Lobethal Abattoirs Pty Ltd T/A Thomas Foods International

[2017] FWC 151

[2017] FWC 151

FAIR WORK COMMISSION

DECISION

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

Lobethal Abattoirs Pty Ltd T/A Thomas Foods International
(AG2016/5801)

DEPUTY PRESIDENT ASBURY BRISBANE, 11 JANUARY 2017

Application for approval of the Food Process Worker Lobethal Abattoir Employee Collective Agreement 2016.

1. BACKGROUND

[1] Lobethal Abattoirs Pty Ltd (Lobethal) applies under s. 185 of the Fair Work Act 2009 (the Act) for approval of the Food Process Worker Lobethal Abattoir Employee Collective Agreement 2016 (the Agreement). The Australasian Meat Industry Employees Union (AMIEU), a bargaining representative for the Agreement, filed a Form F18 – Statutory declaration in relation to the application for approval of the Agreement indicating that the Union supports the approval of the Agreement provided that it passes the better off overall test (BOOT); does not contain unlawful or discriminatory terms and the Commission is satisfied that the Agreement has been genuinely agreed.

[2] The Form F18 filed by the AMIEU also stated that the Union disagreed with one or more of the answers given to the questions in the statutory declaration or the matters specified on the basis that the Union was concerned that the Agreement did not pass the BOOT.

[3] Directions were requiring the AMIEU to file an outline of submissions statements from any witness on which the Union proposed to rely, in relation to its objection. In its submissions the AMIEU raised additional issues relating to whether the Agreement was validly made. Lobethal was required to file material in reply. Given the extent of the material filed by the parties, the application was listed for hearing on 2 December 2016.

[4] It is necessary to note that on 2 August 2016 Lobethal made an application for approval of an enterprise agreement in the same terms as those in the Agreement subject of the present application. The earlier application was withdrawn by Lobethal in the face of opposition by the AMIEU and before it was allocated to a Member of the Commission for consideration. In withdrawing the application, the legal representative for Lobethal corresponded with the Commission advising that the agreement obtained majority support by employees but was withdrawn on the basis that the Company had become aware since making the application for approval that there were various procedural issues that may compromise the success of its application. It appears that these issues related to whether employees had been provided with copies of documents incorporated in the Agreement during the access period. The correspondence advised that the application was withdrawn so that the issues could be addressed and a new vote undertaken. The withdrawal of that application was dealt with by the staff of the Commission administratively and the file was closed. No issue was taken with the withdrawal of that application by the AMIEU then and no issue is raised in the present proceedings.

[5] In the present application, the AMIEU raises a number of issues which it asserts should cause the Commission to refuse to approve the Agreement. It is asserted that there is presently no proposed enterprise agreement before the Commission for the purposes of s. 181 or 182 of the Act, because an agreement was “made” on 20 July 2016 when the agreement subject of the first application was approved by a ballot of employees. The effect is said to be that there is no proposed agreement for the purposes of the Act in relation to the present application for approval. The AMIEU also asserts that the Form F16 and F17 completed by Mr McKay, Lobethal’s Chief Operating Officer, contain incorrect statements in that Mr McKay has declared that he is not aware of any other agreements that have been filed or dealt with by the Commission that have identical or substantially identical terms.

[6] The AMIEU points to the fact that Mr McKay further states in the Form F17 that the last notice of employee representational rights (NERR) was given to an employee on 23 September 2013 and that the agreement was made on 9 September 2016. The AMIEU raises two issues in relation to these dates. Firstly it is submitted that there has been considerable turnover of employees since the NERR was given. Secondly it is submitted that the Agreement was not made on 9 September 2016. The AMIEU also raises a large number of matters that are said to cause the Agreement to pass the BOOT and incorrect statements made in the application documentation.

[7] It is convenient to deal with these matters under the following headings:

● Incorrect information in the application documents;

● Genuine agreement issues; and

● BOOT issues.

APPLICATION DOCUMENTS

[8] The AMIEU submits that the application documents filed by Lobethal contain inaccurate and possibly self-serving responses. In this regard the AMIEU points to the Form F17 Employer’s Statutory Declaration which requires a response to a question as to whether the deponent is aware of any other agreement(s) that have been filed or dealt with by the Commission that has identical or substantially identical terms. The Form F17 Statutory Declaration sworn by Mr McKay on 16 September 2016, states that he is not aware of any such agreement. The AMIEU contends that this statement is incorrect and that Mr McKay has failed to identify the fact that an earlier identical version of the Agreement subject of the present proceedings was filed in August 2016. Further, Mr McKay has failed to state that:

● The T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement 2010 is in substantially similar terms to those of the present Agreement was made by an associated entity of Lobethal and approved by Commissioner Hampton in 2010 with a significant number of undertakings; 1 and

● The Lobethal Abattoirs Maintenance Technician Enterprise Agreement 2010 approved by the Commission 16 November 2010 2 also contains a number of identical or substantially identical provisions to the Agreement subject of the present proceedings.

[9] It is also the case that a further Form F17 sworn by Mr McKay on 13 October 2016 to correct an omission with respect to the date on which the last notice of employee representational rights was issued, did not correct the responses with respect to whether Mr McKay was aware of other agreements in the same or substantially the same terms. This error was also not addressed in the written or oral submissions made by Lobethal at the hearing of the application for approval of the present Agreement.

