Metro Ice Cream Distribution Pty Ltd

[2019] FWCA 935

[2019] FWCA 935

FAIR WORK COMMISSION

DECISION

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

Metro Ice Cream Distribution Pty Ltd
(AG2018/4584)

Food, beverages and tobacco manufacturing industry
VICE PRESIDENT HATCHER	SYDNEY, 13 FEBRUARY 2019

Application for approval of the Metro Ice Cream Distribution Pty Ltd Enterprise Agreement 2018.

[1] An application has been made for approval of an enterprise agreement known as the Metro Ice Cream Distribution Pty Ltd Enterprise Agreement 2018 (Agreement). The application was made pursuant to s 185 of the Fair Work Act2009 (FW Act) by Metro Ice Cream Distribution Pty Ltd (Metro). The Agreement is a single enterprise agreement. The application was accompanied by a Form F17 statutory declaration made by Mr Robert Joannides, Director, on 17 August 2018.

[2] On 24 December 2018, I caused a letter to be sent to Metro identifying eight issues and concerns I had with respect to the Agreement which might cause me to conclude that the Agreement did not meet the approval requirements in ss 186 and 187 of the FW Act. Those issues/concerns were as follows:

(1) Item 7 of the position description of “Warehouse Officer” in Schedule 1 to the Agreement provides that the employee is to be “financially responsible for goods in your custody”. The precise nature of this obligation is unclear. It may be a term which is of no effect under s 326(1) of the Fair Work Act 2009 (FW Act) because it permits unreasonable deductions (for lost or damaged goods) for the benefit of the employer. It may also have the effect, if it imposes a financial liability on the employee, that the employee is not better off overall compared to the relevant modern award.

(2) Clause 11.3 of the Agreement provides that employees cannot take annual leave in the peak period of October-March. This may be inconsistent with the requirement in s 88 of the FW Act that the employer must not unreasonably refuse to agree to a request by the employee to take annual leave.

(3) In respect of telesales employees, the correct reference award is considered to be the Clerks – Private Sector Award 2010 (Clerks Award) rather than the Contract Call Centres Award 2010 (which applies to the contract call centre industry). The pay rate for a casual employee in the classification of Customer Service Representative – Telesales in the Agreement is 5.64% lower than the classification of Level 3 (Call centre customer contact officer grade 2) in the Clerks Award, and 6.28% lower than the classification of Call centre principal customer contact specialist in the Clerks Award. Such employees are therefore not better off overall under the Agreement as compared to the Clerks Award.

(4) The rates of pay for full-time and part-time employees in the classification of Customer Service Representative – Telesales in the Agreement appear not to be sufficiently higher than the award rates of pay in the Clerks Award to ensure that such employees are better off overall having regard to the requirement to work reasonable additional hours in cl 9.3 and the lack of penalty rates for overtime and weekend work in the Agreement.

(5) The rates of pay for employees in the classification of Customer Service Representative – Office Administration in the Agreement appear not to be sufficiently higher than the award rates of pay in the Clerks Award to ensure that such employees are better off overall having regard to the requirement to work reasonable additional hours in cl 9.3 and the lack of shift allowances and penalty rates for overtime and weekend work in the Agreement. In this respect it is considered that this classification may perform work equivalent to Level 3 of the Clerks Award due to the apparent lack of any supervisors.

(6) The rates of pay for employees in the classification of Warehouse Officer in the Agreement appear not to be sufficiently higher than the award rates of pay in the Storage Services and Wholesale Award 2010 (SSW Award) to ensure that such employees are better off overall having regard to the requirement to work reasonable additional hours in cl 9.3 and the lack of shift allowances and penalty rates for overtime and weekend work in the Agreement. In this respect it is considered that this classification may perform work equivalent to Level 3 of the SSW Award due to the apparent lack of any supervisors.

(7) Clause 5.6 of the Agreement purports to require casual employees to give one day’s notice of resignation. This provision is not authorised by s 118 of the FW Act, which does not apply to casual employees (see s 123(1)(c)).

(8) Clause 9.3(b) of the Agreement does not require the matters identified in s 62(3) of the FW Act to be taken into account in determining whether additional hours of work are reasonable or unreasonable.

[3] On 11 January 2019 Metro provided a detailed written response to the identified issues and concerns. On 22 January 2019 I conducted a hearing in relation to the application which was attended by Mr Joannides on behalf of Metro. Following that hearing, on 25 January 2019, Metro sent a document containing proposed undertakings in relation to a number of the identified issues and concerns, and a further modified version of that document was provided on 12 February 2019.

[4] I will deal with those issues and concerns, and Metro’s response thereto including the most recent version of its undertakings, in turn.

Issue 1

[5] Metro proposed the following undertaking:

With respect to Item 7 of the ‘Position Description: Warehouse Officer’, we replace it with:

“7. To ensure stock control procedures are observed at all times and to act responsibly with goods in your care.”.

[6] That undertaking if accepted would satisfactorily address my concern.

Issue 2

[7] At the hearing Mr Joannides explained in detail the highly seasonal nature of Metro’s business which, from Metro’s perspective, would not make it unreasonable to refuse to agree to an employee’s request to take annual leave in the October-March peak period. Mr Joannides also submitted that the requirement not to take annual leave in this period was clearly explained to new employees prior to commencement. In addition, I note that clause 11.1 of the Agreement provides: “Full Time and Part Time Employees are entitled to paid annual leave in accordance with the NES” (underlining added). Having regard to those matters, I am satisfied that clause 11.3 of the Agreement does not exclude s 88(2) of the FW Act.

