Norco Co-operative Limited

[2020] FWCA 2869

[2020] FWCA 2869

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Norco Co-operative Limited
(AG2020/490)

NORCO CO-OPERATIVE RURAL RETAIL AND AGRIBUSINESS ENTERPRISE AGREEMENT 2019

Retail industry
DEPUTY PRESIDENT SAUNDERS	NEWCASTLE, 2 JUNE 2020

Application for approval of the Norco Co-operative Rural Retail and Agribusiness Enterprise Agreement 2019.

Introduction and background

[1] An application has been made for approval of an enterprise agreement known as the Norco Co-operative Rural Retail and Agribusiness Enterprise Agreement 2019 (Agreement). The application was made pursuant to section 185 of the Fair Work Act 2009 (Act).The Agreement is a single enterprise agreement.

[2] The Agreement covers employees working in Norco Co-operative Limited’s (Norco) rural stores and feed mill, as well as some of Norco’s clerical and transport workers who are employed by Norco in New South Wales and Queensland in relation to its rural stores and feed mill.

[3] Norco has provided written undertakings (Undertakings) to support its application for approval of the Agreement. A copy of the Undertakings is attached in Annexure A to this decision.

[4] The Shop, Distributive and Allied Employees Association (SDA) was a bargaining representative for the Agreement. It filed an F18 in which it stated that it did not wish to advise the Fair Work Commission (Commission) whether it supported approval of the Agreement and raised some concerns in relation to the F17 filed by Norco in support of its application for approval of the Agreement. Further, in written submissions filed in the Commission on 25 May 2020, the SDA submitted:

“The SDA recognises the undertakings provided by Mr Kendall of the Applicant would make significant improvements to the Agreement. As a result, the Agreement is now far more likely to pass the BOOT…”

[5] The Transport Workers’ Union of Australia (TWU) was a bargaining representative for the Agreement. It filed an F18 in which it stated that it supported approval of the Agreement “subject to any undertakings required” and raised some concerns in relation to the F17 filed by Norco in support of its application for approval of the Agreement. Further, in written submissions filed in the Commission, the TWU submitted that it remained concerned that the Agreement “may not pass the BOOT insofar as it affects our members”. The TWU’s written submissions identify a number of better off overall concerns which they contend “remain outstanding”.

[6] A hearing, by telephone, was conducted on 1 June 2020 in relation to Norco’s application for approval of the Agreement. Mr Capelin, solicitor, was granted permission to represent Norco, pursuant to s 596(2)(a) of the Act. Mr Worsley, Industrial Officer of the SDA, appeared at the hearing and made brief oral submissions to supplement his written submissions. The TWU notified the Commission in its written submissions that it would “not be participating in the hearing listed before Deputy President Saunders, Monday, 1 June 2020 and we await the decision of the Commission”.

Evidence

[7] Apart from the F18’s filed by the SDA and the TWU, neither union adduced any evidence at the hearing.

[8] Mr John Kendall, Human Resources Manager of Norco, gave evidence in support of the application for approval of the Agreement. Mr Kendall is a long term employee of Norco, having commenced employment with Norco on 16 May 1983. I asked Mr Kendall a number of questions at the hearing, but the SDA declined the opportunity given to them to cross examine Mr Kendall.

[9] Mr Kendall gave the following unchallenged evidence in his witness statement made on 18 May 2020: 1

“1. I am employed as the Human Resources Manager of the Applicant, Norco Co-operative Limited (Norco). I have been in that role since 3 May 2018 and have been employed by Norco in various roles in the Human Resources area since 16 May 1983.

2. I am authorised to make this statement on behalf of Norco and I am also authorised to provide the undertakings set out in the document headed: Proposed Undertakings, which is annexed and marked "A".

3. Alongside Norco's senior management, I am responsible for negotiating Norco's enterprise agreements, including the Norco Co-Operative Limited Rural Retail and Agribusiness Enterprise Agreement 2019 (the Agreement).

4. On 24 February 2020, after the Agreement was made, I made a statutory declaration in support of the approval of the Agreement (the F17). Subject to the following, I stand by and rely upon the F17 in support of Norco's application for approval of the Agreement.

(a) Road Transport and Distribution Award 2020 (RTDA) Point 10 in section 3.3, FBTMA Point 10 in section 3.5: contrary to the F17, the Agreement does provide that if an employee resumes work without having had 10 consecutive hours off duty, the employee must be paid at the rate of 200% until the employee is released from duty for such period. The Agreement provides that the employee is then entitled to be absent until the employee has had 12 (not 10) consecutive hours off duty without loss of pay for ordinary hours occurring during the absence (Agreement clause 9.5.6).

(b) Food, Beverage and Tobacco Manufacturing Award 2010 (FBTMA) Point 14 in section 3.6: It is correct that the Agreement does not provide an entitlement to average rosters over a period which exceeds 28 consecutive days but does not exceed 12 months, as exists in clause 30.3(c) of the FBTMA. However, I do not consider that this is an entitlement which has been omitted from the Agreement. Rather, I consider that the absence of a clause equivalent to clause 30.3(c) of the FBTMA in the Agreement is beneficial to employees.

