Mattassy Pty Ltd T/A Bakers Delight

[2016] FWCA 8043

[2016] FWCA 8043

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Mattassy Pty Ltd T/A Bakers Delight
(AG2016/1670)

MATTASSY PTY LTD ENTERPRISE AGREEMENT 2016

Retail industry
DEPUTY PRESIDENT BULL	SYDNEY, 14 NOVEMBER 2016

Application for approval of the Mattassy Pty Ltd Enterprise Agreement 2016

[1] An application has been made by Mattassy Pty Ltd T/A Bakers Delight (the applicant) for the approval of an enterprise agreement known as the Mattassy Pty Ltd Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) and is a single enterprise agreement.

[2] The Agreement covers all employees engaged by the employer.

[3] The General Retail Industry Award 2010 (the Award) is the relevant reference instrument for the purposes of the better off overall test (BOOT) as required under s. 186 of the Act.

[4] The Commission wrote to the applicant identifying a number of concerns with the terms of the Agreement in comparison to the Award, including that:

● The agreement permits the employer to unilaterally change the employee’s employment under the various parts of the agreement by providing seven days’ written notice;

● The employer may decide to pay employees a fixed salary rather than an hourly rate, and further, that no information as to how such salaries will be calculated has been provided;

● The Agreement reduces the overtime entitlements that part-time employees would receive under the Award;

● According to the analysis undertaken by the Commission, a number of employees engaged under Schedule B of the Agreement do not appear to be better off overall under the Agreement in certain scenarios.

Changes to an employee’s employment

[5] The Agreement provides at clause 5 that the employer may unilaterally change an employee’s employment under Parts A, B, C and D of Schedule B at any time during their employment by providing seven days’ written notice of the change. In effect, an employees’ employment status and classification under the Agreement may be varied without the consent of the employee. The variation may have the consequence of reducing an employee’s rate of pay and/or other entitlements under the Agreement.

[6] The Commission communicated to the Applicant that as no equivalent provision exists in the Award, it could not be satisfied that employees will be better off overall unless some protection was provided by the Agreement

[7] In response the Applicant has provided an undertaking that any change to an employee’s employment under clause 5 will only be by agreement between the employee and the employer, and further, that the employer will ensure that the employee’s pay, penalties and other entitlements will be equal to or greater than those received before the change.

Employees receiving fixed salaries

[8] The Agreement provides at clause 8, paragraph 4 that the employer may decide to pay employees a fixed salary rather than the hourly rates prescribed by the Agreement. No further information as to how salaries will be calculated is provided for in the Agreement, nor did it appear to the Commission on the material provided to it that this information had been provided to the employees prior to the commencement of the vote.

[9] The Commission requested to be provided with information regarding how salaries will be calculated, and information satisfying it that there had been genuine agreement by employees who voted for the Agreement.

[10] In response the applicant has provided an undertaking that the decision to be paid a salary must be by written agreement, and that agreement must also be made in relation to the calculation of the fixed salary and hours covered by the fixed salary.

[11] The Commission also requested an explanation of the reasonable steps that were taken by the employer to explain the operation of this clause to employees. The Commission was concerned that if the clause was not adequately explained to employees there may not have been genuine agreement as required by section 188 of the Act.

[12] The applicant provided submissions explaining the processes that it undertook to explain the terms of the Agreement to employees. The applicant explained that a staff meeting was held with employees who would be covered by the Agreement. At the meeting it was explained to employees that if clause 8 paragraph 4 were enacted, the monetary salary to be paid to employees would be the result of one-on-one negotiations between the employer and the employee. Further, it was explained to employees that the salary received by salaried employees would be equal to or greater to the minimum pay entitlements which the employee would receive under the Agreement if paid an hourly rate (and therefore would be greater than under the Award).

[13] Having considered the submissions provided by the applicant, and on the basis of the material contained in the application and accompanying statutory declaration, I am satisfied that the requirements of section 188 of the Act have been met.