Issues 3 and 4

[8] I confirm the provisional conclusion expressed in the 24 December 2019 correspondence that the correct reference award for telesales employees is the Clerks Private Sector Award 2010. Mr Joannides submitted that Metro conducts a call centre on behalf of Streets, but that is not sufficient to attract coverage under the Contract Call Centres Award 2010. That is because clause 4.2(a) of the award relevantly requires that the principal function of a business be “supplying inbound or outbound customer contact services to a number of clients, on a contract basis, and whose business is independent of the client” in order for there to be coverage. At the very least, the requirement for “a number of clients” (that is, more than one) is not satisfied here.

[9] However, having heard Mr Joannides’ explanation, supported by documents, concerning the duties and responsibilities of the classification of Customer Service Representative – Telesales under the Agreement, I am satisfied that the correct reference classification is Level 2, Call centre customer contact officer grade 1 under the Clerks - Private Sector Award 2010. This because the relevant employees do not in a number of significant respects perform the indicative duties of a Level 3, Call centre customer contact officer grade 2.

[10] Metro offered the following undertakings to resolve any BOOT difficulty:

With respect to the Workgroup ‘Customer Service Representative – Telesales’ in Clause 2.2, we replace:

• the reference Award with “Clerks Private Sector Award 2010”; and
• the reference Employee Classification with “Level 2, Call centre customer contact officer grade 1”.

With respect to the Workgroup ‘Customer Service Representative – Telesales’ in Clause 7.2, we replace:

• the ‘Full & Part Time Employees: Ordinary Time Hourly rate’ with “$25.82”; and
• the ‘Full & Part Time Employees: Overtime Hourly rate’ with “$28.05”; and
• the ‘Casual Employees: Hourly rate’ with “$29.46”.

With respect to the ‘Customer Service Representative – Telesales’ Workgroup, we add that should Overtime Hours exceed twelve (12) hours per week (averaged over 12 months) the applicable ‘Overtime Hourly rate’ for the excess hours will be at least equal to double the ordinary time hourly rate stipulated in the Clerks Private Sector Award 2010.

[11] The above undertakings significantly increase the ordinary time and overtime hourly rates for the above classification. Together with the undertaking concern a guarantee of a minimum double time rate after an average of 12 hours’ overtime, I am satisfied that acceptance of these undertakings would mean that the Agreement passes the BOOT in respect of the classification of Customer Service Representative – Telesales.

Issues 5 and 6

[12] I am satisfied that the reference classification for BOOT purposes for employees classified under the Agreement as Customer Service Representative – Office Administration is Level 2 in the Clerks - Private Sector Award 2010. This is because, as Mr Joannides demonstrated at the hearing, they perform their work under reasonably close supervision.

[13] The BOOT concerns expressed in the 24 December 2019 letter concerned shift work, weekend work, public holiday work and overtime work. The concern in respect of overtime was with respect to casual employees because, unlike full-time and part-time employees, the overtime rates in clause 7.2 of the Agreement for employees classified as Customer Service Representative – Office Administration or Warehouse Officer are not higher than the ordinary time rate and are not sufficiently higher than the award rates to ensure that casual employees are better off overall if significant amounts of overtime are worked.

[14] Metro proposed the following undertakings (noting that with respect to shift work, weekend work and public holiday work, the undertakings also apply to persons classified as Customer Service Representative – Telesales):

With respect to the 'Customer Service Representative - Telesales', 'Customer Service Representative- Office Administration' and 'Warehouse Officer' Workgroups, we add that:

• should shift work be required, the Employer will ensure that the Employee's total pay (averaged over 12 months) will be at least five (5) percent better-off overall than would be the case under the respective reference Award; and

• should an Employee be required to work in excess of one weekend or one public holiday per calendar year, the Employer will pay the Employee for the excess requirement at or above the corresponding pay entitlements of the respective Workgroup reference Award (including penalty rates).

With respect to the 'Customer Service Representative- Office Administration' and 'Warehouse Officer' Workgroups, we add that should Casual Employees be required to work in excess of 48 hours per week (averaged over 12 months), the Employer will pay the Employee for the excess requirement at or above the corresponding pay entitlements of the respective Workgroup reference Award (including penalty rates).".

[15] I am satisfied that acceptance of these undertakings would resolve the identified concerns. With respect to the undertakings applicable to weekend, public holiday and overtime work, the requirement to pay at or above the relevant award rate including penalty rates applies to the “excess requirement” – that is, weekend, public holiday or overtime work in excess of the identified benchmark. Up to the benchmark, the remuneration payable under the Agreement is in excess of that payable under the relevant award, so employees will always be better off overall.

Issue 7

[16] Metro offered the following undertaking:

With respect to Clause 5.6, Casual Employees shall not be required to work additional hours after they submit their resignation.

[17] I am satisfied that acceptance of this undertaking would resolve the concern.

Issue 8

[18] Metro offered the following undertaking:

With respect to Clause 9.3(b), the Employer will take s.62(3) of the Fair Work Act 2009 into account in determining whether additional hours of work are reasonable or unreasonable.

[19] I am satisfied that acceptance of this undertaking would resolve the concern.

Conclusion

[20] A copy of the final consolidated version of the undertakings is attached as Annexure A. I accept the undertakings. I am satisfied that they will not cause financial detriment to any employee covered by the Agreement and will not result in substantial changes to the Agreement. In a number of cases the undertakings increase the remuneration payable to employees under the Agreement.

[21] On the basis of the material contained in the application, the accompanying statutory declaration, the further information provided by Metro and the undertakings attached as Annexure A, I am satisfied that each of the requirements of ss 186, 187 and 188 as are relevant to this application for approval have been met.

[22] The Agreement is approved and, in accordance with s 54 of the Act, will operate 7 days from the date of approval. The nominal expiry date of the Agreement is 4 years from the date of approval.

VICE PRESIDENT

Printed by authority of the Commonwealth Government Printer

<AE501790  PR704906 >

Annexure A