Podium Enterprises Pty Ltd (ATF Richards Family Trust); Tisara (Australia) Pty Ltd

[2012] FWA 3099

[2012] FWA 3099

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Podium Enterprises Pty Ltd (ATF Richards Family Trust); Tisara (Australia) Pty Ltd

(AG2012/2938)

CAMPBELLS STORE WORKPLACE AGREEMENT 2011

RETAIL INDUSTRY

DEPUTY PRESIDENT HARRISON

NEWCASTLE, 16 APRIL 2012

Application for approval of the Campbells Store Workplace Agreement 2011.

[1] This is an application for approval of an enterprise agreement filed by reSolutions@Work as bargaining agent for the employers, Podium Enterprises Pty Ltd (ATF Richards Family Trust) & Tisara (Australia) Pty Ltd.

[2] The agreement, titled “Campbells Store Workplace Agreement 2011”, is to cover employees of the employers.

[3] The agreement does not include a scope of application provision to inform the location or type of work to be undertaken.

[4] The agreement is proposed to operate for four years and to continue thereafter until terminated or replaced, to the exclusion of any previous agreement or applicable award in their entirety.

[5] There is no information of a previous agreement. The application nominates the primary activity of the employer as “Retail Trading”. The awards identified as applicable are:

● The General Retail Industry Award 2010 in respect of shop employees, (the “Retail Award”) and
● The Clerks Private Sector Award 2010 for clerical staff (the “Clerks Award”).

[6] On 1 February 2012 the bargaining agent for the employers was asked to provide better and further particulars in respect to a number of issued identified in correspondence. A reply was received on 6 February 2012.

[7] On 16 February 2012 the bargaining agent was advised that the agreement would not be approved as it did not satisfy the better off overall test and contained some internal ambiguities which could not be resolved by undertakings.

[8] Reasons for refusal to approve the agreement are set out herein.

Bargaining and Approval Process

[9] The bargaining and voting process remains unclear from the agreement and the supporting material provided.

[10] In response to inquiry the bargaining agent for the employer confirmed that no employee responded to the invitation contained in the Notice of Representational Rights issued by the employer to appoint a bargaining agent. There is no evidence of any negotiation in respect to the proposed agreement.

[11] It is not mandatory for employees to appoint a bargaining agent, however, in circumstances where no employee does so the obligation upon the employer to provide information and explanation to employees, so identified in S180(6)(c) of the FW Act, must be considered in accordance with S180(5)(b):

180(5) The employer must take all reasonable steps to ensure that:

... ...

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

180(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

... ...

(c) employees who did not have a bargaining representative for the agreement.

On the information before me, or more to the point the lack thereof, I cannot be satisfied that the requirements of S180(2) and 180(3) have been met.

[12] S180(2) provides:

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

[13] The application states that following the issue of the last Notice of Representational Rights on 22 September 2011, voting commenced on 7 December 2011 and concluded on 21 December 2011.

[14] The application describes the events from 22 September 2011 to 7 December 2011 at point 2.6 as a meeting between all employees and the bargaining agent of the employer to explain the proposed agreement and Notice of Representational Rights. It is put that every employee was given ample opportunity to question the content of the document.

[15] The application further advises at point 2.4 that:

“A further copy of the proposed agreement was given to all employees at least fourteen days following a meeting with the employers bargaining representative. Employees were advised of the process for the negotiation of the agreement at that meeting and advised of the method and timing of the ballot to accept or reject the proposed agreement.”

[16] Further, at 2.5 the application states:

“All employees were reminded by the employer a number of times in the two weeks prior that a secret ballot would be held over the course of fourteen days to enable all employees the opportunity to participate in the ballot.”

[17] The application does not identify the ballot process or by whom it was conducted.

[18] The opportunity to ask questions does not, in my view, discharge the employers obligation under S180(2) to take all reasonable steps to ensure that employees are provided with or have access to material incorporated by reference in the agreement. Nor does it discharge the obligation pursuant to S180(5) to explain the terms and effect of the agreement having regard to the needs and circumstances of unrepresented employees as identified in S180(6).

[19] I am unable to reach the necessary conclusion that the agreement has been generally agreed to.

Classifications/Job Levels and Wage Rates

[20] Part 3 of the agreement makes provision for job levels and wage rates which are inconsistent and inferior to the Awards and apply at the discretion of management.

[21] The Retail Award provides for eight levels of retail employee, Part 4 Clauses 16,17 and 18, as defined in Schedule B, and junior rates from under 16 years of age to 20 years of age.

