Mars Australia Pty Ltd T/A Mars Chocolate Australia

[2015] FWCA 5202

[2015] FWCA 5202

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Mars Australia Pty Ltd T/A Mars Chocolate Australia
(AG2015/2697)

MARS CHOCOLATE A DIVISION OF MARS AUSTRALIA PTY LTD (ABN 48 008 454 313) BALLARAT ENTERPRISE AGREEMENT 2015

Food, beverages and tobacco manufacturing industry
DEPUTY PRESIDENT KOVACIC	CANBERRA, 11 AUGUST 2015

Application for approval of the Mars Chocolate A Division of Mars Australia Pty Ltd (ABN 48 008 454 313) Ballarat Enterprise Agreement 2015.

[1] An application has been made for approval of an enterprise agreement known as the Mars Chocolate A Division of Mars Australia Pty Ltd (ABN 48 008 454 313) Ballarat Enterprise Agreement 2015 (Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (Act). It has been made by Mars Australia Pty Ltd T/A Mars Chocolate Australia (Mars). The Agreement is a single-enterprise agreement.

[2] Subject to concerns that have been addressed by way of undertakings, I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[3] As noted, pursuant to s.190(3), I have accepted undertakings from Mars. In accordance with s.191(1) of the Act the undertakings are taken to be a term of the Agreement. A copy of the undertakings are attached to this decision.

[4] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), being bargaining representatives for the Agreement, have given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) of the Act I note that the Agreement covers those organisations.

[5] The CEPU in its form F18 – Statutory declaration of employee organisation in relation to an application for approval of an enterprise agreement set out a number of reasons as to why it did not support the approval of the Agreement, including that as the Agreement seeks to incorporate various policies of Mars, referred to as Mpower policies, the Fair Work Commission (the Commission) cannot be satisfied that the Agreement passes the better off overall test (BOOT). A further reason cited by the CEPU was that it held concerns that employees other than those identified in the Notice of Employee Representational Rights voted for the proposed agreement. As a result of those concerns, the Commission convened a conference of the parties on 30 June 2015. That conference concluded on the basis that Mars would provide the CEPU and AMWU further information about the Agreement’s coverage of the disputed positions.

[6] On 13 July 2015 the CEPU advised the Commission by email that it no longer pressed its objection to the Agreement’s proposed coverage. However, in that email the CEPU maintained its concerns regarding clause 4.1 of the agreement which it contended incorporated various Mpower policies into the Agreement, with the words “as amended” in the provision meaning that the terms of the Agreement could potentially be unilaterally altered by Mars during the life of the Agreement. By way of background, clause 4 of the Agreement provides as follows:

“4. Relationship to Parent Awards

4.1 This Agreement shall be read and interpreted in conjunction with the terms of the Food, Beverage and Tobacco Manufacturing Award 2010 and the Manufacturing and Associated Industries Award 2010 (the “Awards”) as at the date of approval of the Agreement and Mpower policies as amended. As the context requires, the terms in the Award should be read as altered to make them operate as terms of the Agreement. For example, “Award” may mean “Agreement” and “employer” may mean “Mars”.

4.2 Mars will provide Associates with access to Mpower policies.

4.3 Where a term in the Awards is inconsistent with a term specified elsewhere in the Agreement, the term specified elsewhere in the Agreement will prevail over the term in the Awards to the extent of the inconsistency.

4.4 This Agreement will prevail to the extent of any inconsistency between any Mpower policies and this Agreement…” (Underlining added)

[7] The Commission subsequently convened a telephone hearing to deal with the CEPU’s concern. At that hearing the CEPU drew to the Commission’s attention the recent Full Bench decision in Construction, Forestry, Mining and Energy Union v CSR Limited T/A Viridian New World Glass (Viridian) 1. The agreements at the centre of the decision in Viridian provided that “Any Award provision that does not satisfy the Building Code is not incorporated into this Agreement…” The Full Bench in Viridian quashed the decision of Senior Deputy President Richards to approve the agreements on the basis that the agreements as approved do not pass the BOOT. Specifically, the Full Bench stated in its decision “We are not satisfied that the agreements, in their present form, whereby the future terms and conditions of the employees are capable of being altered by the act of a third party are sufficiently certain to pass the BOOT.”2

[8] For its part the AMWU submitted that it would have issue if Mpower policies were incorporated in the Agreement and requested that any decision regarding the Agreement address the issues canvassed in Viridian.

[9] Following the telephone hearing on 16 July 2015 the Commission wrote to Mars on 24 July 2015 setting out a number of issues and concerns regarding the Agreement. One of the issues raised by the Commission concerned clause 4.1. In particular, the Commission sought clarification as to whether or not the intent of clause 4.1 was for the awards referred to in the provision to be incorporated into the Agreement. The Commission’s email, which was copied to both the CEPU and AMWU, stated among other things in respect of clause 4.1 that:

“By way of background, the use of the expression “in conjunction with” does not have the same meaning as “incorporating”. If an award is incorporated into an enterprise agreement the terms of the award are terms of the enterprise agreement and are enforceable as terms of the enterprise agreement. If the enterprise agreement is read and interpreted in conjunction with an award then the terms of the award do not become terms of the enterprise agreement and are only enforceable if the award itself is enforceable. In this case, the Awards would not apply because of s.57(1) of theAct. As a consequence, from the date the enterprise agreement takes affect the employer would no longer be required to comply with the Awards and employees would be unable to enforce the terms of the Awards.”

[10] Mars responded on 27 July 2015 confirming that:

“…it was and remains the intention of Mars Australia Pty Ltd t/as Mars Chocolate Australia (“Mars Chocolate”) that the Enterprise Agreement be read “in conjunction with” the relevant modern awards as opposed to the terms of those modern awards being incorporated into the Enterprise Agreement. This is reflected in the language of the Enterprise Agreement and in the communications with relevant Associates about the effect of the terms of the enterprise agreement”.

[11] By extension, given the wording of clause 4.1, that position also applies to Mpower policies. The practical effect of this is that Mpower policies are not incorporated into the Agreement and are therefore not enforceable as terms of the Agreement. Drawing on the language used in Viridian, this means that the terms and conditions of the employees provided for by the Agreement are not capable of being altered by a unilateral act by Mars to amend its Mpower policies. Accordingly, the circumstances in this matter differ from those existing in Viridian and clause 4.1 of the Agreement is not an impediment to the Agreement being approved.

[12] Against that background, the Agreement is approved and, in accordance with s.54 of the Act, will operate from 18 August 2015. The nominal expiry date of the Agreement is 1 March 2018.

ATTACHMENT A

 1   [2015] FWCFB 3889

 2   Ibid at paragraph [20]

Printed by authority of the Commonwealth Government Printer

<Price code G, AE415037  PR569982>