaged as part-time employees and informed by ALDI on commencement of their status as part-time employees as mandated by clause 10 of the GRIA and because of their reasonably predictable hours of employment) must be separately assessed for the purposes of the BOOT on a comparative analysis with part-time employment under GRIA.
Non-compliance by ALDI with clause 12.2 of the GRIA
21. The additional matter relied upon by the Commission to support its conclusion that some ALDI part-time employees are not GRIA part-time employees is that ALDI has not complied with clause 12.2 of the GRIA in terms of a failure to agree, in writing, on commencement, certain specified matters. This is submitted, with respect, to be a falsely premised conclusion.
22. Non-compliance with clause 12.2 of the GRIA cannot be relied upon as an indicium or evidence, in and of itself, as to whether or not an employee is a part-time employee for the purposes of the GRIA. It is submitted that that status is already determined by other provisions of the GRIA not considered by the Commission, particularly clauses 10.1-10.2, before any consideration of clause 12.2 of the GRIA becomes relevant.
23. Clause 12.2 makes this clear because it makes reference within itself to a “part-time employee”. In other words, clause 12.2 of the GRIA proceeds upon an assumption that the employee’s status as a part-time employee has already been determined. If an employer has not complied with clause 12.2 of the GRIA in relation to a part-time employee, it is respectfully submitted that that failure goes to award breach, not to the question of whether or not the relevant employee is in fact a part-time employee. Clause 12.2 does not identify pre-requisites to being a part-time employee, it merely identifies subsequent obligations that arise for an employer when it employs a person as a part-time employee and informs them of their status on commencement (as ALDI does).
24. In any event, there is little or no evidence in support of the finding that ALDI does not in fact agree with all of its part-time employees the matters specified in clause 12.2.
Characterisation of status of ALDI’s part-time employees as casuals is a fundamental change which goes to genuine agreement and employer’s obligation to explain the effect of voting employees.
25. A decision by the Commission, in effect, that the proper comparator for parttime employees under the ALDI Agreements is that of a casual employee under GRIA effects, it is submitted, a fundamental change to the characterisation of a class of employees and the BOOT test. A conclusion that the appropriate comparator for part-time employees engaged as such should be with GRIA casuals is fundamentally at odds with the basis upon which a significant part of the voting cohort was contracted and paid to work and is fundamentally at odds with what it is submitted was the understanding of those employees at the time that they were being asked to vote on the ALDI Agreements.
26. Workers who are told on commencement that they are engaged as part-time employees and who do in fact work reasonably predictable hours of work based on the evidence of “indicative” (ie reasonably predictable) rosters were entitled to assume, and it is submitted did assume, that the benefits being offered to them under the ALDI Agreements were properly to be benchmarked against part-time employment under the GRIA.
27. They were not told by ALDI at any time that, although contracted on commencement by ALDI as part-time employees with the usual incidences of part-time employment (leave entitlements etc), they were in fact casual employees within the meaning of the GRIA even though they were not “engaged as such” and indeed were expressly engaged on an alternative mutually exclusive basis.
28. The conclusion reached by the Commission, if permitted to stand, would allow ALDI (and potentially other retail industry employers) to avoid or disregard the fundamental protections of the GRIA’s rostering provisions (clauses 27 and 28). Effectively, in the present case, employees who are engaged as part-time employees forgo rostering protections without the protection of the BOOT to properly compensate or offset them for their loss.
Lack of Genuine Agreement
29. Further, the conclusion reached by the Commission necessarily raises a new question as to whether the voting cohort genuinely agreed to the ALDI Agreements if it was not made clear to ALDI’s part-time employees at any relevant time that they were in fact to be treated as casual employees under the GRIA and that their rights and entitlements under the ALDI Agreements was consequently required to benchmarked for BOOT purposes against the rights and entitlements of a casual employee under the GRIA.
30. If the enterprise agreement, the accompanying documentation (including supporting statutory declarations) and an employee’s offer and acceptance of employment identifies them in each case as a part-time employee, then the employee should be reasonably entitled to rely on those representations when considering and voting on the terms and conditions of the relevant provisions of an enterprise agreement. Again, it should be noted that the GRIA expressly contemplates that an employee must be engaged by an employer in one of three mutually exclusive categories of employment: full-time, part-time or casual.
31. Employees readily understand and appreciate the distinction between part-time employment and casual employment. It is submitted that few would have appreciated that an offer of part-time employment made to them, and accepted by them, under the ALDI Agreements was not in terms to be measured for advantage or disadvantage against the part-time employment provisions of the GRIA, but rather to be measured against the provisions of the GRIA in relation to casual engagement. Such a position is counter-intuitive, particularly where the GRIA mandates that employees must be advised on commencement as to which of three mutually exclusive categories of employment they fall into (presumably so that they have certainty about the safety net rights and entitlements that apply to their employment.
Failure by ALDI to take all reasonable steps to ensure that the terms of the ALDI Agreements, and the effect of those terms, are explained
32. It would naturally follow that for an employer to ensure, as it must, that all reasonable steps have been taken to ensure that the terms of an agreement, and the effect of those terms, are explained to the relevant employees, ALDI was obligated to make it clear that, although it was purporting to engage its non full-time employees as “part-time” employees, it was nonetheless actually engaging them as casual employees within the meaning of the GRIA. To fail to do so was to deny the ALDI’s part-time employees the opportunity to properly inform themselves as to the benefits and disadvantages arising from any approval of an enterprise agreement.
33. The ‘make good provision” highlighted by ALDI as a particular benefit of the ALDI Agreements is a particular example of this prejudice. ALDI part-time employees, in assessing the value to them of such a clause, necessarily needed to appreciate that any future “make good” benchmarking exercise in relation to their entitlements would fall to be weighed, not against the rights of a GRIA part-time employee, but rather against the benefits and entitlements of a GRIA casual employee in order to identify any prejudice. There is no evidence that this important clarification was explained to any ALDI part-time employee at the relevant time.