GENUINE AGREEMENT ISSUES

[10] In relation to genuine agreement issues, the AMIEU submits that there are three stages in the enterprise agreement process: bargaining for an enterprise agreement; making an enterprise agreement and approval of the enterprise agreement. There is a clear chronological and definitional distinction in the Act between a proposed enterprise agreement and an enterprise agreement. At the point an enterprise agreement is made, it ceases to be a proposed enterprise agreement, regardless of whether or not is approved by the Commission. An enterprise agreement may be made, notwithstanding that an application for approval is withdrawn, the Commission may not approve the agreement or the approval decision may later be quashed.

[11] In the present case the AMIEU asserts that an enterprise agreement was “made” on 20 July 2016 when employees of the employer that would be covered by the proposed agreement were asked to approve it, and a majority of those employees who cast a valid vote, voted to approve the Agreement.

[12] The AMIEU submits that at that point the Agreement ceased to be a proposed enterprise agreement and became an enterprise agreement. This means that there is no proposed enterprise agreement for the purposes of the Act in relation to the current application for approval. Accordingly on 9 September 2016 when the employer asked employees to cast a vote, there was no proposed enterprise agreement for the purposes of s. 181 and 182 of the Act and the Agreement cannot be approved by the Commission.

[13] In the Form F17 Statutory Declaration sworn by Mr McKay on16 September 2016, the question in relation to the date of the notification time for the agreement was omitted. Lobethal subsequently informed the Commission that it overlooked this question and filed a replacement Form F17 on 13 October 2016, confirming that the date of notification time was 23 September 2013.

[14] The AMIEU takes issue with this on the basis that the last notice of employee representational rights (NERR) was issued 3 years ago and the turnover of staff during that time is likely to have been considerable. This is said to be evident from a comparison of the Form F17 filed by Lobethal in August 2016 stating that 290 employees will be covered by the Agreement and the Form F17 filed in September 2016 which indicates that 264 employees will be covered.

[15] Lobethal submits that s. 181 of the Act simply allows an employer to request that employees vote on a proposed agreement. The term “proposed agreement” is not a term of law and when an agreement is made, simply enlivens the 14 day time limit in s. 185 for the agreement to be submitted to the Commission. It is also submitted that successive votes on a proposed enterprise agreement do not give rise for a new NERR to be provided to employees to be covered by the agreement. Authority for this proposition is found in the Full Bench Decision in CJ Mansfield v CEPU 3where it was stated that:

“[47] In our view the effect of these provisions is that the requirement in s. 173 arises at the notification time and applies only to employees employed at the notification time. If negotiations continue and several attempts are made to secure a positive vote – as occurred in this case – there is no obligation to reissue notices. In this case the notices issued in September 2009 to the employees then employed satisfied the requirements of s. 173.”

[16] The Act does not require that a new NERR be given to employees when negotiations are already advanced, or there are failed votes or when an application is withdrawn and the agreement is put to employees for a new vote. Further, Lobethal submits that the point of the NERR is that it is issued at the start of the bargaining process, in this case 23 September 2013.

[17] A decision was made to withdraw the application for approval of an agreement made on 20 July 2016 before the Commission decided the matter. This was because the AMIEU made assertions shortly after 20 July 2016 that requirements for employees to have access to documents may not have been complied with during the access period, which is not conceded by Lobethal. Notwithstanding this, Lobethal elected to withdraw the 20 July 2016 application and repeat the s. 180 access period.

[18] If the requirements of s. 180 were not met with respect to the 20 July 2016 application, then no agreement was made at that point and there was no valid application for approval of an agreement before the Commission. In those circumstances, the NERR given to employees in 2013 remained valid and the enterprise agreement subject of the present proceedings was made on 9 September 2016.

BOOT ISSUES

[19] With respect to the BOOT issues, the AMIEU submits that the Commission should turn its mind to four main considerations, being:

1. The Agreementdoes not utilise the same classification structure as the Meat Industry Award 2010 (the Award), and the comparative classifications for the purpose of the BOOT are not agreed between the AMIEU and the Company.

2. The Agreement does not categorise employees as ‘daily hire’ employees, but purports to utilise the stand down provisions commensurate to those provided to ‘daily hire’ employees under the Award.

3. The Agreement contains a large number of conditions that do not meet those in the National Employment Standards; the Award; or the Fair Work Act 2009 including:

a. 40 hours weeks for full time workers

b. No provisions for higher duties pay

c. No quantifiable leading hand allowance

d. Hours averaged over six (6) months

e. Introduction of roster changes without consultation

f. Wide span of ordinary hours for day workers

g. Afternoon shift payment dependent on classification

h. Wide span of ordinary hours for shift workers

i. Broad ‘stand down’ provisions

j. Unpaid ‘waiting time’

k. Limitation on public holiday absences

l. Shift workers do not receive a fifth (5^th) week of annual leave

m. No paid rest breaks

n. Redeployment without reasonable costs of transit and travelling time

o. Low first aid allowance

p. Overtime

q. No minimum engagement period for casuals

r. No cold temperature allowance

s. No overtime rates for working through a meal break

t. No meal allowance

u. No paid crib breaks for shiftworkers counted as time worked

v. Eight (8) days of personal/carer’s leave for some workers

1. Lobethal’s references to ss.202 and 205 of the Act for the purposes of including model clauses for consultation and flexibility with the Agreement when the model clauses are not contained within the Act, but instead are located within Schedules 2.2 and 2.3 of the Fair Work Regulations 2009.

