Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty. Limited

[2018] FWCA 2283

[2018] FWCA 2283

FAIR WORK COMMISSION

decision

Fair Work Act 2009

s.185—Enterprise agreement

Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty. Limited

(AG2018/750)

Coles Supermarkets Enterprise Agreement 2017

Retail industry
Deputy President Gostencnik	SYDNEY, 23 APRIL 2018

Application for approval of the Coles Supermarkets Enterprise Agreement 2017.

1. Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty. Limited are related bodies corporate. They are single interest employers within the meaning of s.172(5) of the Fair Work Act 2009 (Act). They have made an agreement titled Coles Supermarkets Enterprise Agreement 2017 (Agreement) with certain of their employees. Coles Supermarkets Australia Pty Ltd is a bargaining representative for the Agreement and has applied under s.185 of the Act for the approval of the Agreement. I will hereafter refer to these related bodies corporate as “Coles”. The application was lodged on 1 March 2018 and was accompanied by a statutory declaration of Mr Courtney Dixon, Employee Relations Manager of Coles.

1. The Australian Workers’ Union  (AWU), the Australasian Meat Industry Employees Union (AMIEU), the Shop Distributive and Allied Employees Association (SDA) and the Transport Workers’ Union of Australia (TWU) (collectively “the Unions”) are bargaining representatives for the Agreement and each gave notice that it wanted to be covered by the Agreement and supported its approval. Ms Ann Wells, Supermarket Team Member and Ms Penelope Vickers, Team Leader are bargaining representatives for the Agreement and both have filed statutory declarations in support of the approval of the Agreement. Mr Danny Grkovic and Mr Kurt Bryant are also bargaining representatives for the Agreement but did not file a statutory declaration.

1. The Retail and Fast Food Workers Union Incorporated (RAFFWU) indicated that it wished to be heard on the application. The RAFFWU made written submissions in relation to which response submissions by Coles and the SDA were made. All parties agreed that I deal with the matter on the papers. Except for the matters with which I will shortly deal, no issue concerning a pre-approval step, the coverage of the Agreement, the exclusion of the NES or any other approval requirement in relation to the Agreement has been raised or identified. On the material before me I am therefore satisfied that each of the other relevant matters set out in s.186 and s.187 of the Act which condition the exercise of the power to approve the Agreement have been satisfied.

1. The RAFFWU raised two concerns with respect to the application, it submits that:

(a)   the Agreement does not pass the Better Off Overall Test (BOOT); and

(b)   the Agreement may not have been genuinely agreed to by employees.[1]

1. In respect of the first issue raised, the RAFFWU submits that the Agreement provides for a wage rate of 5c per hour more than the General Retail Industry Award 2010 (Award). It says that this is by virtue of a new base rate applying ($20.55 per hour for most adult staff) which incorporates the laundry allowance of $1.25 per shift.[2] It says that for a new part-time adult store team member working three by 3 hour shifts per week during non-penalty times, amounts to 9 hours at $20.55 or $184.95. Under the Award such an employee would earn 9 hours at $20.08 and three payments of laundry allowance or $184.47. Such an employee would earn 48c per week more than the Award, equivalent to $25 per annum.[3]

1. The RAFFWU submits that the Agreement includes a term which purports to establish a standing consent to written variations to the contracted terms by oral or other agreement.[4] Clause 4.1.4(d) states:

“Any agreement to vary the regular pattern of work will be made in writing before the varied hours commence. A variation under this subclause may be of a temporary (including adhoc or one off variations) or permanent nature. A part-time team member can elect to provide written standing consent to vary their regular pattern of work in order to work additional hours at the rates of pay specified in clause 4.1.4(h), provided such standing consent may be withdrawn by the team member at any time. (To avoid doubt, a team member who provides standing consent can still verbally refuse to work additional hours when offered on any occasion.) Such a variation in writing may be made by electronic means (this will include MyColes, One Team, E---mail and SMS).” [Emphasis added by RAFFWU]

1. It says that since the application was made, Coles has implemented a program purportedly obtaining standing consent from staff. It submits that this term has the effect of a staff member agreeing to vary hours verbally rather than by written agreement.[5] The Award provides for variations to contracted hours that would avoid overtime rates at clause 12.3 as follows:

“12.3 Any agreement to vary the regular pattern of work will be made in writing before the variation occurs.”

1. The RAFFWU says that this obligation is not perfunctory. It says that it was the mechanism determined by the Commission to allow an employer to pay an employee other than at overtime rates for hours worked in addition to contracted hours.[6]

1. It says that in considering the BOOT, under the Agreement, Coles can come to an arrangement with an employee to not reduce variations to writing but still pay wages for hours worked at rates lower than overtime rates.[7] The RAFFWU submits that such an arrangement (where non-written variations permit wages to be paid for hours worked at rates lower than overtime rates) was considered by the Full Bench in Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo; The Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo[8] where it was said “we also note that provisions of the Agreement, such as payment to part-timers for additional hours worked could amount to a detriment”. The provision considered in that case paid for additional hours worked at the casual rate of pay rather than the ordinary rate of pay that would otherwise apply as is the case in the Agreement.

