McColl’s Operations Pty Ltd
[2022] FWC 2138
•11 AUGUST 2022
| [2022] FWC 2138 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
McColl’s Operations Pty Ltd
(AG2022/1596)
| COMMISSIONER MCKINNON | SYDNEY, 11 AUGUST 2022 |
Application for approval of the McColl’s Operations Northern Victoria Farm Milk Collection Agreement 2022-2024.
McColl’s Operations Pty Ltd (McColl’s) has applied for approval of a single enterprise agreement known as the McColl’s Operations Northern Victoria Farm Milk Collection Agreement 2022-2024 (the Agreement) under s.185 of the Fair Work Act 2009 (the Act). The Agreement is intended to replace the McColl's Transport Group Holdings Pty Ltd Northern Farm Milk Collective Agreement 2017-2019 (existing Agreement) which expired on 31 December 2019.
The Transport Workers’ Union was a bargaining representative for the Agreement and no separate employee bargaining representatives were appointed. The Union does not support approval of the Agreement. It raises concerns about reductions in employee entitlements if the Agreement is approved. For this and other reasons, it submits that the Agreement may not have been genuinely agreed to by relevant employees.
The agreement-making process
A notice of employee representational rights (Notice) was issued in relation to the Agreement on 10 September 2019. The Notice referred to bargaining in relation to an enterprise agreement (McColl’s Northern Victoria Farm Milk Collection Agreement) which is proposed to cover employees that are employed from Farm Milk Collection in Tongala, Cobram, Northern Victoria and Wagga Wagga. Proposed enterprise agreements were put to a vote of employees unsuccessfully on five occasions: on 12 December 2019, 31 March 2020, 22 May 2020, 26 November 2021 and 18 March 2022.
On 1 February 2022, McColl’s completed the purchase of Peter Stoitse Transport (Stoitse Farm Milk Collection) – and with it a new site in Orrvale, a town in the City of Greater Shepparton. The Orrvale site is covered by the Agreement, which in clause 1.2 covers four base depots in McColl’s Dairy Division, including one in Shepparton. Until the Orrvale purchase, McColl’s operated depots from the premises of other businesses in Shepparton.
On 31 March 2022, management of McColl’s and the Union completed a detailed review of the Agreement to assist in the explanation and understanding of changes. On 29 April 2022, employees were sent an “Info Pack” about the Agreement by email. Employees who did not have an email address were given a printed copy. Employees were also given information about a further vote to approve the Agreement.
From 2-5 May 2022, onsite meetings were held with employees to explain terms of the agreement. Copies of the Agreement and a summary of changes were left in lunchrooms in at least two of the depots (and probably four). A manager subsequently contacted each employee to field any questions and remind them of the vote timing which was scheduled to occur.
On 9 May 2022, employees were asked to vote on the Agreement. The voting period coincided with a period of leave for the Union bargaining representative, who had understood that there would be further meetings before the Agreement was put to a vote. On 10 May 2022, the Agreement was purportedly made when a majority of voting employees (45/59) voted to approve the Agreement. According to McColl’s, a total of 86 employees were eligible to vote.
Was the Agreement genuinely agreed?
I am not satisfied that the Agreement has been genuinely agreed to by the employees. This is because a group of employees covered by the Agreement was excluded from the vote to approve the Agreement. Further, I am not satisfied that if this group of employees had participated in the vote to approve the Agreement, the outcome would have been the same.
McColl’s submits that employees who transferred to McColl’s in February 2022 in connection with the Orrvale site purchase are not covered by the Agreement, because they are covered by the Peter Stoitse Transport Milk Enterprise Agreement 2021 (a transferable instrument that transferred to McColl’s and upon its purchase of Peter Stoitse Transport). I do not know how many employees transferred to McColl’s in connection with the transfer of business (the transferring employees). It is not in dispute however that there were transferring employees and that none were given an opportunity to vote to approve the Agreement.
The explanation given for this error is that the transferring employees are not covered by the Agreement. I disagree, and the reason for this is the distinction in the Act between when an enterprise agreement ‘covers’ a person and when it ‘applies’ to them.
I accept that if approved, the Agreement will not immediately apply to the transferring employees. The nominal expiry date of the Peter Stoitse Transport Milk Enterprise Agreement 2021 is 1 July 2024. Under section 58 of the Act, only one enterprise agreement can apply to employees at a particular time. If an enterprise agreement applies to an employee and another enterprise agreement that covers them comes into operation, the earlier agreement applies to the employee until its nominal expiry date. Once the nominal expiry date passes, the earlier agreement ceases to apply to the employee and the later agreement starts to apply.
As is apparent from section 58, an employee can be covered by more than one enterprise agreement at a time. An enterprise agreement covers an employee if it is expressed to cover them. The Agreement is expressed to cover “all current and future Employees whose base depots are in Tongala, Cobram, Shepparton and Wagga Wagga, whose Divisional alignment is McColl’s Dairy Division, and who perform farm milk collection and other transport services…”. The Agreement covers the transferring employees because they are (or were, at the relevant time) employed to work in McColl’s Dairy Division from the base depot in Shepparton. They perform farm milk collection and other transport services.
Under section 181 of the Act, a request to vote on an enterprise agreement vote is one that is made to “the employees employed at the time who will be covered by the agreement”. In this case, the request was made to some but not all employees who will be covered by the Agreement. Absent confirmation as to how many employees were excluded from the vote on this basis, I cannot rule out the possibility that if the transferring employees had voted, the Agreement would not have been ‘made’ under section 182 of the Act. The omission is one that cannot by cured by an undertaking under section 190 of the Act.
Other matters
The Agreement contains a flexibility term at clause 6.2. The term does not meet the requirements of section 203(6)(a) of the Act in relation to the notice period for unilateral termination of an individual flexibility arrangement. The Act requires this notice period to be “not more than” 28 days. Under the Agreement, the notice period is “no less than” 28 days. In other words, the notice period can be more than 28 days. If the Agreement were to be approved, the model flexibility term would apply as a term of the Agreement.
There is some ambiguity in the wording of the Agreement in relation to the payment arrangements for long distance drivers. Payment on a cents per kilometre basis is described as an “alternative” to hourly driving rates, while the definition of a part-time employee deals with employment on an ‘hourly’ rather than ‘per trip’ basis. Some drivers appear to be paid on the basis of a combination of the two. This makes it difficult to ascertain whether long distance drivers will be better off overall under the Agreement than the Road Transport (Long Distance Operations) Award 2020 (Award).
Further, Table D in Appendix One to the Agreement contains loaded rates for full and part‑time long distance drivers, which in effect incorporates the part-time loading of 15% that would otherwise apply under clause 10.7 of the Award. However, rates of pay for long distance drivers under the Agreement are between 7.29% and 9.98% above the Award, which is not enough to compensate for the loading. Further, the Agreement deals with minimum engagement periods for part-time employees in a different way to the Award.
For these reasons, I am concerned that not all long distance drivers will be better off overall under the Agreement than the Award. McColl’s has given undertakings to address the concerns and if the Agreement were approved, I would accept them.
Conclusion
As I am not satisfied that the Agreement has been genuinely agreed, I cannot approve the Agreement. The application is dismissed.
COMMISSIONER
Appearances:
F Fidge on behalf of the applicant.
B Baarini and D Coghill for the Transport Workers’ Union of Australia.
Hearing details:
2022.
Sydney (by video):
June 14.
Final written submissions:
July 18.
Printed by authority of the Commonwealth Government Printer
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