Conclusion: No genuine agreement and a failure by ALDI to take reasonable steps to explain the effect of the ALDI Agreements
34. If the Commission is correct in its analysis that all ALDI part-time employees are not GRIA part-time employees, it is submitted as a necessary corollary that the Commission could not then be satisfied that the ALDI Agreement were genuinely agreed to by a voting cohort who was not informed as it should have been of their correct status for the purposes of the GRIA. Nor could the Commission safely conclude that ALDI took all reasonable steps to explain the effect of the terms of the ALDI Agreements to its part-time employees. The ALDI Agreements ought not be approved on either ground.
Undertakings
35. ALDI has in any event now offered very substantial undertakings in relation to the operation of each of the ALDI Agreements.
36. Section 190(3) provides:
the FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
37. The SDA submits that the undertakings are so wide ranging that they do in fact create substantial changes to the ALDI Agreements.
38. In CEPU v Main People (2015) FWCFB 4467 a Full Bench of the Commission allowed an appeal against approval of an agreement on the basis that undertakings offered resulted in a significant change to the agreement contrary to s.190(3(b). In doing so they observed, at [34]:
It may be accepted that an undertaking which clarifies an ambiguous provision of an agreement for which approval is sought in accordance with the intention of the parties will not be likely to cause a significant change in that agreement. However, this was not a case of ambiguity.
39. In that case it was the coverage of the agreement which was amended by the undertaking. It is accepted that in this case coverage is not the issue (although it should not be overlooked that one undertaking involves the abandonment of work classifications contemplated by the ALDI Agreements as voted upon). However, the question for the Commission is whether the changes in the agreements are substantial.
40. It does not matter if the changes are improvements: one would expect that undertakings would almost invariably involve improvements since they are directed at addressing concerns about whether or not an agreement passes the BOOT.
41. Put simply, substantial is the corollary of insubstantial. In other words, the question to be asked is the same as “are the changes not insubstantial”. See UFU v CFA (2015) 228 FR 497 where the two phrases are used interchangeably throughout in an industrial and constitutional context.
42. The first problem, therefore, from ALDI’s point of view is that the number of changes canvassed by the undertakings is very large. This tends to suggest that the undertakings effect substantial changes to the ALDI Agreements.
43. Next, as noted earlier, undertaking 3 provides that certain classifications will not be used. This is clearly a substantial change to the ALDI Agreement. Some members of the voting cohort may have voted for the ALDI Agreements on the basis that those classifications were in the ALDI Agreements.
44. Undertaking 4, which provides for payments on notional shift lengths for all leave days, at a set rate, is similarly a substantial change.
45. Finally, undertaking 5 which is to the effect that a maximum of 20 minus bankable hours can be accrued also effects a substantial change although the SDA would submit (see below) that undertaking 5 does not in any event cure the prejudices of the Bankable Hours mechanism provided for in the ALDI Agreements.
46. It should also be noted that it is necessary that undertakings be in a form which is readily enforceable (see Main People at 38).
47. The undertakings proffered are difficult to construe in the context of the ALDI Agreements which themselves are unnecessarily complex and convoluted.
Bankable Hours
48. The undertaking to limit negative bankable hours to a maximum of twenty hours unless an employee agrees otherwise in writing does not sufficiently ameliorate the bankable hours problem identified by the Union parties.
49. Under the Bankable Hours Scheme in the ALDI Agreements, employees are given a fixed number of hours and paid for those hours whether they work them or not. However, it is not at the option of the employee that he or she does not work the agreed contracted hours. ALDI reserves for itself the right to say to an employee that he or she is not required for normal hours.
50. While the alleged advantage of this for the employee is that they receive money from ALDI with some regularity, the real consequence of the arrangement is that the employee is effectively being forced to take a loan from ALDI. That loan may be repaid by working additional unpaid hours in the future. Alternatively, if the loan is outstanding at the conclusion of employment the employee will be liable for a money debt which ALDI has the right to enforce and recover.
51. This is a real detriment for employees and a practice which ought not be encouraged or permitted by the Commission. The undertaking as now proffered limits the accrual of a debt to 20 hours (the undertaking is silent as to the circumstances of those who have presently accrued bankable hours in excess of this limit), but even with that limitation the sums involved can be substantial for the relevant part time employees and it is a debt that is forced upon the employee by the unilateral determination of the employer.
52. Moreover, ALDI has not proposed any undertaking that any accrued debt be non recourse upon termination. ALDI can recover those amounts by legal action if they are unpaid. That also has the potential to increase indebtedness vastly.
53. In circumstance where the agreements either fail the BOOT or are so close to doing so that numerous significant undertakings must be given, it is submitted that this issue on its own is sufficient to justify rejection of the application for approval.
ALDI Stapylton Agreement
54. ALDI makes submissions about the ALDI Stapylton Agreement commencing at paragraph 22.
55. In paragraph 26 it is asserted that store meetings are not work but ought be regarded as training. This is on the basis of the new evidence of Mr Ryan.
56. There is no provision for payments for “training” in the ALDI Agreements.
57. Moreover, training is work. If an employee is required to attend work even for training it is still work payable under the agreement.
58. Accordingly ,ALDI’s submission in this regard is wrong.
59. Similarly, the submission made in relation to payment of a penalty after a break of less than 10 hours is incorrect. ALDI relies upon evidence in respect of what is in effect a constructional issue. It is not to the point that Mr Noble in his evidence considers that a payment of penalty on a penalty (if that is what is involved) is not appropriate. The question rather is what does the GRIA provide?
60. Clause 31.2(b) of the Award is clear. It states that in the circumstances applicable the employee should be “paid at double the rate they would be entitled to until relieved for 12 consecutive hours”.
61. Accordingly, the relevant payment is not at ordinary time rates, but the rate the employee “would be entitled to”.
62. Finally, the Stapylton Store manager 45 hours is paid below the award. This detriment does not appear to have been addressed by any proposed undertakings.
