lululemon athletica Australia Pty Ltd T/A lululemon athletica
[2017] FWCA 3799
•20 JULY 2017
[2017] FWCA 3799
The attached document replaces the document previously issued with the above code on 20 July 2017.
The document has been edited to insert the correct undertaking.
Matthew Jordon
Acting Associate to Commissioner Gregory
Dated: 21 July 2017
| [2017] FWCA 3799 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
lululemon athletica Australia Pty Ltd T/A lululemon athletica
(AG2016/7045)
| Commissioner Gregory | MELBOURNE, 20 JULY 2017 |
Application for approval of the lululemon athletica Australia Pty Ltd Retail National Enterprise Agreement 2016.
An application has been made for approval of the lululemon athletica Australia Pty Ltd Retail National Enterprise Agreement 2016 (“the Agreement”). The application is made under s.185 of the Fair Work Act 2009 (Cth) (“the Act”) by lululemon athletica Australia Pty Ltd T/A lululemon athletica (“the Applicant”). It is a single enterprise agreement.
A number of matters can be highlighted after reviewing the application and the form F17 Employer’s Statutory Declaration, together with the terms and conditions contained in the proposed Agreement. Firstly, the Employer’s Statutory Declaration indicates that the relevant Award for the purposes of the “better off overall” test assessment is the General Retail Industry Award 2010[1]. The Agreement also indicates that the following classifications contained in the Agreement are the equivalent of the corresponding classifications in the Award.
| Agreement | General Retail Industry Award 2010 |
| Educator | Retail Employee Level 1 |
| Key Leader | Retail Employee Level 3 |
| Assistant Store Manager | Retail Employee Level 4 |
| Store Manager | Retail Employee Level 6 |
A comparison of the wage rates provided for in the Agreement with those contained in the underlying Award indicates that the Educator and the Key Leader classifications are to receive approximately 7% more than the rates provided for in the Award. The Assistant Store Manager and the Store Manager are to respectively receive approximately 15% and 18% more than the Award rate. A further comparison of the rates to be provided for work on Saturday, Sunday, on public holidays, and when additional overtime is worked, also indicates that the employees at each of the different classification levels will receive more than the rates that would apply under the Award, although in some cases there is little difference between the respective rates.
The Agreement also indicates that part-time employees are to be employed to work what are described as “contract hours,” which can involve the hours of between 6 and 76 hours over a 2 week pay period.
The Agreement also provides for what are described as “Salaried Employees.” These arrangements can apply in the case of both the Assistant Store Manager and the Store Manager classifications. The salaries to be paid under the Agreement in regard to these arrangements are approximately $7,000 more than the annual rates applicable under the Award, with the comparative figures being as follows:
| Classification | Agreement | General Retail Industry Award 2010 |
| Assistant Store Manager | $47,200.00 | $40,725.36 |
| Store Manager | $51,300.00 | $43,017.52 |
However, under the Agreement “Salaried Employees” are not entitled to additional overtime payments or to additional rates for work performed on Saturday, Sunday or on public holidays. They are also not entitled to the allowances provided for in the Agreement. The Agreement also indicates that while the hours of work of Salaried Employees will generally average 76 each fortnight they can be required to work “reasonable additional hours” from time to time, subject to an overall limitation requiring that not more than 50 hours of overtime can be worked in any one year. The Agreement also allows for time off in lieu to be taken when additional hours are worked “when mutually agreed.” It also indicates that Salaried Employees will generally be required to work on one weekend day each week, but will not be required to work on more than two weekend days in each two week pay period.
The Commission’s review of these arrangements indicates that “Salaried Employees” could work on every Saturday during the course of a 12 month period, and not be disadvantaged in terms of the “better off overall” test assessment. The Commission also wanted to be satisfied that there is no possibility that employees could be worse off if they work a combination of Saturday and Sunday shifts in each two week roster.
After reviewing the application and the terms and conditions contained in the proposed Agreement the Commission sought clarification from the Applicant about the following issues to do with satisfaction with the “better off overall” test requirements. The first matter concerned the so-called “Salaried Employees.” The Applicant noted, in response, that the Agreement obviously contains a higher base rate for these employees. It also notes that there are other terms in the Agreement that are more generous when compared with those contained in the underlying Award. In this content context it referred specifically to the entitlement in sub clause 7.7 in the Agreement whereby an employee who has completed at least 12 months continuous service, and is to be the primary caregiver of their child, is entitled to 8 weeks of paid parental leave. In addition, any employee who is a secondary caregiver will be entitled to 2 weeks of paid leave. It also notes that employees are entitled to an additional day of paid compassionate leave.
However, these entitlements are obviously conditional and only apply to employees in certain circumstances. They would not be entitlements that would automatically apply to all employees.