(c) RTDA Point 7 in section 3.6: The Agreement does not include a capacity to direct an employee with an excessive annual leave accrual to take leave as exists in clause 29 of the RTDA. The Agreement is arguably more beneficial in this respect. Again, I do not consider that this is a beneficial entitlement which has been omitted from the Agreement. Rather, I consider that the absence of any equivalent provision in the Agreement is beneficial to employees.

Annexed and marked "B" is a copy of that F17.

5. On 28 February 2020, Norco (through it's representative, Mr Tim Capelin) lodged the Agreement for approval by the Fair Work Commission.

6. On 4 March 2020, Mr Gerard Dwyer from the Shop, Distributive and Allied Employees' Association (SDA) lodged a statutory declaration relating to the Agreement which included a number of concerns with the Agreement. Annexed and marked "C" is a copy of the SDA's statutory declaration (the SDA's F18).

7. On 6 March 2020, Mr Adam Carter from the Transport Workers' Union of Australia (Queensland Branch)(TWU) made a statutory declaration relating to the Agreement which also included a number of concerns with the Agreement. Annexed and marked "D" is a copy of the TWU's statutory declaration (the TWU's F18).

8. On 13 March 2020, I received an email from Deputy President Saunders' Chambers. The Deputy President raised a number of issues with the Agreement (the FWC Issues). Annexed and marked "E" is a copy of the email from Deputy President Saunders' Chambers dated 13 March 2020.

9. In response to the FWC Issues, the concerns contained in the SDA's F18 and the concerns contained in the TWU's F18, which are combined in a Summary of Issues document, I provide on behalf of Norco certain undertakings, which are contained in the Proposed Undertakings document. Annexed and marked "F" is the Summary of Issues Document.

10. In response to the FWC Issues, adopting the lettering used in the first column of the Summary of Issues document, I note as follows:

(a) Concerning issue (a), which relates to the provision of notice of termination in circumstances of abandonment of employment, I provide on behalf of Norco the undertaking at paragraph 2(a) of the Proposed Undertakings. I believe that undertaking effectively addresses the issue (a), as the undertaking is in the form which was suggested by the Deputy President and meets the issue.

(b) Concerning issue (b), which relates to the rate payable for overtime and weekend work by casual rural stores employees, I provide on behalf of Norco the undertaking at paragraphs 2(b), 2(c) and 2(o) of the Proposed Undertakings. Those undertakings concern narrowing the span of ordinary hours of work of rural stores employees, providing for a maximum number of hours of work for rural stores employees on any day, and providing that Norco will not employ any employees in the RS1 classification. To the extent there is any remaining concern, the undertaking at 2(n) of the Proposed Undertakings (the "Reconciliation Undertaking") effectively address the issue.

(c) Concerning issue (c), which relates to the breaks between work for rural stores employees, although I agree that the Agreement may be considered less favourable, should a longer break between work periods be considered more favourable, I believe that the Agreement provides an appropriate break which is consistent with the more usual standard for breaks between shifts, in this regard I refer to clause 27.3 of the Clerks - Private Sector Award 2010 (Clerks Award) (which provides for a break between shifts of 10 hours), clause 33.3 of the FBTMA cl 41.4(b) and clause 30.1(b) of the Hospitality Industry (General) Award 2010. Therefore, if any negative weight is given to this issue, it should be minimal. The opening hours of Norco's rural stores, and the limited use of overtime in Norco's business, also mitigate against this concern.

(d) Concerning issue (d), which relates to the annual leave loading payable to rural stores employees, I provide on behalf of Norco the undertaking at paragraph 2(d) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (d). I say this because the undertaking, like the General Retail Industry Award 2010 (GRIA), provides for annual leave at 17.5% or the relevant weekend penalty rates, whichever is greater (in the case of day work) or 17.5% or the shift loading (including relevant weekend penalty rates), whichever is greater (for shiftwork).

(e) Concerning issue (e), which relates to the Sunday and overtime rates payable to casual clerical employees, although I agree that the Agreement contains a lesser rate for such work, rural stores are not open on Sundays. To the extent any concern remains, the Reconciliation Undertaking ensures that casual employees are better off.

(f) Concerning issue (f), that the Agreement does not contain a maximum number of hours per day for clerical employees, I provide on behalf of Norco the undertaking at paragraph 2(m) of the Proposed Undertakings. I believe that undertaking effectively addresses the issue (f), as the undertaking provides a maximum number of hours per day for clerical employees of 10, which is equivalent to clause 25.1(b) of the Clerks Award.

(g) Concerning issue (g), which relates to the Agreement not containing a living away from home allowance, I provide on behalf of Norco the undertaking at paragraph 2(e) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (g). The undertaking is in substantially the same terms as clause 19.5 of the Clerks Award.

(h) Concerning issue (h), which relates to the overtime rate payable to casual transport employees, I provide on behalf of Norco the undertaking at paragraph 2(1) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (h). The undertaking, like the RTDA, provides for the payment of a 10% loading on overtime hours worked by casual transport workers.

