National Union of Workers

[2013] FWCA 7921

[2013] FWCA 7921

FAIR WORK COMMISSION

DECISION

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

National Union of Workers
(AG2013/2166)

GALE PACIFIC AND NATIONAL UNION OF WORKERS COLLECTIVE AGREEMENT 2013

Storage services
COMMISSIONER BULL	SYDNEY, 10 OCTOBER 2013

Application for approval of the Gale Pacific and National Union of Workers Collective Agreement 2013.

[1] An application has been made for approval of an enterprise agreement known as the Gale Pacific and National Union of Workers Collective Agreement 2013 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] On 3 September 2013, the Commission sent correspondence to the Applicant, being the National Union of Workers (NUW) as a bargaining representative for the Agreement and the employer, Gale Pacific Limited, to outline a number of concerns it had with aspects of the Agreement. These issues concerned the meal allowance, casual loading and the individual flexibility arrangement in the Agreement.

Undertakings

Meal allowance

[3] In its correspondence the Commission noted that with respect to clause 27 – Allowances, and in particular, the meal allowance the Agreement provides for a meal allowance from 1 June 2013 of $14.56, for warehouse employees and $10.92 for manufacturing employees.

[4] The Storage Services and Wholesale Award 2010 (the Storage Award), provides for a meal allowance of $15.14 and the Textile, Clothing, Footwear and Associated Industries Award 2010 (the Textile Award) provides for a meal allowance of $11.62.

[5] An undertaking has been provided by the employer that the meal allowance for warehouse employees will be $15.14 and for manufacturing employees the meal allowance will be $11.62.

Casual employees

[6] In its correspondence the Commission requested clarification with respect to sub clause 19.5.2 of the Agreement, and in particular, what additional rate is paid to casual employees. The employer has provided an undertaking that casual employees engaged under the Agreement will receive an additional 25% loading.

[7] All undertakings are taken to be terms of the Agreement. A copy of the undertakings is attached at Annexure A.

[8] I have sought the views of the NUW as a bargaining representative in respect of the undertakings, pursuant to s.190(4) of the Act. The NUW has not advised of any concerns with the undertakings provided.

Flexibility Term

[9] The Act requires at s.202(1) that an enterprise agreement must include a flexibility term. The terms of the agreement that may be varied must be included in the flexibility term.

[10] The Commission raised concerns with respect to clause 13 - Flexibility Agreement of the Agreement. Sub clause 13.1(a) is in the following terms:

a) agreement deals with 1 or more of the following matters:

● Advanced payment of accrued annual leave when requested

● Vary amount of salary sacrifice arrangement where salary sacrifice is advised by employee to employer and does not contravene related provisions in the EBA

● Advanced payment of personal leave in excess of 15 days subject to review of management and must be read in conjunction with cashing out of personal leave provisions in the EBA

[11] In correspondence to the NUW and the employer on 3 September 2013 the Commission requested further information as to what terms of the Agreement the flexibility clause seeks to vary and what additional flexibility is provided that is not already provided by the Agreement.

[12] The NUW forwarded a letter from the employer on 24 September 2013 to the Commission that referred to the concerns raised with respect to the flexibility clause in the Agreement. I note that the letter from the employer was dated 9 September 2013.

[13] The letter simply identified what clause of the Agreement each of the flexibility terms sought to vary. The letter stated:

● Advanced payment of accrued annual leave when requested = S 35.5 of the EBA

● Vary amount of salary sacrifice arrangement where salary sacrifice is advised by employee to employer and does not contravene related provisions in the EBA = S29.5 Employee Contributions of the EBA

● Advanced payment of personal leave in excess of 15 days subject to review of management and must be read in conjunction with cashing out of personal leave provisions in the EBA = S37.6 Cashing out of Personal Leave of EBA

[14] The correspondence did not provide any information as to how these terms could be varied to provide additional flexibility.

[15] On 24 September 2013, my Associate sent a further email to the NUW and the employer asking that they provide further correspondence outlining what additional flexibility is provided by the terms to which the flexibility clause seeks to vary in the Agreement such that the requirements of the Act at s.202(1) are met.

