Pernod Ricard Winemakers Pty Ltd

[2017] FWCA 1017

[2017] FWCA 1017

FAIR WORK COMMISSION

DECISION

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

Pernod Ricard Winemakers Pty Ltd
(AG2016/7109)

2016 PERNOD RICARD WINEMAKERS PTY LTD., CELLAR DOORS (BAROSSA VALLEY) ENTERPRISE AGREEMENT

Wine industry
COMMISSIONER ROE	MELBOURNE, 20 FEBRUARY 2017

Application for approval of the 2016 Pernod Ricard Winemakers Pty Ltd., Cellar Doors (Barossa Valley) Enterprise Agreement.

[1] An application has been made for approval of an enterprise agreement known as the Pernod Ricard Winemakers Pty Ltd., Cellar Doors (Barossa Valley) Enterprise Agreement 2016 (the Agreement). The application was made pursuant to Section 185 of the Fair Work Act 2009 (the Act). It has been made by Pernod Ricard Winemakers Pty Ltd (Pernod). The Agreement is a single enterprise agreement.

[2] I am satisfied that all the requirements of the legislation for the approval of the Agreement are met except for concerns raised about Sunday penalties and shiftwork penalties. In respect to the issue of shiftwork penalties Pernod have provided an undertaking which resolves the matter by providing overtime payments to any cellar door employee who works past 6pm. Pernod was not prepared to give such an undertaking concerning the question of Sunday penalties and requested a hearing for it to make further submissions concerning the issue. The matter was listed for hearing on 16 February 2017.

[3] The Agreement applies to two work groups: “front of house” and “kitchen hand/ cook”. The “front of house” group work in two areas – cellar door sales and as food and beverage attendants. It is hardly surprising that I conducted a BOOT analysis against both the Restaurant Industry Award 2010 and the Wine Industry Award 2010 given that Pernod stated in the F17 Form that these were the Awards which applied. The Agreement itself in Clause 13.1.3 provides that an additional week of annual leave shall be provided in circumstances provided for in Clause 31.2 of the Wine Industry Award 2010.

[4] Pernod submits and I accept that it is engaged in the wine industry. I accept the submission of Pernod that those engaged in the kitchens are covered by the Restaurant Industry Award. Those engaged in cellar door sales work can be covered by the Wine Industry Award. The Wine Industry Award has specific classifications for those engaged in this work where the employer is engaged in the wine industry. I accept that those engaged in food and beverage service associated with the restaurant at the Pernod facilities can be covered by the Restaurant Industry Award or the Wine Industry Award notwithstanding the fact that the restaurant is associated with a winery and the employer operates in the wine industry.

[5] The Awards provide that where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work. Pernod say that the front of house employees work across four working areas being cellar door, restaurant, tours & experiences, and events. They say that the standard practice is for an employee to be assigned to one of these working areas for a shift, however, if required an employee will float across those areas during that shift, depending on need. Pernod refer to a recent job advertisement and a position description which they say have a predominate focus on the restaurant side of the work. I agree that this is the case in the examples provided. However, the actual classification definitions in the Award contain a mix of cellar door and restaurant responsibilities. Pernod say that during peak restaurant trading periods there will be more front of house employees assigned to the restaurant than will be assigned to the cellar door work area. Pernod provided revenue figures which provide some indication of the proportion of revenue attributable to the restaurant as opposed to the cellar door. The proportions vary between the sites covered by the Agreement. They estimate that in respect to the St Hugo site about 30% of revenue comes from cellar door activity whist at the other sites it is about 45%.

[6] Pernod in their application sought to conduct the BOOT against both Awards. However, in their submission for the hearing of the matter they argued that all employees under the Agreement are, absent the Agreement, covered by the Restaurant Industry Award 2010.

[7] I will return to the issue of which award is more appropriate for the food and beverage/cellar door sales stream later.

