Fletcher International Exports Pty Ltd

[2018] FWC 2351

[2018] FWC 2351

The attached document replaces the document previously issued with the above code on 27 April 2018.

Corrects a typographical error at [35] and [39].

Associate to Commissioner McKinnon

Dated 30 April 2018

[2018] FWC 2351

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Fletcher International Exports Pty Ltd
(AG2017/4988)

COMMISSIONER MCKINNON MELBOURNE, 27 APRIL 2018

Application for approval of the Fletcher International Exports Pty Ltd (Dubbo) Production Employees' Agreement – further undertakings.

[1] Application has been made for approval of a single enterprise agreement known as the Fletcher International Exports Pty Ltd (Dubbo) Production Employees’ Agreement (the Agreement). The Agreement was made on 11 October 2017 and Fletcher applied for its approval on 20 October 2017 pursuant to s.185 of the Fair Work Act 2009 (the Act) by Fletcher International Exports Pty Ltd (Fletcher).

[2] On 25 October 2017 the Australasian Meat Industry Employees Union (AMIEU) filed a Form F18 Statutory Declaration as a bargaining representative in support of the Agreement. 1 On 9 March 2017 it expressed concern about the Agreement signatory page. On 27 March 2017, it advised that it no longer supported the application for approval. It says undertakings proposed by Fletcher represent ‘substantial change’ to the Agreement and now says that the Agreement was not genuinely agreed. A hearing in relation to the application was held on 6 April 2018.

[3] Except for the matters dealt with further below, no issue concerning a pre-approval step, Agreement coverage, any exclusion of the National Employment Standards (NES) or other approval requirement in relation to the Agreement has been raised or identified.

[4] The relevant award for the purposes of the better off overall test is the Meat Industry Award 2010 2(the Award). The Award is not incorporated into the Agreement.

National Employment Standards

[5] The Agreement provides for a 38 hour week for Cleaners and a standard 40 hour week for other employees, comprising 38 ordinary hours and 2 reasonable additional hours. For the purposes of section 62(1) of the Act, I am satisfied that the average weekly hours provided in the Agreement are reasonable.

[6] The Agreement refers to shiftworkers at clause 3 but does not appear to define employees as shiftworkers for the purposes of the NES as required by section 196(2). Fletcher will be given an opportunity to make submissions and/or give an undertaking to address the concern.

[7] The Agreement provides for annual leave loading at clause 24 but only after the completion of twelve months’ continuous service. This appears to be inconsistent with the NES (section 90(2)). Fletcher will be given an opportunity to make submissions and/or give an undertaking to address the concern.

Better off overall test

[8] The Agreement contains a range of more beneficial terms than the Award, including in relation to rates of pay, minimum engagement for casual cleaners, overtime penalties, Saturday penalties and night shift penalties. The Agreement also provides for additional discretionary bonuses but as these are neither guaranteed nor quantifiable, I have not taken them into account for the purposes of the better off overall test.

[9] The Agreement contains less beneficial terms compared to the Award including in relation to the rates of pay for Cleaner Level 2, different span of hours and penalty provisions, work during meal breaks and annual close down.

[10] A number of Award allowances are not replicated in the Agreement, including first aid allowance, leading hand allowance, clothing allowance and cold allowance and I was concerned that some employees under the Agreement may not be better off overall on that basis. Fletcher provided a submission and revised Form F17 statutory declaration explaining that the various identified Award allowances are either not relevant to employees under the Agreement or factored for in classifications and rates of pay. 3 The additional information now provided addresses the concern.