1. The RAFFWU submits that using the example above of a worker being financially better off by 48c per week, $25 per year, if that worker worked a single 3 hour shift at non-penalty rate times with verbal consent rather than a written contractual variation, they would earn an additional $61.65. That shift under the Award would be paid at overtime rates and attract laundry allowance. It would be paid $20.08 by 3 hours by 150% plus $1.25 in laundry allowance or $91.61. The single shift impacts on the annual $25 benefit by reversing it to a $5 detriment compared to the Award terms.[9]

1. The RAFFWU submits that the standing consent arrangement is a concoction to avoid the Award obligation of reducing each variation to writing. It says that it is beyond doubt that Coles will award any additional hours it wishes to offer to those who provide standing consent. Workers who wish to access such additional hours will, in effect, have to give standing consent. The structure then provides that variations are not agreed in writing as contemplated by the Award. This will maintain the current structure at Coles of awarding and arranging additional hours as voluntary overtime.[10] The RAFFWU says that voluntary overtime is not a benefit to employees. An agreement containing a voluntary overtime clause must contain provisions that are more beneficial than the equivalent terms in the modern award or are not conferred by the modern award in order to meet the BOOT.[11]

1. The RAFFWU submits that the BOOT is not met and that Coles ought be requested to make an undertaking that the “standing consent” provisions will not be referred to, utilised or relied on by Coles.[12] The RAFFWU says that for the sake of completeness, it notes that the clause itself does not explicitly limit standing consent variations without written authority to voluntary overtime. It says that while this appears to be the intent of the provision, it arguably could be applied to permit other variations to the regular pattern of work – such as changes to the hours worked, and when they are worked – other than in writing.[13]

1. Coles contends that clause 4.1.4(d) of the Agreement is not detrimental to employees and should be regarded as being beneficial.[14] Coles contends that the only difference between the Award and the Agreement is that the Agreement allows for the variation, in the case of additional hours only, to be made in writing in advance and then confirmed at a later time.[15] It says that the Agreement confirms that an employee may withdraw their consent at any time and maintain the right to refuse to work additional hours on any occasion even if they have provided standing consent.[16] In support of its contention, Coles relies on the Full Bench[17] decision varying the part-time overtime provisions in the Award from “overtime is payable for all hours worked in excess of the agreed number of hours” to “all time worked in excess of the hours as agreed under clause 12.2 or varied under clause 12.3 will be overtime and paid for at the rates prescribed in clause 28.2 – Overtime (excluding shift work).”[18] Coles posits that the standing consent clause in the Agreement minimises the administrative burden for Coles and employees who wish to work additional hours thus promoting flexibility. More importantly, Coles contends that part-time employees who do not wish to work additional hours and who would only work them when directed to do so, are still entitled to overtime penalties and are afforded the genuine agreement protections.[19]

1. The SDA contends that the assertion by RAFFWU that the Agreement fails the BOOT because of clause 4.1.4(d) is “faint”.[20] It contends that the Award provides, inter alia, that a part-time employee and his or her employer must agree in writing on a regular pattern of work specifying the hours that are to be worked each day, the days to be worked and the commencing and finishing times on each of those days.[21] Additionally, the Award provides that the regular pattern of work can be varied in writing and that a part-time employee is paid at ordinary time rates for hours worked that are agreed.[22] The Award then provides that any time that is worked in excess of the hours that have been agreed to on commencement of employment or as varied, must be paid at overtime rates.[23] In support of its contention, the SDA also refer to the Full Bench decision that determined to vary the part-time overtime provisions in 2010 to ensure that part-time employees do not miss out on the opportunity to work additional hours because the Award required them to be paid at overtime rates.[24]

1. The SDA says that under clause 4.1.4(d), part-time employees are not required to work additional hours at ordinary time rates.[25] They say that the effect of the clause is that if a part-time employee wishes to work additional hours at the appropriate ordinary time rate, then by virtue of clause 4.1.4(d), they can do so and that such a position is the same as the Award.[26] The SDA contend that the only difference between the operation of the Agreement clause and the Award clause is administrative and allows Coles to implement a practical and logistically sound method of allowing part-time employees to work additional hours.[27]

1. The SDA contend that the standing consent provisions in the Agreement are a benefit to employees and provide a clear protection in that a formal record of an employee’s wish to work additional hours must be maintained and that a part-time employee can refuse to work additional hours on any occasion.[28] Furthermore, the SDA submit that clause 4.1.4(d) does not operate to circumvent the payment of overtime penalties, but affords a part-time employee the opportunity to agree to working additional hours in advance and to verbally withdraw such an agreement at any point in time.[29]

1. Overall, the SDA say that the submission of RAFFWU is “a theoretical one divorced from any real understanding of the working conditions and wishes of employees who will be covered by the Agreement” and that their position does not appear “to [not] reflect the wishes of the relevant employees given them overwhelming majority of those employees who chose to vote, who voted in favour of the Agreement and who voted in favour despite the recommendation of RAF Inc. that they vote against the Agreement”.[30]