ALDI Prestons Agreement
63. The same issues apply in respect of the ALDI Prestons Agreement (other than Store Manager 45 hours).
Other matters
64. It is noted that ALDI no longer presses its “make good” clause as a cure all for BOOT non-compliance.
65. It is also noted that the Commission’s modelling has determined that store assistants working any five out of seven days who only work weekends are paid below the GRIA . This does not appear to be addressed by the undertakings and ALDI’s assertion that this is not a possible scenario should be rejected.
Conclusion
66. The SDA formally submits that the Commission’s preliminary conclusion that ALDI part-time employees are not part-time employees within the meaning of the GRIA is not correct and ought be re-considered. On a comparative analysis for BOOT purposes of the rights and entitlements of ALDI’s part-time employees with the rights and entitlements of part-time employment under the GRIA, it is submitted that the ALDI Agreements would fail the BOOT and the ALDI Agreements ought not be approved on that basis.
67. Even on a BOOT comparison between ALDI’s part-time employees and casual employment under the GRIA, it is submitted that the undertakings now proffered by ALDI do not in every case have the consequence that every relevant employee is better off than he or she would be under the provisions of the GRIA.
68. Further, the Commission’s determination that ALDI’s part-time employees are not part-time employees for the purposes of the GRIA, if correct, means that ALDI failed to take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, were explained to the relevant employees in circumstances where it was not explained to the part-time employees forming part of the voting cohort that they were in fact not parttime employees within the meaning of the GRIA but really casual employees whose rights and entitlements under the ALDI Agreements would fall to be measured for BOOT purposes against that casual classification. The same omission by ALDI invites a conclusion that there was no genuine (informed) agreement by the affected cohort of ALDI part-time employees. The ALDI Agreements ought not be approved on either basis.
69. Further, the breadth of the undertakings now proffered by ALDI mean that the ALDI Agreements are now fundamentally different instruments from the instruments as originally put to the ALDI employees. It cannot be said that the voting cohort genuinely agreed to the ALDI Agreements in the form now proposed for approval by the ALDI. The Commission should find that the ALDI Agreements cannot be cured by undertakings in this particular instance. The agreements must be re-negotiated and a fresh vote transacted on terms that properly reflect ALDI’s position.
70. The SDA has read, and otherwise also adopts the submissions of the National Union of Workers dated 5 September 2018, to the extent that the submissions there made have equal application to employees covered by the GRIA.” 31
[13] On 5 July 2019 in the Application before me ALDI submitted that:
“1. These submissions are made in reply to the submissions of the Shop, Distributive and Allied Employees’ Association (the SDA) dated 28 June 2019.
2. As submitted to Commissioner Lee in earlier proceedings in this matter, the existing enterprise agreement for the Jandakot Region is currently the subject of an appeal by the SDA. It should be noted that the only ground of appeal pursued by the SDA relates to the Notice of Employee Representational Rights.
3. In their submissions, the SDA raise the following grounds of opposition:
(a) There is insufficient information for the Fair Work Commission (the Commission) to be satisfied that the ALDI Jandakot Agreement 2018 (the Jandakot Agreement 2018) passes the Better Off Overall Test (the BOOT);
(b) There is an incorrect comparator used for the purposes of the BOOT;
(c) There is insufficient information for the Commission to be satisfied that ALDI Foods Pty Ltd as General Partner of ALDI Stores (A Limited Partnership) (ALDI) has taken all reasonable steps to explain the terms and effect of the proposed agreement to employees who will be covered by it.
4. For the purposes of these reply submissions, paragraphs 3(a) and 3(b) above are dealt with as the “BOOT issues”.
BOOT issues
5. The key points to be made in reply to the SDA submissions with respect to the BOOT are:
(a) “Section 193(7) permits the Commission to assume that if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, then the employee would be better off overall in the absence of evidence to the contrary. However the selection of class for the purpose of s 193(7) will only be of utility if the agreement affects the members of the class in the same way such that there is likely to be a common BOOT outcome. If the Commission is not satisfied on the evidence that an existing or prospective award covered employee is not better off overall, the Commission cannot approve the agreement, at least not without undertakings or in the confined circumstances set out in s 189”. 32 The SDA have not contended that the Agreement affects the members of the class in a different way. Further, the SDA have not adduced any evidence to support any submission that an employee or a prospective employee, is not better off overall;
(b) As previously submitted and as the Commission is well aware, the BOOT is not a line by line test. It involves the making of an “overall assessment as to whether an employee would be better off under the agreement, which necessitates identification of the terms in the agreement which are more and less beneficial to the employee than under the relevant award”; 33
(c) There is no requirement for the agreement to replicate the terms of the relevant modern award. One of the objects of Part 2 – 4 of the FW Act is “to provide a simple, flexible and fair framework that enables collective bargaining, in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity results”. 34 Agreements are able to provide working arrangements tailored to the enterprise while delivering productivity benefits to the employer and improved terms and conditions of employment to employees.
6. The SDA maintain their objection to the decision of the Full Bench in the Loaded Rates Agreements 35decision (the Loaded Rates case) and rely on their submissions made in that case.
7. As submitted in reply to the Commission in the Loaded Rates case, in answering the question posed by section 193 of the FW Act, the Full Bench applied the provisions of the General Retail Industry Award 2010 (the Retail Award) to the relevant provisions of the two agreements the subject of the Loaded Rates case and determined that the hourly rate store employees did not meet the award definitions of either full time or part time employees. Therefore, given the provision of section 12.6 of the Retail Award, the Commission determined the most appropriate point of comparison was a casual employee. 36 This finding was open to the Commission.
8. Further, should the SDA submission be correct that large numbers of ALDI employees have predictable hours, then the predictability of hours must be seen as a benefit for employees in considering the BOOT.
9. The SDA, while taking issue with the evidence of Mr Joyner, a warehouse employee, who gave evidence in the Loaded Rates Case for the National Union of Workers (the NUW), have chosen not to lead any evidence in these proceedings, on any issue which they contest.
