Mr Greg Rogowsky; Mr Nigel Willis; Mr Donald Hill; Mr Bradley Quick

[2019] FWC 1461

[2019] FWC 1461

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Mr Greg Rogowsky; Mr Nigel Willis; Mr Donald Hill; Mr Bradley Quick
(AG2018/5604)

Meat Industry
DEPUTY PRESIDENT BINET	PERTH, 5 MARCH 2019

Application for termination of the WAMMCO International (Katanning) AMIEU Processing Agreement (2013).

[1] Mr Greg Rogowsky (Rogowsky), Mr Nigel Willis, Mr Donald Hill and Mr Bradley James Quick (Applicants) have made an application (Application) to the Fair Work Commission (FWC) to terminate the WAMMCO International (Katanning) AMIEU Processing Agreement 2013 (Agreement) pursuant to section 225 of the Fair Work Act 2009 (Cth) (FW Act).

[2] The Applicants have filed the Application in their capacity as employees covered by the Agreement.

[3] The Agreement is a single enterprise agreement made pursuant to section 185 of the FW Act with a nominal expiry date of 6 August 2017.

[4] The parties to the Agreement are the Western Australian Meat Marketing Co-Operative Ltd trading as WAMMCO International (WAMMCO) and its employees engaged in the processing of meat and associated products at WAMMCO’s Katanning plant (Employees).

[5] The Australasian Meat Industry Employees Union (AMIEU) is covered by the Agreement.

[6] Mr Rogowsky has filed a Statutory Declaration (Rogowsky Declaration), which asserts that the Agreement contains a large number of terms and conditions less beneficial than those provided by the relevant modern award, the Meat Industry Award 2010 (Award). Ms Debra Kennedy (Kennedy), an AMIEU organiser, has also filed a Statutory Declaration (Kennedy Declaration) which asserts that a majority of the Employees are in favour of the Agreement being terminated.

[7] In the event the Application is successful and the Agreement is terminated the minimum terms and conditions of employment of the Employees will be those set out in the Award.

[8] Directions were issued with respect to the Application (Directions). The Directions invited the Applicants, who were represented by the AMIEU, and WAMMCO to provide written submissions in relation to the Application. The AMIEU filed their materials on 2 November 2018 and WAMMCO filed their submissions in reply on 8 November 2018.

[9] The Directions inter alia required WAMMCO to provide a copy of the Directions and the materials filed by the Applicants and WAMMCO in relation to the Application to each Employee. The Directions contained an invitation for any Employee who wished to be heard with respect to the Application to contact the FWC by close of business on 22 November 2018.

[10] A number of Employees subsequently contacted my Chambers to express opposition to the Application. A number of agreed to provide the details of the grounds for their opposition to the Application in the form of a statutory declaration to be provided to the parties (Employee Statutory Declarations).

[11] The AMIEU and WAMMCO were invited to file submissions with respect to the issues raised in the Employee Statutory Declarations. On 2 November 2018, AMIEU filed further submissions and additional evidence and on 8 November 2018 WAMMCO filed submissions.

[12] The Applicants, AMIEU and WAMMCO declined an opportunity to make oral submissions and/or cross examine any witnesses and the Application was determined on the papers.

Legislative Framework

[13] Section 225 of the FW Act states:

“225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.”

[14] Section 226 of the FW Act states:

“226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.”

[15] Under Rule 26(2) of the Fair Work Commission Rules 2013 (Cth) (FW Rules), an application made pursuant to section 225 of the FW Act must be accompanied by a statutory declaration setting out the basis upon which the FWC can be satisfied that the requirements of section 226 of the FW Act have been met.

Consideration

[16] As the Agreement has passed its nominal expiry date and there is no assertion that the Applicants are not employees covered by the Agreement, I find that the Applicants have standing to make the Application pursuant to section 225(b) of the FW Act. I am also satisfied that the appropriate statutory declaration accompanied the Application.

[17] Section 226(a) requires the FWC to be satisfied that it is not contrary to the public interest to terminate the Agreement. This requires the FWC to consider how the termination of an agreement might foreseeably affect the public as a whole, such as the impact on the achievement or otherwise of the various objects of the Act, employment levels, inflation and the maintenance of proper industrial standards.¹

[18] The public interest is distinct in nature from the interests of those covered by the Agreement. The views of those covered by an agreement may be relevant to the exercise of the discretion if they shed light on the effect of the termination on public interest, but those views should not be given any independent weight.²

[19] With respect to the public interest WAMMCO note that there is growing public opposition to live sheep export. WAMMCO submit that an industrial instrument that imposes operational or financial restrictions on its business is likely to limit its capacity to provide an alternative to live sheep export.

