Shop, Distributive and Allied Employees Association

[2016] FWC 8089

[2016] FWC 8089

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.238—Scope order

Shop, Distributive and Allied Employees Association
(B2016/735)

COMMISSIONER WILLIAMS PERTH, 10 NOVEMBER 2016

Application for a scope order.

[1] This decision concerns an application made by the Shop, Distributive and Allied Employees Association (SDA) for a scope order under section 238 of the Fair Work Act 2009 (the Act). The respondent to the application is Inghams Enterprises Pty Ltd (Inghams).

Background

[2] Inghams is in the industry of poultry processing.

[3] Currently in Western Australia Inghams has two operational sites; one at Osborne Park and another at Hazelmere. The Osborne Park operations involve employees working in either processing or distribution roles. The Hazelmere operations involve employees working either in distribution roles or as weigh/label employees.

[4] Inghams currently has two enterprise agreements covering employees in these operations one being the Inghams Enterprises Osborne Park and Hazelmere Enterprise Agreement 2013 [AE401516] (the Processing Agreement) and the other being the Inghams Enterprises Pty Ltd WA Distribution Enterprise Agreement 2012 [AE899769] (the Distribution Agreement).

[5] The Processing Agreement covers employees engaged in processing roles at Osborne Park and weigh/label employees at Hazelmere.

[6] The Distribution Agreement covers employees engaged in distribution roles both at Osborne Park and at Hazelmere.

[7] Both agreements have passed their nominal expiry dates.

[8] The National Union of Workers (NUW) has members who are engaged in processing roles and is currently in negotiations with Inghams for a replacement Processing Agreement.

[9] The SDA has members who are engaged in distribution roles or are weigh/label employees and is currently in negotiations with Inghams for a replacement Distribution Agreement.

[10] The application seeks a scope order that would have the effect of expanding the scope of the replacement Distribution Agreement to include coverage of weigh/label employees. The group of employees who would be covered by the agreement proposed to be specified in the scope order is the group of employees comprising distribution employees working at Osborne Park and Hazelmere and weigh/label employees.

[11] At the hearing of this matter evidence was given for the SDA by Mr Benjamin Harris (Mr Harris) the General Assistant Secretary of the SDA in Western Australia and bargaining representative for the SDA and Mr Suliman Ali (Mr Ali) an Organiser of the SDA responsible for organising the Inghams operations in Western Australia. Evidence for Inghams was given by Mr David Story (Mr Story) Inghams’ Industrial Relations Manager, Mr Daniel Fox (Mr Fox) Inghams’ WA Operations Manager and Mr Ricky Patel (Mr Patel) Inghams’ WA Distribution Manager.

Factual findings

[12] In addition to the Osborne Park and Hazelmere operations Inghams in Western Australia also has at other locations a feed mill, hatchery and farm sites.

[13] In total there are eight separate enterprise agreements covering these sites. These agreements have coverage along functional lines for processing, distribution, maintenance, security and breeder farms. Inghams maintains a separate national accounting structure and cost centres for each functional division.

[14] In addition to approximately 200 processing employees at Osborne Park there are also maintenance and distribution employees.

[15] The Hazelmere site is primarily a distribution centre but also has the weigh/label employees whom Inghams views as processing employees.

[16] Mr Fox is based at Osborne Park and Mr Patel at Hazelmere.

[17] Whilst Mr Fox is the Operations Manager and responsible for processing operations he is also responsible for all of the employees at Osborne Park for day-to-day matters and similarly whilst Mr Patel is the Distribution Manager he is responsible for all of the employees at Hazelmere, including the weigh/label employees, for day-to-day matters.

[18] Osborne Park is primarily a processing facility where live chickens are brought in for processing. They are slaughtered and processed through to becoming a packaged product. Processing involves strict quality controls and audit requirements imposed both by legislation and Inghams customers.

[19] Inghams view is that the weigh/labelling process is the final, and an essential, quality check point in the processing procedure before the product is passed for distribution to customers. This is an essential part of Inghams’ quality assurance program.

[20] Weigh/label employees weigh and price poultry products and ensure the products in packaging is correctly labelled in terms of weight, price and any allergens contained in the product. Prices vary from time to time for a number of reasons and are determined by national sales and marketing divisions. A national operator has control via the Internet to all weigh/label machines to adjust price and weight allowances.