(i) Concerning issue (i), which relates to the payment of penalties for transport employees who perform non-continuous afternoon or night shifts, I do not accept that RTDA clause 22.10 applies to casual employees. In relation to full-time employees, I acknowledge that the Agreement is less favourable in this respect. However, I believe that Transport Employees remain better off under the Agreement. To avoid any doubt, Norco provides the undertaking 2(p) of the Proposed Undertakings, which effectively addresses the issue (i).

j) Concerning issue j), which relates to the amount of annual leave loading payable to transport employees, I provide on behalf of Norco the undertaking at paragraph 2(d) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue j). I say this because the undertaking, like the RTDA, provides for annual leave at 17.5% or the relevant weekend penalty rates, whichever is greater (in the case of day work) or 17.5% or the shift loading (including relevant weekend penalty rates), whichever is greater (for shiftwork).

(k) Concerning issue (k), which relates to reimbursement of expenses including a work diary, articles of clothing, housing and medical checks, I note as follows:

In relation to reimbursement of expenses where required to possess a work diary, to the extent that a Transport Employee requires a work diary to perform their duties, Norco supplies such diaries. Accordingly, Norco does not consider that any employees are worse off.

Regarding special clothing within the meaning of clause 16.4(b) of the RTDA, to the extent that any such clothing is required to perform the duties of Transport Employees, it is supplied by Norco. Accordingly, clause 16.4(b) would not apply in any case.

In relation to housing, clause 19.5(d) of the RTDA is inapplicable because employees are not required by Norco to live at a depot, yard or garage.

Concerning medical checks, I provide on behalf of Norco the undertaking at paragraph 2(g) of the Proposed Undertakings and I believe that undertaking effectively addresses this portion of issue (k). The undertaking, like clause 19.5(e) of the RTDA, provides for reimbursement of medical costs not recoverable from a health fund where an employee or person seeking employment is required to undertake a comprehensive medical assessment.

(I) Concerning issue (I), which relates to the maximum number of ordinary hours per day for transport workers, I provide on behalf of Norco the undertaking at paragraph 2(h) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (I). The undertaking, like clause 13.5 of the RTDA, provides that ordinary hours for transport workers must not exceed eight hours per day.

(m) Concerning issue (m), Norco does not read clause 30.5 of the FBTMA as imposing a maximum number of ordinary hours per day, and accordingly does not consider that the Agreement is any less favourable in this respect.

In any case, the Agreement contains an equivalent to clause 30.5, providing that agreement may be reached on " ... any arrangements of ordinary hours which exceed eight hours in any day." (clause 9.2.3) Accordingly, Norco denies that employees are any worse off on this basis.

(n) Concerning issue (n), which relates to afternoon and night shifts which do not continue, I provide on behalf of Norco the undertaking at paragraph 2(i) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (n). The undertaking, like 31.3(c)(i) of the FBTMA, provides for a penalty of 50% extra for the first three hours and 100% extra for the remaining hours where afternoon or night shifts do not continue for at least five successive afternoon or night shifts or six successive afternoon or night shifts in a six day workshop (where no more than eight ordinary hours are worked on each shift).

(o) Concerning issue (o), which relates to junior rates of pay for feed mill employees, I provide on behalf of Norco the undertaking at paragraph 2U) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue ( o ). The undertaking provides that any feed mill employee aged 16 years of age or younger employed by Norco will be paid 65% of the base rate of pay in Appendix 1 for the classification in which the employee performs work ($14.04 is the rate for juniors 16 years of age under the FBTMA, while the minimum payable to a junior aged 16 or less under the Agreement (including the Proposed Undertaking) is $14.43 for work in classification G1).

11. In response to the TWU's F18, adopting the lettering used in the first column of the Summary of Issues document, I note as follows:

(p) Concerning issue (p), I reject the TWU's assertion that the Agreement is any less favourable in this respect. Norco considers that clause 10.8, which provides that "All time worked in excess of the agreed hours referred to in clauses 10.2(a) to 10.2(c) will be paid at the appropriate overtime rate" is substantially similar to clause 9.5.5 of the Agreement, which provides that " ... Overtime shall apply to all additional hours worked in such circumstances beyond the employee's normally rostered hours." Norco also refers to clause 13.1 of the Agreement.

(q) Concerning issue (q), I disagree that the meal allowance provided by the Agreement is any less favourable on an overall basis than that provided by the RTDA. Although the meal allowance isn't payable if the employee was notified of the requirement to work overtime on the previous day, the meal allowance under the Agreement is higher than the Award ($18.96 compared with $16.25). Additionally, the first meal allowance is triggered after being required to work more than one hour of overtime, rather than being required to work overtime for 2 continuous hours or more under the Award. Further, the Agreement clause provides that an employee who is given notice of working overtime who has provided meal(s) who is then not required to work overtime (or is required to work less overtime) must be paid for the surplus meals. There is no equivalent in the RTDA.

(r) Concerning issue (r), I believe that clause 9.5.6(3) of the Agreement is no less favourable than clause 21.4 of the RTDA. The capacity to reduce the duration of the rest period after overtime from 10 hours to 8 hours can only occur by agreement with employees.

