Hollsam Breads Pty Ltd
[2010] FWA 2038
•11 MARCH 2010
[2010] FWA 2038 |
|
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
(AG2009/24275)
COMMISSIONER GOOLEY | MELBOURNE, 11 MARCH 2010 |
The Hollsam Breads Pty Ltd Enterprise Agreement 2009.
[1] This is an application pursuant to section 185 of the Fair Work Act 2009 (the FW Act) for approval of the Hollsam Breads Pty Ltd Enterprise Agreement (the Agreement).
[2] The Statutory Declaration provided by the employer did not indicate the date on which the last notice to employees under s.173(1) had been provided. Consequently on 22 January 2010 I wrote to Ms Lorelle Wells, the director of Hollsam Breads Pty Ltd and sought additional information about the date that the notice of representational rights had been given to employees. I further raised with Ms Wells concerns I had that the Agreement may not pass the no disadvantage test as the Agreement provided for lesser entitlements than provided in the Shop Distributive and Allied Employees Association – Victorian Shops Interim Award 2000 1 (the Retail Award) and the Bread Trade (Victoria) Award 19992 (the Bread Award).
[3] On 30 January 2010 Ms Wells advised that the notice of representational rights had been provided to employees on 11 November 2009 along with copies of the Agreement and that on that date employees were told that they would vote on the Agreement on 15 December 2009. From her response it was clear that the procedural requirements of the FW Act had been complied with. However as I still had concerns that the Agreement did not satisfy the no disadvantage test the application was set down for hearing on 23 February 2010 and Ms Wells attended the hearing.
[4] Ms Wells in her letter of 30 January 2010 and in her submissions at the hearing provided further details about the operation of her business.
[5] Despite the fact that the Agreement provided for lesser entitlements than provided under the reference instruments, in her statutory declaration Ms Wells advised that the Agreement did not contain any terms and conditions that were less beneficial than any terms contained in the reference instruments.
[6] The Agreement provides that employees will be full time or part time. At the hearing of this application Ms Wells was not able to advise if her retail employees were part-time or casual 3. If they were part-time they have been paid under an agreement which provided for a loaded rate which included any entitlements to sick pay and holiday pay4.
[7] The Agreement makes no provision for the casual employees’ rates or conditions.
[8] Having considered the response of the employer I have identified some of the more significant differences between the Retail and Bread Awards and the Agreement.
Hours of Work/Overtime/Penalties/Public Holidays
[9] The Agreement provides that ordinary hours will not exceed 38 hours per week averaged over 52 weeks. There is no minimum call for employees and no restriction on the number of hours an employee can be rostered in any particular week. There is no span of hours and no restriction on the number of days a week an employee can be rostered. There is no distinction between full and part time employees. Despite clause 7.3 of the Agreement providing that each day’s work will stand alone in calculating additional hours, overtime is only be paid if work is performed outside of ordinary hours. No overtime is paid if employees work preferred hours. No late night penalties are payable and there are no additional payments for working Saturday and Sunday. The rate of working a public holiday is time and a half.
[10] In contrast, the Retail Award provides a span of hours 5, provides for how the 38 hour week is implemented6 and provides for overtime in a wider range of circumstances than is payable under the Agreement7. Part-time employees work a regular roster of hours which can only be varied by agreement8. Employees are paid double time for working on Sunday9, receive an additional payment for working on Saturday10 and receive double time and a half for working on public holidays11.
[11] The Bread Award also provides for how the 38 hour week is implemented 12, overtime and work on Saturday and Sunday13, and double time and a half for working on Public Holidays14.
Rosters
[12] The Shops Award provides for changes to rosters by mutual agreement or if there is an emergency or unforeseen circumstances on 48 hours notice 15. The Agreement provides for a change of roster on 24 hours notice.
Annual Leave Loading
[13] The Agreement does not provide for Annual Leave Loading unlike the Retail Award 16 and Bread Award17.
Annual Leave/Personal Leave
[14] The Agreement permits employees to receive a loaded rate of pay in lieu of annual leave (with the exception of one week in clause 14.3) 18 and in lieu of personal leave. This provision is inconsistent with the Australian Fair Pay and Conditions Standard (AFPCS) as they applied prior to 1 January 2010 and the National Employment Standard (NES) as it applies from 1 January 2010. This provision of course would not cause the Agreement to fail the no disadvantage test as the AFPCS and the NES will prevail. Even if such a provision were permissible the loaded rate of pay for shop assistants working Monday to Friday does not compensate the employees for the loss of annual leave, personal leave and leave loading. If in fact the employees were casual employees the loaded rate of $17.82 paid for Monday to Friday shop assistants is less than the casual rate payable namely $19.83 per hour.
Laundry Allowance
[15] The Agreement does not provide for a laundry allowance as it said to be built into the rate paid to employees. Currently the Retail Award laundry allowance is $6.40 per garment per week 19 and Bread Award laundry allowance is $7.92 per week20.