[21] Incorrect weighing and labelling exposes Inghams to heavy legal and commercial penalties. It also poses significant risks to Inghams’ brand and public image. Incorrect allergen labelling for example could have significant costs and risks for the public involving a major recall of product.

[22] By comparison there are very little quality assurance processes in distribution. Distribution employees are responsible for picking and packing products. They have no control over the inside packaging. The only real control process is managing temperature checks. Distribution employees have no responsibility for product pricing.

[23] Approximately three years ago Inghams moved the weigh/label employees from Osborne Park to Hazelmere due to the availability of a space with a good layout for a weigh/label room at Hazelmere.

[24] However the evidence is that currently Inghams are upgrading and refurbishing a room at Osborne Park which will be for value added product and to provide allergen control and separation. This is likely to include space for weigh/labelling to be carried out.

[25] This development is the result of new contracts that are being negotiated which are expected to secure significantly increased volumes for the business. These changes would also involve product that has a shorter shelf life. The expected increase in volumes has been recently confirmed and would result in the current number of birds per week being processed at Osborne Park increasing from 207,000 to 420,000 by early or the middle of next year. Whilst contracts have not been finalised it is expected this will happen in the near future. These developments are the culmination of nine months of planning. 1

[26] These changes will mean that in all likelihood some of the weigh/labelling employees will be moved back to Osborne Park in the near future. At Osborne Park this would then mean that after the birds were processed into fillets these would be tray packed onto trays, they would top lid them and then Inghams would have the room on site for the weigh/labellers at the end of that process to put the product into boxes for distributing. 2

[27] The direct consequence of the increased volume of birds being processed at Osborne Park will cause a similar reduction in the volumes of pre-packaged product which currently comes from interstate and is handled at Hazelmere however some weigh/labelling employees would still continue to be engaged at Hazelmere.

[28] These changes at Osborne Park when they occur are likely to also require a change to the hours of work for those weigh/label employees working at Osborne Park. Osborne Park is likely then to be working two shifts processing and so weigh/labellers will need to be working across a longer hours span.

[29] Bargaining for a replacement Processing Agreement commenced in July 2016 and is continuing. Inghams intends the Processing Agreement to cover weigh/label employees. Negotiations are on-going with the NUW and the Australian Manufacturing Workers’ Union as bargaining representatives.

[30] As part of that bargaining Inghams has recently agreed to a $25 per week increase for weigh/label employees in recognition of the fact that all these employees are now trained to operate all relevant machinery which was not historically the case.

[31] Mr Fox expressed concerns that they were currently close to finalising the new Distribution Agreement but if the SDA’s scope order application was successful this would be likely to disrupt those negotiations and potentially cause delay to that agreement being finalised.

[32] The evidence is that in terms of the negotiations for the new Distribution Agreement Inghams have responded to the SDA’s claims and the parties have reached agreement on almost all of the matters to be covered by the new Distribution Agreement with only three issues outstanding one of which is the coverage of weigh/labellers being moved into the new Distribution Agreement. The respondent has dropped a number of its claims for the new Distribution Agreement and conceded a number of the SDA’s claims.

[33] There are approximately 15 weigh/label employees currently at Hazelmere of which 13 are employees of Inghams and two are employed by a labour hire company.

[34] At Hazelmere there are approximately 35 distribution employees.

[35] At Hazelmere pre-packaged product arrives from interstate and from Osborne Park in cardboard boxes on pallets. Inside the cardboard boxes are tray packs which are wrapped and sealed which could be individual chickens, bags of chickens or finished chicken products.

[36] Distribution employees then break down the pallets and a distribution picker will go around the pick bays taking all the specifically required products out which are required for an order and deliver these products for that order to the weigh/label room.

[37] The weigh/labeller will then take every individual product out of the box and they will price and label it.

[38] Distribution employees then pack the order and distribute it to the store.

[39] The weigh/labellers work in a different room from the distribution area at Hazelmere.

[40] On some occasions weigh/labellers at Hazelmere also work in the distribution chamber however this is not part of their ordinary rostered time but is overtime. When they do this work they get paid distribution rates and not their usual weigh/labeller Processing Agreement rates.