[22] The Clerks Award provides for three levels of clerical employee with three annual incremented steps in Level 1 and two annual incremented steps in Level 2, Clause 15, 16 as defined in Schedule B.

[23] The agreement proposes only junior rates and one level of retail employee and one level of clerical employee.

[24] Clause 3.1 of the agreement affords management the right to appoint employees to a job level set out in the agreement. The agreement does not include a definition of its classifications, nor is any evidence or information provided to determine the scope of work undertaken so as to allow comparison with the definitions within the award/s.

[25] The agreement provides at 3.1.2 that Level 1 Shop Employee will apply when the employee has acquired the competency to perform the tasks assigned to this level. The agreement does not specify the tasks or how or by whom competency is determined.

[26] Clause 3.1.1 of the agreement provides that employees with no previous experience in the company’s operation, or employees under 20 years of age carrying out the functions set out in levels 1 or 2, will be appointed to the Introductory/Junior/Trainee Level and will remain at that level for three months or while undertaking the training or are 20 years old whichever is the greater.

[27] Clause 3.2 Wages of the agreement provides a rate of pay for only one level of retail worker, not two as referred to in Clause 3.1.1 which is an ambiguity or oversight not capable of rectification by undertaking.

[28] The requirement to remain at the introductory level while training or until the employee is 20 years old is, I conclude, a way of saying that all employees will be paid at their respective age levels until 20 years old, and will not be paid as a level one Retail Worker until they are over 20 and trained to the satisfaction of the employer.

[29] This is supported by Clause 3.3.2 of the agreement which provides that any employee engaged by the Company to undertake a structured training course will be paid the trainee rate which is equivalent to the 20 year old rate.

[30] The wording of the provision allows appointment of persons over 20 years of age at the 20 year old age rate for a minimum of 3 months or until they have completed training which is undefined by the agreement. The result is the potential for an adult over 21 years of age to be paid at the 20 year old junior rate at the employers’ discretion.

[31] The agreement provides only one level of Clerical Employee, defined in the agreement as an employee required to undertake clerical duties consistent with the Level 2 Classification contained in the Clerks’ Award. The full definition of the Clerks Award is not used.

Rates of Pay

Retail

[32] The agreement provides hourly rates only for Full and Part Time Employees, Casuals and a Loaded Rate.

[33] The Loaded Hourly Rate is defined at clause 1.2 Definitions of the Agreement to be the flat hourly rate of pay paid to an employee who is rostered to work up to 38 hours per week, Monday to Sunday, and is inclusive of four public holidays.

[34] Further and better particulars were sought from the employers’ bargaining agent who provided a calculation table which starts with Weekly Rates for employees covered by the Retail Award as:

Level 1 647.30 per week

Level 2 662.80 per week

[35] These are the same amounts prescribed by the award for Level 1 and Level 2 with effect from 1 July 2011.

[36] There is no advantage to the employees in these wage rates and accordingly nothing to offset any of the disadvantages referred to elsewhere in this decision in application of the Better Off Overall Test.

[37] I note that while the explanatory documents provide information in respect to Level 2 and there is mention of Level 2 in the agreement, there is no schedule of rates for Part Time/Full Time, Casual or Loaded in the agreement.

Casuals

[38] Clause 1.2 Definition of the agreement provides that an allowance of 25% is paid in lieu of sick leave, annual leave and other forms of paid leave included in the agreement. There is no distinction between Retail and Clerical Employees.

[39] The Retail Award at Clause 13.2 provides for payment of an additional 25%. The Clerks Award provides at clause 12 that a casual employee be paid 1/38th of the weekly rate prescribed for the class of work plus 25%, instead of entitlements to leave and other matters from which casuals are excluded by the terms of the award and the NES.

Leave

[40] The agreement provides for:

(i) Personal Leave

(ii) Long Service Leave

(iii) Community Service Leave

(iv) Parental Leave

(v) Bereavement Leave

[41] Section 67(2) generally excludes a casual employee from leave other than unpaid pre-adoption leave, however, if the casual engagement satisfies a set of exceptions detailed in Section 67(2), based substantially around long term casual employment and reasonable expectation of continuing employment on a regular and systemic basis, an entitlement will arise.

[42] There is a tension between the agreement and the NES which prevents approval in the current form.

Minimum Engagement

[43] Clause 13.4 of the Retail Award provides for a 3 hour minimum engagement or 1 hour 30 minutes in circumstances of a full time secondary school student in certain circumstances.

