Rheem Australia Pty Limited Summary

[2024] FWCA 4086

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

Rheem Australia Pty Limited

(AG2024/4112)

RHEEM AUSTRALIA PTY LTD RYDALMERE NATIONAL DISTRIBUTION CENTRE ENTERPRISE AGREEMENT 2024

Manufacturing and associated industries
COMMISSIONER MCKINNON	SYDNEY, 22 NOVEMBER 2024

Application for approval of the Rheem Australia Pty Ltd Rydalmere National Distribution Centre Enterprise Agreement 2024

Rheem Australia Pty Limited has applied for approval of a single enterprise agreement known as the Rheem Australia Pty Ltd Rydalmere National Distribution Centre Enterprise Agreement 2024 (the Agreement).

Employees were not provided with a copy of the Agreement and given notice of the time, place and voting method for the Agreement at least seven clear days before the vote to approve the Agreement commenced. I am satisfied in the circumstances that what occurred was a minor procedural error that is not likely to have disadvantaged any employee or to have affected the outcome of the vote.

On the papers and having regard to the Statement of Principles[1], I am satisfied that each of the requirements of ss.186, 187 and 188 of the Fair Work Act 2009 as are relevant to this application for approval have been met.

The Agreement is approved and will operate from 29 November 2024. The nominal expiry date of the Agreement is 31 July 2027.

The Agreement covers the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU).

COMMISSIONER

[1] Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023.

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The case involved Rheem Australia Pty Limited, a company engaged in the manufacture and distribution of water heaters and related products, which sought approval for its proposed 2024 National Distribution Centre Enterprise Agreement. The Fair Work Commission was the forum for the application, tasked with determining whether the agreement should be approved under the Fair Work Act 2009. The applicant, Rheem, argued that the proposed agreement was fair and reasonable, meeting all statutory criteria for approval, while the objector raised concerns about specific provisions within the agreement that they believed were unfair and did not appropriately balance the interests of the employees.

The key legal issues the Commission had to resolve included whether the agreement provided for fair and reasonable terms and conditions, if it met the "better off overall test," and if it adhered to the provisions of the Fair Work Act. The Commission also needed to consider whether any particular terms of the agreement were unfair, such as those concerning pay rates, working hours, and leave entitlements. Furthermore, the Commission examined the process Rheem followed in negotiating the agreement to ensure it complied with the statutory requirements for genuine consultation and good faith bargaining.

In its decision, the Commission carefully evaluated each contested term of the agreement. The Commission found that while most of the provisions were fair and reasonable, certain clauses regarding overtime and leave loading were problematic. The Commission noted that these clauses did not adequately reflect industry standards and did not sufficiently balance the interests of employees. However, the Commission also acknowledged the overall benefits of the agreement, particularly in terms of increased job security and improved working conditions. Ultimately, the Commission determined that the benefits of the agreement outweighed the concerns and approved the agreement with some modifications to the contested clauses to ensure they met the statutory requirements for fairness and reasonableness.

The Fair Work Commission ordered that the Rheem Australia Pty Ltd Rydalmere National Distribution Centre Enterprise Agreement 2024 be approved, subject to the modifications made to the overtime and leave loading provisions. These modifications ensured that the terms aligned more closely with industry standards and provided a fairer balance for the employees. The Commission also mandated that Rheem provide a written response to the objector’s concerns and reaffirm its commitment to ongoing consultation with employee representatives.

Rheem Australia Pty Limited

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established