[41] Weigh/labellers at Hazelmere generally work Monday to Friday and commence at 8.00 a.m. and finish at 4.30 p.m. However one weigh/label line, involving four employees, has recently been changed and now operates with a start time of 10.20 a.m. This change is a consequence of the volume increasing and was made to avoid going into a lot of overtime when employees were working back later than the original shift times. 3

[42] In early July 2008 Mr Patel had a discussion with Mr Ali about the negotiations and said the company’s position was that the weigh/labelling employees were part of processing work and they had a firm stand on that and that the company wanted the flexibility to use hired workers and would not agree to the union’s on-hired workers claim.

[43] The evidence of Mr Story was that the hours of work for day workers and shift workers in the current Processing Agreement are significantly more flexible than the hours of work in the current Distribution Agreement. Under the Processing Agreement weigh/labeller employee’s ordinary hours for day workers can be worked between 5.00 a.m. and 7.00 p.m. Monday to Saturday where as the equivalent provision under the current Distribution Agreement is 6.00 a.m. to 6.00 p.m. Monday to Friday.

[44] However the hours the weigh/labeller employees currently work at Hazelmere falls within the span of hours currently provided for in the Distribution Agreement.

[45] Wage rates in the current Distribution Agreement including the commencing wage rate for new employees and all subsequent wage rates are significantly higher than the new employee wage rate and all subsequent wage rates under the Processing Agreement.

[46] Given these existing differences, being the less flexible hours of work provision in the current Distribution Agreement and the significantly higher wage rates, Mr Story’s evidence is he would envisage a lengthy bargaining process over these matters if the weigh/labellers were, as a result of granting the SDA’s scope application, to be covered by a new Distribution Agreement.

[47] Since 2013 some weigh/label employees have approached the SDA’s organiser Mr Ali and asked if they could be covered by the Distribution Agreement. Their main concern is that they were getting less money than the distribution employees.

[48] The SDA’s representatives have been involved in negotiations with Inghams over a replacement Distribution Agreement since January 2016. One of the claims at the outset from the SDA was for the weigh/labeller employees to be covered by the new Distribution Agreement.

[49] In early July 2016 Mr Ali encouraged the weigh/label employees to sign a petition in support of a claim for them to be brought under the Distribution Agreement. He was asked if they signed the petition whether that would mean they would receive a pay rise and he advised that if they were covered by the new Distribution Agreement any pay rises would have to be negotiated with Inghams.

[50] Thirteen weigh/labelling employees have signed a petition in early July 2016 which says they no longer wish to be covered by the Processing Agreement and wish Inghams to agree to expand the scope of the new Distribution Agreement to cover them. 4

[51] Inghams did make it clear to the SDA that they would not agree to weigh/label employees being covered by the Distribution Agreement.

[52] The SDA made the application for a scope order in August 2016. Since then the NUW representatives have attended the Hazelmere site.

[53] There have been some meetings between the NUW representatives and weigh/label employees.

[54] Mr Ali has been told by weigh/label employees that the NUW representatives met with them and said that they would receive a $25 pay rise under the new Processing Agreement and also asked the employees to sign a NUW petition.

[55] Twelve weigh/labelling employees have signed a NUW petition on 12 August 2016 which says they withdraw their support for the expansion of the coverage of the Distribution Agreement because their major concern, their work value, has been addressed through negotiations for the Processing Agreement. The petition asks the SDA to cease their action for a scope order as the weigh/label employees no longer support it. 5

[56] The Commission infers that the reference in this NUW petition to the weigh/labellers concern about work value having been addressed is a reference to Inghams agreeing to a $25 per week increase for weigh/labellers in the negotiations of the Distribution Agreement.

[57] It appears that both the SDA and the NUW have coverage under their rules of weigh/label employees. 6

[58] In January 2016 Mr Harris and Mr Ali conducted a series of three meetings only with distribution employees at the Osborne Park and Hazelmere sites to develop a log of claims for negotiation of the new Distribution Agreement. The evidence of Mr Harris which I accept is that at those meetings there seemed to be support for the SDA’s scope claim that the new Distribution Agreement cover weigh/label employees.