1. Ms Ann Wells contends that as to the standing consent concern, she believes that it is “one of the best offers that Coles have ever made, as it should all allow part-time team members to easily and seamlessly access the additional hours that they need, paid at ordinary hours or ordinary hours with penalties as the case may be.  Those additional hours then produce extra superannuation and leave.  At the pointy end of a Coles team members working life, and for those who have not been there it is hard to imagine, it is those additional hours, not whether they are paid at overtime rates or otherwise, that matter.”[31]

1. In its reply submissions, RAFFWU contend that the standing consent provisions permit additional hours to be worked as voluntary overtime.[32] RAFFWU say that by not reducing the variation to writing, it cannot be considered a contract variation and that a system which does not reduce such changes to a new written contract are inferior to the Award.[33] RAFFWU contend the result of the provision is that “a worker is supposedly agreeing in writing in advance of even knowing what the contractual variation might be…” and that “it is a furphy and ought not be entertained as anything other than a system of voluntary overtime – even on a case by case and consensual basis.”[34]

1. The provision in the Agreement is different to the Award provision but I do not consider it to be detrimental. I accept that the provision results in an easing of an administrative burden on Coles in achieving a flexibility for which provision is already made in the Award. An employee and Coles are able to agree on a variation contemplated by the Award but through a scheme involving less frequently executed written variation agreements. The existence of flexibility arrangements requiring written agreement provides both flexibility to an employer and safeguards to an employee. The requirement for a written agreement acts as both a safeguard and evidence of agreement. The Agreement requires the standing consent to be in writing. It also allows, without the burden of writing, for an employee to refuse to work particular hours on any occasion notwithstanding the earlier written consent. In the result, the employee is not bound by the earlier written consent. The balance of flexibility and safeguards is preserved by the provision in the Agreement. I therefore do not consider that the provision affects negatively, the assessment of whether the Agreement passes the BOOT. 

1. As to the second issue, the RAFFWU says it was made aware by many employees of Coles that they had been advised by another bargaining representative of the effect of the Agreement[35], it says that it understands that the SDA was afforded substantial access to employees in the form of paid meetings, during the access period and ballot.[36] The RAFFWU says that with such arrangements in place, the information provided in those meetings is a relevant part of the information matrix upon which employees relied when voting on the Agreement.[37] It contends that it has been advised by many employees of Coles that they were told by representatives of the SDA that a “no vote” would result in, inter alia, the wages of workers being cut and/or workers returning to the Award. The RAFFWU says that this is demonstrably untrue and that examples of these misrepresentations was posted on Facebook by the SDA and subsequently was changed 4 days after the explicit misrepresentation was made.[38]

1. The RAFFWU also says that these misrepresentations were combined with hard copy materials which were liable to mislead. The series of materials carried headlines of “Don’t Risk Falling Back to the Award.”[39] The RAFFWU says that the materials mislead in that they provide no reference to the actual effect of a “no vote”, they are distributed before or during the ballot and carry a clear inference that not supporting the Agreement “risked” a “fall back” to the Award. Without the paid meetings where workers were told of the effect of a “no vote”, the meaning of “risk” would have been left to eighty thousand workers to determine (workers without the benefit of industrial or legal expertise).[40] The RAFFWU says that it raised concerns with Coles prior to the ballot taking place but understands that no substantive effort was made by Coles to ensure those employees who participated in the SDA workplace sessions held during paid time, were advised the true effect of a “no vote”.[41]

1. Further, the hard copy SDA materials also identified that the Agreement guaranteed pay rises. It says that the heading boldly declared the Agreement would “ensure pay rises for everyone”, it says that this is not true and that while unusual, the Annual Wage Review could award no wage increase.[42] It submits that to declare that the Agreement guarantees or ensures pay rises is patently false.[43]

1. Coles contends that the Agreement was genuinely agreed to by its employees. First, Coles contend that it cannot reasonably be expected to control the content of information that is provided by bargaining representatives and the manner in which a bargaining representative elects to communicate with its members is a matter for the bargaining representative.[44] Coles says that it cannot be held responsible for that which is out of their control. Secondly,  Coles submits that s.180(5) of the Act imposes an obligation on the employer, not an employee bargaining representative, to take all reasonable steps to explain the terms of the agreement and that it discharged this obligation by providing clear and accurate information to employees of the consequences of a “no vote”.[45]

1. Coles contends that when it first became aware of the concerns in respect of the “no vote” that had been raised by RAFFWU it acted quickly by contacting the SDA and obtained an assurance that the SDA had an accurate and clear understanding of the “no vote”.[46] As to the Facebook post, Coles contends the SDA took a number of steps to rectify the misrepresentation that had been made as soon as it became aware of it and any misunderstanding as to reverting back to the Award would have been absolved.[47]

1. Thirdly, Coles contends that any representation made by the SDA that identified a risk that employees could revert back to the Award in the event of a “no vote” is accurate given the events that transpired between June 2017 and November 2017 when an application was made by a Coles employee to terminate the 2011 enterprise agreement.[48] Lastly, in respect of the concern raised by RAFFWU concerning the statement, “Ensure Pay Rises For Everyone”, Coles submits that this does not present a barrier to approving the Agreement because it was not in any way prepared, distributed or endorsed by Coles, the text beneath the heading clarifies that wage increases are dependent on the Annual Wage Review and that given the history of annual wage increases, it is more likely than not that future increases would be made.[49]

