Arnott's Biscuits Limited T/A Arnott's
[2024] FWCA 3135
•28 AUGUST 2024
| [2024] FWCA 3135 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Arnott's Biscuits Limited T/A Arnott's
(AG2024/2270)
ARNOTT’S BISCUITS HUNTINGWOOD ENTERPRISE AGREEMENT 2024
| Food, beverages and tobacco manufacturing industry | |
| DEPUTY PRESIDENT WRIGHT | SYDNEY, 28 AUGUST 2024 |
Application for approval of the Arnott’s Biscuits Huntingwood Enterprise Agreement 2024
Introduction
Arnott's Biscuits Limited T/A Arnott's (Arnott’s) has made an application for approval of an enterprise agreement known as the Arnott’s Biscuits Huntingwood Enterprise Agreement 2024 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.
The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), the United Workers Union (UWU), and seven individual employees were all bargaining representatives in relation to the Agreement.
On 2 July 2024, the Commission raised the following issues with Arnott’s in relation to the Agreement:
1. Notice of Employee Representational Rights (NERR)
The agreement title in the NERR is the Arnott’s Biscuits Huntingwood Enterprise Agreement 2023, whereas the title clause of the agreement states it is the Arnott’s Biscuits Huntingwood Enterprise Agreement 2024.
2. Compassionate Leave
Clause 25 of the Agreement appears to be silent on the ability to take compassionate leave in cases of stillbirth or miscarriage as provided by s.104 of the Act.
3. Casual Employees
It appears that casual employees can only be engaged in one level under the Food Manufacturing stream. Rates of pay are provided by Schedule 3 for both old and new pay structures. However, it is unclear if the casual rates of pay are inclusive of the casual loading of 23.33% provided by clause 14.5 or if this loading is to be applied in addition to the rates of pay.
4. Annualised Salaries
Schedule 3 of the Agreement provides annualised salaries for all classifications apart from casual employees. Section A, clause 20.2 of the Agreement provides that manufacturing employees’ annualised salaries are inclusive of all allowances excluding shift loadings. It appears that employees still receive overtime for non-rostered hours and penalties for shift and weekends as per clauses 16 and 17 of the Agreement. Section B clause 37.5 of the Agreement provides that security employees receive overtime in addition to annualised salaries and indicates that shift and weekend penalties are absorbed by the annualised salaries. There does not appear to be a reconciliation clause to ensure employees under annual salary arrangements are better off, as per the decision in Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery.[1]
On 9 July 2024, Arnott’s provided a response to these issues.
On 10 July 2024, the Commission was contacted by an employee of Arnott’s who advised that they had concerns about the Agreement. On 17 July 2024, the Commission was contacted by two additional employees who wished to raise concerns. I therefore issued the following Directions:
Any employees or individual employee bargaining representatives who wish to raise any issues relevant to the approval of the Arnott’s Biscuits Huntingwood Enterprise Agreement 2024 (the Agreement) are required to do so by no later than 4:00pm Monday, 22 July 2024.
The Union bargaining representatives may file further submissions in relation to the approval of the Agreement by no later than 4:00pm Friday, 26 July 2024.
Arnott’s may file further submissions in relation to the approval of the Agreement by no later than 4:00pm Thursday, 1 August 2024.
The matter is listed for a Directions hearing via Microsoft Teams at 12:00 PM on Monday, 5 August 2024.
Submissions by Individual Employees
In accordance with the Directions, three submissions from individual employees were filed which were provided to Arnott’s and the Bargaining Representatives. These submissions were in relation to the following matters:
Voting for the Agreement was conducted by electronic vote although employees and their unions wanted voting to be conducted by paper ballot. This may have disadvantaged employees who are not fluent in English or who are not proficient in technology
During the Agreement negotiations some people were confused or concerned over some issues but were less confident to speak up. They were also being told that their union was not able to represent them which created a lot of anxiety for some.
Management and HR staff helped some employees lodge their vote without either a delegate or support person present.
Since the start of negotiations last year management only ever met with small groups of employees to discuss their plans for the coming Agreement. This was in stark contrast to the more common ‘all employees’ communication meetings approach of the past. In these meetings very little or no time was allocated to questions. Arrangements made in these meetings have left others, including future employees, worse off through grandfather clauses.