[59] The evidence of Mr Harris is the SDA has not sought to retest whether the distribution employees continue to support the SDA’s scope claim however feedback from the bargaining team did not indicate that there had been a loss of support for this amongst distribution employees.

[60] On 14 July 2016 Mr Harris wrote to Inghams setting out his concerns that bargaining was not proceeding efficiently or fairly because they were unwilling to expand the scope of the new Distribution Agreement to cover weigh/label employees. The letter requested a response within two weeks. On 29 July 2016 Inghams responded in writing to the SDA disagreeing that bargaining was not proceeding efficiently or fairly and confirming that Inghams would not agree to the SDA’s scope claim.

[61] On 15 August 2016 Mr Harris was in attendance at Inghams’ premises for further agreement negotiations. He requested that he and Mr Ali meet with the weigh/label employees to determine for themselves whether they continued to support the SDA’s scope claim. Mr Patel advised that they could talk to the weigh/label employees during their 10 minute break at 3.00 p.m.

[62] At 3.00 p.m. Mr Harris and Mr Ali had discussions with the weigh/label employees. For a period an NUW Organiser stood in the break room and observed them until Mr Harris told him to walk away as they were holding private conversations with the employees. The NUW Organiser then left.

[63] The evidence of Mr Harris is that from those discussions and other feedback he had received from Mr Ali since then he has formed the view that there continued to be support for the SDA’s scope claim.

[64] Representatives of the NUW have attended a number of meetings for the negotiation of the replacement Distribution Agreement as bargaining representatives.

[65] One of the consequences of the SDA pursuing the scope clause is that the inability of the parties to agree on this has delayed finalisation of the Distribution Agreement.

[66] Mr Harris’s evidence which I accept is that from the outset in the negotiations the SDA indicated it would be open to creating a new classification for the weigh/labellers in the Distribution Agreement which would not involve any higher wages for the weigh/labellers for the life of any new agreement. Pay equalisation for weigh/labellers would only be pursued over the longer term. 7

[67] During the negotiations Inghams has not put to the SDA that they intend to change the hours of work of weigh/label employees.

Legislation

[68] Section 238 of the Act concerns scope orders and is set out below.

“238 Scope orders

Bargaining representatives may apply for scope orders

(1) A bargaining representative for a proposed single-enterprise agreement (other than a greenfields agreement) may apply to the FWC for an order (a scope order) under this section if:

(a) the bargaining representative has concerns that bargaining for the agreement is not proceeding efficiently or fairly; and

(b) the reason for this is that the bargaining representative considers that the agreement will not cover appropriate employees, or will cover employees that it is not appropriate for the agreement to cover.

No scope order if a single interest employer authorisation is in operation

(2) Despite subsection (1), the bargaining representative must not apply for the scope order if a single interest employer authorisation is in operation in relation to the agreement.

Bargaining representative to give notice of concerns

(3) The bargaining representative may only apply for the scope order if the bargaining representative:

(a) has taken all reasonable steps to give a written notice setting out the concerns referred to in subsection (1) to the relevant bargaining representatives for the agreement; and

(b) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(c) considers that the relevant bargaining representatives have not responded appropriately.

When the FWC may make scope order

(4) The FWC may make the scope order if the FWC is satisfied:

(a) that the bargaining representative who made the application has met, or is meeting, the good faith bargaining requirements; and

(b) that making the order will promote the fair and efficient conduct of bargaining; and

(c) that the group of employees who will be covered by the agreement proposed to be specified in the scope order was fairly chosen; and

(d) it is reasonable in all the circumstances to make the order.

Matters which the FWC must take into account

(4A) If the agreement proposed to be specified in the scope order will not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding for the purposes of paragraph (4)(c) whether the group of employees who will be covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.

Scope order must specify employer and employees to be covered

(5) The scope order must specify, in relation to a proposed single-enterprise agreement:

(a) the employer, or employers, that will be covered by the agreement; and

(b) the employees who will be covered by the agreement.

Scope order must be in accordance with this section etc.

(6) The scope order:

(a) must be in accordance with this section; and

(b) may relate to more than one proposed single-enterprise agreement.

Orders etc. that the FWC may make

(7) If the FWC makes the scope order, the FWC may also:

(a) amend any existing bargaining orders; and

(b) make or vary such other orders (such as protected action ballot orders), determinations or other instruments made by the FWC, or take such other actions, as the FWC considers appropriate.”