(s) Concerning issue (s), which relates to paid meal and crib breaks for shift workers, clause 22.9 of the RTDA 2020 (which was substantially similar to clause 24.9 of the RTDA 2010 to which the TWU referred), I consider that Transport Employees are better off under the Agreement, having regard to the rest breaks and meal breaks provided by the Agreement:

Under the Agreement, a Transport Employee's first meal break is paid: The Agreement provides for a 30 minute meal break during a Transport Employee's ordinary hours of work, which must commence no earlier than three and a half hours and no later than five and a quarter hours after an employee's fixed starting time. The Agreement also provides for a rest pause of ten minutes where an employee works four hours or more an any day, and a second ten minute rest pause where an employee works eight hours or more (Agreement clause 11). Additionally, a Transport Employee is entitled to an unpaid 30 minute meal break where the employee works in excess of eight and a half hours on any day. Further, consistent with clause 13.6 of the Agreement, employees working overtime are entitled to additional breaks as follows: More than 1 hour 1 additional meal / crib break; more than 4 hours 2 additional meal / crib breaks; and more than 7 hours 3 additional meal / crib breaks.

In comparison, under the RTDA, while working on day, afternoon or night shift, shiftworkers are entitled to a paid meal break of 20 minutes. The RTDA further provides for a paid 20 minute break where an employee is required to work overtime for 2 hours or more after working ordinary hours, which is taken before commencing overtime work or as soon as practicable after commencing overtime work. The RTDA provides for further rest breaks after completing each four hour period until overtime work is finished, which must be paid for at the applicable minimum hourly rate.

(t) Concerning issue (t), I provide on behalf of Norco the undertaking, at paragraph 2(k) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (t). The undertaking provides for a minimum engagement of four hours' work for transport workers working on a Saturday or Sunday, which is equivalent to RTDA clause 23.1(c).

(u) Concerning issue (u), I acknowledge that the Agreement does not provide employees with the capacity to terminate their employment during the minimum period of notice in circumstances of redundancy pay and retain an entitlement to redundancy pay. However, the redundancy provisions of the Agreement are overwhelmingly more generous than the RTDA. Given the current economic climate, Norco considers that this entitlement is potentially likely to be more beneficial to employees than ever before. At its highest, the redundancy entitlement exceeds the NES by 44 weeks' pay. The average length of service of employees covered by the Agreement is 7 years, the scope of this potential entitlement is significant. Additionally, Norco considers that it is extremely rare for employees to leave their employment in circumstances where they cannot provide adequate notice of termination.

(v) Concerning issue (v), which relates to public holiday shifts (now clause 22.12 of the RTDA), Norco does not consider that shift workers are worse off under the Agreement, rather, the differing clauses have a neutral effect, as some shift workers will be better off due to clause 22.12, (if the majority of their shift falls on the public holiday), while others will be worse off (if only a minor portion of the shift falls on a public holiday). Norco expects this entitlement is likely to be balanced over the course of all public holidays during the year. Norco notes that it provides employees with an additional public holiday (Norco Picnic Day).

(w) Concerning issue (w), which relates to the definition of a shiftworker under the Agreement in establishing an entitlement to the additional week of annual leave pursuant to section 87 of the Fair Work Act 2009 (Cth), Norco does not consider that transport workers are any worse off under the Agreement, as, in Norco's business, shifts for transport workers are not continuously rostered 24 hours a day for 7 days a week, nor are transport workers regularly working on Sundays and Public Holidays.

(x) Concerning issue (x) which relates to the 5th week of notice of termination in circumstances of redundancy, I provide on behalf of Norco the undertaking at paragraph 2(1) of the Proposed Undertakings and I believe that undertaking effectively addresses the issue (x). The undertaking has the effect of ensuring clause 40.8 of the Agreement provides for at least the minimum notice of termination provided by the NES.

12. In response to the SDA's F18, adopting the lettering used in the first column of the Summary of Issues document, I note as follows:

(y) Concerning issue (y), clause 12.8(c) of the GRIA provides that "Rosters will not be changed except as provided in clause 12.8(a) from week to week, or fortnight to fortnight, nor will they be changed to avoid any award entitlements." Although the Agreement does not contain a clause with identical wording, Norco does not consider that the Agreement is materially less favourable in the absence of such wording, noting: the Agreement provides that any change in rosters will be notified to employees at least seven (7) days in advance, or by mutual agreement by Norco and the employees. Should a one off roster change occur at the initiative or Norco, without the minimum seven days notice, employees are entitled to retain benefits forgone as a result of the implementation of the change. This includes the maintenance of penalties, shift loadings, allowances, paid crib breaks and/or other benefits applicable. Overtime shall apply to all additional hours worked in such circumstances beyond the employee's normally rostered hours (Agreement clause 9.5.5).

(z) Concerning issue (z), which relates to the patterns of work permitted under GRIA clause 28.2 and that ordinary hours cannot be worked on more than 19 days in a four week cycle in retail establishments with 15 or more employees under clause 28.5, Norco notes that the GRIA permits ordinary hours to be worked on more than 19 days in a four week cycle with "specific agreement". Norco notes that none of its retail establishments have more than 15 employees working within them, and in any case considers that the Agreement constitutes specific agreement.