Prior to the vote, Arnott’s gave inaccurate information about how the voting would be calculated. The information that was given led people to believe that a non-vote would be counted as a ‘no’ vote. Arnott’s eventually corrected this information before the voting was open.
Arnott’s consistently failed to deliver on undertakings to return to the negotiating table with follow up from previous meetings which effectively stopped any progress. Claims that had been agreed to in principle, were reneged on, further thwarting any progress.
Employees were not allowed to meet for site mass meetings which made communication between all of the employees nearly impossible. This effectively allowed Arnott’s to negotiate with small groups delivering misinformation that would not otherwise have been possible in larger groups.
In relation to Arnott’s responses to the feedback sought by the Commission, employees are not given crib breaks. Some employees covered under the Agreement are contactable during tea and lunch breaks, and may be required to attend a breakdown during this time. This is contrary to the Agreement allowing for breaks away from workstations of 20 and 40 minutes. Employees covered by clause 17.2 receive no RDOs.
The title date of the agreement changed from 2023 to 2024 by Arnott's. This could lead to the assumption that the Agreement term will also start from the date of signing rather than the date of expiry of the current agreement.
Employees covered by Clause 17.2 work a roster pattern of an average 38 hours per week (up to 48 hours). Employees work a 12 hour shift every Saturday, Sunday and Monday for 5 weeks plus a fourth 12 hour shift on Friday every sixth week encompassing the Friday. Breaks are paid with employees entitled to 3 x 20 minute and 1x 40 minute breaks (under clause 18.2 of the proposed Agreement). Employees have never been entitled to RDOs (Work life balance days - WLBs) since the inception of the shift over 25 years ago.
Arnott’s response that the hours of work are approximately 29.5 hour per week is incorrect when factoring in that breaks are paid, therefore employees are required to work through the breaks where required and have not been receiving WLBs. Further, the following paragraph in Arnott’s response detailing paid overtime is comparing the remuneration against the Award, not the current Agreement conditions. Also, the change in the new agreement for employees under Clause 17.2 compared to the current agreement requires the employees to take on additional duties, moving from ‘dedicated planned and preventative maintenance’ to also include reactive and production cover.
Senior management at Arnott’s started telling some employees they had no right to be a member of the AMWU and that the UWU would represent them in negotiations. Further, Arnott’s would not let the Organiser on site.
This became the catalyst for the negotiations being stalled, Arnott’s not having documentation ready and Arnott’s telling employees, that they would not negotiate until the log of claims was reduced. There was even a muffin day, where HR called employees into the Shapes room and offered them a muffin to see what their thoughts were. They did not want to deal with employees through the union representatives.
After about seven months, the plant manager called on communication sessions across the shifts. These were not communication sessions. Whenever anyone tried to express their concerns, they were shut down.
During the vote, HR set up laptops in the Shapes room for employees to vote. There was no union representation to adjudicate proceedings. I saw people go to HR and ask, how to vote, as many employees are not savvy with computers or other technology.
Submissions by Arnott’s
Annualised Salaries
In relation to the issue of annualised salaries, Arnott’s submitted that employees covered by annualised salary arrangements are better off overall under the Agreement compared to the relevant Award having regard to:
The Agreement rates being comfortably higher than the applicable rates under the Food, Beverage and Tobacco Manufacturing Award (Food Award) or the Manufacturing and Associated Industries and Occupations Award (Manufacturing Award);
There very few allowances under the Food Award and Manufacturing Award which could potentially be relevant to the employees; and
The working arrangements of employees under the Agreement.
In relation to Section A employees Arnott’s submitted:
Section A employees who work 8 hour shifts work approximately 33.5 hours per week over a year once breaks and Work Life Balance Leave is taken into account.
Section A employees who work 12 hour shifts work approximately 33.74 hours per week over a year once breaks and Work Life Balance Leave is taken into account.
There is a limited exception to this – being weekend maintenance employees to whom clause 17.2 applies (of which there are around 6 employees). These employees work approximately 31.33 hours per week over a year once breaks are taken into account – not 29.5 hours per week as Arnott's initially identified. Arnott's had previously erroneously factored Work Life Balance Leave into its calculation.
Section A employees' salaries are paid are comfortably higher than the applicable award rates (between 25% and 184%).
Further, employees receive additional remuneration for non-rostered overtime, which exceeds the overtime rates payable under the Award which results in employees receiving an amount which is more than double the rates in the Award.
