MIDG Pty Ltd T/A Healthy Habits Queens Plaza
[2010] FWA 1131
•15 FEBRUARY 2010
[2010] FWA 1131 |
|
DECISION |
Fair Work Act 2009
s.185—Approval of enterprise agreement
(AG2009/22509)
Fast food industry | |
COMMISSIONER ROE | MELBOURNE, 15 FEBRUARY 2010 |
Application for approval of a single-enterprise agreement – Healthy Habits Queens Plaza Enterprise Agreement 2009 – agreement refused.
[1] An application has been made for approval of an enterprise agreement known as the Healthy Habits Queens Plaza Enterprise Agreement 2009 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by MIDG Pty Ltd T/A Healthy Habits Queens Plaza. The agreement is a single-enterprise agreement.
[2] The Agreement was made during the bridging period 1 as defined in the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act), accordingly, when considering whether to approve the Agreement I have taken into account the provisions of Part 2–4 of Chapter 2 of the Act as modified by Schedule 7 of the Transitional Act.
[3] This is an application made under section 185 of the Fair Work Act 2009 (the Act) for approval of an enterprise agreement. Section 185 is in Part 2–4 of the Act which provides for the making of enterprise agreements between an employer and their employees who are employed at the time the agreement is made and who will be covered by the agreement.
[4] On 28 January 2010 the company was requested to provide some additional information to assist FWA in considering whether the Agreement met the requirements of the Act. The company provided additional information on 10 February 2010. FWA also convened a conference with the employer on 15 February 2010.
Does the Agreement meet the No Disadvantage Test?
[5] As the Agreement was made prior to 1 January 2010 the Agreement needs to meet the “No Disadvantage Test” rather than the “Better off Overall Test” which applies to agreements made after that date. The Employer’s Declaration in Support of Application for Approval of Enterprise Agreement (the F17 Form) stated that the Agreement did not contain any terms or conditions of employment that are less beneficial than the reference award which the employer identified as AN140258 Retail Take-Away Food Award- South Eastern Division 2003 (an award of the Queensland Industrial Relations Commission). As it appeared to me that there were some substantial differences between the reference award and the Agreement I sought clarification from the employer.
[6] Having considered the response of the employer I am satisfied that the reference award has been correctly identified as AN140258 Retail Take-Away Food Award- South Eastern Division 2003 (the Award).
[7] Having considered the response of the employer I have identified some of the more significant differences between the Award and the agreement below.
[8] The Award provides for annual leave loading for full-time and part-time employees (clause 7.1.2), which is not provided for in the Agreement.
[9] The provisions for the organisation of ordinary hours of work and related provisions for overtime, meal and rest breaks in the Agreement are less favourable to employees than the Award in that:
1. The Award provides for ordinary hours to be on any 5 of 7 days in a week (clause 6.1.1) where the Agreement allows for ordinary hours to be on any 20 days in four weeks (section 7.1.1). The Agreement does provide that “where practical and convenient to business requirements, you will be rostered off for at least 2 consecutive days in each week unless mutually agreed” (section 7.1.4). Individual flexibility provisions in agreements can allow for changes in the arrangement of hours, however, such agreements are subject to statutory safeguards which are not present in this provision. I am not satisfied that this provision could be regarded as providing that the ordinary hours are to be arranged to provide for two days off in a week.
2. The Award provides that ordinary hours are a minimum of 4 or a maximum of 10 on any day (clause 6.1.2) whilst in the Agreement there is no minimum (apart from a 2 hour minimum for casuals). In the Agreement the maximum is 9.5 hours but the Agreement provides that this can be extended to 12 hours by agreement with anyone not under 18 years of age (sections 7.1.2 and 7.2.1). Individual flexibility provisions in agreements can allow for changes in the arrangement of hours, however, such agreements are subject to statutory safeguards which are not present in this provision. Very short shifts generally disadvantage employees due to the lesser income earned whilst the travel and other costs associated with getting to and from work remain the same as for a longer shift. Extension of the ordinary hours of shifts to up to 12 hours can allow for longer shift hours to be worked without having to pay overtime penalty rates.
3. The Award provides for a minimum 10 hour break between shifts (clause 6.2.2) whilst the Agreement does not provide any limit. However, it is noted that whist the current operating hours are maintained this is not an issue.