1. As to the second concern raised by RAFFWU, the SDA contends that that there was overwhelming support for the making of the Agreement with more than 90% of 50,000 employees voting in favour.[50] The SDA say that the case put forward by RAFFWU that there was no genuine agreement from the employees, particularly in the face of the overwhelming support for the Agreement, raises a vague assertion which should be afforded no weight.[51]

1. As to the Facebook post, the SDA submit that four days after it became aware of the misrepresentation it clarified what it meant by “falling back to the Retail Award”, in a post in the Facebook thread to the following effect:

“Sean to clarify reverting back to the award is a risk. If the Coles EBA concludes with a no vote, it could then be up to Coles as to how they wish to proceed. There are a few options. Coles may decide to enter into further negotiations with the union, although they are not obliged to or required to by law. Or, they may continue to remain on the expired 2011 Agreement, or somebody can terminate the 2011 Agreement and employees would be under the General Retail Industry Award. If the Coles employees fall back onto the General Retail Industry Award then employees will lose all the additional conditions and entitlements of the old agreements which had been negotiated over time and which the SDA was able to maintain in the negotiations for this proposal. These include superior rostering provisions, breaks, various leave provisions etc. This would also mean that the protected rate (that is the higher rate that current employees enjoy) would also disappear”[52]

1. The SDA acknowledge that it is not possible to know how many people saw the Facebook comment made by the Western Australian Branch, but submits that it is “safe to assume that it was a very small number” and more likely than not that those who participated in the discussion would have also seen the correction that was published four days later.[53] Similar to Coles, the SDA submit that it is curious that RAFFWU is concerned with employees reverting back to the Award given that the RAFFWU represented two Coles employees in the application to terminate the 2011 enterprise agreement.[54] In any event, the SDA say that such a consequence is not “fanciful” given there was a risk of reverting back to the Award if a majority of employees who voted on the Agreement was not successful.[55]

1. As to the wage increases, the SDA contend that it is clear from RAFFWU’s submissions that they concede that a wage increase is premised on the Annual Wage Review and thus their submission is without merit.[56]

1. As to the genuine agreement issue, Ms Wells says that her store manager arranged a positive event release of the material relating to the Agreement and the access was provided to the management team “at any time to answer questions, set aside a dedicated computer and phone for team members to consult Mycoles for information and to vote”.[57]  Additionally, Ms Wells says that employees at her store were encouraged to vote and felt that Coles approached the process with a positive and trustworthy attitude.[58]

1. The AWU advised that it concurred with the submissions of the SDA in respect of the concerns raised by RAFFWU and did not wish to say anything further.[59]

1. The TWU, AMIEU, Mr Bryant and Ms Vickers all indicated that they did not wish to make submissions in response to the concerns raised by the RAFFWU. I was advised by Mrs Ivana Grkovic (Mr Grkovic’s mother) that Mr Grkovic is very unwell and was not in a position to make any submissions in respect of the consideration of approving the Agreement.[60]

1. It is firstly to be observed, save for criticism of some of the SDA’s written material, that the matters concerning representations made raised by the RAFFWU are raised on the basis of information provided to it by unidentified persons who are purported to be employees of Coles who will be covered by the Agreement in respect of the communications said to have been made by the SDA to these unidentified employees about the consequences of a “no vote”. The RAFFWU was given the opportunity to participate in an oral hearing but was content for me to determine the matter on the papers. There is no evidence about these communications much less is there any information which can properly be tested or to which the SDA could in fairness respond. Vague allegations made by unidentified persons given in submissions on a hearsay basis hardly provides a proper foundation to conclude that employees covered by the Agreement may not have genuinely agreed to it.

1. Secondly, whilst it is true that Coles is required to take all reasonable steps to explain to relevant employees the terms of the agreement and their effect and that it cannot be held responsible for the communications of other bargaining representatives that cannot be the end of the matter.

1. Information circulated by a bargaining representative about an agreement and its effect which is not accurate and which may have the consequence of misleading employees who will be covered by the agreement about its terms and the effect of those terms might, in appropriate circumstances, provide reasonable grounds for believing that the agreement may not have been genuinely agreed to by the relevant employees.

1. Although allowances may be made for hyperbole in the prosecution for and against a particular proposition, in this case for the approval of the Agreement, it should not be assumed that hyperbole which has the effect of wrongly describing an agreement’s terms or their effect in a serious or significant way will be overlooked. However, I do not consider the circumstances of this application to be such a case. Having reviewed the extensive material lodged by Coles which sets out the explanations of the Agreement and its terms given to or made available to employees who will be covered by the Agreement together with the corrective steps taken by Coles and by the SDA in respect of some of the material that might not have been accurate, I am not persuaded that the material discloses that Coles did not meet its obligation under s.180(5)  of the Act or that the inaccuracies in some of the SDA material were of such magnitude as to provide reasonable grounds for believing that the Agreement has not been genuinely agreed to by the employees. In the circumstances of this case based on the totality of the material before me I am satisfied that the employees genuinely agreed to the Agreement.