[20] The AMIEU submit that it is the public interest to terminate the Agreement because the Agreement bestows a competitive advantage on WAMMCO at the price of Employees by causing Employees to be worse off than the minimum community standards as set out in the Award.

[21] In the Rogowsky Declaration the Applicants identified the following features of the Agreement which they say are less beneficial than the respective Award entitlement:

•  Transfer from full-time permanent employment to casual employment (and vice-versa) on week’s notice (clause 2.1.2),

•  Broad unpaid stand down provisions (clause 2.1.9.2),

•  Unpaid periods – such as those provided in clause 2.1.9.2 – affect service and leave accruals (clause 2.1.10.1),

•  “Temporary” termination of employment with only one weeks’ notice (2.1.11.1(f)),

•  Wide span of ordinary hours of work (clause 2.2.1.2),

•  All overtime paid at only time and a half (clauses 2.3.1 and 3.1),

•  Exclusion of allowances such as cold temperature and first aid allowances (clause 4), and

•  Leave conditions less than the safety-net, including lower accruals, no leave loading and no additional week of leave for shiftworkers (clause 5).

[22] The Agreement was approved in August 2013. Notwithstanding this modelling conducted internally by the FWC indicates that the base rates of pay under the Agreement still exceed the applicable Award rates by between 1.62% and 5.88% for full time employees and by between 14.42% and 33.15% for junior employees.

[23] WAMMCO point out that pursuant to clause 3.2.2 of the Agreement once a classification level is reached Employees continue to be paid the higher rate of pay irrespective of the work they actually perform. This higher rate of pay forms the basis for payments of overtime, accrued entitlements and superannuation under the Agreement.

[24] In support of the application to terminate the Agreement the AMIEU submit that the Agreement wage increases only apply to the base rate of pay and not to overtime rates of pay. According to internal modelling by the FWC full time employees are potentially between 8.56% and 12.24% worse off under the Agreement as opposed to the Award per hour for the first three hours of overtime they perform and between 31.42% and 33.8% per hour for overtime in excess of three hours on overtime performed on Sundays.

[25] WAMMCO dispute AMIEU’s assertion that wages increases do not flow into overtime rates of pay and say that they calculate Employee pay based on the wage increases applying to overtime rates of pay. Even if AMIEU is correct and the Agreement does not strictly require WAMMCO to flow wage increases into overtime rates of pay the potential for employees to reap the reward of a higher rate of pay for overtime hours of work is entirely dependent on the exercise of WAMMCO’s discretion to direct employees to perform overtime work. If WAMMCO chose not to offer overtime work to employees any higher rate of pay for overtime work which might apply under the Award if the Agreement were to be terminated would not result in a financial gain for employees. In fact a higher rate of pay for overtime might lead WAMMCO to take steps to prevent the need for any work to be performed in overtime hours.

[26] AMIEU point out that under clause 33 of the Award shift employees working an afternoon shift commencing at or after 2pm and finishing at or before midnight are entitled to a shift penalty of 15% and those working a night shift finishing after midnight and before 9am a shift penalty of 25%. AMIEU contrast this with clause 2.9.3.1 of the Agreement which provides for a flat loading of $3 per hour for each ordinary hour performed by a shift employee outside the hours of 4am to 8pm.

[27] As with overtime the enhanced financial entitlement available under the Award is dependent on the rostering decisions of WAMMCO. There is no financial loss to employees engaged under the Agreement as opposed to the Award unless WAMMCO chose to roster employees on afternoon and/or night shift.

[28] AMIEU also point out that the Agreement defines ordinary hours over a broader band than the Award and that if the Agreement were terminated work performed between 4am and 6am which currently attracts ordinary rates of pay would attract penalty rates under the Award.

[29] Access to the penalty rates available under the Award for work prior to 6am in the event the Agreement is terminated is dependent on the rostering decisions of WAMMCO. There is no financial loss to employees engaged under the Agreement as opposed to the Award unless WAMMCO chose to roster employees to commence before 6am. Furthermore Employees may attach a utility to commencing and finishing their shifts early which may compensate them for any financial loss. In fact according to WAMMCO the extended ordinary hours span was negotiated into the Agreement by the AMIEU who at that time viewed it as advantageous for its members.