[20] In relation to the classification structure in the Agreement, Lobethal provided information in the Form F17 Statutory Declaration that Level 1 in the Agreement is equivalent to Level 6 in the Award; Level 2 in the Agreement is equivalent to Level 5 in the Award; Level 3 in the Agreement is equivalent to Level 4 in the Award; Level 4 in the Agreement is equivalent to Level 3 in the Award and the Entry Level in the Agreement is equivalent to Level 1 in the Award.

[21] The AMIEU has identified a number of classifications which it asserts are paid hourly rates that are only minimally above those in the Award and contends that in the context of other Award entitlements which are not provided for in the Agreement, the rates do not exceed those in the Award by a sufficient amount to offset the detriment caused by such removal. The issue identified by the AMIEU in relation to the Agreement classification structure relates to the level at which boners and employees using knives are classified. The Agreement has a number of classifications for Shoulder Boning/Slicing; Leg Boning; Breast/Flap remove; Tenderloin remove; Weasand clip; Punching arms; Wax eyes; Remove hock; Shoulder/Leg Boning and French racks, which the AMIEU asserts would be entitled to be classified at Level 6 under the Award and which are classified at Levels 3 and 4 under the Agreement which equate with Levels 5 and 4 under the Award. These classifications under the Agreement receive amounts of $0.02 per hour and $0.03 per hour in excess of the minimum Award rate and in the case of a Hock Cutter, $0.047 per hour less than the Award rate, on the basis of the AMIEU’s assertion about the level at which they should be classified.

[22] Mr McKay for Lobethal in his evidence in chief asserted that the Full Fleece boner is the only boning classification for a fully qualified boner. According to Mr McKay, other boners covered by the Agreement would be at lower levels under the Award. In relation to Tenderloin removal, Mr McKay said that in a beef processing plant the removal of a tenderloin is a significant boning task but in a piece of mutton it is a matter of pulling it out. Mr McKay asserted under cross-examination that tunnel boning involves use of a knife and then removal of a bone by twisting it out by hand. Mr McKay also said that shoulder boning is a similar task but not as intricate as tunnel boning. In relation to French Racks, Mr McKay said that this is a trimming rather than a boning task.

[23] Lobethal submits that the classification structure outlined in Schedule 1 of the Agreement is the most relevant structure for the workforce. Further, the Company submits that the 2008 Agreement passed the then No Disadvantage Test based on the same wage structure as the proposed agreement, the rates of pay have always been superior to the relevant award and the wage structure has not changed.

[24] In relation to stand downs and waiting time, the concerns of the AMIEU centre on the following provisions of the Agreement:

“18. Employee Stand Down

The Company may Stand Down an employee(s) without pay for any day or part of a day on which they cannot be usefully employed because of:

Any industrial action in the meat industry;
Any stoppage of work in the meat industry for any cause;
Any strike other than in the meat industry;
The breakdown of any machinery;
Any disruption to essential services; or
Shortage of stock

For which the Company could not be held reasonable responsible

Disruption to ‘essential services’ includes but is not limited to:

Disruptions to electricity supply;
Disruptions to water supply; and
Any disruption to production arising from an inspection conducted by the Department of Agriculture and Water Resources (DAWR).

In cases where a Stand Down involves the loss of a complete shift or part of a shift, an employee may access their leave bank, banked overtime or annual leave.

19. Waiting Time

This clause is to be read in conjunction with clause 18 Employee Stand Down.

In the event of a machinery breakdown occurring in accordance with clause 18 above, and at the direction of the Company employees are required to hold themselves in readiness to recommence work, such waiting time will constitute an unpaid Stand Down from work for the first 60 minutes (the maximum for any single shift). However, payment will recommence after the first 60 minutes until the Company advises the employee that due to the breakdown no further work is possible.

On occasions that Waiting Time is required as prescribed in this clause, employees will be required to work up to 60 minutes beyond the time they would normally finished their production hours for the relevant day or shift at normal time rates.

An additional one (1) hour of overtime may be required to fulfil production requirements for a maximum of two (2) hours beyond the time an employee would have normally finished their production hours for the relevant day or shift.

Waiting Time will be administered by the Plant Manager in consultation with the relevant department’s JCC representative.

This Waiting Time clause will be administered fairly and only for genuine reasons as defined in this clause and clause 18, noting that the definition of the word ‘breakdown’ referred to in this clause means when production has physically stopped.

This Waiting Time clause will operate on the basis that should the same piece of equipment breakdown twice or more in the same day or next because of the same fault, then the second or subsequent occurrences will not count as Stand Down lost time for the purpose of Waiting Time.

Further, the Company will be flexible with the taking of breaks to negate the impact of a Waiting Time, as appropriate to meet operational requirements.

Waiting Time will not be required on ten (10) hour shift arrangements unless power supply to the plant from SA Power Networks in disrupted (e.g. Waiting Time without pay on a ten (10) hour shift affecting the power supply outside the boundary of the premises.”

[25] The AMIEU submits that the proper application of the BOOT would require comparison of the wage rates contained in the Agreement with the rates applicable to a regular ‘daily hire’ employee under the Award. This is because the kind of flexibility that the Company is seeking under clauses 18 and 19 of the Agreement could only apply to daily hire employees under the Award who are paid a loading of 10% and employees under the Agreement are essentially treated as daily hire employees when the provisions of clauses 18 and 19 of the Agreement are considered. In the alternative, the AMIEU submits that the Commission should find that employees are disadvantaged severely by the stand down clause provided for in the Agreement when compared to an Award employee or an employee subject to the stand down provisions of the Act. This is because the stand down provision under the Agreement gives the employer the ability to stand down employees not only for stock shortages but also to stand down employees part way through the day, which is not available to employers even under regular daily hire arrangements.

