H.A.G. Import Corporation (Australia) Pty Ltd

[2013] FWCA 7424

[2013] FWCA 7424

FAIR WORK COMMISSION

DECISION

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

H.A.G. Import Corporation (Australia) Pty Ltd
(AG2013/2117)

H.A.G. IMPORT CORPN. (AUSTRALIA) PTY LTD ENTERPRISE AGREEMENT 2013

Storage services
COMMISSIONER BULL	SYDNEY, 25 SEPTEMBER 2013

Application for approval of the H.A.G. Import Corpn. (Australia) Pty Ltd Enterprise Agreement 2013 - Individual flexibility agreement explained.

[1] An application has been made for approval of an enterprise agreement known as the H.A.G. Import Corpn. (Australia) Pty Ltd Enterprise Agreement 2013 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] On 28 August 2013, the Commission alerted the Applicant via their representative to a number of concerns it had with aspects of the Agreement. These issues concerned the ordinary hours of work, meal allowance and the individual flexibility arrangement in the Agreement.

[3] Correspondence was received from the Applicant’s representative on 30 August and 2 September 2013 and from the National Union of Workers (NUW) as a bargaining representative for the Agreement on 10 September 2013.

Ordinary hours of work

[4] The Commission notes that the Agreement at clause 18 - Hours of work, and in particular, sub clause 18.2 provides for ordinary hours of work that are greater than the ordinary hours of work provided for in the Storage Services and Wholesale Award 2010 (the Award), being the relevant modern award for the purpose of the better off overall test.

[5] The Applicant and the NUW have provided calculations and advised that the rates of pay in the Agreement are significantly higher and compensate for the additional increase in the ordinary hours of work under the Agreement. I am satisfied that employees under the Agreement would be better off overall in respect of this clause.

Meal allowance

[6] In correspondent to the Applicant and the NUW, the Commission noted that with respect to clause 16.1 - Allowances, the clause refers to an ‘allowance table in clause 16.1 which does not appear in the clause.

[7] The Applicant and the NUW have advised that this is a typographical error and should refer to the table at clause 12.1 of the Agreement that provides for a meal allowance.

Flexibility Term

[8] The Act requires at s.202(1) that an enterprise agreement must include a flexibility term.

[9] The mandated flexibility term is described in the Act as being a term that:

202(1)(a) enables an employee and his or her employer to agree to an arrangement (an individual flexibility arrangement) varying the effect of the agreement in relation to the employee and the employer, in order to meet the genuine needs of the employee and employer; and

(b) complies with section 203.

[10] The Applicant and the NUW were asked for further information concerning the application of clause 41 - Individual Flexibility Agreement.

[11] Sub clause 41.2 of the Agreement is in the following terms:

The terms the employer and the individual employee may agree to vary the application of are those concerning:

a. Advance Payment of Annual Leave

b. First Aid Allowance

[12] In correspondence from the Applicant’s representative on 30 August 2013, the Commission was advised that the same provisions were contained in the previous agreement and that the Applicant’s representative was:

“...not able to specifically identify flexibilities associated with these provisions”

[13] Further correspondence was received from the Applicant’s representative on 2 September 2013, advising the Commission that in regards to the issue of flexibility for the First Aid Allowance, the Agreement deals with the allowance at sub clause 16.2 and 12.1. No further information was provided by the Applicant’s representative.

[14] On 10 September 2013, the NUW provided correspondence to the Commission with respect to individual flexibility arrangement in the Agreement.

[15] The NUW advised that sub clause 41.2(a) dealing with the Advanced Payment of Annual Leave had been mistakenly included in the Agreement and refers to a clause that is no longer in the Agreement.

[16] With respect to sub clause 41.2(b) dealing with the First Aid Allowance, the NUW in its correspondence stated:

“...this provision refers to First Aid Allowance at Clause 16.2. The purpose of the IFA is to allow an individual employee and the employer to agree to have the allowance paid in different ways - for example as an all purpose allowance, or paid monthly etc.”

[17] Upon review of the correspondence from the Applicant and the NUW, I note that sub clause 41.2(a) dealing with the Advance Payment of Annual Leave will have no effect as it was mistakenly included and does not relate to a term of the Agreement.

[18] Pursuant to s.202(1)(a) of the Act with respect to sub clause 41.2(b) it was not clear to the Commission how an individual flexibility arrangement relating to the first aid allowance could vary the effect of the Agreement in relation to the employee and the employer, in order to meet the genuine needs of the employee and employer.

[19] The Applicant has simply submitted that the same term was in the previous agreement.

[20] The NUW has advised that the clause allows the first aid allowance to be paid in different ways, for example, as an all purpose allowance or paid monthly etc, by entering into an individual flexibility arrangement.

[21] Despite the Applicant’s representative not being able to identify how the clause would operate, I am prepared to accept on the basis of the response from the NUW that variations to the first aid allowance in some way provides flexibility in order to meet the genuine needs of the employee and the employer in accordance with s.202(1)(a) of the Act.

[22] The Agreement covers employees involved in the warehousing and distribution activities and who would otherwise by covered by the scope of the Award. I am satisfied that pursuant to s.186(3A) of the Act, this group is fairly chosen as being operationally or organisationally distinct.

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

[24] The National Union of Workers being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers this organisation.

[25] The Agreement is approved. In accordance with s.54(1) the Agreement will operate from 2 October 2013. The nominal expiry date of the Agreement is 11 April 2016.

COMMISSIONER

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