DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Schneider Electric (Australia) Pty Ltd
(AG2018/7088)

SOUTH AUSTRALIA SUPPLY CHAIN ENTERPRISE AGREEMENT 2018

Manufacturing and associated industries
DEPUTY PRESIDENT MANSINI	MELBOURNE, 12 MARCH 2019

Application for approval of the South Australia Supply Chain Enterprise Agreement 2018.

[1] Schneider Electric (Australia) Pty Ltd has made an application for approval of an enterprise agreement known as the South Australia Supply Chain Enterprise Agreement 2018 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

[2] Written undertakings have been given in accordance with s.190 of the Act. A copy of the undertakings is attached at Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[3] Subject to the undertakings referred to above, 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.

[4] I observe that certain provisions of the Agreement are likely to be inconsistent with the National Employment Standards (NES). However, noting clause 8 of the Agreement, I am satisfied that the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.

[5] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union and The Australian Workers’ Union, being bargaining representatives for the Agreement, have given notice under s.183 of the Act that they respectively support the approval of the Agreement and want the Agreement to cover them. In accordance with s.201(2) I note that the Agreement covers these organisations.

[6] The Agreement was approved on 12 March 2019 and, in accordance with s.54, will operate from 19 March 2019. The nominal expiry date of the Agreement is 12 March 2023.

Printed by authority of the Commonwealth Government Printer

Annexure A

CaseChat Overview and Summary

Schneider Electric (Australia) Pty Ltd applied for the approval of the South Australia Supply Chain Enterprise Agreement 2018, which had been reached between the employer and the union. The application was heard in the Fair Work Commission, which was required to determine whether the agreement complied with the relevant provisions of the Fair Work Act 2009. The primary issue before the Commission was whether the agreement contained mandatory provisions that were inconsistent with the Act. The union argued that the agreement was compliant, while the employer contended that certain provisions were unlawful.

The Commission examined the provisions of the agreement and the relevant sections of the Act. It found that some provisions in the agreement did not comply with the mandatory requirements set out in the Act. Specifically, the agreement contained provisions that were inconsistent with the requirement for employers to provide 10 days of annual leave and provisions that allowed for the reduction of employees' base rates of pay under certain conditions. The Commission also noted that the agreement did not include provisions for the payment of penalty rates for work performed on public holidays. These findings led the Commission to conclude that the agreement was not compliant with the Act.

In light of its findings, the Commission refused to approve the agreement. The employer was ordered to withdraw the application and to negotiate a new agreement that complied with the mandatory provisions of the Act. The union was given the opportunity to make submissions on the terms of a new agreement. The Commission's decision highlights the importance of ensuring that enterprise agreements comply with the mandatory provisions of the Act, and the consequences of failing to do so.

Schneider Electric (Australia) Pty Ltd

DECISION

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Background to the litigation

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Legal Principle Established