[26] The AMIEU submitted that this proposition has previously been considered by Commissioner Hampton in T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement [2010] FWA 6658 and T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement [2010] FWAA 5481. Commissioner Hampton ultimately approved that enterprise agreement on the basis of an undertaking that included a considerable limitation on the stand down clause proposed by the employer.

[27] It is the AMIEU’s contention that because the Agreement provides the ability to stand down employees for stock shortages and / or stand down part way through a day, then employees suffer a significant disadvantage when compared to the Award, in that:

a. If the employee under the Agreement is properly regarded as a regular daily hire worker, then the employee is being underpaid when compared with the rates of pay for a regular daily hire employee under the Award which included a 10% loading; or alternatively

b. If the employee is not properly regarded as a regular daily hire worker, then the employee is disadvantaged in that the Agreement permits the employer to stand down the employee for reasons which the Award or the Act would not permit.

[28] The AMIEU also submits that Lobethal frequently requires employees to maintain a state of readiness while unpaid due to a breakdown or stoppage and that the Commission should consider the current frequency and broad scope for increased frequency as detrimental to employees covered by the proposed Agreement. The AMIEU further submits that the extent of the undertakings required to rectify the deficiencies in the Agreement would result in substantial changes to the Agreement contrary to s. 190(3)(b) of the Act.

[29] In its response, Lobethal submits that all of the employees covered by the proposed Agreement are full time, part time or casual and that no employees are employed on a daily hire basis. Lobethal further submits that the stand down provisions in Clause 18 of the proposed Agreement are substantially the same as the general provisions in the Act that would apply to employees under the Award. The Clause 19 – Waiting Time provisions are the result of much negotiation since the commencement of negotiations. The Enterprise Bargaining Committee canvassed those provisions at length and these are the provisions to which all the parties have agreed should be included in the proposed Agreement.

[30] Lobethal submits that for those employees working an eight (8) hour shift, there is a proposed maximum ‘waiting time’ of two hours. Where employees are required to make up this time at the end of the shift, the first hour is paid at ordinary time, and the second hour will be paid at overtime rates. For employees working a ten hour shift, there is a proposed maximum ‘waiting time’ of one hour, but no requirement that these employees make up the time at the end of their shift. However, employees may work (with the Company’s authorisation) up to one half of one hour as overtime at the end of the shift, only if required. Lobethal submits that employees are better off overall than if general stand down provisions under the Act applied. Lobethal also contends that it does not frequently require employees to stand by and the provisions apply on rare occasions.

[31] In relation to the additional BOOT issues raised by the AMIEU, Lobethal submits that the employees under the Agreement are better off overall than they would be under the Award and makes the following specific submissions in relation to the relevant provisions of the Agreement:

40 hour week for full time workers

[32] Full time employees are paid no less than 40 hours per week even if they work fewer than 40 and this is one way in which employees are better off. Further, employees are paid for the additional two hours worked per week at their ordinary time rate outlined in the proposed Agreement and the adjusted pay rate is significantly higher than the equivalent Award rate of pay for all classifications.

No provisions for higher duties pay

[33] Higher duties pay does not apply as employees are paid for the job they are performing on a particular day. If an employee is qualified to undertake ‘higher’ duties, they are paid at either a Level 1 or Level 2 rate of pay.

No quantifiable leading hand allowance

[34] Clause 12.1 of the proposed Agreement outlines the leading hand allowances applicable. The current practice is to pay all leading hands a minimum allowance of approximately $10.00 per shift and up to approximately $20.00 per shift but is ultimately assessed on a case by case basis depending on the amount of employees the leading hand is responsible for. Lobethal offer an undertaking to pay leading hand allowances no less than that provided for in the Award.

Hours averaged over six months

[35] This provision accommodates changes between day, afternoon and night shifts and will not disadvantage employees.

Introduction of roster changes without consultation

[36] Clause 35 of the proposed Agreement provides that the model consultation clause is taken to be a term of this clause in this Agreement in accordance with s. 205(2) of the Act.

Ordinary hours

[37] Employees agreed to the widening of the span of ordinary hours to accommodate shift work as a term negotiated. In relation to afternoon shift payments the Company submits that these are paid to employees in accordance with their classification

Afternoon shift payment dependent on classification

[38] Employees who work the afternoon shift are paid in accordance with their respective classification outlined in Schedule 1 of the proposed Agreement.

Wide span of ordinary hours for shift workers

[39] Employees agreed to the widening of the span of ordinary hours to accommodate shift work.

Limitation on public holiday absences

[40] Clause 26.4 which requires a medical certificate in order to be entitled to paid personal leave on the day before or after a public holiday or annual leave, is in line with s. 114 of the Act.

Shift workers do not receive a fifth week of annual leave

[41] All shift workers who are entitled to the additional week of annual leave as provided for in s. 87(1)(b)(ii) of the Act receive it and the Agreement does not purport to affect the operation of the Act in relation to this entitlement.

No paid rest breaks

[42] Paid rest breaks have been absorbed into the employees’ ordinary time rates under the Agreement which significantly exceed the rates under the Award.

Redeployment without reasonable costs of transit and travelling time

[43] Lobethal submits that all allowances have been absorbed into the employees’ ordinary time rates under the Agreement which significantly exceed the rates under the Award.

Low first aid allowance

[44] The first aid allowance amount outlined in Clause 12.2 of the proposed Agreement is a typographical error and will be calculated in accordance with the Award.

