GrainCorp Operations Ltd T/A GrainCorp

[2017] FWCA 3107

[2017] FWCA 3107

FAIR WORK COMMISSION

DECISION

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

GrainCorp Operations Ltd T/A GrainCorp
(AG2017/420)

GRAINCORP OPERATIONS LIMITED – NSW COUNTRY OPERATIONS (AWU) ENTERPRISE AGREEMENT 2016

Grain handling industry
COMMISSIONER JOHNS	SYDNEY, 6 JUNE 2017

Application for approval of the GrainCorp Operations Limited – NSW Country Operations (AWU) Enterprise Agreement 2016.

[1] The following decision (edited) was issued on transcript on 31 May 2017 approving a single-enterprise agreement known as the GrainCorp Operations Limited – NSW Country Operations (AWU) Enterprise Agreement 2016:

“On 14 February 2017, GrainCorp Operations Limited (Applicant) made an application to the Fair Work Commission (Commission) for approval of the GrainCorp Operations Limited – NSW Country Operations (AWU) Enterprise Agreement 2016 (Agreement).

The application was made pursuant to section 185 of the Fair Work Act 2009 (FW Act).  The Agreement is a single enterprise agreement. 

The agreement was lodged within 14 days after it was made. 

The Applicant provided consolidated and amended written undertakings yesterday.  A copy of those undertakings is Exhibit A8 (Attachment A) in these proceedings.

The Commission, as presently constituted, is 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. 

Subject to the undertakings that I have just referred to the Commission, as presently constituted, is satisfied that each of the requirements of sections 186, 187, 188 and 190 as are relevant to this application for approval, have been met.

In relation to the issue of the better off overall test (BOOT), the only issue outstanding from the perspective of the Australian Workers Union in this matter, was the ordinary hours of work for casual employees.  In relation to that issue, I make the following observations. 

The BOOT is the principal approval requirement dealing with the content of enterprise agreements. The BOOT operates in conjunction with section 206 of the FW Act, to ensure that modern awards constitute an effective safety net for employees covered by enterprise agreements in relation to section 206 and the minimum base rate under enterprise agreements.

Under section 186(2)(d), the Commission must be satisfied that an agreement passes the BOOT before it can approve the agreement.

Section 193 sets out that test.  The Commission must be satisfied that each award covered employee or prospective employee will be better off overall if the agreement applies instead of the relevant award that would have applied to the employee.

As a result, employees might receive lower rates of pay than under the previous collective enterprise agreement, the last collective or enterprise agreement is however not the benchmark for the new agreement, but the relevant award.

In the present matter, the relevant award is the GrainCorp Country Operations Award 2015 (GrainCorp Award) and it is against that award that the Commission has assessed the BOOT.  The BOOT must be satisfied at the time the agreement is lodged for approval.  There are a number of examples of agreements which have been approved, even in circumstances where a significant minority group within the workforce is disadvantaged by the payment rates in the agreement.  An example of that is Re ANZ Stadium Casual Employees Enterprise Agreement 2009[2010] FWAA 3758.

The BOOT is focussed on the terms and conditions set out in the enterprise agreement and the relevant award. It is an objective test. The Commission may conduct the test by assessing a hypothetical employee in relation to the classifications in the enterprise agreement against the comparable classification under the relevant award. Section 193(7) of the FW Act, permits the Commission to assume an employee will be better off overall, where the employee belongs to a class of employees who will be better off overall.

In the present matter, the Commission has been greatly assisted by the evidence and the analysis provided by Mr Ross Gilmore (Exhibit A7).  The Commission, as presently constituted, accepts, for present purposes, that from the sample contained in annexure 1 to that exhibit, casual wages at the primary classification level for casuals, being L1.1, L1.2 and L2.1, are moderately higher under the proposed agreement than casual wages under the GrainCorp Award for all casuals in the sample.

The Commission, as presently constituted, is further satisfied that from the high-level analysis in annexure 2, that an average of five per cent of total casual shifts would attract a lower wage under the Agreement, than under the GrainCorp Award; the remaining 95 per cent of total casual shifts would attract a higher wage under the agreement, than under the award.

Based on the average duration of each shift, over the six-month period, that being 8.6 hours, the net effect would be as follows.

● At classification level 1.1, a casual employee would be $122 better off over the six-month period.
● At classification level 1.2, a casual employee would be $365 better off over the six-month period.

To the extent that the analysis indicates that five per cent of shifts, as opposed to five per cent of employees, would attract a lower wage under the Agreement, than under the GrainCorp Award, it is necessary that the issue not be considered in isolation.  The BOOT test is not a line by line assessment, it is an assessment of the agreement overall.

The Commission, as presently, constituted, has been greatly assisted by the materials which have been filed by the Applicant in this matter, including the evidence of Ms Ivosevic (Exhibit A5).

The Commission, as presently, constituted, has taken into account all of the consolidated undertakings which have been provided to the Commission yesterday, which are exhibit A8, and also taken into consideration the casual conversion clause contained in the Agreement.  In all the circumstances of this matter, and having considered all that has been put, the Commission, as presently constituted, is satisfied that the Agreement passes the BOOT.

The Australian Workers Union, being a bargaining representative for the Agreement, has given notice under section 183 of the FW Act, it wants the Agreement to cover them. In accordance with section 201(2), I note that the Agreement covers that organisation.

The agreement is approved.


In accordance with section 54 of the FW Act, the Agreement will operate from 7 June 2017. The nominal expiry date of the agreement is 30 September 2020.”

COMMISSIONER

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Annexure A