“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Visy Packaging Pty Ltd

[2018] FWC 6268

[2018] FWC 6268

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Visy Packaging Pty Ltd
(C2017/6449)

COMMISSIONER MCKINNON MELBOURNE, 9 OCTOBER 2018

Alleged dispute about any matters arising under the Visy Packaging Pty Ltd (Cartons - Broadmeadows) AFMEPKIU/ETU Enterprise Agreement 2017 – catered food service – subsidy arrangement – whether matters pertaining to the employment relationship.

[1] On 23 August 2018, I issued a decision in [2018] FWC 4953 in which I found that clause 13.2 of the Visy Packaging Pty. Ltd. (Cartons - Broadmeadows) AFMEPKIU/ETU Enterprise Agreement 2017 1(the Agreement) covers two canteens formerly operated at Visy’s Broadmeadows site (the canteen(s)) including the physical facilities and equipment in the canteen area as well as the supply of food through the canteen to employees on the day shift, but only to the extent that it is about permitted matters within the meaning of section 172 of the Fair Work Act 2009 (the Act).

[2] The relevant term in clause 13.2 of the Agreement is as follows:

“The Company shall not modify, remove or reduce any service or facility that has been provided without the agreement of the majority of Employees and their representatives, provided that the facilities are not being deliberately misused, abused, damaged or defaced by Employees.”

[3] The parties subsequently filed submissions on whether, and the extent to which, the prohibition in clause 13.2 of the Agreement on any modification, reduction or removal of the catered food service provided by Spotless, or the subsidy provided by Visy, is about permitted matters.

[4] This decision determines the dispute.

Permitted matters

[5] Section 172(1) of the Act permits enterprise agreements to be made about one or more of the following “permitted matters”  2:

(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;

(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d) how the agreement will operate.

[6] The “matters pertaining to the employment relationship” formulation has a long history. 3 In its present form, it requires that a matter directly affect the employer(s) and employees covered by the relevant enterprise agreement in their capacity as such.4

[7] Whether a matter pertains to the employment relationship is to be objectively determined on the particular facts in each case. 5 The test is to be applied to each discrete, substantive and significant provision.6 As the Explanatory Memorandum for the Fair Work Bill 2009 explains:

“671. Whether a particular term is about matters pertaining to the employment relationship will depend on its precise construction, as well as the circumstances surrounding the particular employment relationship. Frequently, it will be obvious that a term pertains to the employment relationship - e.g., a term about the payment of wages or a term about hours of work and shift patterns. However, there are some terms where it is not so immediately clear whether the terms are about matters pertaining to the employment relationship (see, e.g., the discussion in Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004[2004] AIRC 1064).”

[8] The Explanatory Memorandum contains examples of terms intended to be within the scope of permitted matters and terms that are not intended to be within that scope. Examples of the latter include terms that would “require an employer to engage or not engage particular clients, customers or suppliers who had agreed to commit to certain employment, environmental or ethical standards (unless, e.g., such a terms was directly related to employees’ health and safety).”

[9] In Electrolux Home Products Pty Limited v Australian Workers’ Union 7 Gleeson CJ observed as follows:

“In one sense, anything that is capable of being made the subject of an agreement between an employer and employees could be said to be a matter pertaining to their relationship. An employer could agree, for example, to make regular donations to a particular political party. The established principle, however, is that, in the context with which this legislation is concerned, it is matters which affect employers and employees in their capacity as such that "pertain to the relations of employers and employees.”

[10] The High Court in Electrolux confirmed the well-established proposition that “the relations of employers and employees” refers to the industrial relationship, and not to matters having an indirect, consequential and remote effect on that relationship. 8

[11] In Wesfarmers Premier Coal Limited v the Automotive Food Metals Engineering, Printing and Kindred Industries Union (No 2) 9 the Federal Court observed:

“The words "pertaining to" mean "belonging to" or "within the sphere of" and the expression "the relations of employers and employees" must refer to the relation of an employer as employer with an employee as employee.”