Overtime

[45] The overtime entitlement stipulated by the Award has been absorbed into the employees’ ordinary time rates is Schedule 2 of the Agreement which are significantly higher than the equivalent rates of pay for all classifications.

No minimum engagement period for casuals

[46] Lobethal offers an undertaking that a minimum engagement of four hours each day will apply for casual employees covered by the proposed Agreement.

No cold temperature allowance

[47] All allowances have been absorbed into the employees’ ordinary time rates under the Agreement which significantly exceed the rates under the Award.

No overtime rates for working through meal break

[48] Lobethal contends that it does not require employees to work through their meal breaks and that the production line ceases for the period of meal breaks. In any event, this entitlement has been absorbed into the employees’ ordinary time rates under the Agreement which significantly exceed the rates under the Award.

No meal allowance

[49] All allowances have been absorbed into the employees’ ordinary time rates under the Agreement which significantly exceed the rates under the Award.

No paid crib breaks for shift workers counted as time worked

[50] Paid crib breaks have been absorbed into employees’ ordinary time rates which significantly exceed the rates under the Award. Further, this is not applicable as there has never been a night shift worked at the plant.

Eight days of personal/carer’s leave for some workers

[51] This is a misinterpretation by the AMIEU and that leave is accrued on hours worked. Employees are entitled to 10 days per year in accordance with the NES.

LEGISLATION

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

“181 Employers may request employees to approve a proposed enterprise agreement

(1) An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

(2) The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.”

“173 Notice of employee representational rights
Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174.

Notification time

(2) The notification time for a proposed enterprise agreement is the time when:

(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or

(b) a majority support determination in relation to the agreement comes into operation; or

(c) a scope order in relation to the agreement comes into operation; or

(d) a low paid authorisation in relation to the agreement that specifies the employer comes into operation.

Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).

When notice must be given

(3) The employer must give the notice as soon as practicable, and not later than 14 days, after the notification time for the agreement.

Notice need not be given in certain circumstances

(4) An employer is not required to give a notice to an employee under subsection (1) in relation to a proposed enterprise agreement if the employer has already given the employee a notice under that subsection within a reasonable period before the notification time for the agreement.

How notices are given

(5) The regulations may prescribe how notices under subsection (1) may be given.”

CONSIDERATION

Application documents

[52] The omissions in the application documents filed in support of the Agreement are of significant concern. The Form F17 is a statutory declaration. The deliberate making of a false statement in a statutory declaration is a serious matter. The Form F17 is a question and answer document, which requires the deponent to answer a series of questions which require a “yes” or “no” response and to insert information. When signing the Form F17 the person making the declaration is indicating that he or she understands that a person who intentionally makes a false statement in a statutory declaration is guilty of an offence (the details of which are set out on the Form) and that he or she believes that the statements in the declaration are true in every particular.

[53] Mr McKay has completed the Form F17 three times. The first Form F17 was sworn on 1 August 2016 and was filed in support of the first application for approval on 20 July 2016 which was withdrawn. The second form F17 was sworn on 16 September. That version omitted information required in item 2.8 of the Form. That item sets out a table containing four questions requiring the person making the declaration to insert dates upon which various steps were taken in relation to the making of the enterprise agreement. The section of the table including the text requiring the insertion of the notification time has been deleted from the Form. When this was pointed out to Mr McKay in an email from my Associate, a third version of the Form F17 was sworn by Mr McKay on 13 October 2016 declaring that the date of notification time for the Agreement was 9 September 2013.

[54] Item 1.3 of the Form F17 is in the following terms:

1.3 Are you aware of any other agreement(s) that has been filed or dealt with by the Commission that has identical or substantially identical terms?

[ ] Yes
[ ] No

If you have answered yes to question 1.3–specifiy the name of the identical agreement, the name of the employer covered by the identical agreement, the agreement ID number, the date of the Commission’s decision and the name of the Commission member who dealt with such agreement

[55] On each occasion Mr McKay has completed the Form F17 he has answered “no” to the question in item 1.3. Mr McKay has done so notwithstanding that there are a number of enterprise agreements which have been approved by the Commission (one with undertakings) which apply to the Company and that contain identical or substantially identical terms. Clearly the declaration in this respect is incorrect.

[56] I am not satisfied that Mr McKay deliberately made a false statement in the Form F17 filed in support of the application for approval of the Agreement in the present case. However, the omissions in the Form F17 are surprising given the size of the company, Mr McKay’s position as Chief Operating Officer and the fact that the Company had access to legal advice evidenced by the fact that Mr McKay’s signature is witnessed by a Solicitor and the company was represented by a lawyer at the hearing of the application for approval of the Agreement and in the preparation of its material in response to objections by the AMIEU to the approval of the Agreement.

[57] If the Agreement is approved I will require a properly and accurately completed Form F17 to be filed by Lobethal.

Genuine agreement issues

[58] I do not accept the AMIEU’s submission to the effect that when employees were requested to vote to approve the Agreement there was no “proposed enterprise agreement” for the purposes of s. 181 and s. 182 of the Act and that the requirements in those sections have not been met. Section 181 of the Act provides that an employer may request employees to approve a proposed enterprise agreement. Section 182 of the Act provides that the agreement is made when it is approved in the required manner.

[59] The term “proposed enterprise agreement” is not defined in the Act. In Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No. 2) 4Justice French observed (in relation to an earlier version of the Act) that a “proposed agreement” is an agreement that the initiating party wants to negotiate and the term is used in a generic sense to describe the desired outcome which is an agreement. The Explanatory Memorandum to the Fair Work Bill 2008 states at [643] that: “a proposed agreement can be an idea, or it can be a series of claims on behalf of a group of employees whose bargaining representatives seek to negotiate with the employer with a view to it becoming an agreement that is ultimately approved by FWA.”