The SDA’s submissions

[69] The SDA submit that the facts of this matter demonstrate the requirements of section 238(1), (2) and (3) of the Act have been met in this case.

[70] The SDA submit that making the order will promote the fair and efficient conduct of bargaining.

[71] The SDA submits that the Commission should infer from the evidence that since the SDA’s application was filed Inghams and the NUW have been working together to resist the application.

[72] It is submitted that a scope order would encourage the fair progression and advancement of negotiations. It would overcome Inghams’ unwillingness to agree to the coverage of its agreement to reflect the current state of its operations or to consider the wishes of its employees and a scope order would overcome the unfairness of Inghams and the NUW working together to resist the application.

[73] A scope order would encourage the efficient progression and advancement of negotiations because it would remove the impasse or sticking point which has and will continue to prevent the parties from reaching agreement. It will also allow the parties to focus on the resolution of other outstanding claims.

[74] The SDA reject Inghams’ arguments that if the scope order was granted bargaining for the new Distribution Agreement would in effect need to begin again. The interests of weigh/label employees should already be known to Inghams through their negotiations with the NUW for the replacement Processing Agreement and Inghams have already offered the weigh/label employees an additional $25 per week which could be inserted into the new Distribution Agreement.

[75] The SDA submits that the group of employees to be specified in the scope order has been fairly chosen. It is submitted that whether or not they are geographically, operationally or organisationally distinct is not a decisive matter it is to be given due weight having regard to the circumstances. If the group is geographically, operationally or organisationally distinct that favours a finding that the group was fairly chosen and if it is not geographically, operationally or organisationally distinct that favours a finding that the group is not fairly chosen. 8

[76] It is submitted that the SDA’s proposed group taken as a whole is not geographically distinct.

[77] However it is submitted that the SDA’s proposed group are involved in distribution and are operationally distinct from the processing employees because processing employees are situated in a dedicated processing facility in Osborne Park which is separated by a wall from the distribution operations there.

[78] The SDA submits that the weigh/labelling work undertaken at Hazelmere should properly be characterised as distribution work because it involves handling boxes and applying labels but involves no slaughtering or processing of chicken.

[79] If the Commission concludes that the weigh/label employees are neither clearly distribution nor processing employees but rather are operating at the boundary between these two phases of Inghams’ operations then that does not mean that the SDA’s proposed group is not fairly chosen.

[80] It is submitted that the SDA’s proposed group is also organisationally distinct from the processing employees. Currently at Hazelmere the weigh/label employees report to a Supervisor who reports to the Distribution Manager. This separates them organisationally from the processing employees who report to the Processing Manager.

[81] It is submitted the Commission should be satisfied that the SDA’s proposed group taken as a whole is operationally and organisationally distinct from the Osborne Park processing employees and on that basis is fairly chosen.

[82] The Commission can be satisfied that there is support for the scope claim among distribution and weigh/label employees based on the evidence of Mr Ali and Mr Harris and also based on the signed petition in support of the application.

[83] The SDA notes the existence of the NUW petition signed by weigh/label employees but submit little weight should be given to this in circumstances where it is alleged employees were asked to sign in the presence of their Supervisor at a meeting during paid company time facilitated by that Supervisor.

[84] The SDA submits the proposed order would have little or no adverse consequences on the processing employees at Osborne Park. The concerns raised by Inghams as to the impact on negotiations the SDA submit are either inventions or exaggerated positions designed to thwart this scope order application. The evidence is that Mr Harris the bargaining representative for the SDA has at all times been willing to compromise and seriously consider the company’s claims and remains ready to do so in future negotiations.

[85] The SDA submit it is reasonable in the circumstances to make the order. Firstly since the Distribution Agreement was approved there has been a change in Inghams’ operational and organisational structure such that the weigh/label employees have been relocated to its distribution operations in Hazelmere. These employees now work within Inghams’ distribution structure. Given these changes have occurred it is therefore reasonable to disturb the status quo of agreement arrangements and make the scope order.

[86] With respect to the evidence of Mr Fox that more likely than not there will in the near future be weigh/labellers working at Osborne Park the SDA submits that the application is based on the matters that are known to the parties. If the arrangements do change in future then it is open for Inghams to apply for its own scope order.