(aa) Concerning issue (aa), which relates to a benefit provided under the FBTMA where full-time employee's non rostered day falls on a public holiday, Norco notes that the ordinary hours of work of Norco's Feed Millemployees are not structured to include RDOs. Accordingly, Norco does not consider that the Agreement is any less favourable in this respect. Norco otherwise relies upon the entitlement to an additional public holiday (Norco's Picnic Day) under the Agreement.

Additional Benefits

13. In addition to the benefits outlined in the F17, in securing the Agreement, Norco agreed to back pay the wage increases provided by the Agreement from 1 July 2019 from the first full pay period on or after 1 July 2019 following the Agreement's approval. This amounts to a significant additional benefit to which employees will be entitled in the event that the Agreement is approved. Accordingly, if the Agreement was approved on 1 June 2020 (the day this Application is listed for hearing), Norco will be back-paying the equivalent of 11 months' pay (despite the Agreement not being on foot). The additional payments to employees are significant. For example, a full-time RS2 employee will receive at least $1,219.56, while a fulltime TD3 employee will receive at least $3,746.66. In total, this amounts to an estimated liability exceeding $122,000 to 3 June 2020, plus applicable superannuation.”

[10] I accept the truth and accuracy of the evidence contained in Mr Kendall’s witness statement. That does not mean, however, that I agree with everything Mr Kendall says in his witness statement. In particular, I do not agree with all of the opinions Mr Kendall expresses in his witness statement in response to submissions and assertions made on behalf of the TWU and SDA. I address those matters further below when I give detailed consideration to the concerns raised by the TWU and SDA.

[11] Mr Kendall was the person from Norco who made a statutory declaration (F17) in support of the application for approval of the Agreement. A copy of that statutory declaration is annexure B to this decision. Mr Kendall was not challenged in relation to the evidence contained in his statutory declaration (F17). I accept the truth and accuracy of that evidence, on the same basis as I accepted the evidence contained in Mr Kendall’s witness statement.

Better off overall test (BOOT) – general principles

[12] I must be satisfied that the Agreement passes the BOOT before I can approve it. 2 Section 193(1) of the Act provides that an enterprise agreement passes the BOOT if the Commission is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the enterprise agreement would be better off overall if the enterprise agreement applied to the employee than if the relevant modern award applied to the employee. The “test time” is when the application for approval of the enterprise agreement is made.3

[13] In Armacell Australia Pty and Othersthe application of the BOOT was explained by the Full Bench in the following manner: 4

“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement.”

[14] The BOOT is not applied as a line by line analysis. It is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees. 5 An enterprise agreement may pass the test even if some award benefits have been reduced, as long as overall, those reductions are more than offset by the benefits of the enterprise agreement.6

[15] Ultimately the application of the BOOT is a matter that involves the exercise of discretion, and it involves a degree of subjectivity or value judgement. 7

[16] It is clear from the references to “each … employee” in section 193(1) of the Act that every employee to whom the enterprise agreement will apply, if approved, must be better off overall than if the relevant modern award applied to the employee. It is not enough that a majority or most of the employees to whom the enterprise agreement will apply, if approved, will be better off overall than if the relevant modern award applied. 8

[17] Section 193(7) of the Act is a facultative provision which permits the Commission to be satisfied, in particular circumstances, that all employees in a class of employees will be better off if the agreement applied to that class than if the relevant modern award applied to that class. Section 193(7) provides as follows:

“For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

[18] Section 193(7) was explained in the Explanatory Memorandum to the Fair Work Bill 2008 as follows:

“818. Although the better off overall test requires FWA to be satisfied that each award covered employee and each prospective award covered employee will be better off overall, it is intended that FWA will generally be able to apply the better off overall test to classes of employees. In the context of the approval of enterprise agreements, the better off overall test does not require FWA to enquire into each employee’s individual circumstances.”

[19] The selection of a class for the purpose of s 193(7) of the Act will only be of utility if the enterprise agreement affects the members of the class in the same way such that there is likely to be a common BOOT outcome. 9

[20] It is also important to recognise that the BOOT is hypothetical, because it requires an assessment of whether each employee, and each “prospective award covered employee”, would be better off overall if the enterprise agreement applied to him or her than if the relevant award did. 10

TWU’s concerns

[21] I will now address the concerns raised by the TWU in its written submissions filed in the Commission.

[22] The TWU contends that Norco’s undertaking (2l) concerning a fifth week of notice for an employee who is made redundant and who is at least 45 years of age and has at least two years’ continuous service is inconsistent with the National Employment Standards. I do not accept that submission. The undertaking (2l) confers on such employees a right to a fifth week of notice.

[23] The TWU contends that the Agreement does not contain equivalent benefits for part time employees as those contained in clause 12.4(h) of the Road Transport and Distribution Award (RTD Award). I agree. The Agreement does not require all time worked in excess of the agreed hours for a part time employee to be paid at the appropriate overtime rates. There are circumstances where a part time employee under the Agreement would not be entitled to overtime rates of pay for time worked outside of their hours agreed with the employer. I will take this detriment into account when weighing up whether the Agreement passes the BOOT.