The Commission’s checklist – National Employment Standards (NES)
10. The Full Bench in the Loaded Rates case at paragraphs 136 – 138, after finding that the appropriate point of comparison for hourly rate store employees (and consequently warehouse employees) was a casual employee under the Retail Award (the Storage Services and Wholesale Award 2010 for warehouse employees) stated:
Such a comparison would need to take into account, from a direct remuneration perspective, the rates of pay, casual loading, and weekend and public holiday penalties payable under theRetail Awardand the loaded rates of pay, Sunday work allowances, public holiday penalties and leave entitlements payable under the ALDI Agreements. 37
11. The Commission then annexed a schedule setting out a preliminary BOOT analysis for comment.
12. There is no ambiguity about how the comparison is to be undertaken, given these findings of the Full Bench. Similarly, issues of public holidays, redundancy and leave entitlements and accruals are not complicated by difficulties with the characterisation of the employees. These entitlements can only be seen as a benefit under the Jandakot EA 2018.
13. The SDA’s argument that there is not sufficient material before the Commission to undertake the BOOT exercise is misplaced.
14. ALDI has provided comparisons of rates for hourly rate store employees and relies on the statement of Ms Chivers. Ms Chivers sets out the hours these employees may be required to work and the relevant rate of pay they would receive under the Agreement compared with the relevant rate under the Retail Award. Ms Chivers also sets out similar matters for warehouse employees in her statement.
The Commission’s Checklist – BOOT
15. Limited roster arrangements are set out in clause 13 Hours of Work of the Jandakot EA 2018. The relevant section states:
Part-time employees may be engaged on a Limited Roster basis. Limited Roster Employees will be required to nominate the days on which they are available to be rostered at any time. The Employee may be requested by their Direct Leader to work additional shifts as Ordinary Hours on other days not nominated by the Employee, but may refuse this request. Employees engaged on a Limited Roster will receive leave and public holiday entitlements only on the agreed days on which they are usually available to be rostered.
16. The only difference between fully flexible store employees and limited roster store employees is the limitation on the days on which a limited roster store employee may work as set out above.
[94] Turning then to the issue of the explanation of the incorporated terms of the Coal Award. BGC readily conceded that it did not initiate or publish any explanation about the Agreement as it would apply to employees performing work in black coal mining. 96 It is uncontroversial that no relevant employee was working in black coal mining at the time of the explanations and at the time that employees voted to approve the Agreement. There is also no evidence that the relevant employees had any particular or relevant experience in black coal mining. The distinction BGC sought to make between One Key Workforce (No 1) and the circumstances applicable here, by pointing to the differing “effect” vis-à-vis the reference or existing industrial instruments of the impugned agreement in One Key Workforce (No 1) does not assist it. It was required to take all reasonable steps to explain the effect of the incorporated provisions of the Coal Award, but it took no steps to do so.
[36] Most recently another Full Bench again endorsed the approach in One Key. 130
[37] In the present matter:
a) the F17 Statutory Declaration of Caroline MacPhail (Chivers), filed by the Applicant indicated that the following steps were taken to explain the 2018 Agreement:
i. a full copy of the 2018 Agreement was posted on noticeboards,
ii. a copy of the 2018 Agreement and relevant schedules and an explanation of the impact of the proposed agreement was provided to employees by their leader. At those meetings employees could ask questions.
iii. a copy of the 2018 Agreement and relevant schedules were mailed to employees,
iv. the December 2018 version of the 2018 Agreement provided to employees was marked up showing the changes from the previous draft provided in October 2018, and
v. impact statements were provided.
b) the uncontested evidence of Ms McNaughton establishes that:
i. the 2018 Agreement was substantially based on the predecessor 2015 enterprise agreement (2015 Agreement),
ii. changes as between the 2018 Agreement and the 2015 Agreement were marked up to identify the changes to employees,
iii. the marked up document was provided to employees,
iv. Area Managers and Logistic Managers met with employees,
v. Employees had an opportunity to ask questions,
vi. Absent employees had documents posted to them,
vii. The SDA and the TWU were notified of bargaining,
viii. Both the SDA and TWU attended ALDI sites and conducted meetings with employees,
ix. After bargaining a new draft of the Agreement (marked up again) was provided to employees),
x. Impact Statements were prepared and posted on noticeboards,
xi. All employees received a copy of the Agreement, schedules relevant to their employment and the Impact Statement for their role.
[38] I have reviewed the Impact Statements (A for store employees, B for warehouse employees, and C for transport employees), referred to by the Applicant and provided to employees. I observe that the Impact Statements:
i. Are around 4 pages in length,
ii. Are in plain English and easily readable,
iii. Cover subjects such as:
A. Process issues including an invitation to contact “your Area Manager” if employees have any questions,
B. Explains:
I. that the 2018 Agreement has been negotiated,
II. the SDA challenge to the 2015 Agreement,
III. that if the SDA challenge is successful “terms and conditions will be set by the [relevant Modern Award]”,
IV. what will happen if the 2018 Agreement is approved (i.e. when it will operate and the relationship between it and the 2015 Agreement until it expires or is quashed),
V. the similarity between the 2018 Agreement and the 2015 Agreement,
VI. who is covered by the 2018 Agreement,
VII. how the NES will have precedence over the 2018 Agreement,
VIII. the operation of Bankable Hours (an existing arrangement) and the maximum of minus 20 banked hours,
IX. rostering and hours of work,
X. loadings for casual employees,
XI. Modern Award comparisons and the relevant review mechanism,
XII. Business expenses,
XIII. Superannuation,
XIV. Personal presentation (including compensation for laundry expenses),
XV. Leave arrangements,
XVI. Medical examinations,
XVII. Notice of termination and redundancy,
XVIII. Dispute resolution, flexibility and consultation,
XIX. Work breaks, hours of work and business review payments,
XX. Store Manager trainees,
XXI. Work breaks, loadings and contract hours for Hourly Rate Employees,
XXII. Fortnightly pay arrangements,
XXIII. Payment in lieu of annual leave loading for Hourly Rate Employees,
XXIV. Rates of pay (including what will happen if the 2018 Agreement is not approved and the 2015 is quashed),
XXV. How the Commission determined that Hourly Rate Employees are to be treated as “casual employees … under the Award.”
XXVI. The potential for Individual Flexibility Agreements for Hourly Rate Employees (if the 2018 Agreement is not approved and the 2015 is quashed),
XXVII. Classification matchings between the 2018 Agreement and the Modern Awards, and
C. Contained links to the Modern Awards
[39] No employee of the Applicant complained about or opposed the approval of the 2018 Agreement in the Commission. No employee gave evidence that they did not understand the 2018 Agreement or the effect of its terms.