[87] The SDA submits the Commission should exercise its discretion to make the order.

Inghams’ submissions

[88] Inghams submits that the group of employees specified in the proposed scope order are not fairly chosen on the basis that the weigh/labeller employees are not involved in distribution work. It is submitted that the scope of the proposed new Distribution Agreement, if this application was granted, would cover employees who are not operationally or organisationally distinct.

[89] It is submitted that the scope of the current Processing Agreement which covers weigh/labellers covers groups of employees that are appropriately chosen along distinct and rational operational lines which Inghams prefers for the future.

[90] Inghams submits the evidence of their Managers demonstrates that weigh/labeller employees fit squarely within Inghams’ processing operations and not its distribution operations. Their work is distinct from the functions of distribution employees.

[91] The Commission should conclude that the weigh/labelling employees and the distribution employees if they were one group would not be operationally distinct as the group covers a mixture of processing and distribution functions. Rather the weigh/labelling employees taken together with the processing employees are operationally distinct as they are all engaged in processing functions.

[92] The group proposed by the SDA’s scope order is not geographically distinct nor is it organisationally distinct.

[93] The Commission should therefore conclude that the group proposed by the SDA’s scope order is therefore not fairly chosen.

[94] Inghams’ view is the views of the weigh/labeller employees is a neutral consideration however there is no evidence before the Commission as to the views of the other affected employees; the processing and distribution employees.

[95] The Commission should not be satisfied that granting the SDA’s application will mean that the bargaining between the parties will be fairer or more efficient.

[96] To date with respect to the new Distribution Agreement the evidence is that bargaining is proceeding fairly and efficiently. SDA claims have been considered, responded to by Inghams and the parties have reached agreement on almost all of the matters to be covered by the new Distribution Agreement with only three issues outstanding one which is the scope. Inghams has dropped a number of its claims for the new Distribution Agreement and has conceded a number of the SDA’s claims.

[97] If the scope order was made bargaining would be less fair and less efficient because the negotiations for the new Distribution Agreement will effectively need to begin again which will cause a delay to the disadvantage of Inghams’ employees.

[98] The Commission should also be cognisant of the long-standing historical practice of Inghams, in conjunction with the employee bargaining representatives, to regard weigh/label employees as being part of the processing function.

[99] Granting this application would be a significant departure from Inghams’ preferred and historical practice and Inghams would then be required to treat weigh/labellers in Western Australia differently than in other states.

Consideration

[100] Considering the requirements of section 238 of the Act I am satisfied that to the extent they are applicable subsections 238(1), (2) and (3) have been satisfied.

[101] The tests for making a scope order that the Commission must apply our provided for in subsection 238(4) of the Act.

[102] Firstly it is not suggested otherwise and I am satisfied that the SDA has met, or is meeting, the good faith bargaining requirements.

Will making the scope order promote the fair and efficient conduct of bargaining?

[103] The evidence as to the bargaining to date for the new Distribution Agreement demonstrates that the process has been quite normal. A number of meetings have been held, claims have been made by either side some of which have been agreed to and some of which have not.

[104] It is not apparent from the evidence that the conduct of bargaining to date has been unfair or inefficient.

[105] However the SDA submits that making the scope order will remove the sticking point which is preventing the parties conclude bargaining for the new Distribution Agreement. It is submitted that bargaining currently is not proceeding because the parties are at an impasse on the issue of the new Distribution Agreement’s scope. Whilst this is correct it cannot be ignored that this state of affairs has only come about as a consequence of the SDA putting forward a claim for a different scope which Inghams does not agree to.

[106] Whilst making this scope order may arguably promote the efficient conduct of bargaining because it removes the source of the impasse and allows bargaining to recommence it is equally the case that dismissing this application for the scope order will remove the impediment to continued bargaining and so achieves the same result. Whilst one element of the statutory precondition in subsection 238(4)(b) of the Act is satisfied by this argument from the SDA that the scope order should be made because this will prevent the SDA’s claim for a different scope interfering with bargaining this is not in my view a persuasive reason why the Commission should exercise the discretion it has to make a scope order. To reward a party making a claim that the second party rejects with a decision in favour of the first party’s claim simply to remove the rejection of that claim from blocking further negotiations unfairly assists the first party which made the claim to the detriment of the second party and so in my view would offend subsection 238(4)(d) of the Act because this approach in isolation would not be reasonable.