[24] The TWU contends that meal allowances under the RTD Award are more beneficial than the Agreement. The TWU points in particular to the fact that under the RTD Award the meal allowance is payable even if notice is given. I agree. However, in my assessment the meal allowance provisions in the Agreement are not less favourable to employees on an overall basis than the RTD Award. The meal allowance payable under the Agreement is higher than the RTD Award ($18.96 compared to $16.25). The other more beneficial features of the Agreement in relation to meal allowances are described in paragraph 11(q) of Mr Kendall’s witness statement. Accordingly, this is a neutral consideration in my assessment of the BOOT.

[25] The TWU contends that the RTD Award does not provide for a reduction of breaks from 10 hours to 8 hours between work periods, contrary to the Agreement. This is correct. However, the reduction of a break from 10 hours to 8 hours under the Agreement may only take place if the particular employee concerned agrees. In my view, this is a minor detriment compared to the RTD Award.

[26] The TWU contends that paid crib and meal breaks for shift workers as per clause 24.9 of the RTD Award are not provided for in the Agreement. I find that shift workers will not be worse off under the Agreement compared to the RTD Award insofar as paid crib and meal breaks are concerned, for the reasons identified in paragraph 11(s) of Mr Kendall’s witness statement.

[27] The TWU contends that under the RTD Award an employee is entitled to receive their redundancy benefits if they resign prior to their termination date, but the Agreement does not provide for such a benefit. I agree. However, the very generous redundancy provisions in the Agreement outweigh this detriment. At its highest, the redundancy entitlements under the Agreement exceed the National Employment Standard entitlement by 44 weeks’ pay. This is of significance given the average length of service for employees covered by the Agreement is seven years.

[28] The TWU contends that the Agreement is less beneficial than the RTD Award in relation to major portions of a shift falling on a public holiday. I find that this is a neutral consideration for the reasons identified by Mr Kendall in paragraph 11(v) of his witness statement.

[29] The TWU contends that the definition of shift worker under the Agreement for the purposes of a fifth week of annual leave is less beneficial to employees than the RTD Award. I find that this is a neutral consideration for the reasons identified by Mr Kendall in paragraph 11(w) of his witness statement.

SDA’s concerns

[30] After acknowledging in its written submissions that the Agreement is “now far more likely to pass the BOOT” as a result of the Undertakings given by Norco, the SDA submitted that it wished to draw the Commission’s “attention to one particularly significant detriment in the Agreement – the absence of a rostered day (RDO) provision”. In particular, the SDA submits that under clause 28.5 of the General Retail Industry Award (GRI Award), in retail establishments employing on a regular basis 15 or more employees per week, unless a specific agreement exists to the contrary, the employee will not be required to work ordinary hours on more than 19 days in each four week cycle. The Agreement does not contain such a provision, with the result that, so the SDA submits, the Agreement is less beneficial than the GRI Award.

[31] In answer to questions I asked of Mr Kendall, he gave unchallenged oral evidence, which I accept, that:

● Norco has about 20 retail/rural stores in New South Wales and Queensland;

● Norco’s smaller stores have about three to four employees working in them

● Norco’s largest store has 10 to 12 employees working in it;

● during Mr Kendall’s approximately 37 year work history at Norco, it has never had a store with more than 15 employees; and

● Norco has no plan to have a store with more than 15 employees in the future.

[32] In light of this evidence, I consider it unlikely that Norco will have any stores employing, on a regular basis, 15 or more employees per week during the operation of the Agreement. Accordingly, this potential detriment will be accorded little weight in my assessment of the BOOT. In any event, even if Norco did operate stores employing more than 15 employees per week, I would be satisfied that this detriment would be outweighed by the over-award benefits provided for in the Agreement.

[33] Having addressed this “one particular significant detriment in the Agreement”, I will turn to the balance of the concerns identified in the SDA’s written submissions.

[34] The SDA submits that the rostering provisions of the Agreement insofar as they concern part time employees are less beneficial than the GRI Award because the Agreement, unlike the GRI Award, does not contain a provision to the effect that an employer must not use its power to change a part time employee’s roster, by giving the requisite notice, “from week to week, or fortnight to fortnight, nor will they be changed to avoid any award entitlements”. 11 I agree. I accept this is a detriment and will take it into account in my assessment of the BOOT.

[35] The SDA submits, as does the TWU (in relation to the RTD Award), that under the GRI Award and the Food, Beverage and Tobacco Manufacturing Award (FBTM Award) an employee is entitled to receive their redundancy benefits if they resign prior to their termination date, but the Agreement does not provide for such a benefit. I agree. However, the very generous redundancy provisions in the Agreement outweigh this detriment.

[36] The SDA submits that the GRI Award provides a laundry allowance of $6.25 per week for a full time employee or $1.25 per shift for a part time or casual employee where the employee is “required to launder any special uniform, dress or other clothing”. Norco supplies, at its cost, uniforms to its employees, but does not provide a laundry allowance. I accept this is a minor detriment to be taken into account in assessing the BOOT.