4. The Award provides for 9 days off in a four week period where an employee is rostered to work shifts of 9 or more hours (clause 6.1.2(b)), but there is no such limitation in the agreement.
5. The Award provides that no employee shall be rostered to work more than 10 successive days without a day off (clause 6.1.2(c)), but there is no such limitation in the Agreement. The provision in the Agreement that “where practical and convenient to business requirements, you will be rostered off for at least 2 consecutive days in each week unless mutually agreed” (section 7.1.4) does not guarantee such an outcome.
6. The Award provides that overtime applies to all employees (including casuals) for all work outside of rostered hours (clause 6.6.1), whereas the Agreement provides that overtime only applies to “work of more than an average of 38 hrs over 4 weeks (or longer by mutual agreement)” for full-time or part-time employees, or “on rostered days off” (sections 9.1.1 and 9.1.3). Under the Agreement casuals only get overtime where they work “in excess of 10 hours per day (or the agreed greater maximum span)” (section 9.1.5).
7. The Award provides for double time rates to be paid where a meal break is delayed (clause 6.3.2), whereas the Agreement does not make any such provision.
8. The Award provides for paid 10 minute rest breaks in addition to meal breaks when the shift exceeds 4 hours (clause 6.4), whereas the Agreement does not provide for paid rest breaks except “where and when it can be conveniently arranged by Healthy Habits, if you work more than 5 hours continuously on any day” (section 8.2.3).
[10] The Act does not require agreements to include the NES provisions as the NES applies regardless. Section 55 of the Act does not apply directly to Agreements made during the bridging period. However, where an agreement includes a provision which specifically contradicts the NES then this could lead to confusion given that the NES will apply to employees covered by the Agreement after 1 January 2010. In this case the compassionate leave clause of the Agreement provides “this clause does not apply to casual employees” (section 17) and this is not consistent with the NES which provides that casuals are entitled to 2 days unpaid leave for each occasion.
[11] There are two provisions in the Agreement which the employer has identified as favouring employees when compared to the Award:
1. The Agreement provides for a rate on commencement of the Agreement (section 5.1) which is 39 cents per hour greater than the rate under the reference Award. Although this differential will almost certainly disappear during the life of the Agreement this is not relevant as the NDT must be applied at the time of the application for approval of the agreement.
2. The Agreement provides for the maximum period of work before a meal break of 5 hours rather than 6 hours in the award.
[12] The employer provided sample copies of the employee roster and also information concerning the operating hours of the business and information that all of the current employees who are intended to be covered by the Agreement are casuals. This information suggests that the most relevant provisions which would disadvantage current employees are the failure to provide for overtime for work outside of rostered hours, the failure to provide for overtime when a meal break is delayed, the failure to provide for 10 minute paid rest breaks when shifts exceed 4 hours, and the more liberal provisions with respect to rostering days off.
[13] The employer suggested that I consider undertakings might be appropriate in respect to some of these matters. This could certainly be the case in respect to the question of compassionate leave for casuals. An undertaking that the NES would apply could be accepted. However, in my view the changes required to the basic conditions of employment in the Agreement would result in substantial changes to the Agreement and this is not permitted by Section 190(3)(b) of the Act.
[14] The rosters provided by the employer for a three week period show that between 6 and 8 “team members” are rostered to work each week. In addition to that there are two managers and the proprietor who are shown on the roster. The team members are generally rostered to work between 5 and 8 hours per shift. The exceptions are that one employee worked a few 4 hour shifts and one other employee generally works only 2.25 or 3 hours on a shift.
[15] All employees except the one who works only 2.25 or 3 hours on a shift would be entitled under the Award to a 10 minute paid rest break on their shift in addition to any entitlement to an unpaid meal break. The Award provides for employees who work “a minimum of 4 consecutive ordinary hours but less than 7.6 consecutive ordinary hours on any one Day shall receive a rest pause of ten minutes duration” (clause 6.4).Consecutive hours for this purpose are defined as excluding the meal break. There are also a few shifts on the roster which exceed 7.6 hours (excluding the meal break) and on these shifts under the Award the employee would be entitled to two ten minute rest breaks.