1. Apart from these matters, I raised a number of concerns about the application and requested that Coles provide a response or undertakings to satisfy me as to the concerns raised. The concerns were as follows:

(a)clause 9.6 of the Agreement, which expresses an employee’s entitlement to personal leave in hours rather than days, may contravene s.96 of the Act, which provides that an employee is entitled to accrue 10 days of personal leave per annum;

(b)the Agreement does not appear to offer employees a liquor licence allowance like that provided in clause 20.11 of the Award;

(c)that any Supported Wage System (SWS) employees who are not entitled to the one off cash payment may not be better off overall under the Agreement;

(d)clause 5.9 of the Agreement offers trainees “[l]evel 1 team member rates (including junior rates)”,  it is unclear how this provision is intended to operate and it is also unclear whether the Agreement is intended to cover trainees who would otherwise be covered by the National Training Wage (NTW), and whether such trainees would be required to complete all training off-site or some on-site;

(e)clause 5.1.3 of the Agreement, and to items A1.4(b)-(c) of Appendix A of the Agreement, which classify “skilled non-tradesperson[s]” and any “team member who is required to utilise the skills of a trade for the majority of the time in a week and who has completed Coles nominated training, but who has not completed an appropriate trades course and does not hold an appropriate Certificate III” as Level 3 team members. The Deputy President also refers to item A1.5(c) of Appendix A of the agreement, and to item B.4.3 of Schedule B of the Award, both of which classify “an employee who is required to utilise the skills of a trades qualified person for the majority of the time in a week. This includes: Butcher, Baker, Pastry Cook, Florist” as a Level 4 employee; and

(f)some indicative job titles listed in clause 5.1.3 of the Agreement- in particular ‘office in charge’ and ‘duty manager’, who are classified as Level 6 employees in the Agreement do not appear to reflect the classification descriptions listed in Appendix A of the Agreement, and may fall within Award classification descriptions for a higher classification level. If the classification matching provided by the employer is not accurate, some employees may receive rates of pay below equivalent Award rates of pay.

1. As indicated above, I requested that Coles provide a response to a number of concerns I had regarding the content of the Agreement. My concerns and the relevant response provided by Coles are detailed below.

Personal Leave

1. Section 186(2)(c) of the Act provides that, before approving an agreement, the Commission must be satisfied that “the terms of the agreement do not contravene section 55” of the Act, which provides, among other things, that enterprise agreements must not exclude, in whole or in part, the National Employment Standards.

1. Clause 9.6.2 of the Agreement provides that a full-time employee is entitled to accrue 76 hours of personal leave per year of continuous service. Clause 9.6.3 of the Agreement provides that part-time employees accrue personal leave on a pro-rata basis. In light of the decision of the Full Bench of the Commission in RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union,[61] this appeared to contravene s.96 of the Act, which provides that employees are entitled to accrue 10 days of personal leave per annum. As a result, I was concerned that the Agreement did not meet the requirements of s.186(2)(c) of the Act.

1. Coles has undertaken that clause 9.6.2 of the Agreement will be applied in accordance with s.96 of the Act. This undertaking addresses my concern in relation to this issue. I am therefore satisfied that together with the undertaking, the Agreement terms do not contravene s.55 of the Act.

Better Off Overall Test (BOOT)

1. I was also concerned that the Agreement did not pass the BOOT and therefore did not meet the requirements of s.186(2)(d) of the Act. In relation to the BOOT, I raised the following concerns with the parties.

Liquor Licence Allowance

1. The Agreement does not offer employees a liquor licence allowance. In contrast, clause 20.11 of the Award states that an employee who holds a liquor licence under a relevant State or Territory law will be paid an allowance of 3.1% of the standard rate per week ($25.08 per week). Modelling performed by the Commission shows that an employee entitled to the liquor licence allowance would not be better off overall under the Agreement.

1. Coles provided an undertaking to address this concern however, I was not initially satisfied that the undertaking sufficiently addressed the issue that had been raised. Coles provided a revised undertaking stating that “an employee who holds a liquor licence under a relevant State or Territory law will be paid a flat amount of $25.08 per week.” The undertaking provided by Coles addresses my concerns in relation to this issue.

Supported Wage System (SWS) Employees

1. The minimum rate of pay payable to an SWS employee under item 3.2 of Appendix C of the Agreement ($84 per week) is equal to the minimum rate of pay payable to an SWS employee under Schedule C of the Award (also $84 per week). The Agreement does not offer a Laundry allowance ($6.25 per week or $1.25 per shift as provided by clause 20.2(b) the Award). Further, the majority of the terms offered by the Agreement that are more beneficial than the Award either do not apply to SWS employees, or are conditional and therefore may not apply to particular employees in practice. As a result, I was concerned that SWS employees who were not entitled to the one off cash payment payable under clause 5.6.4 of the Agreement would not be better off overall under the Agreement.

