Forever New Clothing Pty Ltd T/A Forever New

[2016] FWCA 2842

[2016] FWCA 2842

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Forever New Clothing Pty Ltd T/A Forever New
(AG2016/2530)

FOREVER NEW CLOTHING PTY LTD ENTERPRISE AGREEMENT 2016

Retail industry
DEPUTY PRESIDENT BULL	SYDNEY, 10 MAY 2016

Application for approval of the Forever New Clothing Pty Ltd Enterprise Agreement 2016.

[1] An application has been made by Forever New Clothing Pty Ltd T/A Forever New (the applicant) for the approval of an enterprise agreement known as the Forever New Clothing Pty Ltd Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is a single enterprise agreement.

[2] The Agreement covers all Australian retail store employees engaged by the employer, and does not cover staff employed in Head Office. As per s.186(3) of the Act, I am satisfied that the group of employees covered by the Agreement was fairly chosen based on the operational distinction of the employees.

[3] The General Retail Industry Award 2010 (the Award) is the relevant reference instrument for the purposes of the better off overall test (BOOT) as required under s. 186 of the Act.

[4] On 21 March 2016, the Shop, Distributive and Allied Employees Association (the SDA) wrote to the Commission advising that they had an interest in, and a number of concerns about the terms of the Agreement. The SDA sought to be provided with copies of all materials filed by the applicant to assist them to respond appropriately.

[5] On 29 March 2016, the applicant wrote to the Commission advising that the SDA was not a bargaining representative in relation to this Agreement.

[6] On 30 March 2016, the Commission wrote to the SDA requesting that the SDA establish that it was a bargaining representative for the Agreement.

[7] On 31 March 2016, the Commission wrote to the applicant raising the following concerns in relation to the BOOT:

● The nominal expiry date of the agreement is stated to be four years from the date of its commencement;

● The dispute resolution term does not provide for representation of parties at Step One of the procedure;

● That salaried employees may not be better off overall if required to work up to four hours of unpaid overtime per two week cycle; and

● That employees who regularly work after 6pm may not be better off overall due to the lack of evening penalties in the Agreement.

The SDA’s request for copies of all documentation filed with the Commission

[8] On 1 April 2016, the SDA filed submissions with the Commission in relation to its request to access copies of all documentation that had been filed.

[9] Notably in these submissions, the SDA advised that they do not currently have any members employed at Forever New that would be covered by the Agreement.

[10] On 8 April 2016, the applicant filed submissions with the Commission in response to those lodged by the SDA. These submissions reiterated the position that the SDA was not a bargaining representative for the Agreement.

[11] On consideration of these submissions the Commission, in the interests of transparency 1, permitted the SDA to attend the Fair Work Commission offices to access the material filed in relation to the application.

The nominal expiry date of the Agreement

[12] The Agreement provides a nominal expiry date of four years from the date of its commencement, which would then be four years and seven days from the date of its approval. The Commission noted that under s.186(5) of the Act, the nominal expiry date of an agreement can be no more than four years from the date of approval.

[13] In response to the request of the Commission, the applicant provided an undertaking that the nominal expiry date of the Agreement would be four years from the date of its approval by the Commission.

The dispute resolution term

[14] The Commission noted that the grievance procedure at clause 2.4 of the Agreement did not allow for representation of employees at Step 1 of the procedure. Under s.186(6) of the Act, the Commission must be satisfied that the Agreement includes a dispute settlement term that allows for the representation of employees covered by the Agreement for the purposes of that procedure.

[15] In response to the request of the Commission, the applicant provided an undertaking that in addition to clause 2.4.6 of the Agreement, employees may elect to have a representative of the employee’s choice at any stage of the dispute resolution procedure.

Salaried employees working unpaid overtime

[16] The Commission noted that clause 5.3.5 of the Agreement provides that salaried employees will be entitled to take time off in lieu of payment for overtime where they work in excess of four hours of overtime during a two week roster cycle.

[17] The Commission was not satisfied that the rates of pay were high enough to compensate employees in the event that they were expected to work up to four hours of unpaid overtime per two week cycle.