[40] It is also relevant to note that at the time of the vote the 2018 Agreement covered 662 employees of ALDI. Of those 579 (87%) voted and, of those who voted, 556 (96%) voted in favour of the 2018 Agreement.
[41] The SDA was the only complainant. The SDA complained as follows:
“…The explanation in respect of store employees concerning the comparator of part-time employees with casual employees under the GRIA is contained only on the last page where reference is made to what Hourly Rate Stores employees would be paid in the event that the 2015 agreement was quashed and the 2018 agreement not approved. The explanation does not contain any other reference to casual employees under the GRIA being the appropriate comparator. As such the Commission cannot be satisfied that ALDI have taken all reasonable steps to explain the terms and the impact of the terms on the proposed agreement to the potentially impacted class of employee, namely ALDI part-time employees.”
[42] I reject the complaint. The explanation was neither inappropriate nor inadequate. First, if the 2015 Agreement is not quashed (and it had not been at the time the Impact Statements were issued), the comparator in terms of the effect of the 2018 Agreement is the 2015 Agreement. True it is that the Modern Awards are the reference instrument for the purposes of the BOOT, but at this time they do not govern the terms and conditions of the employees. The Modern Awards do not presently apply. Even if the Modern Awards did apply the explanation was appropriate in the circumstances.
[43] While it is arguable that more could have been explained this does not mean that ALDI did not take all reasonable steps to ensure that the terms of the 2018 Agreement and the effect of those terms were explained to relevant employees. Having regard to the materials provided by ALDI to its employees this is not a case where the employees were left having no idea about their effect of the terms of the 2018 Agreement they voted on. That information was clear. No employee claimed otherwise. There was no evidence from any employee about the issue. No one claimed they were misled by ALDI’s materials. I have no doubt in concluding that the ALDI employees were properly informed about the 2018 Agreement and the effect of it.
[44] Having regard to all that was before the employees I am satisfied that when they came to vote they were able to make an informed vote. The employees were as fully informed as practicable. The condition precedent to the exercise by the Commission of its jurisdiction under s.186 of the FW Act to approve the 2018 Agreement has been established. ALDI complied with s.180(5).
[45] Likely ALDI could have done more in terms of their discussions with its employees; but that is not the statutory test.
[46] As I have stated on a previous occasion, “in agreement approvals, as in most things in life, perfect should not be the enemy of the good, or the good enough. In the present matter, the steps taken by the Applicant were good enough or, to more correctly use the language of the FW Act, reasonable.” 131
[47] For the reasons above I have concluded that I am satisfied that ALDI took all reasonable steps to ensure that the terms of the 2018 Agreement and the effect of those terms were explained to the relevant employees. Consequently, ALDI complied with the pre-approval step mandated by section 180(5)(a). For this reason the 2018 Agreement can be approved if the other statutory requirements have been satisfied.
Consideration – National Employment Standards (NES) issues
[48] Section 55(1) of the FW Act provides that,
“(1) A modern award or enterprise agreement must not exclude the National Employment Standards or any provision of the National Employment Standards.”
[49] Section 56 of the FW Act provides that,
“A term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55.”
[50] In the course of considering the 2018 Agreement a number of concerns were raised with ALDI about the operation of the 2018 Agreement and the National Employment Standards (NES). Those concerns related to:
a) Casuals,
b) Public holidays,
c) Annual leave for shift workers,
d) Personal leave entitlements,
e) Notice of personal leave,
f) Abandonment of employment,
g) Redundancy amount,
h) Annual leave/personal leave payment and accrual,
i) Notional shift hours.
[51] In the final form of the undertakings ALDI decided only to address the issue of casuals. ALDI has undertaken for the life of the 2018 Agreement not to employ casual employees. This undertaking resolves that issue.
[52] I do not need to further consider the remaining issues. First, if any of the terms contravene s.55(1) of the FW Act, they will have no affect pursuant to s.56 of the FW Act. In any case the 2018 Agreement contains a clause addressing its relationship with the NES. It provides that:
“This Agreement is to be read and interpreted in conjunction with the National Employment Standards…Where there is an inconsistency between this agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency” 132
[53] That is to say, the 2018 Agreement does not exclude the NES. Although a more fully formatted NES precedence clause is to be preferred, I am satisfied that none of the outstanding NES issues prevent the 2018 Agreement from being approved.
Consideration – BOOT
[54] Coming now to the BOOT issues.
[55] Recently, in relation to applications for approval of other ALDI agreements, 133 his Honour Vice President Catanzariti observed that,
[11] The task of applying the BOOT has been recognised as being summarised in various Full Bench decisions as follows:
[100] There are two well-established propositions concerning the application of the BOOT which may be derived from previous Full Bench decisions. The first, which is essentially a restatement of s 193(1), is that the BOOT requires a finding that each award covered employee and prospective employee would be better off under the agreement than under the relevant modern award. 134 The requirement that “each” such employee and prospective employee be better off overall is a rigorous one. The ordinary meaning of “each” is “every, of two or more considered individually or one by one”.135 Thus, every award covered employee or prospective employee must be better off overall, with the corollary that if any such employee is not better off overall, the relevant enterprise agreement does not pass the BOOT. Thus, in an agreement containing loaded rates in whole or partial substitution for award penalty rates, it is not sufficient that the majority of employees - even a very large majority - are better off overall if there are any employees at all who would not be better off overall.”136
[12] Further, the principles when applying the BOOT to a loaded rate agreement has also been summarised by the Full Bench:
[115] In summary, the following principles apply to the application of the BOOT to a loaded rates agreement:
(1) The BOOT requires every existing and prospective award covered employee to be better off overall under the agreement for which approval is sought than under the relevant modern award. If any such employee is not better off overall, the agreement does not pass the BOOT.