Accident Make Up Pay
[16] The Agreement makes no provision for accident make up pay. The Retail Award 21 and the Bread Award22 both provide for accident make up pay.
Preferred Hours Arrangements
[17] The Agreement provides for the payment of a lower rate of pay for employees who elect to work preferred hours to suit their personal circumstances. In Hao Yun Pty Ltd Employee Enterprise Agreement 23 Commissioner McKenna considered a preferred hours clause. Commissioner McKenna referred to the decisions of Commissioner Whelan and Commissioner Smith which dealt with preferred hours arrangements:
“In Bendy Q P/L t/s Jamaica Blue Knox City & Ors [2009] FWA 1869, Whelan C recently considered a number of applications for the approval of enterprise agreements which appear, from the decision, to follow a similar, but not identical, template to the applications before me. Whelan C said this in relation to the preferred hours arrangements:
[41] It is not, in my view, appropriate nor does it pass the no disadvantage test, to include in an agreement a general provision which removes penalty provisions from the employees’ rate of pay on the basis that they have nominated certain hours during which they are available to work. If the employer requires work to be performed during those hours and the employee is able to perform that work then that is a normal incident of employment and not a special arrangement which might be covered by either section 65 or the type of arrangements covered by section 203. It is notable that if employees were to be engaged under these ‘preferred hours’ arrangements they would be paid less than if the relevant award applied.
I note also that in Bupa Care Services, ANF and HSU Enterprise Agreement 2009 [2010] FWA 16 Smith C recently considered a preferred hours arrangement, albeit the clause differed from the provisions of these agreements. In declining to approve the agreement, Smith C noted:
[17] Against this background, it can be seen that this proposed clause represents a cost saving rather than a benefit. It would be difficult to suggest that an employee would see the benefit in being paid less than that which would ordinarily apply. In short, it is the gift of employment that the employer is offering provided it is at a discounted rate from the safety net. This is a concept which, in my view, has far reaching implications for the operation of the safety net of wages and conditions.”
[18] Commissioner McKenna stated that she agreed“with the approach to preferred hours adopted in these quotes, and generally, in Bendy Q P/L t/s Jamaica Blue Knox City & Ors and Bupa Care Services, ANF and HSU Enterprise Agreement 2009. To the extent three of the agreements contain preferred hours arrangements, they, self evidently, fail the no disadvantage test - given the displacement of entitlement to higher rates that otherwise would attach to the performance of work during those hours.”
[19] I agree with the approach to preferred hours adopted in the decisions of Commissioners Whelan, Smith and McKenna. In this Agreement the preferred hours rates of pay for retail employees are below the minimum rate of pay in the pay scale summary for the Retail Award for shop assistants and supervisors. The rate for other classifications would not compensate an employee who predominately works on weekends for the loss of penalties paid under the Award and hence I find that the Agreement fails the no disadvantage test due to inclusion of such a provision.
The Rates of Pay
[20] The rate of pay for Monday to Friday shop assistant level 1 (unloaded) is eight cents an hour more than the current minimum rate of pay. This amount does not compensate the employee for the loss of annual leave loading let alone penalty rates, laundry allowance and the other entitlements provided under the Retail Award.
Benefits
[21] The Agreement provides for a bonus of $200 to be paid to employees upon the anniversary of the approval of the Agreement and new employees will receive a bonus after 12 months employment. I have taken these benefits into account when assessing the Agreement.
Undertakings
[22] I considered whether there were any undertakings the employer could provide which would enable the Agreement to be approved. However Fair Work Australia is not able to accept undertakings if the undertakings are likely to result in substantial changes to the Agreement 24. In this case the number of variations required to Agreement would be substantial and therefore Fair Work Australia could not approve the Agreement even if undertakings were given.
Conclusion
[23] For the reasons set out above I am not satisfied that the Agreement does not or would not result, on balance, in the reduction in the overall terms and conditions of employment of the employees who are covered by the Agreement under the reference instruments relating to these employees and therefore the application for approval is refused.
COMMISSIONER
1 AP796250.
2 AP769688.
3 Transcript PN 78.
4 Transcript PN 78.
5 The Retail Award clause 23.
6 Ibid clause 22.
7 Ibid clause 29.
8 Ibid clause 10.3.
9 Ibid clause 19.
10 Ibid clause 18.
11 Ibid clause 38.
12 The Bread Award clause 10.
13 Ibid clause 23.
14 Ibid clause 29.
15 The Retail Award clause 23.6.
16 Ibid clause 32.6.
17 The Bread Award clause 25.6.
18 It is unclear what this provision means as clause 14.5 makes it clear that clause 14.3 does not apply to employees who elect to be paid the loaded rate.
19 The Retail Award clause 20.2.
20 The Bread Award clause 18.4.
21 The Retail Award clause 39.
22 The Bread Award clause 18.5.
23 [2010] FWA 383.
24 Fair Work Act 2009, sections 190(2) and (3).
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