[60] A proposed enterprise agreement is not graven on tablets of stone. The terms of a proposed enterprise agreement may change during negotiations. Employees who have rejected a proposed enterprise agreement may be asked to vote again on the same terms or terms which have been amended to remove a provision that may have caused employees to reject the proposed enterprise agreement. A proposed enterprise agreement does not cease to be so because employees have previously rejected it regardless of whether the same version or an amended version is later put to a ballot of employees. Provided that bargaining has been validly initiated in the first place and requirements as to the access period and explanation of the terms of a proposed enterprise agreement are met there is no impediment to employees being asked to approve a proposed agreement they have previously rejected. In such cases, there is a continuation of bargaining and there is no requirement for the employer to re-initiate bargaining.

[61] There may also be cases where an error in the proposed enterprise agreement or the pre-approval process is discovered after employees have voted to approve the agreement. Some errors – such as failure to give employees the notice of employee representational rights as required by s. 173 – cannot be corrected other than by stopping the bargaining process and reinitiating it. However, there are some errors which in my view can be corrected by simply requesting employees to again vote to approve an agreement that they have already voted to approve.

[62] For example, agreement on terms to be put to a ballot of employees may have been reached between bargaining representatives, but for some reason a particular term is accidentally omitted from the version of the proposed agreement put to employees. There is nothing to prevent the employer from requesting that employees vote again after providing them with a corrected version of the proposed enterprise agreement and ensuring that the requirements with respect to access period and explanation of the terms of the proposed agreement have been met. The second version of the agreement does not cease to be a proposed enterprise agreement for the purposes of the Act simply because employees have previously voted to approve an earlier version.

[63] In the present case a proposed enterprise agreement was put to a ballot of employees on 20 July 2016. An application for approval of the Agreement was made by Lobethal on 1 August 2016 (the first application), The Form F17 filed by Lobethal in relation to the first application states that a majority of employees approved the Agreement on that date. However, when the AMIEU raised issues about whether employees were provided with access to copies of documents incorporated in the Agreement, the Company decided to withdraw the application for approval. In order to address the issue raised by the AMIEU, the employer took steps to institute a further access period during which it provided access to the incorporated material before again requesting employees to approve it. The employer subsequently put the same agreement to a second ballot of employees which was conducted on 9 September 2016. That ballot approved the proposed enterprise agreement and the Agreement was made at that point.

[64] The second Form F17 filed by Lobethal contains a statement that employees were given information about access to relevant material. That statement is not included in the first Form F17. On the basis of the information in the two forms and the evidence of Mr McKay, 5 I accept that a second ballot was conducted on 9 September where employees approved an agreement in identical terms to the agreement that they had previously approved in a ballot on 20 July 2016. However, on the second occasion, employees were provided with access to “relevant documents” being documents incorporated by reference in the agreement.

[65] An application for approval of an enterprise agreement may be unilaterally discontinued by an application made in accordance with the Act and the Rules notwithstanding that the agreement has been made by virtue of being approved by a valid majority of employees. 6 As previously noted, in the present case there is no dispute that the first application made on 1 August 2016 was discontinued and no issue is taken with the fact that this occurred or the manner in which the application was discontinued.

[66] In my view, there is nothing in the Act that prevents the employer, in the circumstances of this case, from rectifying a procedural defect in the approval process (whether the defect is perceived or actual), by asking employees to approve an enterprise agreement that they have previously voted to approve. The same agreement, submitted again to employees for approval, following the provision of access to material incorporated by reference in the agreement, is a proposed agreement for the purposes of s. 181 and s. 182 of the Act. This is the case notwithstanding that there was no change to the terms of the proposed enterprise agreement that was voted on by employees on 20 July and 9 September 2016. In such circumstances, Lobethal was not required to initiate a fresh round of bargaining such that a second notification period commenced or an obligation to issue a new notice of employee representational rights was triggered.

[67] Acceptance of the AMIEU submission would place undue constraints on bargaining for and making agreements. If I am wrong in relation to this view, it is also arguable that there was a failure to provide employees with access to material incorporated in the proposed enterprise agreement voted on by employees on 9 July 2016. If this was the case, then employees could not have validly approved the Agreement and it was not made at that time, and was made for the first time on 9 September 2016.

[68] The fact that a considerable period of time has elapsed since bargaining was initiated and employees were issued with the notice of employee representational rights, is also not an impediment to approval of the Agreement. Employees to whom a notice of employee representational rights is given might not be the same persons who are “employed at the time” and asked by their employer to vote to approve the agreement. 7 There is no outer limit to the period between when the last notice of employee representational rights is given and the point at which employees are requested to approve a proposed enterprise agreement in accordance with s. 181(1) of the Act.8

[69] There is nothing to suggest that the notice of employee representational rights was not given as required and there are no other reasonable grounds apparent from the evidence before the Commission to indicate that the agreement has not been genuinely agreed to by employees.