[37] The SDA contends that the Agreement, unlike clause 20.7 of the GRI Award, does not provide require the reimbursement of the cost of a taxi fare from work to home “where an employee commences or ceases work after 10pm on any day or prior to 7am on any day and the employee’s regular means of transport is not available and the employee is unable to arrange their own alternative transport”. The trading hours of Norco’s stores is from 8am until 5pm Monday to Friday and 8am until midday on Saturday. The ordinary hours for such employees is 7am until 6pm Monday to Friday and 7am until midday on Saturday. Employees occasionally work outside these hours to undertake an annual stocktake or to assist a specific customer who needs to attend the store outside normal trading hours. Further, employees working in Norco’s stores are based in rural areas and usually drive their own vehicles to and from work. Having regard to all these circumstances, I consider this to be a very minor detriment compared to the GRI Award.

[38] The SDA submits that clause 22.5 of the GRI Award provides that the employer must make superannuation contributions while an employee is on any paid leave or has a work-related injury or illness for the period of absence from work (subject to a maximum of 52 weeks). I agree. Norco makes superannuation contributions on all leave, but only makes superannuation contributions while an employee is on a work-related injury or illness where its insurer requires it to do so. I accept this is a detriment which must be taken into account in my assessment of the BOOT.

[39] The SDA submits that clause 28.11 of the GRI Award, unlike the Agreement, provides that ordinary hours will be worked so as to provide an employee with two consecutive days off each week or three consecutive days off in a two week period. I agree. I will take this detriment into account in my assessment of the BOOT.

[40] The SDA submits that clause 28.12 of the GRI Award, unlike the Agreement, provides that ordinary hours and any reasonable additional hours may not be worked over more than six consecutive days. This is so, but Norco’s stores are not open on a Sunday, so there is no realistic likelihood of an employee covered by the Agreement being required to work over more than six consecutive days. This is a neutral consideration in my assessment of the BOOT.

[41] The SDA submits that the benefits of clause 28.14 of the GRI Award, including rosters being displayed on notice boards and an employee who disagrees with a roster change being given a minimum of 14 days’ written notice, are not contained in the Agreement. That is correct. Norco says that in the context of small rural stores, these matters are dealt with in a practical way in discussions between employees and store managers, and employees have notice of their rosters notwithstanding that they are not displayed on notice boards. I am satisfied that this is a detriment to be taken into account in my assessment of the BOOT.

[42] The SDA submits that the GRI Award provides that an employee who works seven hours or more is entitled to two ten-minute rest breaks. The Agreement provides a second rest break for shifts of eight hours or more. I accept this is a detriment and will take it into account in my assessment of the BOOT.

[43] The SDA submits that the first aid allowance under the Agreement ($15.15 per week) is less than the FBTM Award ($17.16 per week). This is correct. I will take the detriment into account in my assessment of the BOOT.

[44] The SDA submits that clause 26.2(d) of the FBTM Award provides for reimbursement of damaged clothing, spectacles and hearing aides, but the Agreement does not. This is correct. Norco replaces any damaged clothing it supplies to employees. Norco replaces damaged spectacles and hearing aides if they are damaged in a workplace incident and a workers’ compensation is involved, but not otherwise. I accept that the absence of these benefits from the Agreement is a detriment; it will be taken into account in my assessment of the BOOT.

[45] The SDA submits that clause 26.2(e) of the FBTM Award provides that where an employee is required to wear special clothing and equipment, the employer must reimburse the employee for the cost of purchasing and laundering such special clothing and equipment unless the special clothing and equipment is paid for and laundered by the employer. This is correct. These benefits are not provided for by the Agreement. Norco supplies clothing but does not launder it or pay for it to be laundered. I accept this is a detriment to which I will have regard in my assessment of the BOOT.

[46] The SDA submits that the FBTM Award provides that if an employee is terminated by their employer and is re-engaged by the same employer within a period of six months, the employee’s unclaimed balance of paid personal/carer’s leave continues from the date of the re-engagement. There is no equivalent benefit in the Agreement. I agree. I will assign this detriment appropriate weight in my assessment of the BOOT.

BOOT conclusion

[47] The Undertakings provided by Norco have addressed many of the concerns raised by the Commission, SDA and TWU in relation to the Agreement. As to the balance of the concerns raised by the SDA and the TWU which are not the subject of undertakings, I have addressed them above and given them appropriate weight in my assessment of the BOOT.

[48] The F17 filed by Norco provides a comprehensive assessment of the benefits and detriments of the Agreement compared to each of the underling awards. I have had regard to each of those benefits and detriments, read together with the matters referred to above in this decision, in my assessment of the BOOT. In the result and having regard to all the circumstances, my overall assessment is that, as at the test time, each award covered employee, and each prospective award covered employee, would be better off overall if the Agreement applied to them than if the relevant award applied to them. The over-award benefits under the Agreement which outweigh the detriments include higher wages, generous redundancy entitlements, and back payment of wage increases provided for by the Agreement from 1 July 2019 from the first full pay period following approval of the Agreement.