1. Coles has undertaken that it “will apply C3.2 and C9.3 as if references to $84 are references to $90.50”. As $90.50 is higher than the sum of $84 (minimum rate payable to SWS employees under the Award) and $6.25 (weekly laundry allowance provided by the Award). The undertaking provided by Coles has addressed my concern in relation to this issue.

Trainees

1. Clause 5.9 of the Agreement offers trainees “[l]evel 1 team member rates (including junior rates)”. Clause 5.5.1(c) of the Agreement states that Coles may employee “a trainee under the arrangements contained in the General Retail Industry Award 2010 (as amended).” This appears to be a reference to the National Training Wage (NTW), and suggests that the trainees referred to in clause 5.9 of the Agreement are those who would otherwise be covered by the NTW. However, clause 5.5.1(c) of the Agreement does not contain information in relation to whether trainees would be required to complete all training off-site or some on-site, nor does the Agreement as a whole provide any further information regarding the work to be performed by trainees.

1. As a result, it is unclear whether employees paid under clause 5.9 of the Agreement as made would be better off overall under the Agreement. Consequently, I sought further information regarding the intended operation of clause 5.9 of the Agreement, as well as further information regarding the trainees covered by the Agreement to whom clause 5.9 would apply.

1. In response, Coles undertook that:

“Where, but for this Agreement, the National Training Wage would have applied to an employee, Coles undertakes that it will pay the higher of:

•  the relevant wage rates as set out in subclause 5.9,or
           •  the relevant National Training Wage rate plus an additional47 cents per hour.”

1. The Agreement offers a minimum engagement period of three hours for part-time employees. If the above undertakings are accepted, a part-time trainee working such a shift would earn $1.41 more under the Agreement than they would receive under the NTW. This is sufficient to compensate such an employee for the per shift laundry allowance of $1.25 provided for by the Award.

1. Further, as the undertaking offers trainees as a minimum 47 cents per hour above the relevant NTW rate of pay, whether an employee completes all of his or her training off-site or some on-site is no longer relevant for the purposes of the BOOT.

1. As a result, the undertaking above addresses my concerns in relation to trainees.

Classification Matching

1. In response to question 3.3 of the Form F17 submitted to the Commission, Coles stated that “[c]lassifications between the Award and the Agreement are the same except for Customer Service Agents who are classified under level 1 of the Award but level 3 of the Agreement.”

1. This appears to be correct, with the following exceptions:

• “team member who is required to utilise the skills of a trade for the majority of the time in a week and who has completed Coles nominated training, but who has not completed an appropriate trades course and does not hold an appropriate Certificate III” (these employees appear to fall within the indicative job title “skilled non-tradesperson” listed in clause 5.1.3 of the Agreement)- these employees are classified as Level 3 employees under the Agreement (items A1.4(b)-(c) of Appendix A, the Agreement) but appear to be more appropriately classified as Level 4 employees under the Award (see item B.4.3 of Schedule B)

• “office in charge” and “duty manager” employees, (listed in clause 5.1.3 as indicative job titles for Level 6 employees). These job titles do not appear to reflect the classification descriptions listed in Appendix A of the Agreement, and may fall within Award classification descriptions for a higher classification level.

1. If the classification matching provided by the employer was not accurate in relation to the above employees, these employees would receive rates of pay under the Agreement either below equivalent Award rates of pay, or not high enough to compensate for reductions in entitlements under the Agreement. Such employees would not be better off overall under the Agreement.

1. I requested submissions from Coles to address my concerns in relation to this issue.

1. In response, Coles undertook that “the following wording, contained in A1.4, will not be applied:

   A team member who is required to utilise the skills of a trade (eg bakery) for the majority of the time in a week, and who has completed Coles nominated training, but who has not completed an appropriate trades course and does not hold an appropriate Certificate III

   and instead it will be read as:

A team member principally performing skilled non-trade tasks (eg bakery), and who has completed the Coles Skilled Baker Program, or similar.”

1. This undertaking addresses my concern in relation to skilled non-tradesperson employees.

1. Coles also provided submissions regarding “duty manager” and “office in charge” employees.

1. In relation to “office in charge” employees, Coles has submitted that “the equivalent Award classification is the Clerical Officer Level 3.” Appendix A of the Agreement includes Clerical Officer Level 3 as an indicative job title falling within the Agreement Level 6 classification. Schedule B of the Award also lists Clerical Officer Level 3 as an indicative Level 6 job title. The Agreement and the Award both define Clerical Officer Level 3 in substantially similar terms (see item A1.7(c)-(d) of App. A of the Agreement, and item B.6.3-B.6.4 of Schedule B of the Award).

1. Coles has also submitted that:

“Office in Charges are expected to follow procedures and guidelines as established by Coles. They operate at store level, rather than across the organisation. They exercise limited initiative, discretion and judgement. An Office in Charge would refer complex queries and payroll tasks to the support team at Coles’ head office”

1. I requested that Coles provide a position description for “office in charge” employees covered by the Agreement. The position description provided by Coles in response to my request showed, inter alia, that “office in charge” employees are not required to have employees who report to them either directly or indirectly.