The Commission also made reference to the circumstances of part-time employees and, in particular, whether they are entitled to overtime payments when hours are worked in excess of their so-called “Contract Hours,” as would apply under the terms contained in the underlying Award. The Applicant referred, in response, to the provisions contained in sub clauses 1.2.4, 1.2.14 and 5.3.3. of the Agreement. Sub clause 1.2.4, firstly, indicates that “Contract Hours are the hours a Part-Time Employee is scheduled to work each 2 week period.” Sub clause 1.2.14 next indicates that “Ordinary Hours means 76 hours per 2 week pay period for a Full-Time Employee and for a Part-Time Employee means their Contract Hours.” Sub clause 5.3.3 finally, indicates that “Any work completed by a Full-Time or Part-Time Employee that is either in excess of Ordinary Hours, or that falls outside the condition set in clause 5.2 will be classified as overtime.”
The Applicant continued to indicate in its response that the combination of these provisions means that part-time employees will be entitled to overtime payments if they are required to work hours in excess of their scheduled hours in any given fortnight. I am satisfied that these provisions make clear that “Contract Hours” for a part-time employee equate to ordinary hours, and if hours are worked in excess of these hours then overtime entitlements would apply. These provisions would therefore appear to equate to those contained in the Award.
The Commission, finally, made reference to the provisions contained in sub clause 51.5 of the Agreement, which indicate that employees may be required to attend team meetings or training session on days when they would not otherwise be required to be at work. On these occasions they would be entitled to be paid at the ordinary time rates of pay, whereas under the Award these hours would generally be paid as overtime. The Applicant indicated in response that it does not schedule these sessions outside of ordinary hours, or at weekends.
It is also noted that the Applicant originally offered to provide what might be described as a reconciliation undertaking. This would have allowed an employee to request that a comparison be made between the relevant entitlements under the Agreement and those that would have been received under the Award. If any shortfall was identified through this process that deficiency would be made up. However, the Commission referred in response to the Full Bench decision in Shop, Distributive and Allied Employees’ Association v Beechworth Bakery Employee Co Pty Ltd T/A Beechworth Bakery[2]and suggested it had cast doubt upon whether it was appropriate to accept undertakings in that form in regard to any deficiencies associated with the “better off overall” test requirements.
The Applicant responded by providing some further examples of modelling using rosters worked over a two week period in its stores in different States in order to demonstrate that the salary entitlements provided for under the Agreement would exceed those that would otherwise be received under the General Retail Industry Award 2010.
It also indicated that it was prepared to provide a further undertaking, which would increase the salary provided to both the Store Manager and Assistant Store Manager classifications by approximately 6%.
It is also noted that the Commission received a request from the Shop Distributive and Allied Employees’ Association (“the SDA”) for copies of the F16 Application and the F17 Employer’s Statutory Declaration. The Applicant initially objected to this request because it was concerned it might delay the progress of the application, but concluded that it was ultimately for the Commission to decide whether to provide the SDA with access to the documents. The SDA were not indicated in the F16 to be a Union Bargaining Representative for the proposed Agreement. The Commission subsequently decided in accordance with the recent Full Bench decision in Construction, Forestry, Mining and Energy Union v Ron Southon[3] that it was appropriate to provide copies of the requested documents to the SDA, and this was done.
Section 186(1) of the Act requires that the Commission must approve an Agreement if it is satisfied that each of the various requirements in ss.186 and 187 are met. S.186(2)(d) requires that the Commission must be satisfied the Agreement passes the “better off overall test.” The test is set out in s.193(1) in the following terms:
“193 Passing the better off overall test
When a non greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.”[4]
It is well established that the application of the test requires identification of terms in the proposed Agreement that are more beneficial, and those which are less beneficial, with an overall assessment then being made about whether the employees would be “better off overall” under the terms and conditions contained in the Agreement, compared to those in the underlying Award.
As indicated, the Applicant has now provided a revised written undertaking. A copy of this undertaking has been provided to the employees to be covered by the Agreement. After reviewing the terms of the undertaking I am satisfied that it will not cause financial detriment to any employee to be covered, or result in substantial changes to the Agreement. The undertaking contained in the attached document is accordingly accepted and in accordance with s.191 of the Act will now be taken to be a term of the Agreement.
I am otherwise satisfied that each of the requirements of ss.186, 187 and 190, as are relevant to this application for approval, have been met.
The Agreement is approved and in accordance with s.54 of the Act will operate from 27 July 2017. The nominal expiry date of the Agreement is 26 July 2021.
COMMISSIONER
[1] MA000004
[2] [2017] FWCFB 1664
[3] [2016] FWCFB 8413
[4] Fair Work Act 2009 (Cth) s 193
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