Bartter Enterprises Pty Ltd

[2019] FWCA 1603

[2019] FWCA 1603

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Bartter Enterprises Pty Ltd
(AG2018/2911)

BARTTER ENTERPRISES PTY LIMITED (RIVERINA FARMS NSW) ENTERPRISE AGREEMENT 2018 - 2022

Agricultural industry
COMMISSIONER GREGORY	MELBOURNE, 12 MARCH 2019

Application for approval of the Bartter Enterprises Pty Limited (Riverina Farms NSW) Enterprise Agreement 2018 - 2022.

[1] An application has been made under s.185 of the Fair Work Act 2009 (“the Act”) by Bartter Enterprises Pty Ltd for approval of an enterprise agreement known as the Bartter Enterprises Pty Limited (Riverina Farms NSW) Enterprise Agreement 2018 - 2022 (“the Agreement”). It is a single enterprise agreement.

[2] The Applicant is part of the Baiada Group, and the proposed Agreement is intended to cover around 124 employees who are variously employed as general hands, stock hands, farm hands, farm transporters and rural tradespersons. It is also noted that 94 employees voted in the ballot to approve the Agreement, with 88 voting in favour. The employees are employed on various poultry farm sites in the Riverina region of New South Wales. Approximately half of the total number of employees are engaged on either a part-time or casual basis.

[3] After reviewing the application, the F17 Employer’s Statutory Declaration, and the terms and conditions contained in the proposed Agreement, the Commission sought clarification from the Applicant about a series of matters.

[4] The Australian Workers’ Union (“the AWU”), who were a Union Bargaining Representative for the Agreement, also provided a F18 Statutory Declaration of Employee Organisation. The AWU indicated in the Declaration that it supported the approval of the Agreement, subject to it complying with the requisite statutory provisions. It also referred, in particular, to three clauses in the Agreement, and suggested that in each case they provide inferior conditions when compared to those in the underlying Pastoral Industry Award 2010.

[5] Those matters concerned:

•  The part-time employment provisions – in this case the AWU submitted that the clause in the Agreement could act to deprive employees of overtime entitlements that they would otherwise be entitled to under the Award. It also suggests that part-time employees would also not have regular stability in terms of their weekly hours, and could instead be involved in working arrangements with variable hours that were more akin to a casual work arrangement, but without receiving the additional casual loading.

•  The casual employment provisions – in this case the AWU noted that the Agreement does not require the employer to inform casual employees on engagement about who they are employed by, their hours of work, their classification level, and their rate of pay. It also appeared that the Agreement did not provide for casual employees to receive overtime or other penalty rate entitlements.

•  The final matter raised by the AWU concerned the clause dealing with abandonment of employment, and in this case the AWU submits that it proposes to exclude the notice of termination entitlements in the National Employment Standards, and the statutory obligation that an employee is protected from dismissal on the basis of temporary absence from work.

[6] The Applicant provided responses to each of the matters raised by the AWU, as well as to some additional matters raised by the Commission. It submits that the part-time employment arrangements satisfy the requirements of clause 10.3(a) in the Pastoral Industry Award 2010 in that part-time employees work less than 38 hours per week; their hours are reasonably predictable; and they receive on a pro rata basis equivalent pay and conditions to full-time employees, who perform the same kind of work. Clause 12.4.5 in the Agreement also provides for the payment of overtime for part-time employees for, “All time worked falling outside of the daily ordinary hours equivalent to a full-time employee or in excess of the hours mutually arranged on engagement or at a later date shall be paid at the appropriate overtime rates.” It also acknowledges that the arrangements in the Agreement do not provide for definite finishing times each day, however, it submits that the nature of the poultry farming industry is that finish times on any day depend on daily work requirements.

[7] It continued to indicate that in compensation the Agreement does guarantee a minimum number of 16 hours per week for part-time employees, and provides a 7.5% loading for all ordinary hours worked. This practice has been operating for many years in the poultry farming industry in respect of part-time employment arrangements. It also submits that this arrangement is preferable to the vagaries and uncertainties associated with casual employment. The Agreement also provides for a four hour minimum engagement on each occasion, whereas the Award has no minimum engagement provision for part-time employees, and only provides for a minimum engagement of three hours for casual employees.

[8] In terms of the casual employment arrangements it is noted that casuals are paid the casual loading for all ordinary hours worked. Penalty rates are then calculated on ordinary time rates without including the casual loading. It also refers to the provisions contained in clauses 17.2.2 and 29.4.2, which provide for additional penalty rate entitlements for casual employees on Sundays and public holidays. The entitlements to shift penalties in accordance with clause 20.2 also apply to casual employees. The Applicant also proposed to provide an undertaking in the following terms:

“Casual employees will be paid overtime worked, Monday to Saturday, at the rate of 175% of the ordinary time rates for the first 2 hours and 200% thereafter, inclusive of the casual loading.”

