Coca Cola Amatil (Aust) Pty Ltd T/A Coca Cola Amatil
[2021] FWCA 1850
•7 APRIL 2021
| [2021] FWCA 1850 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Coca Cola Amatil (Aust) Pty Ltd T/A Coca Cola Amatil
(AG2021/92)
COCA-COLA AMATIL (AUST.) PTY LTD RICHLANDS (QLD) MANUFACTURING ENTERPRISE AGREEMENT 2020 - 2023
Food, beverages and tobacco manufacturing industry | |
COMMISSIONER BOOTH | BRISBANE, 7 APRIL 2021 |
Application for approval of the Coca-Cola Amatil (Aust.) Pty Ltd Richlands (QLD) Manufacturing Enterprise Agreement 2020 – 2023 - Absence of Classification Structure from Agreement – requirements for approval.
[1] This decision is about an application brought by Coca-Cola Amatil (Aust) t/a Coca-Cola Amatil (the Applicant) under section 185 of the Fair Work Act 2009 for the approval of a single enterprise agreement made on 19 January 2021, the Coca-Cola Amatil (Aust) Pty Ltd Richlands (Qld) Manufacturing Enterprise Agreement 2020-2023 (the Agreement).
[2] On 21 January 2021 the Electrical, Energy and Services Division, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the ETU) and the United Workers Union (UWU) lodged forms F181 in support of the application.
[3] There are two matters for determination in this decision:
● whether the terms of Agreement are consistent with the Act and whether the Agreement complies with the National Employment Standards (the compliance issues); and
● to address concerns raised by the UWU that the Applicant’s classification structure was not included in the Agreement (the classification issue).
Compliance issues
[4] Correspondence was sent to the applicant and the Unions raising a number of concerns in relation to the terms of the Agreement and National Employment Standards (the NES).
[5] Clause 31.11 of the Agreement states if an employee takes annual leave in advance and then leaves the company, the company may deduct the outstanding holiday pay from any monies due, with the Employee’s consent. I observe this deduction is inconsistent with s.324 of the Act and accordingly may not be enforceable.
[6] I observe that the following provisions are likely to be inconsistent with the National Employment Standards (NES):
● Clause 20.2 – Maximum weekly hours of work;
● Clause 31 – Annual leave;
● Clause 32.6 – Personal/Carer’s leave.
[7] However, noting clause 6 of the Agreement, I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.
[8] Having resolved the concerns around terms of the agreement and National employment standards, I now turn to the matter of the absence of the classification structure raised by the UWU.
Absence of classification structure from the Agreement
[9] The UWU raised a concern about the proposed Agreement not including a classification structure in the Agreement. The UWU advised2 that it disagreed with one or more statements in the employer’s declaration relation to the Agreement in the following terms:
“United Workers Union (UWU) refers to the responses contained in the F17 document at Q4 and Q9. UWU is concerned with the absence of a classification structure in the agreement with duties and responsibilities of each classification clearly defined in the agreement. Q4 and Q9 refer to “The Richland’s Manufacturing Career Pathway” that which sits outside the agreement in policy which provides no certainty to CCA employees during the life of the agreement and is vulnerable to unilateral change by the employer without agreement or consent of CCA employees.”
[10] The relevant legislation from the Fair Work Act 2009 (Act) is extracted below:
Section 180
Employees must be given a copy of a proposed enterprise agreement etc.
Pre-approval requirements
(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials. (Emphasis added)
…
Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds
(b) young employees;
(c) employees who did not have a bargaining representative for the agreement.
186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
…
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
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.”
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.
…
[11] The Commission is required to approve an enterprise agreement made under section 185 where the requirements of sections 186 and 187 are satisfied.
[12] It is the Applicant’s submission, that it has satisfied section 186 and 187 the Agreement must therefore be approved.
[13] It is the UWU’s submission that the Agreement should contain the Career Pathway classification structure in the Agreement to meet the approval requirements under sections 186 and 187 of the Act.
Submissions of the Applicant
[14] The Agreement was made on 8 January 2021 with employees voting 63% in favour to approve the Agreement The Applicant submitted that its understanding is that the UWU supports the approval of the Agreement.
[15] The Applicant submitted that during the negotiation phase, the UWU ultimately agreed to remove the existing classification levels from the Agreement as part of the total package for the agreement.