1. Having regard to the position description I am satisfied that “office in charge” employees perform the work of Clerical Officer Level 3 as defined in the Agreement and Award. Coles’ submissions, which I accept have addressed my concerns in relation to this issue.

1. In relation to “duty manager” employees, Coles submitted that:

“A ‘Duty Manager’ referred to in B.6.2 of the Award is not equivalent to a ‘Duty Manager’ under the Agreement.
Coles Duty Managers report into full-time store managers and essentially act as “Assistant or Deputy or 2IC Shop Manager of a shop with Departments/Sections.””

1. In support of these submissions, Coles has provided a position description for “Store Department Manager (Store Support Manager/ Dry Goods Manager/ Customer Service Manager/ Dairy Manager/ Fresh Produce Manager/ Delicatessen Manager/ Bakery Manager/ Meat Manager/ Duty Manager)”[Emphasis added].

1. The position description shows that “Store Department Manager” employees, of which “Duty Manager” employees appear to form a sub-set, report to “Store Manager” employees.

1. The position description lists “previous experience as a Department Manager 2IC or Management Trainee and/or comparable retail industry experience” and “Technical department knowledge in their department” as “Technical Knowledge & Job Specific Skills” required by “Store Department Manager” employees.

1. The position description also lists “Team Engagement” as a major responsibility. The team referred to appears to be a department within a Coles Supermarket.

1. In response to Coles’ submissions on this issue, RAFFWU made submissions contending that “Duty Manager” employees should properly be considered as falling within the Award Level 8 classification definition.

1. RAFFWU submitted that the position description provided by Coles was “generic” and “does not describe the work of a Duty Manager”, and that it was RAFFWU’s understanding that, “[w]hile they may often also be employed as a Department Manager, … the actual Duty Manager role is to have responsibility for the entire store in a way not dissimilar from that of a Store Manager.” RAFFWU also submitted that, when on duty, “Duty Manager” employees “are often the only manager responsible for a number of departments where Department Managers are not on duty (such as in the evenings.)”. As a result, RAFFWU submitted that “Duty Manager” employees “are performing work at a level higher than that of a Department Manager.”

1. RAFFWU also submitted, with reference to item B.6.2 of Schedule B of the Award, that the Award drew an equivalence between the role of “Manager” and “Duty Manager” by listing “Manager/Duty Manager in a shop without Departments/Sections (may be under direction of person not exclusively involved in shop management)” as an indicative job title for Level 6 employees. Moreover, RAFFWU submitted that the Award drew a distinction between the role of Duty Manager and the roles of department manager and assistant, deputy or 2IC shop manager, by also listing “Section/Department manager with 5 or more employees (including self),” and “Assistant or Deputy or 2IC Shop Manager of a shop with Departments/Sections” as separate indicative job titles for Level 6 employees.

1. As a result, RAFFWU submitted that the inclusion of “[a] Shop Manager of a shop with Departments/Sections” in the list of indicative job titles for Level 8 employees in the Award should be read as indicating that “Duty Manager” employees in a shop with departments, such as Coles, should properly be classified as Level 8 employees under the Award.

1. In response to RAFFWU’s submissions, Coles re-iterated its earlier submission that “Duty Manager” employees should properly be classified as Level 6 employees under the Award. The Applicant further submitted that:

• “‘indicative job titles’ are just that, ‘indicative’ rather than determinative”;

• RAFFWU”s submissions in relation to the Award failed to take into account that:

o“The indicative job title is ‘Manager/Duty Manager’ not simply ‘Duty Manager’”; and that

o“The Manager/Duty Manager “may be under direction of person not exclusively involved in shop management”. Taken in the negative, a Manager/Duty Manager, of a store without departments, who is under the direction of a person exclusively involved in shop management (ie. a store manager looking after just one store) would be at a lower classification lower than Retail Employee Level 6.” As a result, a “Duty Manager” employee, who reports to a Store manager employee cannot be considered to be a Level 8 employee under the Award.

1. Finally, Coles submitted that “a Coles Duty Manager does not perform the same role as a Coles Store Manager”. Coles provided a list of responsibilities that “Store Manager” employees are required to undertake, but that “Duty Manager” employees are not required to undertake. These include “the setting of rosters each roster cycle”, being  “accountable for remuneration costs, waste and mark downs for a store”, “planning, career development and product line decisions” and “the handling of customer feedback that has been escalated from the team”. Coles also submitted that “[w]ere an issue beyond normal business as usual to arise (such as a system outage or flooding), a Coles Duty Manager would contact the Coles Store Manager rather than making a decision themselves.”

1. RAFFWU asserts that “the “may”” in “may be under direction of person not exclusively involved in shop management” is clearly not intended to be a requirement. Casting the provision in the negative is inappropriate.”

1. RAFFWU also noted that Coles had submitted that “a Coles Duty Manager is responsible for the immediate in-person supervision of the store for a particular period of time.” RAFFWU contends that this should be viewed as an admission that “Duty Manager” employees hold greater responsibility than department manager employees.