[16] However, the Agreement does not guarantee any rest breaks. The Agreement clause firstly makes a paid rest break discretionary by using the qualifier “where and when it can be conveniently arranged by Healthy Habits”, and secondly it only says that rest breaks are a possibility “if you work more than 5 hours continuously” (section 8.2.3). Given that the Agreement provides that you must get an unpaid meal break if you work more than 5 hours, workers will not normally work 5 hours continuously. Elsewhere in the Agreement and in the Award if it is intended that the unpaid meal break should be ignored for the purpose of determining if work is continuous this is stated explicitly. I doubt that one could interpret the Agreement clause as requiring a rest break in addition to a paid meal break in a shift of say 5.5 hours.
[17] Based on the sample three week roster provided by the employer the average shift length for all employees excluding the worker who generally works 2.25 to 3 hours is approximately 6 hours. The 10 minute rest pause is therefore approximately 2.78% of the working time of these workers or 41.5 cents per hour on the hourly rate for the level one worker under the proposed Agreement rate (clause 5.1). Based on the sample roster provided by the employer it is clear that under the Agreement the employer is getting 10 minutes additional labour from all employees except one on every shift worked. This is worth approximately 41.5 cents per hour to those employees. Given that some shifts exceed 7.6 hours, when two rest breaks are required under the Award but not the Agreement this is an underestimate of the value of the lost rest time. This exceeds the value of the over-award payment provided by the Agreement of 39 cents per hour.
[18] The failure to provide for the payment of overtime penalties when working additional hours beyond a rostered shift in the Agreement is also significant. Based upon the sample rosters provided by the employer, under the Award if an employee worked overtime on any shift in that roster then they would be entitled to overtime penalty rates on the additional hours worked (clause 6.6.1 of the Award). However, under the Agreement overtime penalty rates would not have been paid in any case unless a very long period of overtime is worked since overtime is only paid to casuals where the work “exceeds 10 hours in a day or the agreed greater maximum span”. This is likely to have a significant effect. For example every time an employee failed to come to work due to illness and the employer asked another employee to come in early or work back late that employee would miss out on overtime penalties they would have been entitled to under the Award.
[19] The failure to pay overtime penalty when a meal break is delayed is also likely to be significant. It is quite common in a fast food retail environment for meal breaks to be delayed due to fluctuating customer demand. Under the Award in this circumstance double time is paid until the meal break can be taken or until the end of the shift (clause 6.3.2). Under the Agreement there is no such provision.
[20] On the other side of the ledger it is necessary to examine the impact of the different provisions for unpaid meal breaks. Under the Agreement there is an unpaid meal break after 5 hours work (section 8.1), whereas the Award allows for such a break to be delayed until after 6 hours work (clause 6.3.1). It does not appear from the rosters provided by the employer that this is the current work practice. On the current rosters it appears that the unpaid meal break only operates on shifts of 6 hours or longer. So for example, on the rosters provided the shift from 7am to 3pm is shown as 7.5 hours work (i.e. 7.5 hours work plus 30 minutes unpaid meal break) while the shift 12 noon to 5.30pm is shown as 5.5 hours work (i.e. 5.5 hours work with no unpaid meal break). Hence under the Agreement, on the current rosters, the employee on the second shift will now get 30 minutes less pay but will get an unpaid meal break. It would be hard I think to argue that this is a significant net advantage to the employee.
[21] There are as detailed earlier a number of other conditions which are inferior to the Award. The majority of these may not have a major impact on the current employees whilst the business operates as it currently does but there is nothing in the Agreement to prevent the employer changing the operating hours of the business, employing full-time or part-time employees rather than casuals, or requiring workers to perform duties outside rostered hours. The grievance and disputes procedure in the Agreement does not allow for arbitration without the agreement of both parties and the consultation clause does not require employee agreement to significant changes (sections 20 and 21). So ultimately the employer has the prerogative to change staffing and operating arrangements during the life of the Agreement.
[22] For the above reasons I find that on balance the agreement does not meet the No Disadvantage Test.
Have employees genuinely agreed? The role of the bargaining representative
[23] The F16 Form – Application for approval of Enterprise Agreement is signed by Wendy Pendergast who is the “Owner of Healthy Habits Queens Plaza”. In answer to question 5 on the form “Were there, to the best of the Applicant’s knowledge other employee (i.e. non-union) bargaining representatives for the agreement?” she has answered “Yes – see F18 form”.