[18] In response to the request of the Commission, the applicant provided an undertaking that salaried employees will not be required to work more than 50 hours of unpaid overtime per year.

[19] The Commission conducted an analysis of the rates provided in the Agreement in light of this limitation and is consequently satisfied that salaried employees are better off overall under the Agreement in the circumstances.

Evening penalties

[20] The Commission noted that clause 5.2.1 of the Agreement allowed for ordinary hours to be worked up to 10pm or midnight in certain stores on all days of the week. The Commission also noted that there were no separately identifiable evening penalties provided in the Agreement.

[21] The Commission was not satisfied that the hourly rates of pay in the Agreement were high enough to compensate employees for a lack of evening penalties in the Agreement.

[22] In response to the request of the Commission, the applicant provided an undertaking as follows:

“In relation to clause 5.2.1 of the Agreement, Forever New will, upon request every 6 months, and otherwise, at least annually, carry out a reconciliation of the pay its part time Employees regularly working hours after 6:00pm Monday to Friday would have been entitled to if the General Retail Industry Award 2010 ("Award") applied. If Forever New finds, as a result of this reconciliation, that an Employee has received less under the Agreement than they would have received under the Award, Forever New will pay that Employee a reconciliation top-up payment to make up the difference identified. Top-up payments will be paid within 21 days of the reconciliation date.”

[23] The Commission was not satisfied that the reconciliation clause provided in this undertaking created an enforceable right to payments to employees equal to or higher than those contained in the Award. The Commission requested further undertakings from the applicant to address these concerns.

[24] In response to the request of the Commission, the applicant provided a revised undertaking as follows:

“In relation to clause 5.2.1 of the Agreement, Forever New has set remuneration for each classification to ensure Employees are better off overall under this Agreement than under the General Retail Industry Award 2010 ("Award") which would otherwise apply. Where an Employee considers they are not better off overall under this Agreement than under the Award, they may request a comparison of the wages (or salary) received for a nominated period of time under this Agreement and the wages they would otherwise be provided with under the Award. Any shortfall in wages which would otherwise be payable under the Award will be paid to the Employee in the next pay period after the review is completed. If the Employee and Forever New cannot reach agreement on the wages which should be paid, the Grievance Procedure in clause 2.4 of the Agreement will be followed and the parties will agree to the Fair Work Commission arbitrating and making a binding determination to resolve the matter.”

[25] The Commission is satisfied that this undertaking creates an enforceable right to payments to employees equal to or higher than those contained in the Award, and has no limitation on its availability.

Undertakings provided

[26] The undertakings provided by the applicant address the Commission’s concerns in relation to the nominal expiry date, dispute resolution term, salaried employees working unpaid overtime and the lack of evening penalties in the Agreement. The undertakings provided by the employer are attached at Annexure A of this decision. The undertakings are taken to be a term of the Agreement.

[27] The undertakings are not so substantial that if asked to vote again, the employees who voted would not approve the Agreement. I am therefore satisfied that the undertakings do not result in a substantial change to the Agreement, as per s.190(3)(b) of the Act.

SDA submissions regarding their objections to the Agreement

[28] On 21 April 2016, the SDA filed submissions with the Commission detailing its concerns with the Agreement.

[29] On 28 April 2016, the applicant filed submissions with the Commission in response to those lodged by the SDA.

[30] Having considered both the submissions lodged by the SDA and those lodged by the applicant, the Commission is not satisfied that the concerns raised by the SDA alter its interpretation of the BOOT in light of the undertakings provided.

Approval

[31] Taking into account the undertakings provided by the applicant, I am satisfied that the Agreement results in employees being better off under the Agreement.

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

[33] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 17 May 2016. The nominal expiry date of the Agreement is 10 May 2020.

DEPUTY PRESIDENT

Annexure A

 1   Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo;

A Printed by authority of the Commonwealth Government Printer

<Price code G, AE418825  PR580068>

ustralasian Meat Industry Employees Union, The v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo[2015] FWCFB 7090 at [47].