(2) Section 193(7) permits the Commission to assume that if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, then the employee would be better off overall in the absence of evidence to the contrary. However, the selection of class for the purpose of s.193(7) will only be of utility if the agreement affects the members of the class in the same way such that there is likely to be a common BOOT outcome. If the Commission is not satisfied on the evidence that an existing or prospective award covered employee is not better off overall, the Commission cannot approve the agreement at least not without undertakings or in the confined circumstances set out in s.189.
(3) The application of the BOOT to a loaded rates agreement will, in order for a meaningful comparison to be made, require an examination of the practices and arrangements concerning the working of ordinary and overtime hours by existing and prospective employees that flow from the terms of the agreement. This will likely require classed to be identified based on common patters of working hours, raking into account evening, weekend and/or overtime hours worked.
(4) The starting point for the assessment will necessarily be an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment for which the agreement provides or permits. For example if an enterprise agreement makes express provision for employees to be required to work ordinary hours on weekends, those provisions cannot be ignored for BOOT purposes simply because the employer asserts it does not currently utilise those working hours or roster patterns.
(5) In the case of existing employees, this may involve an examination of existing roster patterns worked by various classed of employees as at the test time. The use of same rosters to compare remuneration produced by a loaded rate pay structure compared to the relevant modern award may be an effective method of doing this. There may be objective evidence that a particular pattern of working hours of roster pattern permitted by an enterprise agreement is not practicable, or cannot or is unlikely to be worked.
(6) In the case of prospective employees, the assessment will necessarily involve a degree of conjecture. In the case of an enterprise operating at a defined workplace or workplaces, the Commission may be in a position to make sensible predictions about the basis up which prospective employees might be engaged based on the roster patterns worked by existing employees. However if a business is small and/or still at the development stage, or the agreement would cover a wider range of classifications, work locations and/or roster patterns that are not in existence as at the test time, useful predictions may not readily be drawn from the way in which the existing workforce operates. In that situation the assessment will require an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment which the agreement provides for or permits.
(7) If the information concerning patterns of working hours needed to assess whether a loaded rates agreement passes the BOOT is not contained in the employer’s Form F17 statutory declaration accompanying the approval application, it may be necessary for the Commission to request or require the production of such information.
(8) The BOOT involves the making of an overall assessment as to whether an employee would be better off under the agreement, which necessitates identification of the terms in the agreements which are more and less beneficial to the employee than under the relevant award.
(9) The overall assessment required will essentially be a mathematical one where the terms being compared related directly to remuneration. The assessment will be more complex where the agreement contains some superior entitlements which are non-monetary in nature, accessible at the employee’s option or which are contingent upon specified events occurring.
(10) In respect of non-monetary, optional or contingent entitlements in an agreement, the assumption cannot be readily be made that they have the same value for all employees. In the case of a contingent benefit, it will be necessary to make a realistic assessment about the likelihood of the benefit crystallising during the period in which the agreement will operate.
(11) Where a loaded rates agreement results in significant financial detriment for existing or prospective employees compared to the relevant award, it is unlikely that a non-monetary, option or contingent entitlement under the agreement will sufficiently compensate for the detriment for all affected employees such as to enable the agreement to pass the BOOT. 137
[56] I agree with and, with respect, adopt his Honour’s reasoning in endorsing and adopting the elements of the Loaded Rates decision extracted above.
[57] In the present matter the following BOOT issues were identified and ALDI responded to the same.
All employees
a) Part-time overtime – because of the Loaded Rates Case (the reasoning in which I adopt) ALDI’s part-time employees are properly to be compared with casual employees for the purposes of the BOOT. Consequently, this is now longer a BOOT issue.
b) Review of pay rates – the rates of pay cannot be reviewed downwards. This is not a BOOT issue.
c) Reconciliation – although the relevant clause in the 2018 Agreement does not conform with a Beechworth clause I am satisfied, for the reasons advanced by ALDI, that the clause is a benefit under the 2018 Agreement. It is a measure supporting a finding that the 2018 Agreement is better off over all.
d) Banked Hours – I am satisfied that the way in which the banked hours provisions work, do so at the election of the employee. When employees work they are paid relevant amounts. In addition they can bank hours. There is a cap on negative hours. It seems to me that the scheme is actually a benefit to employees and should be considered as such in an assessment of the BOOT. I also note that His Honour Vice President Catanzariti approved 138 the Prestons and Stapylton Agreements containing like banked hours provisions.
e) Allowances – allowances should not be considered on a line-by-line basis. The proper way to account for them is to assess them as a part of the overall assessment applicable to the BOOT. In any case, as ADLI correctly submits, some of the allowances are not applicable to their employees.
Salaried Store Employees
f) Rates of pay for Store Management Trainees – because all employees commencing in the position of Store Management Trainee will commence at the Year 2 rate of pay, this is not a BOOT concern.
g) TOIL – I am satisfied that, for the reasons advanced by ALDI, that the issue of TOIL is not a BOOT issue.
h) Overtime – this issue should not be considered on a line-by-line basis. The proper way to account for it is to assess it as a part of the overall assessment applicable to the BOOT.
Hourly Rate Store Employees
i) Rates of pay for Store Assistants working any 5 out of 7 days – noting the need to treat part-time employees as casuals for the purpose of the BOOT, this is no longer a BOOT issue.
j) Overtime - noting the need to treat part-time employees as casuals for the purpose of the BOOT, this is no longer a BOOT issue.
Transport and Distribution employees
k) Rates of pay for Transport and Distribution employee Section Leaders – I am satisfied, for the reasons advanced by ALDI that these employees are better off overall.