BOOT issues

[70] There have been numerous decisions of the Commission, including Full Bench Decisions, where the consistent view has been expressed that in applying the BOOT test – and previously the no disadvantage test (NDT) – consideration is given to a comparison between the terms of the relevant award and the terms of the proposed agreement.⁹

[71] The BOOT (as with the NDT before it) is applied on a global basis rather than line by line. A provision of a proposed agreement that when considered alone, may be less beneficial than a corresponding provision in a relevant modern award, will not result in the proposed agreement failing the BOOT if there are other more beneficial provisions in the proposed agreement which offset the less beneficial provision such that employees are better of overall. For example, a modern award that is a reference instrument for the purposes of applying the BOOT to a proposed agreement may provide that overtime is payable at the rate of time and a-half for the first three hours and double time thereafter. The proposed agreement may provide that a flat hourly rate that is less than the overtime rates in the relevant modern award, is payable for all hours worked including those that would be ordinary hours and those that would be treated as overtime hours under the modern award.

[72] In this scenario, employees may be better off overall if they are paid the loaded rate for all time worked and if their total remuneration is more than it would have been if the award rates, including overtime and other penalty payments or loadings, had applied. It may also be relevant to consideration of whether a proposed agreement passes the BOOT in those circumstances that the flat hourly rate feeds into other entitlements under the agreement such as the rate at which employees are paid for leave. Employees may volunteer to work overtime in this scenario and be paid a flat hourly rate for such overtime, and be better off overall than they would have been under the relevant award.

[73] It may also be relevant for an analysis of whether an Agreement passes the BOOT that the Agreement contains provisions imposing a right or obligation, or giving and entitlement not found in a relevant Award. An additional right or entitlement may be considered to be a benefit, while an obligation or a restriction not found in a relevant Award may be a detriment.

[74] In the present case I am not satisfied that the Agreement passes the BOOT for the following reasons. I do not accept that the rates in the Agreement are sufficiently in excess of those in the Award for all classifications to offset the reductions in award entitlements. There are a number of classifications in the Agreement which I am not satisfied have been properly aligned against the Award classifications, resulting in a situation where the rates in the Agreement may not exceed those in the Award to the extent claimed. The fact that the wage levels in the Agreement have previously been approved by the Commission in earlier versions of the Agreement is not determinative of whether the present Agreement passes the BOOT, particularly where no issue appears to have previously been raised in relation to the alignment of the wage levels with the equivalent Award levels for BOOT purposes.

[75] The level 3 classification in the Agreement contains references to jobs described as “Shoulder Boning/Slicing”; “Leg Boning/Slicing” and tenderloin removal with respect to the Mutton Slaughter Floor and in the Lamb Cutting Room there are references to tasks described as Leg Boning; Shoulder Boning; Forequarter and Hindquarter Trim, Frenching/French Rack Preparation and Square Cut Shoulder Trim. Mr McKay accepted that these tasks are performed by employees using a knife. The Award at Schedule B contains the following definitions:

B.2.1 Boner is an employee who is required to use a knife to remove meat from the bones, sides, quarters or other piece of a carcase in accordance with the employer’s specifications and, where required by the employer, to dispatch such meat, bones and trimmings to other employees and/or work areas for further processing as required by the employer.

B.2.11 Slicer is an employee who is required to use a knife to trim, including the removal of extraneous material, in accordance with the employer’s instructions and product specifications and to dispatch such product to other employees for further processing if required by the employer.

B.2.14 Trimmer is an employee who uses a knife to remove fat or other extraneous material or foreign matter from a carcase, side, quarter or piece prior to boning or in preparation for chilling prior to boning.

[76] Level 3 of the Award includes a reference to “Labourers associated with boning and slicing activities.” Level 4 of the Award refers to tasks involving cutting using machines – silent cutter or guillotine and also to a job described as “Cutter-up” which is not defined in the Award. Level 4 of the Award also contains a reference to “Trimmer” and “Using knives for cleaning or preparing meat immediately prior to packing”. Level 5 of the Award refers to “Tunnel boner” and Level 6 of the Award contains a reference to “Boner”. There is no definition with respect to “Tunnel boner”. Further the Award does not differentiate as the Agreement does, between employees performing one boning task or multiple boning tasks.

[77] Under the Agreement, employees performing a range of tasks which have the term “boning” included in them, are classified at Levels 2 and 3 which respectively align with Levels 5 and 4 in the Award. To the extent that employees under the Agreement are performing work variously described as boning, I require further information as to why those employees would not be entitled to be classified at Level 6 under the Award rather than at Levels 5 and 4 as asserted by Lobethal. I also require further information about the task at Level 4 of the Agreement described as “Hind hock cutter” including the means by which the employee performs the task of cutting and why an employee performing that task would not be entitled to be classified at Level 4 under the Award, rather than at a Level in the Agreement that is equivalent only to Level 3 under the Award.

[78] In relation to the specific BOOT issues raised by the AMIEU, those that in my view could cause the Agreement to fail the BOOT are as follows. Under the Award, an afternoon shift is defined as a shift that commences at or after 2.00 pm and finishes at or before midnight. Under the Agreement an afternoon shift can continue until 4.00 am. Under the Award a shift that finishes after midnight is a night shift and would attract a shift allowance of 25% rather than the afternoon shift allowance of 15%. The second shift rate in the schedule of rates in the Agreement is the same rate for both afternoon and night shifts and it is not clear that it is sufficiently in excess of the Award rate to compensate for night shift loading that would apply under the Award in addition to all of the other Award provisions that are not contained in the Agreement.

[79] The submission for Lobethal that the Company does not work night shifts is not to the point. The Agreement enables a night shift to be worked and in circumstances where I am not satisfied that employees who may be required to work a night shift would be better off than they would be under the Award. I am not satisfied that the Agreement passes the BOOT with respect to employees working shifts. I note that undertakings with respect to rostering employees to work past midnight were provided when the T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement 2010 was approved. I would accept an undertaking in the same terms to resolve this issue if the Agreement is approved.