[44] Clause 4.2.3 of the agreement provides for a maximum of 10 hours per day for casual employees. There is no provision for a minimum engagement which is a disadvantage to the employee compared to the award.

Part Time Employees

[45] Clause 12 of the Retail Award provides specific arrangements for Part-time employees in the following terms:

12.7 A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed. All time worked in excess of the hours as agreed under clause 12.2 or varied under clause 12.3 will be overtime and paid for at the rates prescribed in clause 29.2 - Overtime.

[46] Clause 4.2.1 of the agreement allows part time employees to agree to work up to 38 hours per week over the seven days of the week Monday to Sunday averaged over a period of four weeks.

[47] The ability to work up to 38 hours per week allows the part time employee to work 38 hours per week which is inconsistent with Clause 12.1 of the award which provides that a part time employee is one who works less than 38 hours per week and has reasonably predictable hours of work.

[48] There is further tension between the terms of this agreement and Division 3 of the NES which regulates minimum weekly hours.

[49] Sections 63 and 64 of the FW Act allow for averaging of weekly hours subject to a requirement that the arrangements are reasonable.

[50] The agreement makes no reference to the NES, thus seeks to exclude the balancing considerations prescribed therein.

[51] In response to issues raised in correspondence to the applicant, the following was provided:

Cash Out of Annual Leave

“Cl 5.1.6 Cash out of Annual Leave

The company accepts that the clause and s93 of the Act are inconsistent and will provide an undertaking that the cashing out of annual leave will apply consistent with the provisions of s93(2) of the Act.

Payment of Public Holidays

Cl 5.6.5

In the original draft of the agreement, the company did not provide for payment of public holidays within the aggregate rate of pay and therefore, allowed for a day or days to be accumulated and then substituted. Hence the expression “additional day off” which is consistent with the provisions of Cl 5.6.3. If required, the company will provide within the letter of undertaking to remove the application from the agreement.

Overtime

Cl 4.5.4

The clause is clear and concise. All overtime whether authorised or unauthorised which the employer and employee have agreed in writing will be taken as time in lieu, will be paid for at single time. This provision has been approved in the majority of agreements listed in point 3.5 above .

[52] The Agreement provides for inclusion of four public holidays in the loaded hourly rate, then makes further provisions for public holidays which I consider untenable in the form proposed.

Public Holidays

Payment for Public Holidays not Worked

[53] The public holiday provisions are inconsistent with the NES.

[54] The requirement that a Full Time or Part-time employee not required to work on a public holiday is only paid for that public holiday if the employee has already worked four public holidays in the present year is inconsistent with section 116 of the Fair Work Act (FW Act).

Payment for Work on a Public Holiday

[55] The agreement allows for inclusion of payment of four public holidays in the hourly rate and payment for all public holidays worked in excess of the four is acceptable subject to the calculation of the amount to be included in the rate for the four public holidays.

[56] When an employee has worked four public holidays and employment then ceases for any reason, so that the employee does not receive payment for all of the hours included in the divisor for calculating the public holiday payment without provision for reconciliation of the difference in termination pay, the employee will be underpaid for the public holidays worked and accordingly the provision does not satisfy the Better Off Overall Test.

[57] The Retail Award prescribes Payment for Public Holidays worked at Clause 29.4(d) as:

Work on a Public Holiday must be compensated by either-

(i) payment at the rate of 150%

(ii) an equivalent day or equivalent time off instead without loss of pay; or

(iii) an additional day or equivalent time as annual leave.

[58] The Clerks Award provides payment for Public Holidays worked at Clause 31.3 at the rate of double time and one half (250%) on either the Public Holiday or a substituted day with a minimum of four hours engagement.

[59] The agreement does not provide the four hour minimum for a Clerical Employee. This is less favorable than the award.

Overtime

[60] Reference is made to agreements which have been approved with a similar overtime provision. This may be so, however, in the context of this application, which offers no offset arrangements for value of overtime or rostering information which would allow application of the Better Off Overall Test, the provision of all overtime as time in lieu at single time is inferior to the provisions of the relevant awards.

[61] I conclude that the agreement is inconsistent with the National Employment Standards and does not meet the Better Off Overall Test.

[62] The agreement also contains a significant internal error in referring to two levels of classification whilst providing rates for only one. This and other inconsistencies are not capable or rectification by undertaking.

[63] I decline to approve the agreement.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<Price code C, PR522297>