[58] Having considered each of the BOOT issues it is necessary to consider the same in light of the rates of pay, monetary and non-monetary benefits contained in the 2018 Agreement to determine whether “over all” employees and potential employees are better off under the 2018 Agreement as opposed to the relevant Modern Awards. I also note the undertaking given about the maintenance of “typical work patterns … during the life of the [2018] Agreement”.
[59] In determining the same I was not assisted by the annexures put forward by the SDA. Those annexures adopted a line-by-line assessment. As stated above, that is not the correct approach when it comes to assessing the BOOT. Further, in respect of who ALDI considers to be part-time employees, the proper comparator is casuals under the relevant Modern Awards. Noting that, as casuals, they receive annual leave, this monetary entitlement (that has a non-monetary benefit as well) is a significant benefit of the 2018 Agreement.
[60] There is ample material available to undertake the BOOT assessment and it confirms that employees and potential employees are better off overall. There is no evidence before me to establish that any employee or potential employee is not better off under the 2018 Agreement than under the relevant Awards.
[61] For these reasons I am satisfied that the 2018 Agreement passes the BOOT.
Consideration – substantial change
[62] The SDA contend that the undertakings (when considered as a whole) result in a substantial change to the 2018 Agreement. If this is the case it would be a barrier to approval.
[63] I disagree that the excision of casual employees has that effect. Noting the small number of casual employees engaged by ALDI it does not rise to the level of substantial change.
Conclusion
[64] On 18 October 2019 the Employer provided a consolidated version of the undertakings provided during the course of the conduct of the matter. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the 2018 Agreement and that the undertakings will not result in substantial changes to the 2018 Agreement. The undertakings are taken to be a term of the 2018 Agreement.
[65] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
[66] Pursuant to s.202(4) of the Act, the model flexibility term prescribed by the Fair Work Regulations 2009 (Cth) is taken to be a term of the 2018 Agreement.
[67] The SDA being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers the SDA.
[68] Despite repeated invitations for the TWU to participate in the proceedings before me the Commission has not received any correspondence from the TWU. It should be noted that the TWU was included into all email correspondence sent from my Chambers. Specifically, my Chambers emailed the initial directions to the parties on 27 May 2019 and the TWU was invited to file a Form F18 on that occasion. On 21 June 2019, my Chambers inquired about whether the TWU was going to participate at the hearing, and if so, they were invited to file a Form F18 and submissions as per the directions. It should also be noted that on 5 July 2019 my Associate wrote to the TWU stating:
“The Commissioner extends an invitation to the Transport Workers’ Union (TWU) to file in the Commission and serve on the Applicant and the SDA’s legal representative, a Form F18 prior to the Hearing at 10:00am Tuesday, 9 July 2019, in Sydney.
The Commissioner notes that while the TWU was part of the bargaining process for the proposed enterprise agreement, it has not filed any material in relation to this matter to date. If this assertion is incorrect, please advise the Commission via return email immediately.”
[69] All these emails were sent to Jason Walters of the TWU and the TWU’s general email addresses for both its national office and its Western Australia office.
[70] In light of the fact that the TWU has neither filed submissions nor filed a Form F18 in the Commission, the TWU has not given written notice that they want the Agreement to cover it in accordance with s.183(1) of the FW Act. Accordingly, the Agreement does not cover the TWU.
[71] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 6 November 2019. The nominal expiry date of the Agreement is 5 November 2021.
COMMISSIONER
Appearances:
Mr G Hatcher SC and Ms A Perigo for the Applicant.
Mr E White for the SDA.
Hearing details:
2019.
Sydney:
July 9
Annexure A
1 Transcript of 9 April 2019, PN59.
2 ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) T/A ALDI Stores [2019] FWC 3555.
3 Ibid [16].
4 Ibid [16] – [17].
5 [2019] FWC 3555.
6 Loaded Rates Agreements [2018] FWCFB 3610.
7 [2018] FWCFB 3610 at [103].
8 [2018] FWCFB 3610 at [112].
9 See Re Armacell Australia Pty Ltd (2010) 202 IR 38.
10 Fair Work Act 2009 section 193.
11 [2018] FWCFB 3610 at [136].
12 [2018] FWCFB 3610 at [136], [137], [138].
13 (2018) 280 IR 191.
14 [2013] FWC 3495.
15 [2013] FWC 3495 at [78]
16 ALDI Prestons Agreement 2013 [2016] FWCA 4320 per Bull DP at [67].
17 Approved by DP Bull in [2016] FWCA 2028. The ALDI Jandakot Agreement 2015 is currently the subject of an appeal by the SDA. The only ground of appeal relates to the Notice of Employee Representational Rights. A date for the hearing of the appeal has not yet been set.
18 See Schedule 4 annexed to the Form F17 submitted by ALDI dated 20 December 2018.
19 (2017) 268 IR 265
20 (2017) 268 IR 265 at [42] – [45].
21 ALDI Minchinbury Agreement 2012, ALDI Stapylton Agreement 2012, ALDI Derrimut Agreement 2012 [2013] FWC 3495 at [85].
22 ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) v Shop, Distributive and Allied Employees Association (2017) 92 ALJR 33 at [97].
23 (2017) 268 IR 265 at [43].
24 Clause 14, Jandakot EA 2018.
25 Liquor Control Act 1988 section 100.
26 Liquor Control Act 1988 section 100.
27
28 ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association and Anor (2017) 262 CLR 593; [2017] HCA 53 [99].
29 Exhibit 12.
30 ALDI Foods Pty Limited as General Partner of ALDI Stores (A Limited Partnership) T/A ALDI Stores [2019] FWCA 6816.
31
32 Loaded Rates Agreements [2018] FWCFB 3610 at [115(2)].
33 Loaded Rates Agreements [2018] FWCFB 3610 at [115(8)].
34 Fair Work Act 2009 section 171(a).
35 [2018] FWCFB 3610.
36 Loaded Rates Agreements [2018] FWCFB 3610 at [136] – [138]. Also note that the Storage Services and Wholesale Award 2010 has a similar provision at clause 11.3(i).