[30] The AMIEU also point out that the Agreement provides for unpaid rest breaks in contrast with the 10 minute paid rest breaks provided at clause 32.2 of the Award. AMIEU have valued these rest breaks at between $760 and $811 per annum per employee but say this could be higher if the rest breaks were treated as overtime.

[31] In further support of the Application the AMIEU says that Employees are currently denied annual leave loading provided for by the Award. WAMMCO dispute this and assert that annual leave loading is paid in accordance with the Agreement.

[32] AMIEU’s own calculations recognise that as compared to the Award when considering those features which occur regardless of rostering arrangements many Employees are better off under the Agreement. On the AMIEU’s submissions all Employees only stand to gain from the termination of the Agreement if rostering arrangements are such that Employees would qualify for the enhanced overtime and shift penalties contained in the Award.

[33] WAMMCO submit that based on the typical rosters worked over the last two decades 90.7% of employees will between $76.83 and $23,665.90 per annum worse off compared to their current income in the event that the Agreement is terminated. According to WAMMCO the gain for those few Employees who would benefit from the termination ranges from $400 to $2800.

[34] AMIEU also identified a number of other features of the Agreement which they say are more disadvantageous than the comparable Award entitlement. This includes inter alia the absence of allowances such as a first aid allowance and a cold temperature allowance, a requirement to work a minimum of 6 hours prior to a meal break rather than 5, the capacity to substitute the Queen’s Birthday holiday, the right to request conversion from casual to permanent employment, domestic and family violence leave and the capacity of WAMMCO to transfer workers to and from casual employment on a weeks’ notice. In addition the AMIEU submit that the stand down provisions in the Agreement are so broadly drafted that the categorisation comparator with the Award should be Daily Hire which attracts a 10% loading rather than Full Time Permanent.

[35] Allowances are only payable if the circumstances exist which would qualify the employee for the entitlement. There is no evidence before me which, if any, Employees covered by the Agreement would be eligible for the allowances absent from the Agreement in the event the Agreement was terminated. According to WAMMCO the extended meal break and substituted Queen’s Birthday were negotiated into the Agreement by the AMIEU who at that time viewed these features of the Agreement as advantageous for its members. WAMMCO also point out that the AMIEU’s submissions do not take into account the option under the Agreement of cashing out personal carers leave.

[36] In determining whether it is appropriate to terminate an enterprise agreement, section 226(b) of the FW Act requires consideration be given to the views and circumstances of the employer, employees and any employee organisation covered by the agreement.

[37] WAMMCO neither supports nor opposes the Application. However, WAMMCO submitted that termination of the Agreement is contrary to the public interest and that a majority of employees would be worse off if the Agreement is terminated.

[38] The AMIEU supports the Application.

[39] The Applicants assert that Employees are in favour of termination of the Agreement.

[40] As evidence of Employee views the Applicants filed the Kennedy Declaration. In her declaration, Ms Kennedy explains that she attended the WAMMCO site on 27 and 28 August 2018 to circulate a petition in support of the Application. She says that in advance of her visit she arranged for the distribution of a flyer comparing Award and Agreement conditions. A copy of the flyer was annexed to her declaration. During her site visit she says that she explained to Employees the purpose of the petition. She claims that most Employees were keen to sign the petition. I note however than only 150 of the 270 workforce are alleged by the AMIEU to have eventually signed the petition.

[41] Ms Kennedy claims in the Kennedy Declaration that only a small majority declined to sign and that she made clear to them that signing was voluntary. She asserts that she did not coerce, intimidate or otherwise induce Employees to sign the petition. She says that she was aware that a number of the Employees could not speak English and that she made sure she identified Employees who could translate for those who could not. She admitted that she could not find a translator in the Skins Shed but says that for this reason she did not ask the non English speaking Employee there to sign the petition. She also says that Employees were informed that they could retract their signature at any time by emailing the AMIEU.

[42] The AMIEU subsequently confirmed to Chambers that no retraction emails had been received.

[43] The Directions invited Employees to express their views about the Application directly to Chambers. The Employees who expressed their views directly to the FWC all opposed the Application. For reasons of privacy I have not identified those Employees by name in my decision.