[49] A comparison between the pay rates under the Agreement with the relevant award rates at test time is shown in the table below:

Modern Award Classification	Agreement Classification	Modern Award Rate	Agreement Rate	Percentage Difference
Food Award
Level 1	G1	$19.49	$22.34	14.61%
Level 2	G2	$20.06	$23.61	17.70%
Level 3	G3	$20.82	$23.97	15.14%
Level 4	G4	$21.54	$24.36	13.10%
Level 5	G5	$22.70	$25.07	10.42%
Level 6	G6	$23.41	$25.82	10.29%
Road Transport Award
Grade 4	TD1	$21.82	$22.56	3.39%
Grade 5	TD2	$22.09	$22.83	3.35%
Grade 6	TD3	$22.35	$23.10	3.36%
Clerks Award
Level 1.3	C1	$22.43	$23.49	4.73%
Level 2.2	C2	$23.12	$24.21	4.70%
Level 3	C3	$23.97	$25.10	4.73%
General Retail
Level 1	Rural Stores 1	$21.41	$22.21	3.72%
Level 2	Rural Stores 2	$21.92	$23.61	7.71%
Level 3	Rural Stores 3	$22.23	$23.97	7.84%
Level 4	Rural Stores 4	$22.70	$24.36	7.32%
Juniors - General Retail (compared to level 1)
at 16 years <	at 16 years <	$9.63	$13.32	38.29%
at 17 years	at 17 years	$12.85	$16.65	29.65%
at 18 years >	at 18 years >	$14.99	$22.21	48.17%
Juniors - Clerical (compared to level C1)
at 16 years <	at 16 years <	$11.22	$14.09	25.62%
at 17 years	at 17 years	$13.46	$17.62	30.89%
at 18 years >	at 18 years >	$15.70	$23.49	49.62%
Juniors - Transport (compared to level TD1)
at 16 years <	at 18 years >	$14.46	$21.82	50.90%
at 17 years	at 18 years >	$14.46	$16.92	17.01%
at 18 years >	at 18 years >	$14.46	$22.56	56.02%
Juniors - Food (compared to level G1)
at 16 years <	at 16 years <	$14.04	$13.40	-4.54%
at 17 years	at 17 years	$16.05	$16.75	4.38%
at 18 years >	at 18 years >	$18.05	$22.34	23.75%

[50] It needs to be noted that (a) Norco has given an undertaking to address the pay rate deficiency for “juniors – food” at an age of below 16 and (b) Norco has given an undertaking not to employ any employees in the Rural Stores 1 classification, which has the lowest pay differential between the Agreement and the GRI Award. The balance of employees covered by the GRI Award were entitled, at test time, under the Agreement to a pay rate of at least 7.32% above the GRI Award.

Undertakings

[51] I am satisfied that the effect of accepting the Undertakings is not likely to:

(a) cause financial detriment to any employee covered by the Agreement; or

(b) result in substantial changes to the Agreement.

[52] The Undertakings either provide small additional benefits to employees or provide an assurance that existing practices will be maintained. The Undertakings do not change the Agreement’s remuneration structure, nor are they likely to result in a wholesale reshaping or other considerable change to the Agreement.

[53] Undertaking 2(n) is a reconciliation undertaking for casual employees. I am satisfied that it meets the requirements of such undertakings as were identified as necessary and appropriate by a Full Bench of the Commission in Shop,Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd. 12

[54] The views of each person who the Fair Work Commission knows is a bargaining representative for the Agreement have been sought in relation to the Undertakings.

[55] Pursuant to subsection 190(3) of the Act, I accept the Undertakings. The Undertakings are taken to be a term of the Agreement.

Conclusion

[56] Subject to the Undertakings, I am satisfied that each of the requirements of sections 186, 187, 188 and 190 as are relevant to this application for approval have been met.

[57] The SDA being a bargaining representative for the Agreement, has given notice under section 183 of the Act that it wants the Agreement to cover it. In accordance with subsection 201(2) of the Act, I note that the Agreement covers the organisation.

[58] The TWU being a bargaining representative for the Agreement, has given notice under section 183 of the Act that it wants the Agreement to cover it. In accordance with subsection 201(2) of the Act, I note that the Agreement covers the organisation.

[59] The Agreement is approved and, in accordance with section 54 of the Act, will operate from 9 June 2020. The nominal expiry date of the Agreement is 30 June 2022.

DEPUTY PRESIDENT

Appearances:

T Capelin, solicitor,on behalf of Norco

M Worsley, Industrial Officer of the SDA, on behalf of the SDA

Hearing details:

2020.

Newcastle:

1 June.

Annexure A

Annexure B

 1   Ex A1

 2   s.186(2)(d) of the Act

 3   s.193(6) of the Act

 4   [2010] FWAFB 9985 at [41]

 5   SDA v Beechworth Bakery Employee Co Pty Ltd[2017] FWCFB 1664 at [12]

 6   Re Australia Western Railroad Pty Ltd T/A ARG – A QR Company [2011] FWAA 8555 at [8]; NTEIU v University of New South Wales[2011] FWAFB 5163 at [47]

 7   TWU v Jarman Ace Pty Ltd[2014] FWCFB 7097 at [28]

 8   Loaded Rates Agreements [2018] FWCFB 3610 at [100]

 9   Loaded Rates Agreements [2018] FWCFB 3610 at [115(2)]

 10   SDA v Aldi Foods Pty Ltd [2016] FCAFC 161 at [33] per Jessup J, who was in the minority but no issue was taken by the majority with this part of Jessup J’s reasons.

 11   GRI Award at cluse 12.8(c)

 12   [2017] FWCFB 1664

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