This means that the Commission can be comfortably satisfied that all Section A employees will be better off overall under the Agreement and a reconciliation clause is not required.
In relation to Section B employees Arnott’s submitted:
There is only one person employed who is covered by Section B. This employee works 12 hour shifts. The annual salary under the Agreement is $95,491.32. Based on calculations Arnott's has prepared for an 8 week roster cycle for this employee (which were provided to the Commission), the approximate payment due under the Food Award is $76,845.24 – making the salary approximately 24.2% higher than the Food Award.
Arnott's also relies upon section 193A(6) which provides that, in assessing the BOOT, the FWC may only have regard to patterns or kinds of work, or types of employment, if they are reasonably foreseeable at the test time. In considering what is reasonably foreseeable, the FWC must have regard to the nature of the enterprise or enterprises to which the agreement relates.
Matters raised by individuals
In relation to the concerns raised about electronic voting, Arnott’s submitted that this method of voting is commonly used in voting on industrial matters (including PABOs). As noted by the UWU, electronic voting is not contrary to the principles in the Statement of Principles on Genuine Agreement (the Statement).
Arnott’s also made the following submissions in response to the issues raised by the individual employees:
A base level of technological literacy is required to work at Huntingwood. Paper copies of the proposed enterprise agreement, the terms and effect, and information on the voting process were also provided to employees upon request.
During the voting period, Arnott's had dedicated rooms for voting with computers, a phone and iPads that could be used to vote, giving employees options to vote using devices they were most comfortable using.
Members of the Arnott’s bargaining team also provided assistance, on request, on how to cast a vote, but this did not involve observing employees casting their vote.
Employees were also offered the option to cast their vote over the phone through a designated phone line with CorpVote. Arnott's was not involved in this.
Arnott's has a multi-lingual workforce, although all employees have a working knowledge of English, which is necessary to work at Huntingwood.
Arnott's took a range of steps to ensure employees' understanding of the voting process and Agreement.
The Terms and Effect and the Frequently Asked Questions documents were expressed in plain English.
Leading up to and during the access period, employees were encouraged to show the Agreement and related documents to their family or someone they trusted if they felt this would assist their understanding.
Arnott's also held 'drop-in' sessions leading up to the access period, where employees could speak to a member of the bargaining team about any comprehension questions or other concerns they had.
There were no concerns raised by any employees during the access period about an inability to understand the documents or communications.
Submissions by the AMWU
In relation to the voting process, the AMWU submitted that it had been advised that members were not comfortable with the electronic voting process. The AMWU sought for a paper ballot process to be used, however this was not agreed by Arnott’s. In relation to the anonymous complaints about the voting process the AMWU submitted that it not been provided with and is unaware of any evidence of interference by management in the process.
Submissions by the UWU
In relation to the issues raised by individual employees, the UWU submitted that these do not indicate a lack of genuine agreement by the majority of employees to be covered by the
Agreement, for the following reasons:
The issue of some employees wanting to be represented by the AMWU rather than the UWU during bargaining is simply not relevant to the matters to be considered by the Commission in approving the Agreement under s. 188 of the Act and under the Statement;
The conduct of the vote on the Agreement through an electronic voting system rather than a paper voting system is not contrary to the principles in the Statement. The Statement does not require that voting on an enterprise agreement take place by way of a paper ballot, or any other particular methodology. It requires that employees to be covered by an enterprise agreement are given a fair and reasonable opportunity to vote.
Employees to be covered by the Agreement were afforded such an opportunity.
Directions hearing on 5 August 2024
The matter was listed for a Directions hearing on 5 August 2024 following receipt of all submissions made in accordance with the directions that I issued on 17 July 2024. The purpose of the Directions hearing was to ascertain whether there were any outstanding matters in dispute between the parties and whether it was necessary to conduct a hearing in relation to the application for approval. The AMWU, CEPU and UWU each pressed requests for Arnott’s to provide written undertakings in relation to the issues raised by the Commission on 2 July 2024 about annualised salaries, compassionate leave and casual employees. Arnott’s agreed to provide undertakings about the compassionate leave and casual employees issues but submitted that it was not necessary to provide an undertaking about annualised salaries. The AMWU raised a concern that its members are not aware how their annualised salaries were calculated. I adjourned the matter so that the parties could confer about the issue of annualised salaries.
