Australian Health & Nutrition Association Limited T/A Sanitarium Health Food Company
[2024] FWCA 2591
•11 JULY 2024
| [2024] FWCA 2591 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Australian Health & Nutrition Association Limited T/A Sanitarium Health Food Company
(AG2024/1729)
SANITARIUM HEALTH FOOD COMPANY - MEALS ENTERPRISE AGREEMENT 2024
| Food beverages and tobacco manufacturing industry | |
| DEPUTY PRESIDENT SLEVIN | SYDNEY, 11 JULY 2024 |
Application for approval of the Sanitarium Health Food Company - Meals Enterprise Agreement 2024
An application has been made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Australian Health & Nutrition Association Limited T/A Sanitarium Health Food Company for approval of an enterprise agreement known as the Sanitarium Health Food Company - Meals Enterprise Agreement 2024 (the Agreement). The Agreement is a single enterprise agreement. The United Workers’ Union (UWU) was a bargaining representative for the Agreement. There were also individual employee bargaining representatives. The Commission must approve the Agreement if satisfied that the requirements in ss. 186 and 187 are met.
Concerns were raised with the applicant about meeting the requirements in the Act. Some of those were raised by the Commission. Others by the UWU.
The Commission raised concerns that the requirement in s 186(2)(c) that the Agreement not exclude terms of the National Employment Standards (NES) may not be met. In particular, clause 34 relating to the circumstances where compassionate leave is available to an employee and clause 47.3 setting out the circumstances where an employer has the right to withhold an amount from an employee’s termination pay on termination may be read so as to operate in a manner inconsistent with the NES. Undertakings were provided to address these matters and I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES and so the requirement in s 186(2)(c) is met.
Section 186(2)(d) requires the Commission to be satisfied the Agreement passes the better off overall test (BOOT). The test is found in s.193 of the Act and it is to be applied in accordance with s.193A. Under s.193 the Commission must be satisfied, as at the time the application for approval was made, that each award covered employee, and each reasonably foreseeable employee, for the agreement would be better off overall if the agreement applied to the employee than the relevant modern award. Here the relevant awards are the Food, Beverage and Tobacco Manufacturing Award 2020 (the Award). In applying the test, the Commission is required by s 193A to make a global assessment of whether each employee would be better off having regard to the terms of the agreement which would be more beneficial than the Award and the terms which would be less beneficial. In making that assessment, the Commission may have regard to the patterns or kinds of work, or types of employment, that are reasonably foreseeable at the time of the application. A number of BOOT concerns were raised about the Agreement.
First, the Commission sought clarification about future pay rates or the percentage increase that employees will receive during the life of the Agreement. Relatedly, the issue of pay rates for apprentices was raised. In response the applicant explained that the percentage increase being applied to the increased rates that constitute the first column in Schedule A to the Agreement is not yet known (as it will either be the Sanitarium corporate annual percentage increase or WPI, whichever is greater). As to apprentice rates, the applicant indicated it does not employ any apprentices under the Agreement.
Secondly, concerns were raised in respect to extended shift lengths and the impact they had on the entitlement to overtime payments. The Agreement is silent on maximum shift length. The Award provides a maximum shift length of 12 hours but only by agreement. The Agreement also states overtime rates will not apply until 15 minutes after the rostered finishing time. The applicant has provided an undertaking that the Agreement will be read on the basis that an employee will be entitled to be paid overtime rates for any work beyond 12 hours and 15 minutes. The applicant submitted that the 15 minute rule in clause 29.7 is a legacy provision and that employee bargaining representatives are aware of the distinction between authorised and unauthorised overtime. A representative for the employee bargaining representatives separately indicate that the employee bargaining representatives do not view that this issue would result in the financial detriment or should not weigh against approval of the Agreement.