[11] The Agreement provides for a span of hours of 4.00am to 7.00pm, Monday to Friday, while the Award span of hours is 6.00am to 8.00pm, with the ability to vary the span by one hour at either end by agreement. I was concerned about whether employees working shifts beginning at 4.00am would be better off overall under the Agreement and Fletcher has given an undertaking to address the concern. 4

[12] The Agreement provides for shift work but does not reflect the Award loadings for working less than 5 consecutive shifts. Afternoon shift hours are wider than those in the Award and the definition of night shift is different. Unlike the Award, some work commencing on one day and extending into a weekend is not considered weekend work. In each respect, the Agreement may not leave shift workers better off overall and Fletcher has given undertakings to address the concerns. 5

[13] The rates of pay for some Cleaners may mean that they are not better off overall under the Agreement and Fletcher has given undertakings to address the concerns. 6 The AMIEU subsequently raised a similar concern for the “Learner” classification. It says that under the Award, a Learner would progress to the next level after three months. I accept that this may give rise to a concern for employees in the “Learner” classification. While there is some question about whether Fletcher employs Learners, the Agreement provides that it can, and will, do so.7 Fletcher will be given an opportunity to make any submissions or give any undertakings it wishes to give to address the concern.

[14] Clause 7 of the Agreement deals with annual close down but does not contain a number of safeguards in the Award. Fletcher has given an undertaking to address the concern. 8

[15] The AMIEU objects to some of the undertakings given by Fletcher which it says amount to “fundamental” and substantial change to the Agreement:

1. It does not agree with the undertaking that will ensure the span of hours commences at 5.00am rather than 4.00am. Somewhat counterintuitively, it notes that under the Agreement ordinary hours can only be worked Monday to Friday, whereas the Award includes ordinary hours on weekend.

2. It disagrees with the classification matching provided by Fletcher for a Cleaner Level 1 and says that the correct comparison is the MI2 classification in the Award, which is a person who has been employed for more than three months. It says a Cleaner Level 1 will be worse off under the Award if reclassified to MI2 by $18.80 per week. The calculations provided by the AMIEU are based on a 40 hour working week while the Agreement provides for Cleaners to work 38 ordinary hours per week. The undertaking given by Fletcher will ensure that Cleaners earn more than the MI2 classification after three months, in line with the Award.

3. It submits that the Agreement does not provide for a productivity payment scheme or rams allowance, although there is nothing before me to indicate that these are Award entitlements or that Fletcher has adopted a system of payment by results. It seeks undertakings to guarantee existing arrangements of that kind under the current enterprise agreement. The better off overall test in this case requires an assessment of the Agreement against the Award. There is no basis upon which I could seek undertakings to guarantee terms of an existing enterprise agreement where the matter dealt with was not also a matter dealt with in the Award and relevant to the Agreement.

4. It does not accept the undertaking on annual close down because it says it is not unreasonable for Fletcher to give three months’ notice and to apply to close down on the grounds of production. Clause 37.8 of the Award provides for an annual close down for the purpose of allowing annual leave to employees. It provides for three months of the close down “where possible”. Fletcher has given an undertaking that it will provide three months’ notice of a shutdown “where possible” and the AMIEU seeks removal of the words “where possible”. I accept that the Agreement term is broader and less prescriptive than the Award but I am not satisfied that the undertaking given in relation to it represents a detriment to employees or a substantial change to the Agreement. The “where possible” formulation is the same in both the Agreement and the Award.

5. It seeks that “night shift” be defined by reference to the Award with equivalent penalties to apply. I am not concerned about the level of night shift penalty under the Agreement, having regard to the total remuneration that will apply for working night shift.

[16] The AMIEU invites me to request the parties to redraft the enterprise agreement incorporating the various undertakings and put it to another vote. However, I am required to deal with the application before me in accordance with the Act. I do not consider it appropriate to act as the AMIEU suggests.

[17] A copy of undertakings provided to date is attached in Annexure A. I am satisfied that the effect of the undertakings is not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement. The undertakings are accepted. On balance, I am satisfied that with the undertakings provided, and subject to the issues identified in this decision being addressed, employees will be better off overall under the Agreement than the Award.

Was the Agreement genuinely agreed?

[18] The AMIEU submits that the Agreement was not genuinely agreed because the effect of the Agreement on the Boning Team (that is, a reduction in take home pay for Boners, Slaughterers and Sawyers) was not properly explained to employees and that if other employees who will benefit from the Agreement had been made aware of that fact, they would not have voted in support of it. The AMIEU provides no evidence in support of this contention. Instead, it filed a number of documents to show that the Boning Teams will earn less under the Agreement than under the current enterprise agreement. That fact is not disputed and I accept it. However, as Fletcher submits, the better off overall test requires a comparison between the Agreement and the Award. Accordingly, the documents provided are not relevant to the better off overall test assessment.