1. In light of the uncertainty concerning the responsibilities of a Duty Manager in the Agreement, I afforded Coles an opportunity to consider providing an undertaking to address those concerns. In response, Coles have provided an undertaking which outlines the definition and responsibilities of a Coles Duty Manager. The undertaking provided by Coles demonstrates the delineation between a “Duty Manager” and “Store Manager”. It is evident that a Coles “Duty Manager” is not responsible for the day to day operations of a store and does not carry the same responsibility as that of a Store Manager. Moreover, given that a Duty Manager reports to a Store Manager it is difficult to reconcile how both positions can be classified as a Level 8 under the Award. I am satisfied that a Duty Manager as described in the undertaking is properly classified as a Level 6 under the Award and that the undertaking provided by Coles addresses the concerns that I held.

1. All of the bargaining representatives were afforded an opportunity to raise any further submissions or objections to the revised undertakings that were provided by Coles. Aside from the objections that have been referred to above from RAFFWU, no bargaining representatives have raised any concerns with the submissions or undertakings provided by Coles.

1. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings 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 accepted. Having regard to the undertakings, I am satisfied that the Agreement passes the BOOT.

1. Subject to the undertakings referred to above, and on the basis of the material contained in the application and accompanying statutory declaration, I am satisfied that each of the requirements of ss.186, 187, and 190 as are relevant to this application for approval have been met.

1. As indicated earlier, the Shop, Distributive and Allied Employees Association, The Australasian Meat Industry Employees Union, Transport Workers’ Union of Australia and The Australian Workers’ Union being bargaining representatives for the Agreement, have given notice under s.183 of the Act each organisation wants the Agreement to cover it. In accordance with s.201(2) and based on the statutory declarations provided by the organisations, I note that the Agreement covers the four aforementioned organisations.

1. The Agreement with undertakings was approved on 23 April 2018 and, in accordance with s.54, will operate from 30 April 2018. The nominal expiry date of the Agreement is 30 April 2020.

DEPUTY PRESIDENT

Written Submissions

RAFFWU Outline of Submissions dated 19 March 2018, 3 April 2018, 18 April 2018 and 19 April 2018

Coles Outline of Submissions dated 28 March 2018, 16 April 2018, 18 April 2018 and 20 April 2018

SDA Outline of Submissions dated 28 March 2018

AWU Outline of Submissions dated 29 March 2018 and 19 April 2018

AMIEU Outline of Submissions dated 4 April 2018

TWU Outline of Submissions dated 6 April 2018

Mr Kurt Bryant and Ms Penny Vickers Outline of Submissions dated 4 April 2018

Ms Ann Wells Outline of Submissions dated 5 April 2018

Annexure A

[1] RAFFWU Submissions dated 19 March 2018 at [6]

[2] Ibid at [9]

[3] Ibid at [10]

[4] Ibid at [12]

[5] Ibid at [14]

[6] Ibid at [15]

[7] Ibid at [16]

[8] [2016] FWCFB 2887 at [29]

[9] Ibid at [19]

[10] Ibid at [20]

[11] Ibid at [21]

[12] Ibid at [24] – [25]

[13] Ibid at [27]

[14] Coles Submissions dated 28 March 2018 at [5]

[15] Ibid at [7]

[16] Ibid

[17] General Retail Industry Award 2010 [2010] FWAFB 305

[18] Coles Submissions dated 28 March 2018 at [10]

[19] Ibid at [12]

[20] SDA Submissions dated 28 March 2018 at [6]

[21] Ibid at [7]

[22] Ibid at [8] – [9]

[23] Ibid at [9]

[24] Ibid at [10] – [12]

[25] Ibid at [14]

[26] Ibid

[27] Ibid at [15] – [16]

[28] Ibid at [19]

[29] Ibid at [22]

[30] Ibid at [24]

[31] Email from Ms Ann Wells to chambers dated 5 April 2018 at 2:05am

[32] RAFFWU Submissions dated 3 April 2018 at [2] – [3]

[33] Ibid at [5]

[34] Ibid at [7]

[35] RAFFWU Submissions dated 19 March 2018 at [29]

[36] Ibid at [30]

[37] Ibid at [32]

[38] Ibid at [35], Annexure A

[39] Ibid at [36], Annexure B

[40] Ibid

[41] Ibid at [39]

[42] Ibid at [41]

[43] Ibid at [42]

[44] Coles Submissions dated 28 March 2018 at [17]

[45] Ibid at [18]

[46] Ibid at [18(ii)]

[47] Ibid at [18(iii)]

[48] Ibid at [19]

[49] Ibid at [20]

[50] SDA Submissions dated 28 March 2018 at [29]

[51] Ibid at [29]

[52] Ibid at [40]

[53] Ibid at [41]

[54] Ibid at [45] – [46]

[55] Ibid at [48]

[56] Ibid at [51] – [52]

[57] Email from Ms Ann Wells to chambers dated 5 April 2018 at 2:05am

[58] Ibid

[59] Letter from Steve Baker (Acting Branch Secretary) dated 29 March 2018

[60] Email from Mrs Ivana Grkovic dated 19 April 2018 at 8.46pm

[61] [2015] FWCFB 2881

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