[8] There are a number of matters in the Agreement which are beneficial to employees when compared to the relevant Awards, the Wine Industry Award and the Restaurant Industry Award. The most significant beneficial terms are higher rates on Saturday (150% versus 125%), income protection insurance for those with more than 12 months service, and significantly enhanced redundancy benefits for longer serving employees.

[9] The classifications in the Agreement cover a range of classifications in the relevant Awards. This is because the Awards provide for progression to a higher level at different points than provided for in the Agreement. I am satisfied that the best matching of Award levels to the Agreement classifications is as follows:

Modern Award Classification	Agreement Classification	Modern Award Rate	Agreement Rate	Percentage Difference
Front of house: Cellar door sales - Wine Industry Award 2010
Grade 1 (note in some cases match may be Grade 2)	Trainee	$17.96	$18.91	5.28%
Grade 2	Level 1	$18.74	$19.48	3.92%
Grade 3	Level 2	$19.51	$22.87	17.24%
Kitchen hand/cook – Restaurant Industry Award 2010
Level 1	Level 1	$18.21	$18.91	3.83%
Level 2	Level 2	$18.91	$19.48	2.99%
Level 3 (Cooks only)	Level 3	$19.56	$22.87	16.94%
Front of house - Restaurant Industry Award 2010
Grade 2	Trainee	$18.91	$18.91	0.00%
Grade 3	Level 1	$19.56	$19.48	-0.43%
Grade 3	Level 2	$19.56	$22.87	16.94%

[10] Under the Wine Industry Award an employee progresses from Grade 1 to Grade 2 after 12 months or less. There is no limit on the time spent as a Trainee under the Agreement. It is therefore possible that a Trainee may in some cases be matched to a Grade 2 employee under the Award. The Trainee rate in the Agreement is only 0.09% higher than the Grade 2 rate in the Award. However, I consider this unlikely given that the Agreement contains detailed provisions to ensure employees are provided with reasonable opportunity to progress to the next level. Under the Restaurant Industry Award an employee who is supplying or dispensing liquor or who has not completed training but is performing general waiting involving both food and drink is classified at Grade 2. This corresponds with the requirements for a Trainee under the Agreement. An employee who performs these duties and has completed necessary training is classified at Grade 3 under the Award and this corresponds with Level 1 under the Agreement.

[11] There are also a number of matters which are detrimental to employees. The most significant of these are the lack of casual conversion clause as provided in the Wine Industry Award, the requirement to attend training and staff meetings for a minimum of two hours pay, the requirement to perform some training without pay and other training at ordinary rates of pay, the significantly wider span of ordinary hours than in the Wine Industry Award (up to 9pm without payment of penalty), meal breaks after six hours rather than five hours, reduced provision for paid breaks when working in excess of 10 hours and when working more than two hours overtime, the lack of adjustment for expense related allowances, the requirement to launder own uniform without reimbursement (a detriment when compared to the Restaurant Industry Award), capacity to change rosters at one day’s notice (a detriment when compared to the Restaurant Industry Award), lack of payment of casual loading on overtime (a detriment when compared to the Wine Industry Award), and less regularity of part time hours than in the Restaurant Award. The minimum engagment period for casuals is better than the Restaurant Industry Award. I am satisfied that given the nature of the business and its rosters the incidence of overtime for casuals will be very low.

[12] I am satisfied that the employees who work in the kitchen classifications under the Agreement are better off overall when compared to the Restaurant Industry Award. The benefits of the higher rates in the Agreement when combined with the other beneficial provisions outweigh the matters which I have identified as detrimental.

[13] The undertaking offered in respect to work after 6pm for cellar door employees resolves any concerns relating to the detriments arising from the span of hours. I am satisfied that when considered overall the more beneficial provisions when balanced against the less beneficial provisions mean that employees who are working front of house/ cellar door sales who would otherwise be under the Wine Industry Award are better off overall except for the issue of Sunday penalty rates. I consider the issue of Sunday penalty rates below.