On 7 August 2024, Arnott’s advised my Chambers that the annualised salary arrangement had been in place since for more than 20 years and that Arnott’s had agreed with the AMWU and the CEPU to conduct a review of the annualised salary arrangements for the purpose of identifying where possible what allowances were originally incorporated into salaries and what other allowances have been incorporated into subsequent iterations of the Enterprise Agreement, which would otherwise be applicable under the Manufacturing and Associated Industries Award 2020.
On 9 August 2024, the AMWU advised my Chambers that it was is satisfied with the undertakings provided by Arnott’s and does not raise an objection to the approval of the enterprise agreement. The CEPU also advised my Chambers that the undertakings were acceptable. The UWU has not raised any objection to the proposed undertakings. The AMWU, CEPU and UWU have each filed Form F18 Declarations where they each advised that they support approval of the Agreement by the Commission.
Genuine Agreement
Section 186(2)(a) of the Act provides that, in approving an enterprise agreement, the Commission must be satisfied that it has been genuinely agreed. Section 188 of the Act sets out the requirements for determining whether an agreement has been genuinely agreed, including the requirement to take into account the matters in the Statement.
I have considered the submissions made by the individual employees, Arnott’s, the AMWU and the UWU. The submissions by the individual employees are in relation to annualised salaries, the agreement making process and the voting process. The concerns about the agreement making process are potentially allegations that Arnott’s did not comply with the good faith bargaining obligations under s. 228(1). These are matters which could have been raised at any time during bargaining either directly or through the bargaining representatives but there is no evidence that this occurred. While it is understandable that some employees may have preferred and wished to maintain the paper voting process, there is no requirement as noted by the UWU that voting on an enterprise agreement take place by way of a paper ballot, or any other particular methodology. In relation to concerns that Management and HR staff helped some employees lodge their vote without either a delegate or support person present, the action described could simply be Arnott’s showing an employee how to use the voting technology. There is no evidence that Arnott’s exercised a vote on behalf of any employee or advised any employee to exercise their vote in a particular way. It was open for an employee who was assisted by Arnott’s in this way to complain to a bargaining representative but there is no evidence of such complaints being made. I note that the number of employees who exercised a vote in relation to the Agreement was significant. 274 out of 288 employees covered by the Agreement voted in relation to the Agreement with 145 employees voting to approve the Agreement
Having regard to these matters and the submissions of the parties, there is no evidence that the good faith bargaining obligations were not complied with. Further, I am satisfied that Arnott’s has complied with s. 188 of the Act and the Statement. In particular, I am satisfied that that Arnott’s provided employees with a reasonable period to consider the Agreement, explained to the employees the terms of the Agreement and their effect and provided employees with a reasonable opportunity to vote on the Agreement in a free and informed manner by informing the employees of the time, place and method for the vote.
Pursuant to paragraph 19 of the Statement, I have given significant weight to the fact that the AMWU, CEPU and UWU each support the approval of the Agreement and do not have concerns that the Agreement was not genuinely agreed to by the employees covered by the Agreement.
NERR and name of Agreement
The NERR used the title Arnott’s Biscuits Huntingwood Enterprise Agreement 2023 as bargaining commenced in 2023, however the proposed agreement was not made until 2024, resulting in a change of the title of the Agreement. Arnott’s submitted that the NERR is correct because this was the name of the proposed agreement at the time it was issued. The agreement which was ultimately made is the same agreement – it was simply made in 2024. Arnott’s submitted that if the Commission regards this as being a non-compliance with section 174, it is a minor technical error. I accept these submissions and disregard the change in title in the NERR as a minor technical error under section 188 of the Act.
Section 190 Undertakings
Arnott’s provided written undertakings in relation to the issues raised above about compassionate leave and casual employees. I am satisfied that the undertakings provided by Arnott’s will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the Agreement and a copy can be found in Schedule 4.
Section 186, 187, 188 and 190
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.
Section 183 Bargaining Representatives
The AMWU, CEPU and UWU being bargaining representatives for the Agreement, have each given notice under s.183 of the Act that they want to be covered by the Agreement.
In accordance with s.201(2), I note that the Agreement covers the AMWU, CEPU and UWU.
Approval
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 4 September 2024. The nominal expiry date of the Agreement is 1 October 2027.
DEPUTY PRESIDENT
[1] [2017] FWCFB 1664
Printed by authority of the Commonwealth Government Printer
<AE525940 PR778724>
0