Orora Packaging Australia Pty Ltd

Case •

[2024] FWCA 4130

•

2 DECEMBER 2024
[2024] FWCA 4130

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185 - Application for approval of a single-enterprise agreement

Orora Packaging Australia Pty Ltd

(AG2024/4034)

ORORA PACKAGING AUSTRALIA PTY LTD - GLASS MAINTENANCE ENTERPRISE AGREEMENT 2024

Manufacturing and associated industries

COMMISSIONER CONNOLLY

MELBOURNE, 2 DECEMBER 2024

Application for approval of the Orora Packaging Australia Pty Ltd - Glass Maintenance Enterprise Agreement 2024

Approval

  1. An application has been made for approval of an enterprise agreement known as the Orora Packaging Australia Pty Ltd - Glass Maintenance Enterprise Agreement 2024 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act) by Orora Packaging Australia Pty Ltd (the Applicant). The Agreement is a single enterprise agreement.

  1. The matter was allocated to my Chambers on 11 November 2024.

  1. The notification time for the Agreement under s.173(2) was 24 July 2024 and the Agreement was made on 2 October 2024.  Accordingly, the genuine agreement requirements the Agreement is to be assessed under are those applying after 6 June 2023 and the better off overall test (BOOT) is that applying on and from 6 June 2023. [1] 

  1. On 22 November 2024, the Employer was invited to address aspects of the Agreement including through the provision of an undertaking.

  1. In respect of the alleged Notice of Employee Representational Rights (NERR) deficiency I do not believe that the insertion of the incorrect name of the Agreement had the effect of disenfranchising any employee who is covered by the proposed Agreement from participation in the bargaining process. I am satisfied (taking into consideration s.188(5) of the Act and the decision in Huntsman Chemical Company Australia Pty Limited T/A RMAX Rigid Cellular Plastics & Others) that the procedural or technical error is minor and that the employees were not likely to have been disadvantaged, and accordingly, that there has been a genuine agreement.

  1. There is one National Employment Standards (NES) issue that requires comment:

·   Deduction on termination: Clause 7.4 states ‘If, upon termination of employment, there are any amounts owing by an Employee to the Employer, the Employee may agree in writing that the amount owing to the Employer may be deducted from any monies or entitlements owed to the Employee. If agreement is not reached on repayment, the Employer may initiate proceedings to recover the amount by lawful means.’ The effect of this is that this clause appears to permit the employer to deduct employee’s entitlements under the NES (such as notice of termination, accrued but unused annual leave or long service leave on termination). This raises the issue that this provision may be inconsistent with Chapter 2 Part 2.2 Division 2 of the Act.

  1. Clause 1.4.2 of the Agreement acts as an effective NES precedence clause, in that it states that “Where there is an inconsistency between this Agreement and a term of the NES, and the NES term provides a greater benefit to the employee, the NES term will apply to the extent of the inconsistency.”. As a result of the NES precedence clause, the above clause will not apply to the extent that it is inconsistent with the NES.

  1. The Applicant has provided written undertakings, dated 22 November 2024, and a copy is attached in Annexure A. A copy of the undertaking has been provided to the bargaining representatives and I have sought their views in accordance with s.190(4) of the Act. The bargaining representatives did not express any view on the undertaking.

  1. I am satisfied that the undertaking will not cause financial detriment to any employee covered by the Agreement and that the undertaking will not result in substantial changes to the Agreement, thus appearing to meet the requirements of s.190(3). The undertaking is taken to be a term of the Agreement.

  1. The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), 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) of the Act I note that the Agreement covers this organisation.

  1. I am satisfied that each of the requirements of ss.186, 187, 188, 190, 193 and 193A of the Act as are relevant to this application for approval have been met.

  1. The Agreement is approved and, in accordance with s.54 of the Act, will operate from 7 days after the date of approval of the Agreement. The nominal expiry date is 2 December 2028.