Thirdly, a matter was raised in respect to casual loading. Clause 12.9 appears to provide that a casual employee who works shift work will be paid the shift allowance in addition to the casual loading. This suggests that the casual loading will be paid on a cumulative basis, inconsistent with clause 10.2 of the Award which provides that the casual loading constitutes part of the casual employee’s all-purpose rate. The applicant has provided an undertaking that the clause 12.9 will be read on the basis that the casual loading constitutes part of the employee’s all-purpose rate.
An undertaking was also provided in relation to a concern about shift lengths for part-time employees. The undertaking provides that clause 11.5 of the Agreement will be read on the basis that part time employees may request to work no less than 3 consecutive hours per day or shift where an agreement is reached it will be recorded in writing.
A further issue concerned shiftwork provisions. Clause 27.6 provides that employees who receive less than 48 hours’ notice of a roster change will be paid at 150% for the first 2 hours and 200% thereafter, which is inconsistent with the Award. The question that arises is a whether this avoids the continuous shiftwork provisions of the Award as employees will be required to work overtime and shifts other than rostered shifts. A similar concern was raised about clause 29.3 being inconsistent with clause 23.3 of the Award which provides that continuous shiftworkers will receive overtime at 200%. The applicant submits that it does not employ any continuous shift workers in accordance with the Award, as it does not operate on the Sabbath, and so does not have work carried out on consecutive shifts for 24 hrs 6 days per week. The applicant addressed a similar concern about non-continuous shiftworkers by explaining it did not employ employees on that basis either.
The UWU raised a concern that the meal allowance at clause 20 of the Award may in certain circumstances be more favourable than the Agreement. In response the applicant explained that the circumstances described by the UWU, which related to meal allowances payable to day workers, should not arise in practice as it does not currently engage day workers.
The UWU also raised a concern about the provision in the Agreement that allowed the applicant to direct employees to take annual leave during a shutdown was less beneficial to employees as it did not include the same notice provisions and other protections in the Award. The applicant submitted that it was unlikely to use the provision and call a shut down outside the notice requirements in the Award but that in any event the lesser benefit was more than made up for by the beneficial provisions in the Agreement. The UWU also pointed to less beneficial provisions in the Agreement going to the way higher grade duties and call back payments are treated. The applicant accepted that the Agreement provisions may operate in a way that is less beneficial to employees compared to the Award entitlements but contends that they are compensated for by the benefits provided in the Agreement.
Given the explanations provided by the applicant, the undertakings provided, and having regard to s.193A(6), and in particular the types of employment and patterns of work of the employees covered by the Agreement, I am satisfied on a global assessment that the BOOT is met. A copy of the undertakings in relation to the matters raised is attached in Annexure A. The terms of the undertakings were provided to all bargaining representatives. No objection was raised. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and will not result in substantial changes to the Agreement. Pursuant to s.201(3), the undertakings are taken to be terms of the Agreement. I note that should the work patterns, kinds of work or types of employment under the Agreement change, an application under s.227A is available for a reconsideration of the BOOT.
The Agreement does not cover all of the employees of the employer, however, taking into account the factors in sections 186(3) and (3A) I am satisfied that the group of employees was fairly chosen. Having regard to the undertakings and the material contained in the application and filed in relation to it, including submissions of the applicant as to intended operation of the Agreement, I am satisfied that each of the requirements of ss.186 and 187 are met.
The United Workers’ Union, 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 organisation.
The Agreement contains minor typographical errors resulting in incorrect page numbers for some provisions in the proposed Agreement that was distributed to employees for the purposes of the access period. At the time of lodging this application, the Applicant advised that corrections had been made, the bargaining representatives had been notified, and an amended version of the Agreement was filed correcting the errors. I am satisfied that the corrections should be made and that it is appropriate to do so pursuant to s.218A of the Act.
The Agreement was approved on 11 July 2024, and, in accordance with s.54, will operate from 18 July 2024. The nominal expiry date of the Agreement at clause 6 is 11 July 2028.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<AE525421 PR776933
ANNEXURE A
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