[24] The F18 Form is signed by Nicole Harden who describes herself on the form as “Healthy Habits Queens Plaza Senior Shop Assistant”. At question 3 on that form she answers “no’ to the question “were you a bargaining representative for a member or members of your organisation who is an employee or employees covered by the agreement?” At question 4 she answers “yes” to the question “were you entitled to represent the industrial interests of the employee or employees referred to in question 3 in relation to work that will be performed under the agreement?” I take these responses together with the declaration of the owner Wendy Pendergast to mean that Nicole Harden was a bargaining representative but not a union bargaining representative.
[25] The F17 Form – Employer’s declaration in support of application for approval of enterprise agreement is also signed by Wendy Pendergast. In that form she states that there are 6 employees to be covered by the Agreement and 5 employees who cast a valid vote and that all 5 of them voted in support of the proposed agreement(questions 2.8, 2.9 and 2.10). She also states that the Agreement “does not cover managerial employees” (questions 2.15 and 2.16). The Agreement at section 2.1 provides “this agreement is made between us and covers all our employee classifications other than management”.
[26] In that form she also states that there are 6 female and 6 casual employees and 4 employees under the age of 21 (question 4.1). One can assume that given that there are only 6 employees to be covered by the Agreement this means that there are 6 female casual employees of whom 4 are under the age of 21.
[27] The Agreement itself is singed by Wendy Pendergast as the employer and by Nicole Harden as “employee representative”.
[28] The rosters provided to FWA by the company show under the heading “Managers” two names, “Nicole and Bess”, and under the heading “Team Members”, between 6 and 8 names depending on the week of the roster, “Lisa, Emily, Cassie, Caitlan, Melanie, Lucy, Kate, Alana”. This strongly suggests that the employees who voted on and who are to be covered by the Agreement do not include the management employee Nicole who has signed the Agreement as the employee representative and who is identified as such on the F16 and F18 forms.
[29] The employer’s representative confirmed to FWA that Nicole Harden is not intended to be covered by the Agreement and was selected by Wendy Pendergast to act as the employee’s non-union bargaining representative. Her responsibilities included to count the votes and to make sure that employees got copies of the Agreement and answers to their questions if any.
[30] Regulation 2.06 of Fair Work Regulations 2009 provides:
“2.06 Appointment of bargaining representatives — independence
A bargaining representative of an employee must be:
(a) free from control by the employee’s employer or another bargaining representative; and
(b) free from improper influence from the employee’s employer or another bargaining representative.”
[31] I am not satisfied that Nicole Harden could be a bargaining representative in this case because as a management employee who is not going to be covered by the Agreement she does not have the same interests as the employees who will be covered by the Agreement and cannot be said to be free from the control or improper influence of the employer.
[32] I now turn to the question as to whether the fact that Nicole Harden is not properly a bargaining representative but has signed the Agreement and purported to act as the bargaining representative affects the capacity of FWA to approve the Agreement.
[33] Section 186 of the Act relevantly provides:
“186(2) FWA must be satisfied that:
if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement.”
[34] The issue as to whether the employees have genuinely agreed is dealt with in Section 188 as follows:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”
[35] I am satisfied that there are reasonable grounds to believe that the Agreement has not been genuinely agreed to by the employees in that the bargaining representative was not entitled to sign the Agreement on behalf of the employees or to act as a bargaining representative. The role of a bargaining representative is very important in the bargaining process. The Act provides that an agreement cannot be approved unless the process for advising employees concerning bargaining representatives is strictly followed. The Act also provides that bargaining representatives have clear rights and responsibilities which are codified in some detail in the Act. Hence an agreement cannot be approved unless a proper process to allow employees to select and consult with a bargaining representative has occurred, and unless any appointed bargaining representative has been recognised by the employer. This suggests that if a bargaining representative is not genuinely independent it must have an effect on the question of genuine agreement and therefore on the capacity to approve the agreement.
[36] I also believe that the lack of independence of the bargaining representative undermines good faith bargaining and therefore to approve the agreement would be a breach of the provisions of Section 187(2) of the Act:
“Requirement that approval not be inconsistent with good faith bargaining etc.
187(2) FWA must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.”
[37] It is not consistent with good faith bargaining for the employees’ bargaining representative to be a management employee who is not going to be covered by the agreement. This is reinforced by the fact that good faith bargaining requirements may also have been breached. Good faith bargaining requirements are defined in Section 228 of the Act:
“228 Bargaining representatives must meet the good faith bargaining requirements
(1) The following are the good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet:
(a) attending, and participating in, meetings at reasonable times;
(b) disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
(c) responding to proposals made by other bargaining representatives for the agreement in a timely manner;
(d) giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals;
(e) refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining;
(f) recognising and bargaining with the other bargaining representatives for the agreement.”