[16] Pay rates under the Agreement are between 25.15% and 40.85 percent higher than the relevant award. The Applicant submitted that the lowest rate of pay in the Agreement is significantly higher than the highest rate of pay under the relevant award.
[17] As to the requirements for approval, the Applicant submitted that it has satisfied the requirements in sections 186 and 1873 as to the requirements in section 188 that concern whether employees have genuinely agreed – the Applicant submits it has met all the preapproval steps and therefore the Agreement must be approved submissions of the UWU.
Submissions of the UWU
[18] The UWU submitted that the Agreement should contain the Career Pathway classification structure to meet the requirements of section 186 and 187 of the Act. The UWU submits it first raised concerns during bargaining negotiations in December 2020 for a replacement agreement where it opposed the removal of the classification structure from the body of the replacement agreement on the basis that it would have the effect of prejudicing employees.
[19] The prejudicial effect is that the Agreement, without the classification structure, gives no certainty about classifications at which employees perform work during the life of the Agreement. The UWU revisited these concerns in further email correspondence on 19 January 2021.
[20] The UWU submitted that the Career Pathway classification structure should be contained in the Agreement for the following reasons:
● it would defeat the purpose of performing a BOOT test if the test is performed in the absence of a static classification structure contained in the Agreement which can be unilaterally changed by an employer without the consent of employees when it is being compared against the relevant modern award;
● it would lead to an incongruous result to have an enterprise agreement that does not include a static classification structure because the enterprise agreement has been the subject of the voting process but remains open later to unilateral change by the employer;
● there is a potential for disputation as it will be difficult to ascertain the objective intention of the contested words in the Agreement; or identify the substantial character of work being undertaken;
● it is unclear the applicant has met the requirements contained in section 180 (2) of the Act;
● the Career Pathway classification structure was circulated to employees prior to voting in the access period and informed the basis of the majority of relevant employees to vote yes to the Agreement.
Consideration
[21] Section 186 of the Act sets out the basic rule concerning approval of enterprise agreements. It is that the Commission must approve an agreement under this section if the requirements under section 186 and 187 are met.
[22] Section 186 requires genuine agreement by the relevant employees. Section 188 defines the meaning of genuinely agreed. This includes certain preapproval requirements under section 180.
[23] The UWU submitted it is unclear whether the applicant has met the requirements of section 180 (2) of the Act. Section 180 (2) provides as follows:
(1) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
the relevant employees have access, throughout the access period for the agreement, to a copy of those materials. (Emphasis added)
[24] The employer’s declaration in support of its application appended a Terms and Effects document which stated as follows:
● Removal of Classification Structure from the body of the EA, now sits outside under separate cover (with the process map) and is referred to as the Richland’s Manufacturing Career Pathway.
● The Richlands Manufacturing Career Pathway can be reviewed and changed` during the life of the agreement.
[25] Having provided a copy of the text of the Agreement and the Career Pathway document (with an explanation in the Terms and Effects document that indicated the classification structure would be removed from the body of the enterprise agreement), the Applicant has satisfied the requirements under section 180 (2) of the Act.
[26] Section 180 (5) requires that the employer take all reasonable steps to ensure the terms of the agreement, and the effect of those terms, are explained to relevant employees and it is done an appropriate manner taking into account the particular circumstances and needs of relevant employees.
[27] The Applicant refers to briefing sessions held with employees who would be covered by the Agreement. Employees were given printed copies of the proposed Agreement, copies of the career pathway document and the Terms and Effects document.
[28] The UWU relies on the case of Harbour City Ferries Pty Ltd4. In that case, Riordan C raised a concern where the classification structure was excluded from the enterprise agreement and whether therefore there was an appropriate explanation in order to satisfy section 180 (5) of the Act. Riordan C concluded when an agreement makes no mention of the classification descriptors and intentionally excludes all previous agreements, a detailed presentation of classification structure should have been included in the agreement explanation presentations. The Commissioner noted that it was not contested that such an explanation did not occur.
[29] Here, however, distinct from Harbour City Ferries, an explanation of the agreement was given to employees. This occurred through a combination of the provision of the agreement, the Terms and Effects document which provides a clause-by-clause explanation, the opportunity to seek further clarification and the provision of the Career Pathway document. Additionally, the UWU raised its concerns with the employer in December 2020.
