Pfd Food Services Pty Ltd T/A Pfd Food Services
[2023] FWCA 216
•20 JANUARY 2023
| [2023] FWCA 216 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Pfd Food Services Pty Ltd T/A Pfd Food Services
(AG2022/5252)
PFD FOOD SERVICE PTY LTD (ROCKHAMPTON) ENTERPRISE AGREEMENT 2022
| Storage services | |
| DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 20 JANUARY 2023 |
Application for approval of an enterprise agreement – BOOT concerns – undertakings accepted – enterprise agreement approved.
Introduction and background
On 14 December 2022, PFD Food Services Pty Ltd (PFD) applied for approval of the PFD Food Services Pty Ltd (Rockhampton) Enterprise Agreement 2022 (Enterprise Agreement), which covers employees of PFD who are employed at or from PFD’s branch in Rockhampton in one of the classifications contained in Appendix C of the Enterprise Agreement, and who perform work in or in connection with any food products and other associated products, including warehousing, driving and clerical work.
PFD has provided undertakings (Undertakings) to address a number of better off overall concerns raised by the Fair Work Commission and the Transport Workers’ Union (TWU). Annexed and marked “A” is a copy of the Undertakings.
The TWU is a bargaining representative for the Enterprise Agreement. The TWU supports approval of the Enterprise Agreement “subject to any required undertakings”.[1] The TWU does not have any outstanding issues in relation to Undertakings 1, 5, 6, 7, 8, 9 and 17. The TWU objects to the balance of the Undertakings.
BOOT – general principles
I must be satisfied that the Enterprise Agreement passes the better off overall test (BOOT) before I can approve it.[2] Section 193(1) of the Fair Work Act 2009 (Cth) (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]
Although the BOOT is a point-in-time test, the “test time does not confine the BOOT analysis to provisions of an agreement that are applicable only at its inception; employees must be better off overall under the agreement, not just better off at test-time”.[4]
In Armacell Australia Pty and Others the application of the BOOT was explained by the Full Bench in the following manner:[5]
“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.”
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.[6] 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.[7]
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.[8]
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.[9]
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]
Undertakings
In accordance with s 190(3) of the Act, I may only exercise my discretion to accept the Undertakings if they meet the concerns I have identified about the requirements set out in sections 186 and 187 and I am satisfied that the effect of accepting the Undertakings is not likely to:
(a)cause financial detriment to any employee covered by the Enterprise Agreement; or
(b)result in substantial changes to the Enterprise Agreement.
The Undertakings to which objection has been made by the TWU relate to concerns identified in relation to various ways in which one or more employees may not, in particular circumstances, be better off overall under the Enterprise Agreement compared to the relevant award. PFD has given Undertakings that, if the particular circumstances which have been identified occur in a particular week, it will conduct a reconciliation to establish what the relevant employee(s) would have been paid under the relevant award in respect of that week and compare that amount to the amount paid to the employee(s) under the Enterprise Agreement, and if any shortfall is found, the employee(s) will be back paid the shortfall in the next pay period, plus an additional 1% of the difference as compensation.
The TWU submits that the Undertakings to which they object do not provide for the Enterprise Agreement to pass the BOOT at the time of the Enterprise Agreement being made, and they are likely to cause financial detriment to the employees covered by the Enterprise Agreement. I disagree.
If accepted, the Undertakings are taken to be a term of the Enterprise Agreement (s 191(1) of the Act). In the event that the circumstances identified to PFD as potential areas of concern arise, PFD will be obliged by the Undertakings to conduct reconciliations within a short period of time and then, in the next pay period, compensate affected employees by paying them the shortfall plus an additional 1% of the difference as compensation. In my view, this will ensure that the employees (including prospective employees) covered by the Enterprise Agreement will, at all times during the operation of the Enterprise Agreement, be better off overall under the Enterprise Agreement compared to the relevant award. It follows that the Undertakings will not cause financial detriment to the employees covered by the Enterprise Agreement.
Having regard to the terms of the Enterprise Agreement, including those provisions that confer more beneficial entitlements on employees than the relevant award,[11] together with the Undertakings, I am satisfied, as at the test-time, that each employee and prospective employee of PFD who is covered by the Enterprise Agreement would be better off overall if the Enterprise Agreement applied to them than if the relevant award applied to them. For the same reasons, I am also satisfied that the Undertakings meet the BOOT concerns identified.
As to whether the effect of accepting the Undertakings would be likely to result in substantial changes to the Enterprise Agreement, it is necessary to consider the number and breadth of the Undertakings.[12]
Having carefully considered each of the Undertakings individually and collectively, I am satisfied that the effect of accepting them would not be likely to result in substantial changes to the Enterprise Agreement. For the most part, they only have work to do in particular factual circumstances and then only if those circumstances result in one or more employees earning less under the Enterprise Agreement than they would have under the relevant award.
Pursuant to subsection 190 of the Act, I exercise my discretion to accept the Undertakings.
Satisfaction of other requirements
Subject to the Undertakings, I am satisfied that each of the requirements of ss 186, 187, 188 and 190 as are relevant to this application for approval have been met.
The Transport Workers’ Union of Australia, 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.
The Enterprise Agreement is approved and, in accordance with s 54 of the Act, will operate from 27 January 2023. The nominal expiry date of the Enterprise Agreement is 31 August 2026.
DEPUTY PRESIDENT
Annexure A
[1] Form F18 filed by the TWU
[2] s.186(2)(d) of the Act
[3] s.193(6) of the Act
[4] Nursing and Midwifery Federation v Domain Aged Care (Qld) Pty Ltd (t/as Opal Aged Care)[2019] FWCFB 1716 at [27]
[5] [2010] FWAFB 9985 at [41]
[6] SDA v Beechworth Bakery Employee Co Pty Ltd[2017] FWCFB 1664 at [12]
[7] 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]
[8] TWU v Jarman Ace Pty Ltd[2014] FWCFB 7097 at [28]
[9] Loaded Rates Agreements [2018] FWCFB 3610 at [100]
[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] See the answer to question 10 in the Form F17 filed by PFD
[12] ALDI Foods Pty Ltd v TWU[2012] FWCFB 9298 at [54]
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