[38] The employer as a bargaining representative does not meet the good faith bargaining requirements if the employee’s bargaining representative is not independent as this undermines collective bargaining and is not consistent with the obligations in Sections 228(1)(e) and (f).
Genuine collective bargaining
[39] I have some doubts as to whether the Agreement is a collective agreement capable of being approved under the provisions of Section 185 of the Act, because I doubt that collective bargaining has taken place. This raises more general concerns about whether approval of the Agreement would be consistent with good faith bargaining as required by Section 187(2) or whether it has been genuinely agreed as required by Section 188 of the Act.
[40] The Objects of the Act as a whole (Section 3) include:
“(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and ….
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action…”
[41] Australia is a signatory to the ILO Convention 98 “Right to Organise and Collective Bargaining Convention 1949” which relevantly provides in Article 4:
“Measures appropriate to national conditions shall be taken, where necessary, to encourage and promote the full development and utilisation of machinery for voluntary negotiation between employers or employers' organisations and workers' organisations, with a view to the regulation of terms and conditions of employment by means of collective agreements.”
[42] The Objects of Part 2-4 Enterprise Agreements of the Act (Section 171) makes the centrality of collective bargaining clear:
“to provide a simple, flexible, and fair framework that enables collective bargaining in good faith …”
[43] The Explanatory Memorandum for the Act in dealing with Part 2–4 Enterprise Agreements, states in paragraph 640:
“640. Part 2-4 provides for the making of enterprise agreements through collective bargaining primarily at the enterprise level. It enables employers and employees, and their bargaining representatives, to bargain in good faith to make an enterprise agreement.”
[44] It is clear from the Explanatory Memorandum that enterprise agreements are collective agreements that will cover a group of employees:
“642. Enterprise agreements are collective agreements that will cover a group of employees. Part 2-4 provides for the making of two types of enterprise agreement – single-enterprise agreements and multi-enterprise agreements. A single-enterprise agreement or multi-enterprise agreement relating to a genuine new enterprise may also be a greenfields agreement.”
[45] In this respect I adopt the reasoning in Commissioner Whelan’s decision in respect to the Café Yaringa case. 2 Commissioner Whelan observed:
“It is abundantly clear from a reading of the Fair Work Act 2009 and the Explanatory Memorandum that the Act makes no provision for statutory individual employment contracts. I would have thought that it was abundantly clear that a collective agreement is not simply a collection of individual contracts bundled together and relabelled as an ‘enterprise agreement’. There was not, and it would appear obvious that nor was there intended to be, any collective bargaining associated with the exercise undertaken by the employer’s bargaining representative. The employees in this case were simply asked to sign individual employment contracts which the bargaining representative somewhat misleadingly rebadged as an enterprise agreement for the purpose of obtaining the approval of Fair Work Australia.” 3
[46] Although in this case the circumstances are different. The wording of the Agreement and the process for the bargaining suggest that collective bargaining has not taken place.
[47] The Agreement does not read like a document that has been negotiated between the company and its employees.
[48] For example many of the clauses are phrased as questions or as statements like those one might expect to find in an individual employment contract. For example:
“Section 2. Who does this agreement apply to?
This agreement is made between us and covers all our employee classifications other than management.”
“3.1 When will this agreement come into operation?
This agreement will come into operation 7 days after the date Fair Work Australia (FWA) notifies us that the Agreement has passed the No Disadvantage Test (NDT) and will have a nominal expiry date of 1 December 2013.”
“Section 4. Nature of your Employment
4.1 You will be employed in the position advised to you in your letter of appointment or as otherwise notified to you.”
“6.1 What are your duties and responsibilities?
6.1.1 You will carry out all duties specified in any job description supplied for your position as well as any other reasonable requests made by Healthy Habits or its nominated representative.”
[49] Section 1 of the Agreement defines “you” as meaning “our employees collectively or you individually as the context indicates” and defines “we, our or us” as meaning “collectively You and Healthy Habits”. Hence in the whole structure of the Agreement it is very difficult to distinguish the interests of individual employees, employees collectively and the employer interest.
