Inghams Enterprises Pty Limited T/A Inghams Group Limited

[2017] FWCA 902

[2017] FWCA 902

FAIR WORK COMMISSION

DECISION

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

Inghams Enterprises Pty Limited T/A Inghams Group Limited
(AG2016/7789)

INGHAMS ENTERPRISES (MURARRIE AND HEMMANT) ENTERPRISE AGREEMENT 2016

Poultry processing
COMMISSIONER ROE	MELBOURNE, 14 FEBRUARY 2017

Application for approval of the Inghams Enterprises (Murarrie & Hemmant) Enterprise Agreement 2016.

[1] An application has been made for approval of an enterprise agreement known as the Inghams Enterprises (Murarrie & Hemmant) Enterprise Agreement 2016 (the Agreement). The application was made pursuant to Section 185 of the Fair Work Act 2009 (the Act). It has been made by Inghams Enterprises Pty Limited T/A Inghams Group Limited (Inghams). The Agreement is a single enterprise agreement.

[2] After considerable exchange of correspondence between the Fair Work Commission and Inghams I am satisfied that all the requirements of the legislation for the approval of the Agreement are met except for the matter raised by a bargaining representative, the AMIEU, in respect to the clause providing for suspension of employees. There were several concerns I raised with Inghams which have been resolved through the provision of an appropriate undertaking. I am satisfied that the undertaking does not result in a substantial change to the Agreement and will not result in a financial detriment to any employee.

[3] The suspension issue was first raised by the AMIEU in their F18 Form on 22 December 2016. On 6 January 2017 I wrote to Inghams and AMIEU advising that I agreed with the AMIEU concerns and sought a response from the employer to that issue amongst others. Inghams provided a response to all issues raised including the suspension issue on 13 January 2017. AMIEU was provided with a copy of the response. The response included proposed undertakings. I consider that this was Inghams complying with its obligation to consult with the AMIEU in respect to proposed undertakings. The AMIEU had the opportunity to provide any comments on the adequacy of Inghams’ response to Inghams and the Fair Work Commission. It failed to do so.

[4] When the Fair Work Commission considered that the concerns raised had been addressed to its satisfaction the matter was listed for approval. The AMIEU advised that it maintained its objection in respect to the issue of suspension and wished to make further submission. The AMIEU also submitted that there had been a serious breach of natural justice by the Fair Work Commission. I immediately advised the AMIEU that I was happy to consider further submissions in respect to the matter of suspension despite the fact that the AMIEU had failed to take the opportunity to respond earlier. I listed the matter for hearing on 13 February 2017 for that purpose. I do not consider that there has been any breach of natural justice or procedural fairness to the AMIEU. The AMIEU were not denied access to relevant material. By administrative error some correspondence was not copied to the AMIEU but as soon as we were aware of that it was rectified. The AMIEU were provided with the employer response to the Fair Work Commission concerns on 13 January 2017 and had ample time to respond if it so wished. There is no requirement for the Commission to specifically request submissions from a bargaining representative or to delay the approval process if a bargaining representative chooses not to make a submission.

[5] The Agreement provides in Clause 3.7.3 that an employee accused of misconduct may be suspended without pay for up to three days to allow an investigation. If the employee is exonerated or receives a warning then the employee will receive their ordinary time pay for the period of the suspension.

[6] The AMIEU submit that the suspension for misconduct may amount to constructive dismissal or adverse action under the Act. They submit that an express right to suspend has not arisen under a contract, statute or the applicable industrial instrument. They also submit that the provision is a BOOT consideration. They point to the financial hardship which may arise and the lack of any specific right in the Agreement to access paid leave entitlements during the period of suspension. They also suggest that the employee may not accrue leave entitlements whilst on unpaid suspension.

[7] The Agreement provision provides for suspension without pay. The AMIEU submit that any right to suspend must be expressly stated, it cannot be implied. The AMIEU refer to the decision in Warburton v Taff Vale Railway Co 1as authority for the proposition that even where there is an express right to suspend without wages during the period of suspension, the employee is entitled to wages during the period of suspension if he is dismissed at the end of that period. They refer to other cases concerning suspension. In the main the AMIEU submissions explain by reference to the common law why suspension without pay is unjust and unreasonable. They submit that it is not in line with the principles of natural justice because it is effectively punitive and pre-judging the issue prior to an investigation. I agree with the thrust of the AMIEU submissions on this point. However, the common law situation is able to be displaced by Statute and/or industrial instrument. The Fair Work Act 2009 does not limit provision in Agreements concerning suspension except if they are unlawful terms.