Overtime for part-time employees

[14] The Commission noted that under the terms of the Agreement, part-time employees would receive overtime rates only for hours worked outside the rostering provisions in section 4(a) or (b) of the Agreement, rather than receiving overtime rates for all time worked in excess of their agreed hours as is the entitlement under the Award.

[15] The Commission indicated that it is not satisfied that the hourly rates of pay in the Agreement are high enough to compensate employees for the reduction in overtime penalty rates and requested that the applicant provide undertakings to address this concern.

[16] In response the applicant has provided an undertaking amending the rostering provisions of the Agreement to confirm that hours in excess of a part-time employee’s agreed hours will be paid at overtime rates.

Employees under Schedule B, Parts A and B working weekends

[17] The Commission noted that the Agreement does not offer any weekend penalties for employees engaged under Schedule B, Parts A and B, who would otherwise be entitled to be paid penalty rates when working weekend shifts under the Award.

[18] The Commission indicated that it is not satisfied that the base rates of pay contained in the Agreement are high enough to compensate employees in the event that they regularly perform work on weekends.

[19] In response the applicant has provided an undertaking which increases the base rates of pay in the Agreement for these employees and limits the proportion of weekend hours that may be worked.

[20] The Commission has conducted an analysis of the hourly rates and limitation on hours provided in the undertaking. The Commission is satisfied that the higher rates and limitation of the proportion of hours that employees may work on weekends will ensure that employees at all classification levels under Schedule B, Parts A and B remain better off overall under the Agreement.

Casual bread employees under Schedule B, Parts A and B working night shift

[21] The Commission noted that the Agreement does not offer any shift penalties for employees paid under Schedule B, Parts A and B of the Agreement.

[22] The Commission indicated that it is not satisfied that the base rates of pay for casual bread employees are high enough to compensate employees in the event that they regularly work night shifts.

[23] In response the applicant provided undertakings increasing the rates of pay for employees and limiting the proportion of night shift hours that could be worked.

[24] The Commission has conducted an analysis of the hourly rates and proportion limitations provided in the undertakings. The Commission is satisfied that the higher rates and limitation on the proportion of night shift hours that employees may work will ensure that casual bread employees under Schedule B, Parts A and B remain better off overall under the Agreement.

Employees paid under Schedule B, Parts C and D

[25] The Commission noted that penalty rates payable to employees engaged under Schedule B, Parts C and D of the Agreement are similar to the penalty rates under the Award, however, a number of Award allowances have been excluded from the Agreement, including the first aid allowance.

[26] The Commission also noted that some of the rates of pay under Schedule B, Parts C and D of the Agreement were only 0.05% above the corresponding Award rates of pay.

[27] The Commission indicated that it is not satisfied that the rates of pay under Schedule B, Parts C and D are sufficient to compensate employees for loss of some Award allowances.

[28] In response the applicant has provided an undertaking that the rates of pay under Schedule B, Parts C and D would never be less than 2% above the Award rates of pay.

[29] The Commission is satisfied that the increased rates of pay provided in the undertakings will ensure that employees engaged under Schedule B, Parts C and D will remain better off overall under the Agreement.

Undertakings provided

[30] The undertakings provided by the applicant address the concerns raised by the Commission.

[31] The undertakings are taken to be a term of the Agreement and a copy is marked Annexure A. The undertakings are not so substantial that if asked to vote again the employees who voted would not approve the Agreement. I am therefore satisfied that the undertakings do not result in a substantial change to the Agreement, as per s.190(3)(b) of the Act. The undertakings should be brought to the attention of the employees.

Approval

[32] Taking into account the undertakings provided by the applicant, I am satisfied that the Agreement results in employees being better off overall under the Agreement.

[33] The undertakings should be brought to the attention of the employees covered by the Agreement by the applicant.

[34] 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.

[35] The Agreement is approved. In accordance with s.54(1), the Agreement will operate from 21 November 2016. The nominal expiry date of the Agreement is 13 November 2020.

DEPUTY PRESIDENT

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Annexure A