[12] The decision in United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board 10 is also relevant.11 In that case, a Full Bench of the Commission confirmed the relevance of Re Cram; ex parte NSW Colliery Proprietors’ Association Limited12 to the “matters pertaining” formulation, deriving this proposition:

“A matter will pertain to the relationship of employers and employees if it directly affects the conditions of employees, which includes all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment.” 13

[13] As a general rule, a payment made to, or for the benefit of, an employee by an employer is normally presumed to pertain to their relations unless it falls into a category identified as outside the relationship. 14 However, a matter does not become a matter pertaining to the employment relationship simply because it is a matter over which employers and employees are in dispute.15 The test of sufficient direct effect on the employment relationship is key.16

Consideration

[14] The canteen(s) the subject of this dispute comprised the physical facilities and equipment in the canteen areas as well as a catered food service that was generally available during the hours of 7.00am and 2.00pm, Monday to Friday, excluding rostered days off and public holidays, with some variation. 17 Three staff were provided by Spotless to work in the canteens.18

[15] There is no dispute that the physical facilities and equipment in the canteen areas remain available for use. Visy says, and it is not contested, that those facilities have improved since the dispute arose.

The catered food service

[16] The catered food service was operated under a catering contract between Visy and Spotless. I infer that it was the most recent in a series of arrangements made by Visy for food and drinks to be available on site at least during the day. According to Visy, changes to those arrangements occurred periodically over the years, including in relation to the identity of the service provider, opening and closing times, items available for purchase and methods to subsidise costs. 19

[17] The catering contract is not in evidence. The materials suggest that it provided for Spotless to operate the canteen(s) in return for payment by Visy of a pre-determined amount, not calculated by reference to daily or weekly sales. 20 Payment of that amount has been described as a ‘subsidy’ because of its effect in keeping food and drink prices low for users of the canteen,21 who were mostly employees covered by the Agreement but also other Visy employees and visitors to the site, including union officials.22 However, the purpose of the payment was to ensure the contract remained valuable to Spotless, regardless of the value of sales or, by correlation, level of use.23

[18] Employees on day shift had the ability to benefit from the catering contract by using the canteen, but there was no requirement for them to do so and most did not. 24 Employees had other options, including eating at home before or after work, bringing food and drinks to work or purchasing them from one of the number of alternative cafeteria and restaurant options near the site or through a food delivery service.25 The catered food service was for use during non-work time – that is, before or after work or during breaks.26 Employees using the service paid for their purchases from wages they had already accrued.27

[19] The catered food service contributed to the environment in which day shift employees worked, but it was not a necessary requisite, attribute, qualification, environment or other circumstance affecting the employment. It was not, for example, necessary in the way that provision of water or meal preparation or eating facilities would ordinarily be necessary to ensure employee occupational health and safety at the workplace. It was not the sole, or even primary, means by which employees on day shift could avail themselves of a meal.

[20] I also do not consider that the catered food service was a reward for employees’ work. Employees were not rewarded any more or less for their work as a consequence of their access to, and/or use or non-use, of the canteen. Employees on day shift had the option of access to cheap food through the canteen, a result that could equally be achieved by bringing meals from home.

[21] A term of the Agreement requiring Visy to maintain the catered food service without modification would amount to a requirement that Visy ensure Spotless’s continued provision of three workers to staff the canteen(s). In my view, mandating the provision of a third party workforce to provide onsite catering does not sit comfortably within the sphere of the employment relationship.

[22] For these reasons, I am not satisfied that an obligation to maintain the catered food service under clause 13.2 directly affected the conditions of employees in their capacity as employees of Visy covered by the Agreement. It did not affect any necessary requisite, attribute, qualification, environment or other circumstance affecting their employment directly. It affected day shift employees indirectly when, and if, they chose to be customers of the canteen(s). It did not affect or relate to work done, or to be done by those employees. 28 It was not a matter pertaining to the employment relationship between them.