[44] The Employees who contacted the FWC directly were concerned about the economic impact on them of the termination of Agreement. One estimated that she would be nearly $5,000 worse off annually if the Agreement was terminated. Another expressed a concern he would be more than $100 per week worse off under the Award as opposed to the Agreement and that one of his young colleagues would be reduced to youth wages. He also pointed out that the higher overtime payments available under the Award would be of no financial benefit to him if WAMMCO withdrew discretionary overtime.

[45] A number of Employees expressed doubts about the legitimacy of the petition organised by the AMIEU. They say that the AMIEU did not adequately explain to employees the differences between the entitlements contained in the Agreement and the Award. They allege that many of those who signed the petition did not properly understand the petition or its implications because they are from ethnic backgrounds with low education levels and poor English skills. One Employee alleges that when he tried to conduct his own petition opposing the termination that a union member intimidated him and discouraged other Employees from signing.

[46] The Employee Statutory Declarations were provided to the AMIEU and WAMMCO in an unredacted form and they were given the opportunity to respond to the views contained in the Declarations.

[47] In their response to the issues raised in the Employee Statutory Declaration, AMIEU assert that the Employees relied on WAMMCO’s calculations to determine that they would be worse off if the Agreement is terminated. The AMIEU assert that WAMMCO’s calculations were flawed because their classification matching is incorrect and that WAMMCO has failed to take into account various financial and non financial differences between the Agreement and the Award. AMIEU also say that in the absence of details of the hours of work and roles it is not possible to corroborate the Employees assertion that they would be worse off if the Agreement was terminate.

[48] The AMIEU submit that the views of the Employees who provided Statutory Declarations are not indicative of the views of the majority of employees and that their allegations with respect to the legitimacy of the petition organised by the AMIEU are unsubstantiated and therefore can be of little probative value to the FWC.

Conclusions

[49] With respect to the public interest WAMMCO note that there is growing public opposition to live sheep export. WAMMCO submit that an industrial instrument which imposes operational or financial restrictions on its business is likely to limit its capacity to provide an alternative to live sheep export. The issue of live sheep export is a contentious issue. There is divergence in views about the public interest in ceasing it. WAMMCO did not particularise how either the Award or the Agreement would impose restrictions which would impact on its capacity to provide an alternative to live sheep export.

[50] The AMIEU submit that it is the public interest to terminate the Agreement because the Agreement bestows a competitive advantage on WAMMCO at the price of Employees by causing Employees to be worse off than the minimum community standards as set out in the Award.

[51] The AMIEU didn’t provide evidence as to the terms and conditions applying at WAMMCO’s competitors in order to demonstrate that WAMMCO are in fact obtaining a competitive advantage.

[52] AMIEU have demonstrated only that some Employees might be better off under the Award in particular circumstances. A significant extent of the disadvantage relied upon by the AMIEU depends on narrow interpretation of the Agreement not currently applied by WAMMCO. Furthermore, the extent of the disadvantage if any depends on rostering decisions of the WAMMCO.

[53] WAMMCO do not support the termination of the Agreement.

[54] The petition without more suggests that slightly more than half the workforce support the termination and that 130 of the 280 strong workforce do not. The conviction of the views of those who signed the petition is unclear from the materials submitted by the Applicants. At least three employees strongly oppose the termination. Their evidence with respect to the circumstances in which the petition was gathered brings into doubt the weight that can be attached to the petition. In circumstances where the AMIEU chose not to call evidence to rebut their allegations, other than the statement of the relevant union organiser, or to cross examine them about their allegations then the allegations of the Employees with respect to the petition cannot be simply dismissed without any weight being attached to them.

[55] Having considered all the materials before me the Applicants have not satisfied me that it is in the public interest to terminate the Agreement or that it is appropriate to do so taking into account all the circumstances, including the evidence of the views of the Employees, WAMMCO or the AMIEU.

[56] If the AMIEU are of the view that the majority of employees genuinely wish to have the Agreement terminated then they may wish to re-apply for the agreement to be terminated after taking steps to ensure that they are able to establish the veracity of any petition they gather. For example, they may consider providing the petition in the native language of those who do not have adequate English literacy, tendering witness statements from Employees who support the Application and/or cross examining any Employees who oppose the application on the grounds that any future petition is not credible.

[57] To the extent that this process has identified any individual employee that may be worse off under the Agreement than the Award or rostering arrangements which might produce such an outcome then I would commend to WAMMCO that they give consideration to addressing these discrepancies.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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1 Re Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at 40–41.

2 Ibid.