[50] There is no evidence that employees have been involved in any negotiation process. Nor is there adequate evidence that they have been advised of the effect of the proposed Agreement and the differences between it and the reference Award and the impact on the transition to the Modern Award as required by Section 180(5) of the Act. It is difficult to see why the employees would have voted for the Agreement if they had had such advice. The majority of employees are young employees whose circumstances and needs are required to be taken into account for the purpose of ensuring appropriate explanation of the terms of the agreement and the effect of those terms under Sections 180(5) and (6) of the Act.
[51] The employer’s responses to questions 2.3, 2.4, 2.5 and 2.6 on the F17 Form suggest that on 20 November 2009: “The employees received a copy of the Agreement at a meeting and the terms of the agreement were discussed with the employees. Employees were given the opportunity to ask questions and/or seek clarification on any term in the agreement.” At the same time they received a notice that voting would take place between 30 November and 6 December. This has been confirmed to FWA by the employer’s representative. There is no suggestion that there was any negotiation process prior to the meeting of 20 November hence it is most unlikely that employees, especially young employees, would have been in a position to have considered and understood the Agreement to be able to ask questions or understand the implications at the meeting on 20 November. The employer’s representative advises that employees did have an opportunity to consider and ask questions if they had any between 20 November 2009 and the start of voting on 30 November 2009.
[52] The way in which the Agreement is phrased as if it is a series of answers to employee’s questions about their conditions of employment suggests that the Agreement document itself was the advice to employees on the impact of the Agreement. The fact that on the F17 Form the employer said that there were no terms less beneficial than the reference Award suggests that it is unlikely that employees were advised in detail of the Award conditions they would be denied by the Agreement or of the potential benefits of the Modern Award they would be denied access to.
[53] Section 22. Individual Flexibility Arrangement of the Agreement is also illustrative.. The terms of the clause generally follow the model flexibility term. However, the language is ambiguous. For example “We may agree to make an individual flexibility agreement to vary the effect of the terms of the agreement” and “the agreement is genuinely agreed by us” and “the arrangement meets our genuine needs”. If the clause can be read as including the possibility of a collective “you” it would not comply with the requirements of the Act in Section 202(1)(a) where it states that a flexibility term, “enables an employee and his or her employer to agree to an arrangement …varying the effect of the agreement in relation to the employee and the employer, in order to meet the genuine needs of the employee and employer”.
[54] If in the Agreement the section can be read as allowing for a collective flexibility arrangement there would also be an issue with Section 203(3) which requires that, “the flexibility term must require that any individual flexibility arrangement is genuinely agreed to by the employer and the employee,” rather than a group of employees. Section 203(5) of the Act makes this very clear when it provides that, “the employer must ensure that the flexibility term does not require that any individual flexibility arrangement agreed to by an employer and employee under the term be approved, or consented to, by another person.” If it is found that the clause in the Agreement does not comply with the requirements of the Act the model flexibility term may be deemed to form part of the Agreement instead. So the problem with the flexibility clause does not affect the capacity to approve the agreement. I raise this matter because it illustrates the problem with the way in which the Agreement is structured and its failure to distinguish individual and collective inetersts..
Conclusion
[55] The Agreement cannot be approved because I find that:
1. It does not meet the No Disadvantage Test as required by Section 186(2)(d) of the Act.
2. It has not been genuinely agreed to by employees as required by Sections 186(2)(b) and 188 of the Act because the bargaining representative is not independent as required by Regulation 2.06 of Fair Work Regulations 2009 and because the Agreement has been signed on behalf of the employees by a management representative who will not be covered by the Agreement.
3. It is not a collective agreement which could be approved under the provisions of Section 185 of the Act. The form of the document and the process by which it was finalised are not consistent with collective bargaining. It is unlikely that the implications of the proposed Agreement were properly explained to affected employees as required by Section 180(5), and the bargaining representative was not independent as required by Regulation 2.06 of the Fair Work Regulations 2009. I doubt that there was any collective bargaining or negotiating process prior to employees being provided with a document and being advised as to when and how they would vote on it. Approval of the Agreement would undermine good faith bargaining (Section 187(2)).
COMMISSIONER
1 Item 2, Part 1, of Schedule 2.
2 Café Yaringa Pty Ltd t/as Café Yaringa [2009] FWA 1388.
3 Ibid at [13].
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