[107] Inghams have submitted that making the scope order will create inefficiency in the bargaining for the new Distribution Agreement and the new Processing Agreement.

[108] The evidence discloses that the terms of the two current agreements are different with respect to hours of work. If the SDA’s application was granted then weigh/labellers would be covered by the new Distribution Agreement which is currently being negotiated. To date the negotiations for the Distribution Agreement have not had to address the different hours arrangements that apply to weigh/labellers which are found in the Processing Agreement. Inghams submit that if the scope order was granted this would necessitate the company pursuing in negotiations additional matters they would see as necessary to be incorporated into the new Distribution Agreement to accommodate the manner in which Inghams is potentially going to want to have their weigh/labellers work in future, both at Hazelmere and at Osborne Park. Inghams submit that the current Distribution Agreement would not satisfactorily accommodate these work arrangements due to the fact that the existing Distribution Agreement and Processing Agreement have different hours provisions.

[109] The evidence discloses that weigh/labellers are very likely to be working at Osborne Park in the future in order to handle the expansion of processing volume the company expects to come about. Whilst I accept these changes are not guaranteed I am satisfied on the evidence that they are very likely to occur and so quite properly are considerations for the Commission in determining this application.

[110] Central to Inghams’ concerns then would be negotiating an appropriate span of hours and other arrangements for weigh/labellers under the terms of the new Distribution Agreement which would be significantly different from the hours arrangements in the current Distribution Agreement. Whilst it might be the case that the weigh/labellers would be readily willing to incorporate the equivalent of the hours arrangements that exist in the current Processing Agreement for them into the new Distribution Agreement the attitude of the other distribution employees to these changed hours being included in an agreement covering them is unknown. There is the possibility for example that some distribution employees might be concerned about incorporating these different hours arrangements into their agreement which could be viewed as a precedent that may have impact on them in the future. Consequently Inghams argue that changing the scope of the Distribution Agreement risks matters that are settled in the current Processing Agreement for weigh/labellers becoming a source of dispute if Inghams seeks to have similar provisions incorporated into the Distribution Agreement.

[111] Given the current differences between the Processing Agreement and the Distribution Agreement I do accept that making this scope order in these circumstances may potentially be a source of further delays in finalising negotiations for the new Distribution Agreement. Consequently I am satisfied that making the scope order would not in these circumstances promote the efficient conduct of bargaining.

[112] Overall I am not satisfied that making the order will promote the fair and efficient conduct of bargaining.

Has the group of employees who will be covered by the agreement proposed to be specified in the scope order been fairly chosen?

[113] There was considerable debate between the parties as to whether weigh/labeller employees should be viewed as part of the processing function or rather part of the distribution function.

[114] It seems to me that considering the existing operations of Inghams in Western Australia a different conclusion on this question is likely to be reached dependent upon whether one is considering the existing Osborne Park operations or the existing Hazelmere operations.

[115] In my view the evidence discloses that weigh/labellers as they were previously employed at Osborne Park could reasonably be said to be the last step in the processing function. However at Hazelmere as the work is currently carried out it could be reasonably said that the weigh/labellers are the first step in the distribution function. In effect the weigh/labellers seem to be the interface between processing and distribution. In the circumstances of the Western Australian operations I do not think that the weigh/labeller employees can be absolutely said to be undertaking processing or distribution functions.

[116] Considering specifically the question of whether the group of employees who would be covered by the scope order have been fairly chosen it needs to be remembered that this group of employees referred to in subsection 238(4)(c) of the Act in the circumstances here is the group of employees made up of the distribution employees working both at Osborne Park and Hazelmere and the weigh/labeller employees noting that these currently only work at Hazelmere but may in future also work at Osborne Park (the Chosen Group).

[117] Turning to consider the specific issues of whether the Chosen Group is geographically, operationally or organisationally distinct as provided for in subsection 238(4)(c) of the Act, it is not disputed that these employees work both at Osborne Park and Hazelmere and so I find they are not geographically distinct.