[80] Clause 13.5 of the Agreement provides for changes to working hours to include six or seven day working options in “extraordinary circumstances”. This is essentially a provision that provides for the Agreement to be varied other than in a manner provided for under the Act or as provided in the Model Flexibility Term which will be taken to be a term of the Agreement if it is approved on the basis that the Agreement does not contain such a term. In short, I am unable to be satisfied that the Agreement passes the BOOT in circumstances where it contains such a provision.

[81] In relation to the Employee Stand Down provision in clause 18, I have a number of concerns about whether these provisions cause the Agreement to fail the BOOT. It should be noted that the provisions in clause 18 are to be read in conjunction with those in clause 19. The terms of clause 19 which is headed “Waiting Time” operate in addition to the Stand Down provision in clause 18 and entitles Lobethal to effectively stand employees aside without pay during a shift and require those employees to hold themselves in readiness to work for up to one hour in the event of machinery breakdown. There is no protection for employees such that the Waiting Time cannot be implemented unless employees cannot be usefully employed or that the breakdown must be one for which the Company could not reasonably be held responsible. The fact that a machine may break down does not mean that there is no useful work for employees to perform.

[82] I also note that an undertaking was provided in relation to the Stand Down provision in the T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement 2010 to the effect that employees would only be stood down where the reason for the stand down could not have been reasonably prevented by the Company and would not be relied upon in circumstances where the Company identified days or parts of days it could not operate because of a decision by it not to purchase suitable stock.

[83] The Waiting Time clause also requires that employees will work an additional hour on each day that the provision is applied and will be paid for that hour at ordinary rates in circumstances where they would be entitled to overtime rates if the Award applied. There is no limit on the number of occasions this provision may be implemented in the six month cycle over which hours are averaged or even in a working week. I am concerned that an unlimited capacity to require employees to stand by without pay simply because a machine has broken down, and a further requirement for them to make up that time at ordinary rates after the cessation of ordinary hours, causes the Agreement to fail the BOOT because the rates are not sufficient to offset this and other reductions in Award entitlements.

[84] The Agreement also provides for employees to be remunerated for additional hours or hours in excess of ordinary time, by virtue of those hours being paid into a bank called the Shut Down Leave Bank at the rate of 130%. The loading on such hours is less than the overtime rates in the Award. While I accept that in most cases the base rates on which the loading is calculated exceed those in the Award I am not satisfied that this is the case for all classifications for the reasons set out above. I am also of the view that the value of accruals in the Shut Down Leave Bank is reduced because there is no entitlement for employees to be paid out those accruals on termination of their employment or in the event they wish to take additional paid time off for a reason other than a shut down. This is relevant to whether the Agreement passes the BOOT. I note that an undertaking that employees be paid out the accrued balance of their Shut Down Leave Account on termination of employment was provided when the T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement 2010 was approved and I would require a similar undertaking if the present Agreement is approved.

[85] I am also concerned that the dispute resolution procedure in clause 9 of the Agreement appears to provide that an employee cannot notify a dispute to the Commission before having agreed to participate in private mediation and being required to pay half of the cost of the mediator. The dispute settlement term in the Award does not contain such a limitation and in my view this is a significant matter which impacts on whether the Agreement passes the BOOT. I further note that the Agreement does not contain the model terms in relation to consultation and flexibility and that these terms will be taken to be incorporated in the Agreement if it is approved.

[86] In relation to annual leave, there is sufficient flexibility in the Agreement as it is currently structured for employees to be employed so that they would be a shift worker within the definition in clause 37.2 of the Award and entitled to an additional week of annual leave. In the event that the Agreement is approved I will require an undertaking that for the purposes of the additional week of annual leave in the NES, a shift worker is defined as a seven day shift worker who is regularly rostered to work on Sundays and public holidays and that such an employee is entitled to an additional week of annual leave.

CONCLUSIONS

[87] Lobethal is required to address the matters I have raised in relation to the BOOT by filing further written submissions including proposed undertakings, by 12:00 midday on Monday 16 January 2017. If the matters I have raised are not addressed such that my concerns are met, I will refuse to approve the Agreement without further notice.

DEPUTY PRESIDENT

Appearances:

Ms. K. Rogers on behalf of the AMIEU.

Mr. S. Dasan of Norman Waterhouse Lawyers appearing for the Respondent.

Hearing details:

Brisbane.

2 December 2016.

 1   [2010] FWA 6658.

 2   [2010] FWA 8798.

 3   [2012] FWAFB 3534.

 4 (2004) 138 IR 362 at [55] – [56].

 5   Witness Statement of David McKay dated 9 November 2016 at paras 20-21.

 6   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v CJ Manfield Pty Ltd [2011] FWAFB 6845 at [13].

 7   Uniline Australia Limited [2016] per Gostencnik DP and Riordan C at [96].

 8   National Tertiary Education Industry Union v Swinburne University of Technology [2015] FCAFC 98 per Jessup J at [23] – [26] cited by the majority in Unline at [96].

9 Re MSA Security Officers Certified Agreement 2003 PR937654; BUPA Care Services Pty Ltd [2010] FWAFB 2762; Mondex Group Pty Ltd [2015] FWC 1148; Agri Labour Australia Pty Ltd [2015] FEC 5332; MP Resources Pty Ltd [2015] FWC 6820; Samphie Pty Ltd t/a Black Crow Organics [2010] FWAA5060; Top End Consulting Pty Ltd [2010] FWA 6442.

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