[8] I am satisfied that:

● There is no common law right to suspend an employee without pay. Inghams would not have the right to suspend employees without pay in the circumstances provided for in the Agreement if that right was not conferred upon it by the Agreement.
● There is nothing in the Fair Work Act 2009 which prohibits an Enterprise Agreement from including provisions concerning suspension of employees as part of a disciplinary process
● The Fair Work Act 2009 includes as an unlawful term provisions which reduces an employee’s unfair dismissal rights. A provision which provided for indefinite or lengthy suspension without pay might, depending upon the terms, be an unlawful term. If the suspension amounts to a dismissal then it would be an unlawful term because it reduces an employee’s unfair dismissal rights. However, in this case the suspension is effectively paid unless there is a dismissal within the next three days and if there is a dismissal then unfair dismissal rights are unaffected.
● The Fair Work Act 2009 includes as an unlawful term an objectionable term which permits or requires a contravention of general protections. Some suspension terms could be objectionable terms.
● Section 524 of the Act allows for stand down in limited and specified circumstances and provides that the section cannot be relied upon for a stand down where an enterprise agreement allows for stand down in those specified circumstances. A note to Section 524 provides that an enterprise agreement may also include terms that impose additional requirements that an employer must meet before standing down an employee.
● The relevant modern award does not include any provision for suspension of employees with or without pay as part of a disciplinary process. The inclusion of such a provision in an enterprise agreement may therefore be a matter which is less beneficial than the reference instrument and must be taken into account for the purposes of the BOOT.

[9] Given the short period of suspension permitted, the restriction of the circumstances in which suspension is permitted to investigation in respect to alleged misconduct and the requirement to pay the employee for the time lost if the employee is not dismissed following the investigation, I am satisfied that the term does not reduce an employee’s unfair dismissal rights and does not permit or require a contravention of general protections. It does not require or permit adverse action to be taken against an employee for a prohibited reason. I am not satisfied that the provision is an unlawful term.

[10] I am also not satisfied that Section 524 operates to prohibit this clause from being included in an enterprise agreement. It is not a stand down clause which is excluded from inclusion in an enterprise agreement due to the operation of Section 524.

[11] I consider that the clause does provide a detriment when compared to the Award. I therefore consider it to be a factor which must be taken into account for the purpose of the BOOT. However, I do not consider it to be a major detriment due to the safeguards it contains – the loss is limited to three days during an investigation and the three days are reimbursed if the employee is not dismissed. If the provision was not available to the employer then in some circumstances, particularly in respect to an employee who has less than six months service and does not have protection from unfair dismissal, an employee whom the employer intends to dismiss may well be dismissed earlier.

[12] I requested that the employer provide an additional undertaking in respect of this clause to avoid doubt. That undertaking is to make clear that if the days of suspension are reinstated those days count for the accrual of paid leave and superannuation and also that employees on suspension may access paid leave entitlements if they wish.

[13] I consider that the benefits in the Agreement (considered in conjunction with the undertakings offered) are sufficient to outweigh the detriments including this relatively minor detriment. For example, the additional pay under the Agreement for an employee who is protected from unfair dismissal when compared to the pay for the employee under the Award will be sufficient to offset any loss due to suspension of up to three days prior to termination of employment.

Conclusion

[14] I am satisfied that the problems with this Agreement can be cured by the provision of undertakings. I am satisfied that taken as a whole the undertakings provided do not result in a substantial change to the agreement nor in financial detriment to any employee covered by the Agreement. The bargaining representatives have been consulted. The undertakings are attached.

[15] I am satisfied that the other statutory requirements for the approval of the Agreement have been met.

[16] The AMIEU being bargaining representatives for the Agreement, have given notice under Section 183 of the Act that they want the Agreement to cover them. In accordance with Section 201(2) I note that the Agreement covers the organisations.

[17] The Agreement is approved and, in accordance with Section 54 of the Act, will operate from 21 February 2017. The nominal expiry date of the Agreement is four years after the Agreement was made, that is, the nominal expiry date is 8 December 2020.

COMMISSIONER

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1 (1902) 18 TLR 420.