37 Loaded Rates Agreements [2018] FWCFB 3610 at [138].
38 SDA submissions dated 28 June 2019 at [15].
39 SDA submissions dated 28 June 2019 at [16].
40 (2017) 92 ALJR 33 at [97].
41 SDA submissions dated 28 June 2019 at [18].
42 (2018) 277 IR 23.
43 (2018) 277 IR 23 at [112].
44 (2018) 277 IR 23 at [113]
45 (2018) 277 IR 23 at [115]
46 Statement of Margaret McNaughton dated 18 June 2019 at [21]
47 Statement of Margaret McNaughton dated 18 June 2019 at [21]
48 (2018) 277 IR 23.
49 (2017) 270 IR 410 per Flick J.
50 (2017) 270 IR 410 at [105].
51 (2018) 277 IR 23 at [112].
52 (2018) 277 IR 23 at [113].
53 (2018) 277 IR 23 at [115].
54 [2018] FWC 1466 per Gostencnik (12 June 2018).
55 [2018] FWC 1466 at [66].
56 [2018] FWC 1466 at [87].
57 [2018] FWC 1466 at [88].
58 [2018] FWC 1466 at [99].
59 [2018] FWC 3949 per DP Kovacic (4 July 2018).
60 [2018] FWC 3949 at [54].
61 [2018] FWC 3949 at [55].
62 [2018] FWC 3949 at [60].
63 Diamond Offshore General Co v Baldwin (2018) 284 IR 1 per Hatcher VP, Asbury DP and McKenna C (12 November 2018).
64 (2018) 284 IR 1 at [29].
65 (2018) 284 IR 1 at [33].
66 Colbros Electrical Contracting Pty Ltd Single Enterprise Agreement 2018 [2019] FWCA 4747 (8 July 2019).
67 Construction Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited [2019] FWCFB 4022 per Hamberger SDP, Gostencnik DP and Saunders DP.
68 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [3].
69 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [11].
70 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [12], [13].
71 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [15] – [19].
72 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [21].
73 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [21].
74 Transcript dated 9 July 2019 at PN408.
75 Transcript dated 9 July 2019 at PN410.
76 Transcript dated 9 July 2019 at PN411 – 412.
77 Transcript dated 9 July 2019 at PN451.
78 Transcript dated 9 July 2019 at PN453.
79 Fair Work Act 2009 section 193(6).
80 Loaded Rates Agreements [2018] FWCFB 3610.
81 [2018] FWCA 2888 per Johns C (17 August 2018).
82 Transcript 9 July 2019 at PN 449.
83 [2018] FWCA 2888 at [58(c)].
84 [2018] FWCA 2888 at [58(d)].
85 [2018] FWCA 2888 at [58(g)].
86 [2018] FWCA 2888 at [58(i)].
87 [2016] FWC 5315 per Asbury DP (14 September 2016).
88 [2018] FWCFB 1772 per Catanzariti VP, Hamilton DP and Lee C (26 March 2018).
89 [2016] FWC 5315 at [158], [159].
90 [2016] FWC 5315 at [160].
91 [2018] FWCFB 1772 at [33].
92 [2018] FWC 1466.
93 [2018] FWC 1466 at [92].
94 The question in the employer’s statutory declaration regarding less beneficial terms is at question 3.4 under Part 3 – Better Off Overall Test.
95 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019 at [9].
96 One Key Workforce v CFMEU (2018) 277 IR 23 [112].
97 One Key Workforce v CFMEU (2018) 277 IR 23 [115].
98 Annexure A, Annexure B and Annexure C to the statement of Margaret McNaughton.
99
100 (2018) 277 IR 23.
101 (2018) 277 IR 23 at [112].
102 (2018) 277 IR 23 at [115].
103 SDA submissions dated 6 August 2019 at [10].
104 SDA submissions dated 6 August 2019 at [10].
105 SDA submissions dated 6 August 2019 at [14].
106 SDA submissions dated 6 August 2019 at [15].
107 ALDI submissions dated 18 June 2019 [41] – [49].
108 Exhibit 9 Statement of Margaret McNaughton dated 18 June 2019.
109 SDA submissions dated 6 August 2019 at [31].
110 SDA submissions dated 6 August 2019 at [32].
111 SDA submissions dated 6 August 2019 at [33].
112 BOC Limited (Gas & Gear – Victoria) Certified Agreement 2019[2019] FWCA 5544.
113 [2019] FWCA 5544 at [8].
114 [2019] FWCA 5544 at [9].
115 [2018] FWCFB 3610.
116 [2018] FWCFB 3610 at [115]
117 Exhibit 10 Statement of Caroline Chivers dated 18 June 2019 at [7]
118
119 Exhibit 9.
120 Exhibit 17.
121 The words “average” were inserted into the paragraph when Ms Chivers amended her witness statement on 9 July 2019
122 Exhibit 10.
123 [2016] FWC 5315.
124 [2016] FWC 5313 at [156].
125 [2010] FWAFB 4602.
126 [2018] FCAFC 77.
127 [2018] FWCFB 1772.
128 [2018] FWCFB 6907.
129 [2018] FWC 1466.
130 See The Australian Workers’ Union v Gray Australia Pty Ltd as trustee for The Gray Family Trust t/a Ceres Farm & Kenrose Co Pty Ltd and Others[2019] FWCFB 4253.
131 Merlin Entertainments (Australia) Pty Ltd [2019] FWCA 6463, [32].
132 Clause 5 of 2018 Agreement.
133 ALDI Foods Pty Ltd as General Partner of ALDI Stores (A Limited Partnership) t/a ALDI Stores [2019] FWCA 6816.
134 Solar System Pty Ltd [2012] FWAFB 63997 at [11]; Hart v Coles Supermarkets Australia Pty Ltd[2016] FWCFB 2887 at [6], [15]; SDAEA v Beechworth Bakery[2017] FWCFB 1664 at [11].
135 Macquarie Online Dictionary.
136 Loaded Rates Agreements [2018] FWCFB 3610 at [100].
137 Loaded Rates Agreements [2018] FWCFB 3610 at [115].
138 [2019] FWCA 6816.
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