[16] An email was received that day from the employer asking to speak to my Associate, stating that the employer ‘would like to understand what other information we (the employer) can supply to sufficiently comply with your (the Commission’s) requirements’.

[17] My Associate spoke to the employer on 25 September 2013. The employer advised my Associate that it was unsure what additional flexibility was provided. The employer was advised to speak to the NUW to discuss a response or alternatively advise in writing that they would like to have the model flexibility term inserted.

[18] On 25 September 2013, an email was received from the NUW. Attached to the email was a copy of the flexibility clause found in the Agreement and a copy of the model flexibility term as found in the Fair Work Regulations 2009. The NUW stated:

We consider that clause 13 is adequate for the purpose of approval of the EA, however, if the Commission requires, we will consult with the employer on altering the clause to comply with the commission’s requirements.

[19] My Associate sent a further email on 25 September 2013, advising the NUW and the employer that the Commission required correspondence outlining what additional flexibility is provided by the terms the clause seeks to vary in the Agreement or alternatively that the NUW and the employer seeks to adopt the model flexibility term. The email asked that any correspondence be received by no later than 27 September 2013.

[20] No response was received from the NUW or the employer by 27 September 2013. On 1 October 2013, my Associate sent an email to the NUW and the employer to advise them that as no further information had been received the Agreement would be approved and that the model flexibility term would be taken to be a term of the Agreement.

[21] On 3 October 2013, the NUW sent an email to my Chambers stating that they intended to provide a response by 4 October 2013 with respect to the flexibility clause and regret that the deadline of 27 September 2013 was missed by the NUW.

[22] On 4 October 2013, an email was received from the NUW. With respect to the first two dot points in sub clause 13.1(a) of the Agreement, the NUW stated that the clause enables the employer and an employee to vary the effect of the Agreement in following ways:

● By an employee who is taking a period of paid annual leave being paid annual leave in advance rather than in the normal pay cycle; and

● By an employee varying the amount deducted from their pay by way of a salary sacrifice contribution at less than the 3 monthly intervals required by clause 29.7.8.

[23] Further, the NUW stated that it conceded that the proposed flexibility envisaged by the third dot point in clause 13.1(a) provides no additional flexibility to that already provided by clause 37.6 of the Agreement.

[24] Pursuant to s.202(1)(a) of the Act a flexibility term must enable 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.

[25] With respect to the advanced payment of accrued annual leave, the Commission was initially advised by the employer on 24 September 2013 that this related to sub clause 35.5 of the Agreement which deals with when annual leave can be taken. The NUW now states that this provides for an employee who is taking a period of annual leave to enter into a flexibility agreement to be paid annual leave in advance rather than in the normal pay cycle. I do not consider the Agreement or the NES provisions prevent the payment of annual leave in advance when taking the leave rather than as per the normal pay cycle.

[26] With respect to the salary sacrifice provision of the flexibility term, the NUW submits that this would allow an employee to vary the amount deducted from their pay by way of a salary sacrifice contribution at less than 3 monthly intervals as required by sub clause 29.7.8 of the Agreement, such a variation actually refers to the notice to be provided to the employer before a variation can occur.

[27] It is difficult to perceive how the variation to the salary sacrifice agreement provision as described by the NUW meets the genuine needs of the employee and employer; this is particularly where the employer has declined to provide any explanation. Despite this reservation the submissions of the NUW on this point are accepted.

[28] The Agreement covers the employer’s warehouse store employees and manufacturing production employees. I am satisfied that pursuant to s.186(3A) of the Act, this group is fairly chosen as being operationally or organisationally distinct.

[29] I am satisfied that each of the requirements of ss.187 and 188 of the Act as are relevant to the application for approval have been met.

[30] The National Union of Workers being a bargaining representative for the Agreement has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2), I note that the Agreement covers this organisation.

[31] The Agreement is approved. In accordance with s.54(1) the Agreement will operate from 17 October 2013. The nominal expiry date of the Agreement is 1 March 2016.

COMMISSIONER

Annexure A

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