[30] There is no material before the tribunal that employees did not understand the explanation that the classification structure was being removed from the Agreement and could be changed during the life of the Agreement. That is exactly what was detailed in the Terms and Conditions document.
[31] In January 2021, notwithstanding these concerns having been raised by the UWU, the Agreement was approved by majority of employees. I am therefore satisfied that the employer has taken all reasonable steps to ensure the terms of the Agreement and the effect of those terms were explained to relevant employees. Further I consider there are no other reasonable grounds for believing the Agreement has not been genuinely agreed to by employees.
[32] Having been satisfied that the employees have genuinely agreed to the enterprise agreement and that the Agreement does not contravene section 55 of the Act, I turn to whether the Agreement passes the better off overall test (BOOT).5
[33] The UWU submitted that when an application has been made under Part 2-4 of the Act to approve an enterprise agreement it defeats the purpose of performing the BOOT test if the test is performed in the absence of a static classification structure contained in the Agreement - meaning the classification structure can be unilaterally changed by the employer without the consent of employees when it is being compared against the relevant modern award.
[34] Further the UWU submitted the absence of a career pathway classification structure in the enterprise agreement renders the assessment of work by employees in order to determine which of the classifications contained in the replacement agreement best described as the substantial character of the work undertaken is uncertain and impossible to perform with any degree of precision. As a result it is inconceivable that the relevant construction principles as set out in Berri6 can be correctly applied.
[35] The Applicant does not accept that the absence of a classification criterion in the body of the Agreement will lead to incongruent and imprecise classifications. In any event, the employer submitted that the UWU’s opinion about a hypothetical possibility of classification disputes is immaterial and not relevant to the approval requirements under section 186 and 187. It refers to the existing dispute settling procedures within the Agreement.
[36] While it may be that wherever possible parties to an Agreement will seek to put in sufficient provisions that will deal with potential future disputes, it is not mandated. What is mandated is that the Commission be satisfied that each class of employees is better off overall. The Commission must be satisfied that each employee under the Agreement would be better off overall if the Agreement applied to the employee rather than the relevant modern award applied to the employee.
[37] That the UWU has concerns about the inclusion of the career pathway classification structure in the enterprise agreement will lead to disputes and uncertainty is not a matter that can be considered as part of the approval process. If there was to be a dispute concerning the classification of an employee it will be dealt with under dispute resolution clause. It is not a matter for BOOT. I therefore conclude that the removal of the career pathway classification structure from the enterprise agreement cannot be a matter prohibiting approval of the Agreement.
[38] I turn now to the BOOT assessment. It requires consideration as to whether each class employee is better off as compared to the Award.
[39] In this regard the Applicant provided classification matching employee classifications in the Agreement to classifications in the relevant modern award.7 The pay rate comparison demonstrates the rates of pay are between 25.15% and 40.85% above the award. The lowest agreement rate of $25.51 is higher than the highest award rate of $23.82. The employer has satisfied the BOOT for the purposes of s.193 of the act.
[40] Having satisfied the requirements of section 186 that the Agreement has been genuinely agreed to by employees and it passes the better off overall test, the Agreement is capable of being approved.
[41] I am satisfied, on the basis of information set out in the Form F16 Application for approval of an enterprise agreement and the Form F17 Employer’s declaration in support of an application for approval of the Agreement that each of the requirements of ss. l86, 187 and 188 as are relevant to this application for approval have been met. The Agreement does not cover all of the employees of the employer, however, taking into account s.186(3) and (3A), and on the basis of the information contained in the Form F17, I am satisfied that the group of employees covered by the Agreement was fairly chosen.
[42] The CEPU and UWU, being bargaining representatives for the Agreement, have given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) of the Act and based on the declaration provided by the CEPU and UWU, I note that the Agreement covers these organisations.
[43] The Agreement is approved in accordance with s.54 of the Act and will operate from 14 April 2021. The nominal expiry date of the Agreement is 30 June 2023.
COMMISSIONER
1 Declarations of an employee organisation in relation to an application for approval of an enterprise agreement (other than Greenfields agreement).
2 F18 filed on behalf of the United Workers Union, question 6.
3 Applicant’s outline of submissions dated 29 March 2021, paragraphs [6] – [8]
4 [2017] FWCA 221.
5 Fair Work Act 2009 (Cth), s.186(2)(d).
6 AMWU v Berri Pty Ltd[2017] FWCFB 3005.
7 Form F17 at Q9.
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