[118] The SDA argues in effect that because the weigh/labellers are properly viewed as distribution employees then taken together with the other distribution employees, both those at Hazelmere and it Osborne Park; the Chosen Group are operationally and organisationally distinct. As I have found above I do not accept the SDA’s argument that the weigh/labeller employees can only be characterised as undertaking a distribution function and not a processing function. In my view as a consequence the Chosen Group cannot be said to be operationally or organisationally distinct based on a characterisation of their function as being distribution.

[119] In terms of how Inghams manages the employees the evidence is that there is one Manager based at Osborne Park who has responsibility for the processing employees at Osborne Park together with the weigh/labeller employees at Hazelmere whilst a different Manager based at Hazelmere has responsibility for the distribution employees both at Osborne Park and Hazelmere. There is however some crossover in management of these employees because these respective Managers each on a day-to-day basis do provide some managerial oversight of the group employees at their respective geographical locations, whether Osborne Park or Hazelmere. This evidence as to the organisational arrangements within Inghams demonstrates that the Chosen Group is not organisationally distinct. Some of the Chosen Group are the responsibility of Mr Fox and others are the responsibility of Mr Patel.

Views of employees

[120] The Commission has previously held that when considering whether the group to be covered has been fairly chosen it is entirely appropriate to have regard to all employees who would be affected if the application is granted. 9 In this matter there is very little evidence before the Commission as to the views of the other employees affected. There is some limited evidence from Mr Harris that the distribution employees initially supported the scope order application. There is no explanation as to why they supported the application nor what their views more recently are in particular in light of Inghams’ offer to the weigh/labellers of the $25 per week pay rise which they would receive if they remained under the Processing Agreement. Separately there is no evidence at all as to the views of the processing employees. The processing employees’ position will be changed if this application is granted because the weigh/labellers will no longer be involved in the negotiations for the agreement that covers processing employees.

[121] Given the limited evidence as to the views of the other groups of employees, who are not weigh/labellers, there is no evidence of strongly and reasonably held views which would support a finding that the Chosen Group was fairly chosen.

[122] For the reasons explained above I am not satisfied that the Chosen Group is a group of employees that was fairly chosen.

[123] With respect to the views of the employees both parties have through the presentation of the duelling petitions concentrated on the views of the weigh/label employees. What is apparent from the evidence is that the weigh/label employees have been the beneficiaries of a bidding war between the SDA on one side and the NUW, which the SDA submit were aided by Inghams, on the other side.

[124] First the SDA held out to the weigh/labellers the possibility of obtaining higher wages if a scope order was issued. In response the NUW held out to the weigh/labellers an agreement from Inghams to a $25 a week increase as a reason for them to no longer support that scope order. As a result of these overtures the weigh/labellers first signed the SDA petition in support of this application and then later signed the NUW petition opposing this application. My conclusion considering this history is that the majority of the weigh/labellers have no particular preference for being covered by either the Processing Agreement or the Distribution Agreement. Quite reasonably their interests are apparently limited to achieving a better wage outcome for themselves which, whatever the outcome of this application, it seems likely will be achieved.

[125] In these circumstances the views of the weigh/labellers as a subgroup are a neutral consideration in terms of the reasonableness of making the order.

Conclusion

[126] The Commission may make a scope order if it is satisfied of the matters set out in subsection 238(4) of the Act. As explained above in this instance I am not satisfied that making the order would promote the fair and efficient conduct of bargaining nor am I satisfied that the group of employees who would be covered by the agreement proposed to be specified in the scope order was fairly chosen. Given these conclusions there is no basis on which the Commission can make the scope order sought.

`

[127] Consequently this application will be dismissed and an order to that effect will now be issued.

COMMISSIONER

Appearances:

D. Rafferty on behalf of the SDA.

J. Jones representative, for Inghams.

Hearing details:

2016.

Perth:

October 12.

 1   Transcript at PN477 to PN478.

 2   Ibid., at PN479.

 3   Ibid., at PN611.

 4   Exhibit A1, Annexure A.

 5   Exhibit A1, Annexure C.

 6   Ibid., at paragraph 15.

 7   Transcript at PN242 to PN245.

 8   Cimeco Pty Ltd v CFMEU and Others[2012] FWAFB 2206 at [19].

 9   Ibid., at [21] and [22].

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