Variation

  1. The Agreement lodged contained an error in Schedule 2 located on page 35 which contained incorrect rates of pay. On 18 October 2024, the Applicant lodged the following letter to the Commission:

“The parties wish to note an error in agreement AG2024/4034 which was lodged with the FWC on 14th October 2024 for approval.

Schedule 2 sets out the rate for 8 employees whose current rates of pay were agreed to be grandfathered. The concept of grandfathering rates is referred to both in the Agreement at Clause 4.9 and was explained to these employees during the agreement explanation process. The communications clearly state that the rate for this group was to remain unchanged once the agreement was to take effect. See the documents "9 Day - Weekend Roster Presentation" page 1, presented on 10th September and "ECA Maintenance 2024 team member presentation" page 6, presented on 20th & 23rd September 2024, attached with the application.

To that end, the parties seek that page 35 of the agreement be removed and placed with the new page 35, that contains the correct rates of pay.

The company has consulted with the AMWU in respect to the error, and the AMWU agree that that rates are incorrect and that the new page 35 will correct the error. The matter has also been discussed with the employees affected who are aware of this letter and the corrected EA page.”

  1. This letter was signed by both the Applicant and the AMWU.

  1. Section 218A, which came into effect on 7 December 2022, is as follows:

“218A Variation of enterprise agreements to correct or amend errors, defects or irregularities

(1) The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (whether in substance or form).

(2)The FWC may vary an enterprise agreement under subsection (1): (a) on its own initiative; or

(b) on application by any of the following:

(i) one or more of the employers covered by the agreement; (ii) an employee covered by the agreement; or

(iii) an employee organisation covered by the agreement.

(3) If the FWC varies an enterprise agreement under subsection (1), the variation
operates from the day specified in the decision to vary the agreement.”

  1. As has been noted in recent decisions of the Commission,[2] s.218A of the Act is not unlike the slip rule found in s.602 of the Act which allows the Commission to correct or amend an obvious error, defect or irregularity (whether in substance or form) in relation to a decision of the Commission. Its evident purpose is to remove complexity associated with varying enterprise agreements containing obvious errors, defects or irregularities by simplifying the process by which corrections may be made.

  1. Before an amendment under s.218A can be made, the Commission must first be satisfied of the existence of an obvious error, defect or irregularity (whether in substance or form). Upon the finding of such an error, defect or irregularity, the Commission may, not must, vary the enterprise agreement. The power to vary should only be exercised to the extent necessary to remove the error, defect or irregularity.

  1. I am satisfied that the existence of an error in Schedule 2 of the Agreement which contains incorrect rates of pay. While section 218A does not specify what factors should be considered in the exercise of a discretion to vary an enterprise agreement, I am satisfied that the amendment should be made, and that it is appropriate to do so by varying the Agreement pursuant to s.218A of the Act. In the present case, the error is readily identified, as is the correction needed to make the Agreement accurately reflect what was clearly intended. There are no reasons not to exercise my discretion and good reasons to do so. The error in Schedule 2 on page 35 of the Agreement will be amended to reflect the correct rates of pay provided by the Employer, as ordered below.

Order

  1. I order, pursuant to s.218A of the Act, that the Agreement be varied to correct an obvious error as follows:

  1. By deleting Schedule 2 on page 35 of the Agreement and replacing it with the following:

  1. This variation will operate on 2 December 2024.

  2. The Applicant has simultaneously submitted a copy of page 35 of the Agreement which contains the variations in Schedule 2. The Agreement, as varied, will be published with this Decision.


COMMISSIONER

Annexure A


[1] The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) made a number of changes to enterprise agreement approval processes in Part 2-4 of the Fair Work Act. Those changes broadly commenced operation on 6 June 2023, subject to various transitional arrangements that included those to effect described above.

[2] See for example [2023] FWCA 844 per Gostencnik DP, and [2023] FWC 115 per Asbury DP (as Vice President Asbury

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