[19] Fletcher accepts that the Boning Team, which comprises approximately 12% of employees covered by the Agreement, will earn less under the Agreement than the enterprise agreement it will replace. It says this was clearly explained to employees during the agreement making process and that it was well understood. A statutory declaration of Melissa Fletcher, CEO, set out the agreement making process. 9 According to Ms Fletcher, 47 dedicated, small-group information sessions about the Agreement were held at the Dubbo plant.10 An average of 12 employees participated in each session. They were provided with detailed explanations about the Agreement and its effect and given the opportunity to ask questions. A powerpoint presentation was shown to employees and a copy was provided to the Commission. 11

[20] I do not accept the gist of the AMIEU submission that by conducting meetings with small groups of approximately 12 employees at a time, Fletcher was seeking to undermine collective bargaining. The Act requires reasonable steps to be taken when explaining enterprise agreement terms and their affect to employees, and requires the particular characteristics of employees to be taken into account in doing so. In this case, I consider that small group meetings were more likely to be effective than a whole of workplace approach with hundreds of employees in a room at the same time. I am satisfied that the small group format was reasonable and appropriate in the circumstances.

[21] The powerpoint presentations provided to the Commission show a range of similar presentations tailored to different work groups (including Petfood, Loadout, Skins, Cleaners and Fabrication). 12 They detail a number of key features of the Agreement. Where relevant, they show the proposed rates of pay for employees on the Boning Team. They do not expressly state that the Boning Team will receive a pay cut. The presentations must be seen in context of the other information provided to employees, including copies of the Agreement and explanatory material and in light of what seems to me to have been an ongoing, contentious discussion about the proposed change that only concluded when the Agreement was made.

[22] Ms Fletcher says that the wage rates for the Boning Team were a “matter of significant contention” both during bargaining and in the information sessions about the Agreement, with union delegates and Boners repeatedly making their objection to the proposed pay cuts known. 13 She says Managers explained why the changes were important.14

[23] Fletcher filed a document called “Explanation of the Terms of the Fletcher International Exports Pty Ltd (Dubbo) Production Employees’ Agreement” which it says was distributed in hard copy to employees on 28 September 2017 as well as a further explanatory document issued in response to employee feedback between 29 September 2017 and 1 October 2017. 15 The former clearly states that the Agreement will displace the current enterprise agreement and the Award, as does the Agreement itself.

[24] Fletcher says the overwhelming majority of employees will receive ‘long overdue’ wage increases and the overall outcome addresses Fletcher’s current business circumstances and the longstanding disparity in wages of Boners compared to Labourers at the workplace. Overall it says its labour costs will increase as a result of the Agreement, primarily for the benefit of its lower paid employees.

[25] The AMIEU says no translators were present at group meetings and disputes whether the Agreement was provided in languages other than English. The evidence it provides in support of those contentions are two unsworn statements of Anthony Boland, union delegate. 16 The first says that he was in a group meeting with workers from the hot boning room about the Agreement and that no interpreter from non-English speaking background was there. It does not say who was there or if there were any employees of non-English speaking background present.17 The statement has not been tested and is not relevantly probative. It does not give rise to a reasonable concern about the veracity of Ms Fletcher’s sworn statutory declaration.

[26] The second is a hearsay statement to the effect that two employees told Mr Boland that they did not get a copy of the Agreement in their own language. 18 It does not explain the level of English comprehension of the employees or indicate that they did not understand either the Agreement or the agreement making process. The two employees appear to have signed the statement on 18 April 2018, some six months after the Agreement, presumably at Mr Boland’s request. Again, the evidence was only provided to the Commission after the hearing of the matter on 6 April 2018. It has not been tested and I do not have any sound basis to find that the two employees mentioned in Mr Boland’s statement were at a disadvantage in the voting process.

