Independent Purchasing Company (Australasia) Limited T/A Subway

[2019] FWC 5997

[2019] FWC 5997

FAIR WORK COMMISSION

STATEMENT

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

Independent Purchasing Company (Australasia) Limited T/A Subway
(AG2019/1966)

COMMISSIONER LEE SYDNEY, 28 AUGUST 2019

Application for approval of the IPC Asia Pacific Enterprise Agreement 2019.

[1] An application has been made by Independent Purchasing Company (Australasia) Limited T/A Subway (the Applicant) for the approval of the IPC Asia Pacific Enterprise Agreement 2019 (the Agreement).

[2] The Shop, Distributive and Allied Employees Association (the SDA) has raised concerns that the Agreement does not pass the Better Off Overall Test (BOOT). The Applicant submits that the Agreement passes the BOOT.

[3] The relevant Modern Award for the purposes of the assessment of the BOOT is the Fast Food Industry Award 2010 (the Award).

Background Document

[4] The matter was listed for hearing on Friday, 22 August 2019. In preparation for the Hearing, I circulated a Background Document which detailed “Proposed Agreed Facts” for the parties to consider which are identified below:

•  Adult rates of pay are between 2.03% - 2.13% higher than the corresponding rates of pay in the Award.

•  Rates of pay for junior employees are 2.13% higher than the Award.

•  The rates of pay for full time and part time employees incorporate a payment in lieu of annual leave loading.

•  When the annual leave loading is factored into the pay rate comparison, the rates of pay are between 0.68% - 0.78% above the Award rates of pay as per Attachment A.

•  Casual employees remain between 2.03% - 2.13% above the Award rates as per rates above.

[5] The purpose of the document was to establish a suitable baseline for consideration of other matters that might arise is assessing whether the Agreement passes the BOOT. At the Hearing, both the Applicant and the SDA agreed to the facts set out in the Background Document and agreed that this is a suitable ‘jumping off point’ for the purposes of the assessment of the BOOT. 1

[6] At the conclusion of the hearing, I advised the parties that I had altered my previously expressed provisional view that the Agreement passed the BOOT. I have now formed the view based on the submissions provided, that the Agreement does not pass the BOOT.

Agreement terms

[7] As foreshadowed at the Hearing, I have prepared a summary of the matters that I consider more beneficial than the Award and those that I consider less beneficial.

[8] The following terms are identified as less beneficial than the Award:

1. Meal allowance: The meal allowance at clause 30 of the Agreement is less beneficial for full time employees. This remains the case even after taking into account the undertaking provided by the Applicant.

2. Laundry Allowance: The uniform allowance at clause 29 of the Agreement is less than what is provided for at clause 19.2 (b) of the Award and only applies to part time employees.

3. Special clothing allowance: There is no analogous provision to clause 19.2 (a) of the Award.

4. Superannuation: Clause 26 of the Agreement does not to extend to confer rights that employees have under clause 25.5 (b) of the Award.

5. Overtime on a public holiday for full time and part time employees: The penalty for full time and part time employees when engaged to perform overtime on a public holiday is less than the Award.

6. Time off in lieu: The Agreement does not specify that the period of time off that an employee is entitled to take is equivalent to the overtime payment that would have been made as found at clause 26.5 (b) of the Award.

7. Hours of work: There is no analogous provision to clause 25.2 (b) of the Award.

8. Excess travelling costs: There is no analogous provision to clause 19.3 of the Award.

9. Travelling time reimbursement: There is no analogous provision to clause 19.4 of the Award.

10. Transfer of employee reimbursement: There is no analogous provision to clause 19.5 of the Award.

11. Transport allowance: There is no analogous provision to clause 19.6 of the Award.

12. Transport of employee reimbursement: There is no analogous provision to clause 19.7 of the Award.

•  I note that clauses 19.3 - 19.7 of the Award provide specific and enforceable entitlements in comparison to clause 28 of the Agreement.

13. Adjustment of expense related allowances: There is no analogous provision to clause 19.10 of the Award.

14. Part time employees: Clause 12 of the Award prescribes a number or requirements and rights for employees which are absent at clause 7.2 of Agreement. Overall, this amounts to a less beneficial term.

15. Deductions: Clause 51 of the Agreement allows the Employer to deduct from an employee’s wages or, upon the termination of employment, to deduct from final pay, including from annual leave entitlements, any sums owned to the Employer by the Employee relating to their employment. Clause 50.2 of the Agreement provides that employees are responsible for all loss and damage suffered by the Employer due to wilful acts or neglect on their part caused during their employment, including loss and damage to property belonging to the Employer. Deductions in accordance with clause 50.2 can be deducted from any accrued leave entitlements on termination as per clause 51.3.

16. Requests for flexible working arrangements: There is no analogous provision to clause 27A of the Award.

17. Casual employees: Clauses 8 and 22.1 (a) refer to casual employees engaged on a ‘regular’ basis. Clause 7.3 excludes casual employees from the entitlement to annual and personal leave. This appears inconsistent with the decision ofWorkPac Pty Ltd v Skene [2018] FCAFC 131.

[9] The following terms have been identified by the Applicant as more beneficial, than the Award with which I agree:

18. Clause 11.3 of the Agreement provides greater access to additional pay for performing duties outside principle purpose of employment.

19. Clause 40 of the Agreement provides opportunity for study leave.

20. Clause 39 of the Agreement provides uncapped jury service leave.

21. The value of wage rate premiums increasing when penalties are applied.

[10] However, I note that these benefits (with the exception of item 21) are contingent benefits and have to be considered in that context. For example, access to uncapped jury service is only a benefit if an employee is required to attend for jury service.

[11] The following terms have been identified by the Applicant as more beneficial than the Award to which I provide the following response:

22. I do not accept that clause 7.2 (b) of the Agreement is a more beneficial term as noted at item 15 above.

23. The assertion that annual leave loading has been included into casual rates of pay despite casuals not being entitled to it results in a more beneficial term is confusing and potentially misleading. The fact is that Casual rates of pay are between 2.03% - 2.13% above the Award rates as agreed to by the parties in the Background Document and this has been taken into account is assessing the BOOT.

[12] Matters raised by the SDA that are not mentioned above are considered neutral and/ or irrelevant for the purpose of determining whether the Agreement passes the BOOT.

[13] Based on these considerations I have formed the view that the Agreement does not pass the BOOT.

Next steps

[14] As I advised at the hearing, the Applicant is afforded the opportunity to provide any undertaking/s to address the concerns outlined above. Any undertaking provided must be provided by close of business Wednesday, 11 September 2019.

[15] The SDA is directed to provide any views they may have on any undertakings proffered by the applicant by close of business Wednesday, 18 September 2019.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR711788>

 1   PN27; PN33.