[14] If the front of house/cellar door sales employees would otherwise be working under the Restaurant Award then I do not consider that the employees classified as Trainee or Level 1 under the Agreement would be better off overall. The benefits for some employees which arise from income protection and improved redundancy do not outweigh the detriments associated with the meal break provisions, the rostering provisions, the training provisions, and the uniform laundry provisions. It is true that if an employee is required to work ordinary hours between 9pm and 10pm under the Agreement they would be entitled to overtime rates whereas under the Award they would not be entitled to extra payment. However, there is nothing in the Agreement which ensures that each employee would regularly receive this benefit.

[15] I now turn to the issue of the Sunday rate. The penalty rate for ordinary hours on Sunday in the Restaurant Award is 150% but the rate in the Wine Industry Award is 200%. In respect to cellar door sales employees covered by the Wine Industry Award I am not satisfied that those employees would be better off overall if they work a significant proportion of their hours on a Sunday. There is nothing in the Agreement which prevents a casual or part time employee being engaged to work solely on a Sunday. An employee working an 8 hour shift on a Sunday would be 4 hours pay worse off than under the Wine Industry Award. Given that the rates of pay are 3.9% above the Award an employee would have to work about 100 hours on Monday to Friday to make up for this shortfall. To overcome the concern it would be necessary to provide an undertaking either to increase the penalty rate on Sunday or to restrict the amount of Sunday work to the equivalent of eight hours every three months.

[16] Pernod says that typical rosters involve 6 hour shifts. We modelled work over 4 weeks based on 72 hours on weekdays and 24 hours on Saturday and 24 hours on Sunday. A grade 1 employee under the Wine Industry Award would earn $2,888.80 for this work whilst under the Agreement a Trainee would earn $2,928.14. The higher rates on Saturday and during the week are sufficient to offset the lower rates on Sunday.

[17] However, the rosters applicable to employees vary over 7 day operation generally between 9am and 9pm. The BOOT cannot be met without some limitation on the proportion of Saturday and Sunday work or some increase in the penalty payment for Sunday.

[18] Returning to the award coverage issue I am satisfied that it is increasingly common for wineries to link cellar door operations with food and beverage services. In some cases the business is principally a food and beverage service and the cellar door sales is only incidental. In these circumstances the Restaurant Industry Award would apply to those who work in the restaurant and also provide assistance with cellar door sales or work some shifts in cellar door sales. In this case I am satisfied that under the Agreement all the front of house workers are required to perform both cellar door sales work and front of house restaurant work. I am satisfied that cellar door sales work is not just incidental to the restaurant work. The revenue figures provided demonstrate this. I am satisfied that in this case the Wine Industry Award 2010 is the best fit – that is, it is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

[19] At the hearing on 16 February 2017 Pernod offered to provide three undertakings, the first two of which had been offered earlier, to the following effect:

● No employee will be engaged to work solely on Sundays.
● Overtime will be paid for cellar door sales work after 6pm.
● The penalty rate for Sunday work will be increased from 150% to 175%.

[20] It is possible to construct a roster scenario where an employee might be disadvantaged in monetary terms which compared to the Wine Industry Award 2010, however, I consider that considering the benefits and the disadvantages overall each employee will be Better Off Overall when compared to the Award taking into account the undertaking provided. All employees are required to work on weekends and as a consequence all employees will receive the benefit of the higher rates applicable for Saturday work along with the higher rates for work during Monday to Friday.

Conclusion

[21] I am satisfied that the problems with this Agreement can be cured by the provision of undertakings. I am satisfied that taken as a whole the undertakings provided do not result in a substantial change to the agreement nor in financial detriment to any employee covered by the Agreement. The bargaining representatives have been consulted. The undertakings are attached.

[22] I am satisfied that the other statutory requirements for the approval of the Agreement have been met.

[23] The Agreement is approved and, in accordance with Section 54 of the Act, will operate from 27 February 2017. The nominal expiry date of the Agreement is 30 June 2019.

COMMISSIONER

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