[27] The AMIEU also says that the effect of the Agreement was not properly explained to employees because explanatory information about the Agreement was not provided in languages other than English, in circumstances where the workforce has a high proportion of migrant workers. However, the statutory declaration of Melissa Fletcher attests to the fact that Hindi and Mandarin translators were present at relevant agreement information sessions as was a parent of a deaf employee. The full text of the Agreement was distributed in hard copy to all relevant employees and translated into Mandarin, Korean and Hindi and handed to employees fluent in those languages. 19

[28] There is nothing before me to indicate that employees were misled about the effect of the Agreement or that a different result would have been achieved had more or different emphasis been adopted in the agreement making process. On the contrary, I am satisfied after hearing from the parties including Ms Fletcher and Mr Glen Maylen, union delegate, that the Agreement and its effect was explained to employees in accordance with the Act, including in relation to the rates of pay that would apply if the Agreement was approved.

[29] Finally, the AMIEU says the voting process was compromised by the inclusion of persons who will not be covered by the Agreement and because Fletcher encouraged its employees to vote “yes”. It relies on 14 ‘letters’ from employees that fall into one or more of these categories:

•  Unhappy with the Agreement outcome and/or will be worse off under the Agreement than the current enterprise agreement;

•  Unhappy with the approach taken to explaining the Agreement (Dait);

•  Unhappy with the voting process by SMS;

•  Alleging intimidation (Jardine);

•  Asking why employees who will not be covered or who are no longer employed (visa workers and people “on staff”) were allowed to vote on the Agreement.

[30] The AMIEU filed a document alleging that “Kerry Potter” (a nurse who appears to have been employed by Fletcher) received a SMS message about the Agreement even though she was not covered by it. 20 The AMIEU also provided a list of 30 names it says relate to employees who had ceased employment with Fletcher at “around September 2017” (that is, before the Agreement was made).21 The AMIEU suggested that persons on the list may have been involved in voting for the Agreement. No further information about the cessation dates or classifications of any of those persons was provided.

[31] Fletcher disagrees that the voting process was flawed. It says the Agreement was made by a clear majority of employees with 304 employees voting in favour of the Agreement and 93 voting against. Even if all 124 migrant worker votes were discounted, a clear majority of employees would remain in favour of the Agreement.

[32] Fletcher filed a “Workplace Ballot Final Report” prepared by IRIQ Law after conducting the Agreement ballot on behalf of Fletcher. The Report indicates a 76% response rate from employees, with a total of 304 employees voting in favour and 93 against. It contains a list of employees who received an SMS ballot notification or paper ballot (sent on request if an employee was unable to vote using their phone).

[33] A review of the list of employees provided by the AMIEU against the IRIQ report indicates that Kerry Potter was not on the list of employees invited to participate in the Agreement ballot. As the Commission recently noted, vague allegations given in submissions on a hearsay basis hardly provide a proper foundation to conclude that employees covered by the Agreement may not have genuinely agreed to it. 22 I am not satisfied that the material submitted by the AMIEU after the hearing gives rise to a reasonable concern that the Agreement has not been genuinely agreed. Even if all 30 employees on the list provided participated in the vote but were not entitled to do so, the outcome would have been the same. That is, the Agreement would have been approved by a majority of employees employed at the time.

[34] The AMIEU filed a sample of two text messages sent on behalf of Fletcher to employees in connection with the Agreement vote. 23 It says the text messages tainted the voting process because they encouraged employees to vote “Yes”. The text messages show that Fletcher was asking employees to approve the Agreement and that there was also an option for employees to vote “No”. There is nothing exceptional about them. They simply reflect an employer exercising its right under section 181 to request that employees approve the agreement by voting for it. No basis for concern about whether the Agreement was genuinely agreed arises.