The subsidy arrangement

[23] For the same reasons, the obligation to maintain a subsidy arrangement between Visy and Spotless was similarly remote from the sphere of the employment relationship between Visy and its employees. Visy was clearly directly affected by the arrangement as the entity responsible for payment and because, on account of the payment, it received a promise from Spotless to operate the canteen(s). Spotless was also directly affected by the payment arrangement as the beneficiary of the payment and provider of services to Visy in return.

[24] Employees on day shift could choose to be affected by Visy’s obligation to maintain the subsidy arrangement, because that arrangement allowed the canteen(s) to continue to operate despite low levels of use at the site. It gave them the option of access to food and drink at lower than retail prices. However, that effect was indirect, consequential and remote to their relationship of employment. It did not affect or relate to work done, or to be done, by employees covered by the Agreement. To the extent that it did affect employees, it was in their capacity as customers of the canteen.

[25] I find that the obligation to maintain the subsidy arrangement was not a matter pertaining to the employment relationship between Visy and employees covered by the Agreement.

Conclusion

[26] Visy’s obligations under clause 13.2 of the Agreement to maintain, without modification, the catered food service and the subsidy arrangement, are not about matters pertaining to the employment relationship between Visy and employees covered by the Agreement.

[27] No party contended that either the catered food service or the subsidy arrangement were instead about matters pertaining to the relationship between the employer and either of the unions covered by the Agreement, or about deductions from wages or how the agreement will operate. I find that they were not.

[28] To the extent that clause 13.2 of the Agreement prohibited any modification, reduction or removal of the catered food service provided by Spotless, or the subsidy provided to Spotless by Visy, it was not about permitted matters.

[29] The result is that Visy was not required to maintain either the catered food service provided by Spotless or the subsidy arrangement it had negotiated with Spotless to provide that service.

[30] The dispute is determined accordingly.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR701176>

 1   AE424684

 2   Fair Work Act 2009 (Cth), s.12.

 3   Explanatory Memorandum to the Fair Work Bill 2009, at [661]-[678].

 4   Electrolux Home Products Pty Limited v AWU [2004] HCA 40; (2004) 221 CLR 309.

 5 [2004] HCA 40 at [241]; Wesfarmers Premier Coal Ltd v AMWU (No 2) [2004] FCA 1737 at [62].

 6   PR956575

 7 [2004] HCA 40 at [9]

 8   R v Portus; Ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 at359 and 362: R v Kelly; Ex parte Victoria (1950) 81 CLR 64 at 84

 9 [2004] FCA 1737 per French J at [78]

 10   [2016] FWCFB 2894

 11   See also Airport Fuel Services v Transport Workers Union of Australia [2010] FWAFB 4457 and National Union of Workers v Alto Manufacturing Pty Ltd [2015] FWC 2730.

 12 (1987) 163 CLR 117

 13   [2016] FWCFB 2894 at [26]

 14   Australian Maritime Officers Union v Sydney Ferries Corporation [2009] FCAFC 145 at [21]

 15 (1950) 81 CLR 64 at 85

 16 [2004] HCA 40 at [89]

 17   Exhibit 1, Statement of Michael Bull

 18   Exhibit 4, Statement of Paul Kirk at [7]

 19   Exhibit 6, Statement of Shawn Kopel at [11]

 20   Exhibit 5, Statement of Levent Latifoglu, at [9]

 21   Exhibit 5 at Annexure B

 22   Audio recording of hearing on 11 July 2018, evidence of Mick Bull

 23   Exhibit 5 at [9]

 24   Exhibit 6 at Annexure B

 25   Exhibit 6 at Annexure B; Exhibit 5 at [20]

 26   Exhibit 1 at [8]

 27 [2009] FCAFC 145 at [19]

 28 (1987) 163 CLR 117 at 137, citing R v Kelly; Ex parte Victoria (1950) 81 CLR 64 at 84