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

[2020] FWCA 5469

[2020] FWCA 5469

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222—Enterprise agreement

ALDI Foods Pty Ltd as General Partner of ALDI Stores (A Limited Partnership) T/A ALDI Stores
(AG2020/3007)

ALDI PRESTONS AGREEMENT 2017

Retail industry
DEPUTY PRESIDENT BULL	SYDNEY, 2 DECEMBER 2020

Application for termination of the Enterprise Agreement ALDI Prestons 2017.

[1] ALDI Foods Pty Ltd as General Partner of ALDI Stores (A Limited Partnership) T/A ALDI Stores (ALDI) has made an application, pursuant to s.222 of the Fair Work Act 2009 (Cth) (the Act), to terminate the ALDI Prestons Agreement 2017 [AE505554](the 2017 Agreement).

[2] The 2017 Agreement is a single enterprise agreement and was approved by the Commission on 16 October 2019 1 and has a nominal expiry date four years from the date of approval, being 15 October 2023. As is apparent, the 2017 Agreement has not yet reached its nominal expiry date.

Relevant Legislation

[3] The relevant provisions governing applications to terminate agreements before their nominal expiry date are set out at ss. 220-224 of the Act as follows:

“220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(2) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

221 When termination of an enterprise agreement is agreed to

Single-enterprise agreement

(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

Multi-enterprise agreement

(2) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination.

222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.

224 When termination comes into operation

If a termination of an enterprise agreement is approved under section 223, the termination operates from the day specified in the decision to approve the termination.”

Consideration

[4] Pursuant to s.222(1) set out above and clause 2 - Parties to the Agreement of the 2017 Agreement, I am satisfied that the applicant ALDI is covered by the 2017 Agreement and has standing to make the termination application.

[5] Having been satisfied that the requirements of s.222(1) have been met, the Commission must terminate the 2017 Agreement subject to being satisfied of the remaining requirements under the Act.

[6] By way of background, the 2017 Agreement termination has proceeded on the basis of a replacement agreement having immediate effect upon termination of the 2017 Agreement. In this regard employees on 11 June 2020, were provided with details of the changes to terms and conditions of their employment proposed to be made in a new enterprise agreement that would replace the existing 2017 Agreement although it had not passed its nominal expiry date.

[7] The information provided to employees regarding the changes to the terms and conditions of their employment was based on the difference between the 2017 Agreement and a proposed new enterprise agreement, the ALDI Prestons Agreement 2020 (2020 Agreement).

[8] As required by s.221 of the Act, an in term agreement can only be terminated where the majority of employees covered by the agreement who cast a vote; approve the termination.

[9] In support of its application, ALDI provided a statutory declaration of Alex Foster, Managing Director of ALDI Stores. The statutory declaration outlined the steps taken by ALDI to satisfy s.220(2) of the Act which as set out above, concerns the voting process undertaken to terminate the 2017 Agreement.

[10] On 31 August 2020, information about the ballot was placed on noticeboards in each store, the warehouse, the distribution centre and sent to each employee by email.

[11] On 8 September 2020, voting for the termination of the 2017 Agreement commenced and concluded on 22 September 2020. There were 2,903 employees covered by the 2017 Agreement. The total number of valid votes cast was 2,568 with 1,600 of the valid votes being in favour of terminating the 2017 Agreement.

[12] Based on the statutory declaration of Mr Foster, I am satisfied that ALDI has complied with s.220(2) of the Act by taking all reasonable steps to notify employees of the time and place at which the vote was to occur, the voting method to be used and has provided a reasonable opportunity for employees to decide whether they wish to approve the proposed termination.

[13] With respect to s.223(b) of the Act, I am satisfied that the majority of employees who cast a valid vote, voted to approve the proposed termination.

[14] With respect to s.223(c), I am further satisfied that there are no ‘other reasonable grounds’ for believing that the employees have not agreed to the termination.

[15] Subsection 223(d) requires the Commission to take into account the views of the employee organisation(s) covered by the 2017 Agreement.

[16] On 14 October 2020, my Chambers wrote to the Shop, Distributive and Allied Employees Association (SDA), which is the only employee organisation covered by the 2017 Agreement, 2 requesting its position in relation to the proposed termination by no later than 5:00pm on Wednesday, 21 October 2020. Following subsequent emails, this was extended until 12:00pm on Friday, 30 October 2020. On 30 October 2020, Bernard Govind – Industrial Officer of the SDA, emailed Chambers to advise that the SDA was not opposed to the termination if the 2020 Agreement was approved.

[17] The SDA stated that, because it was not contemplated that employees would revert to the various underpinning modern awards (awards) should the termination of the 2017 Agreement be approved, the SDA was opposed to the termination should employees revert to the awards as a result of the 2020 Agreement notbeing approved.

[18] On the basis that the employer has complied with subsection 220(2), the employees have genuinely voted in favour of the termination, there are no ‘other reasonable grounds’ for believing that employees have not agreed to the termination, noting the views of the SDA and the matters outlined above, I consider that the requirements of the Act have been met and consider it appropriate to approve the termination of the 2017 Agreement.

[19] The application for termination of the 2017 Agreement and approval of the 2020 Agreement were lodged at the same time. The 2020 Agreement (AG2020/3011) (PR724980) was approved by the Commission on 1 December 2020 and in accordance with s.54 of the Act, the 2020 Agreement is to operate from 8 December 2020.

[20] Pursuant to s.224 of the Act, the termination of the 2017 Agreement will take effect from midnight on 7 December 2020. This will allow the 2020 Agreement to immediately provide coverage and employees will not revert to any modern awards but will have the terms and conditions of their employment transition to the approved 2020 Agreement.

[21] An order to terminate the 2017 Agreement will issue concurrently with this Decision [PR725053].

DEPUTY PRESIDENT

 1   [2019] FWCA 6816

 2   [2019] FWCA 6816 at [27]

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