[35] Finally, the submissions of the AMIEU suggest that at least some employees feel that migrant workers and backpackers employed by Fletcher should not have been allowed to vote on the Agreement, because they were “brought on simply to askew the vote in favour of the company” and because some of them are no longer employed by Fletcher. There is no evidentiary basis for the former quite serious allegation and I do not accept it. As to the latter, the Act deals with the category of employees who are entitled to vote on an enterprise agreement. Under section 181, an employer may request “the employees employed at the time who will be covered by the agreement” to approve the agreement by voting for it. Many employees who are employed for short periods nevertheless have an interest in enterprise agreements that cover them and the Act requires that they be given an opportunity to have their say. There are no reasonable grounds for concern about whether the Agreement was genuinely agreed on this basis.

[36] I also note submissions of the parties regarding the challenges in sourcing labour in regional Australia and attempts to overcome it, either through the Agreement, the Meat Industry Labour Agreement or otherwise. These matters provide some context for the agreement-making process, but they are ultimately not relevant to whether the Agreement should be approved.

[37] This is not a case where there is a scarcity of information about the agreement-making process or the steps taken to involve employees in the process. Taking all of the material before me into account, I am satisfied that the Agreement was genuinely agreed.

Mandatory terms

[38] The Agreement refers to, but does not include, the model flexibility term prescribed by the Fair Work Regulations 2009. Pursuant to s.202(4) of the Act, the model flexibility term is taken to be a term of the Agreement.

[39] The Agreement refers to, but does not include, the model consultation term prescribed by the Fair Work Regulations 2009. Pursuant to s.205(2) of the Act, the model consultation term is taken to be a term of the Agreement.

Signature page

[40] The AMIEU expressed concern that it was not the signatory to the Agreement on behalf of employees. An opportunity was provided to the AMIEU during the hearing to address the concern by providing a signed signature page of the Agreement for inclusion in the final version. It agreed to do so, but ultimately did not. I am satisfied that the Agreement has been signed by the relevant representatives for the purposes of regulation 2.06A of the Fair Work Regulations 2009.

Conclusion

[41] Fletcher is directed to file any undertaking it wishes to give in relation to the definition of shiftworker, the entitlement to annual leave loading and/or the progression of employees in the Learner classification within 7 days of this decision. The AMIEU is directed to provide any views on any further undertakings provided within 10 days of this decision.

[42] Having regard to the undertakings already provided in relation to the Agreement, I am otherwise satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

COMMISSIONER

Appearances:

D Bates for the Applicant

J Schultz for The Australasian Meat Industry Employees Union

Hearing details:

2018.

Melbourne:

April 6.

Printed by authority of the Commonwealth Government Printer

<PR606308>

Annexure A

 1   Form F18 lodged with the Commission on 25 October 2017

 2   MA000059

 3   Form F17 filed with the Commission on 13 April 2018

 4   Undertaking filed with the Commission on 19 April 2018

 5   Undertaking filed with the Commission on 19 April 2018

 6   Undertakings filed with the Commission on 19 April 2018

 7   Fletcher International Exports Pty Ltd (Dubbo) Production Employees’ Agreement lodged with the Commission on 20 October 2017, Clause 39 and Classification Schedules

 8   Undertakings filed with the Commission on 19 April 2018

 9   Form F17 lodged with the Commission on 13 April 2018

 10   Form F17 lodged with the Commission on 13 April 2018, Q2.7

 11   Powerpoint presentations filed in the Commission on 13 April 2018

 12   Ibid

 13   Form F17 lodged with the Commission on 13 April 2018, Q2.6

 14   Ibid

 15   “Explanation of the Terms of the Fletcher International Exports Pty Ltd (Dubbo) Production Employees’ Agreement” filed with the Commission on 20 October 2017.

 16   AMIEU’s submissions filed with the Commission on 18 April 2018, Attachments 1 and 2

 17   AMIEU’s submissions filed with the Commission on 18 April 2018, Attachment 1

 18   AMIEU’s submissions filed with the Commission on 18 April 2018, Attachment 2

 19   Form F17 lodged with the Commission on 13 April 2018, Q2.6

 20   Email from the AMIEU to the Commission dated 18 April 2018

 21   Ibid

 22   Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty. Limited [2018] FWCA 2283, [34]

 23   AMIEU’s submissions filed with the Commission on 18 April 2018, Attachments 3 and 4