[9] The Applicant finally objects to the way in which the AWU has sought to characterise the abandonment of employment clause. It submits in response that it does not prescribe automatic dismissal, nor does it imply termination of employment in cases of temporary absence from work. It submits instead that the provisions are in line with previous authorities, which have confirmed that an employer must take additional steps in terminating the employment of an employee who “walks off the job,” and it is not sufficient for an employer to simply conclude in those circumstances that an employee’s employment has effectively been terminated as a consequence of them abandoning their employment. It also points to the NES precedence clause in sub clause 4.3, which provides that the National Employment Standards in the Act shall apply to all employees covered by the Agreement except to the extent that the Agreement provides entitlements that are more favourable to the employees. This provision accordingly requires the Applicant to comply with the Notice of Termination provisions in the NES.

[10] The Applicant also provided further details in regard to classification matching and submits that the rates of pay under the Agreement are in excess of the equivalent Award classification rate, and generally exceed the next higher classification rate as well. It is noted in this context that the Commission’s review of the Agreement indicates that the wage rates are approximately 5/6% higher than those contained in the underlying Award at the lower classification levels, and significantly greater than this in respect of other classifications in the Agreement.

[11] The Applicant also indicated that the original F17 Employer’s Statutory Declaration lodged with the application contained a typographical error in regard to the date upon which the Agreement was made, and the correct date should have been 12 June 2018, and not 12 March 2018 as stated. The Agreement was lodged with the Commission on 26 June 2018 and it submits it was therefore lodged within the requisite 14 day period after it was made. A revised F17 Employer’s Statutory Declaration has also been provided to the Commission confirming the correct dates.

[12] Section 186(1) of the Act requires the Commission on application for approval of an enterprise agreement to approve the Agreement “if the requirement set out in this section and section 187 are met.” 1 Section 186(2), firstly, requires that the Commission must be satisfied that “the agreement has been genuinely agreed to by the employees covered by the agreement,”2 and, secondly, that “the agreement passes the better off overall test.”3

[13] Section 188 of the Act continues to deal with the circumstances in which employees can be said to have genuinely agreed to an enterprise agreement. It states:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.” 4

[14] As indicated, s.186(2)(d) requires that the Commission must be satisfied that the Agreement passes the “better off overall test.” The requirements of the test are dealt with in s.193(1) in the following terms:

“193 Passing the better off overall test

When a non greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as At the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.” 5

[15] Section 193(6) also provides that the “test time” is the time the application for approval is made under section 185.

[16] It is well established that the application of the “better off overall” test requires the identification of terms and conditions in the proposed Agreement that are more beneficial for the employees, and those which are less beneficial, with an overall assessment then being made about whether the employees would be “better off overall” under the Agreement.

[17] I have reviewed the terms and conditions contained in the proposed Agreement compared to those in the underlying Pastoral Industry Award 2010. I am satisfied that, on balance, the Agreement contains terms and conditions that are more beneficial for the employees than those contained in the Award. In this context I refer, in particular, to the wage rates, various allowances, and the hours and overtime arrangements.

[18] I have also reviewed the abandonment of employment provisions contained in sub clause 21.4.1 of the proposed Agreement. I am satisfied that those provisions do not suggest that an employee is considered to have been terminated if they have been absent for more than three rostered days without notification. They indicate instead that in those circumstances there will be a series of processes put in train, which include all reasonable steps being taken over the next seven days to attempt to contact the employee and understand the circumstances involved. It also indicates that if a reasonable explanation for the absence has not been provided in those circumstances then the business will take further action to “terminate their employment subject to the NES.” This provision exists along with the general NES precedence clause contained in sub clause 4.3 of the Agreement.

[19] I am satisfied, in response, that this provision does not presume that an employee is considered to have terminated their employment if they have abandoned their employment as provided for in sub clause 21.4.1. It simply instead sets out the processes that will be put in train if an employee has been absent from work for more than 3 days without explanation. One of those outcomes could eventually be termination of employment, but this would only occur after a series of further steps have been gone through. I am satisfied, in turn, that the provision does not act in breach of any statutory requirements.

[20] It is also noted that clause 36 of the Agreement states that an individual flexibility term can be terminated by either the employer or the employee giving written notice to the other party of 13 weeks. The Act states that the written notice of termination must not be more than 28 days. Therefore, under s.202(4) of the Act the model flexibility term prescribed by the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[21] As indicated, the Applicant has also proposed that a written undertaking be provided in respect of overtime entitlements for casual employees. A copy of that undertaking is attached in Annexure A. I am satisfied that it will not cause financial detriment to any employee to be covered by the Agreement, and that it does not constitute a substantial change to the Agreement. The undertaking is accordingly approved and will now be taken to be a term of the Agreement.

[22] I am otherwise satisfied that each of the requirements of ss.186, 187 and 188, as are relevant to this application for approval, have been met.

[23] The Australian Workers’ Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, Electrical Division NSW, being bargaining representatives for the Agreement, have both given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) I note that the Agreement covers those organisations.

[24] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 19 March 2019. The nominal expiry date of the Agreement is 12 June 2022.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

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Annexure A

 1   Fair Work Act 2009 (Cth) s 186(1).

 2   Fair Work Act 2009 (Cth) s 186(2)(a).

 3   Fair Work Act 2009 (Cth) s 186(2)(b).

 4   Fair Work Act 2009 (Cth)s 188.

 5   Fair Work Act 2009 (Cth) s 193.