ALDI Foods Pty Ltd v Shop, Distributive & Allied Employees Association

The High Court of Australia considered an appeal by ALDI Foods Pty Ltd concerning the approval of an enterprise agreement for its new Regency Park undertaking. The dispute arose when the Fair Work Commission (the Commission) initially approved an agreement made between ALDI and 17 employees who had accepted offers of employment for the new undertaking before it commenced operations. The Shop, Distributive & Allied Employees Association (SDA) challenged this approval, arguing that the agreement should have been classified as a "greenfields agreement" and that the Commission had erred in its assessment of whether the employees were "better off overall" (BOOT) compared to the relevant modern award.

The legal issues before the High Court were whether the agreement was required to be a greenfields agreement under the *Fair Work Act 2009* (Cth), and if not, whether the Commission had properly satisfied itself that the employees covered by the agreement would be better off overall than they would be under the relevant modern award. Specifically, the Court had to determine when employees are considered "covered by" an agreement for the purposes of s 186 of the Act, and whether the Commission's assessment of the BOOT, which included a clause allowing for payment of any shortfall compared to the modern award, constituted a proper comparison.

The High Court reasoned that the agreement was not a greenfields agreement because it was made with employees who were already employed by ALDI in other undertakings and had accepted offers of employment in the new undertaking. The Court clarified that employees are "covered by" an agreement from the time it is made, not from when they commence working under it. Regarding the BOOT, the Court found that the Commission had failed to properly engage in the required comparison between the agreement and the modern award, as the inclusion of a catch-up clause did not substitute for an initial assessment of overall benefit.

The High Court allowed the appeal in part. It set aside the orders of the Full Court of the Federal Court and directed that a writ of mandamus issue, requiring the Commission to determine the appeal from the Deputy President's decision according to law. This meant the Commission was required to re-examine whether the agreement passed the BOOT.