Shop, Distributive and Allied Employees Association v Aldi Foods Pty Limited As General Partner Of Aldi Stores (A Limited Partnership) Trading AS Aldi Stores, Clint Peddersen-Curtis
[2025] FWCFB 143
•16 JULY 2025
| [2025] FWCFB 143 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Shop, Distributive and Allied Employees Association
v
Aldi Foods Pty Limited As General Partner Of Aldi Stores (A Limited Partnership) Trading AS Aldi Stores, Clint Peddersen-Curtis
(C2024/8177)
| DEPUTY PRESIDENT EASTON | SYDNEY, 16 JULY 2025 |
Appeal against decision [2024] FWCA 3774 of Deputy President Colman at Melbourne on 29 October 2024 in matter number AG2024/3190 to approve the ALDI Dandenong Agreement 2024 – Appeal dismissed.
On 7 August 2024 ALDI Foods Pty Limited, acting as General Partner of ALDI Stores (A Limited Partnership) (ALDI) made an enterprise agreement with its employees in the Dandenong Region. Of the 2247 employees eligible to vote, 2113 employees voted and 1646 employees voted to approve the “ALDI Dandenong Agreement 2024” (the Agreement). Almost 78% of the voting employees supported the Agreement, which is approximately 73% of the workforce. The Shop, Distributive and Allied Employees Association (SDA) was a bargaining representative and did not support the making of the Agreement.
As required by s.185 of the Fair Work Act 2009, ALDI applied to the Fair Work Commission for approval of the Agreement. The SDA opposed the approval, arguing that the Agreement did not pass the 'Better Off Overall Test' (BOOT) when measured against the General Retail Industry Award 2020 (Retail Award) or the Storage Services and Wholesale Award 2020 (Storage Award), and that the Agreement could not be approved without undertakings (see ss.186(2)(d), 190 and 193 of the Fair Work Act 2009 (Cth) (the Act)).
After a contested hearing Deputy President Colman approved the Agreement on 29 October 2024 and published his reasons for doing so: ReALDI Dandenong Agreement 2024[2024] FWCA 3774 (the Decision).
The SDA appealed the Decision, claiming that the Deputy President made certain errors when applying the BOOT and ultimately erred in approving the Agreement.
In the proceedings below, the SDA relied on the following matters to support its claim that the Agreement did not pass the BOOT without further undertakings:
(a)the wages of duty store managers were not higher than, or not sufficiently higher than, the corresponding award wage. At the heart of this objection was the contention that Duty Store Managers should be compared to higher grades in the Retail Award than the grades nominated by ALDI (see Decision at [3], [8]-[11]);
(b)part-time hourly rate employees engaged as flexible store assistants, limited roster store assistants, fixed roster store assistants and part-time duty managers were not better off overall compared to part-time employees under the Retail Award in relation to rostering arrangements; and
(c)there were other detriments that resulted in the Agreement not passing the BOOT, including an “unusual and invasive provision in relation to medical examinations”, the loss of provisions regarding the scheduling of work, the overtime rate after more than three hours of overtime per day and the overtime trigger, the loss of a break loading in certain circumstances, additional hours for part-time employees, and a small difference in relation to annual leave loading.
The SDA’s appeal fails because the SDA has not established any appealable error in the Deputy President’s findings of fact, any error in his interpretation of the Agreement or the Retail Award, or any appealable error in the process by which the Deputy President undertook the global assessment required under the BOOT.
The statutory framework – appeals
A person who is aggrieved by a decision of the Commission may apply for permission to appeal that decision (s.604). Appeals under s.604 of the Act can only proceed with permission of a Full Bench. If a Full Bench is satisfied that it is in the public interest to grant permission, it is required by s.604(2) to do so. The Full Bench of the Commission in Cole v The Commissioner for Public Employment, Office Commission Public Employment[2023] FWCFB 35 at [19] restated the principles relating to the public interest test for permission to appeal:
“The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. Some of the considerations that may attract the public interest are where a matter raises issues of importance and general application, or there is a diversity of decisions at first instance so that appellate guidance is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters. It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.”
[Footnotes omitted]
An appeal under s.604 is an appeal by way of rehearing and the Commission’s powers on appeal are only to be exercised for the correction of error: see Coal and Allied Operations Pty Ltd v AIRC [2000] HCA 47 at [10]-[17], (2000) 203 CLR 194 at 202-204.
The Commission may receive further evidence on appeal (per s.607(2)) however an appellant will ordinarily not be allowed to lead further evidence unless they can show in the interests of justice that the further evidence would have produced a different result if it had been available at the trial (per CDJ v VAJ (No 2) [1998] HCA 76 at [111], (1998) 197 CLR 172 at 202).
Appeals from decisions to approve enterprise agreements
The SDA argued that the Deputy President’s decision contained appealable errors. To understand the Full Bench’s task in correcting error on appeal, it is necessary to firstly identify the nature of the decision below.
As part of the contested approval process the Deputy President found that the Agreement passed the BOOT. The assessment of whether workers are better off overall is evaluative. The Commission must compare a package of terms and conditions against other standards. The Commission is required by s.193A(2) to undertake a “global assessment” as to whether “each employee would be better off” that must have regard to the terms of an agreement that are more beneficial to employees and to the terms of an agreement that are less beneficial.
In making this global assessment members invariably consider and compare monetary and non-monetary benefits and detriments. The Full Bench in Re Apple Pty Ltd [2023] FWCFB 185 at [64]-[65] described this global assessment process:
“An enterprise agreement will be found to have passed the BOOT if the Commission is satisfied, that at the test time, each award covered employee and each reasonably foreseeable employee for the agreement would be better off overall if the agreement applied to the employee rather than if the award applied to the employee. The BOOT is not to be applied as a line-by-line test. Rather, it is a global assessment of the provisions in the agreement compared to the relevant awards taking into account those provisions that are less beneficial and weighing them against those provisions that are more beneficial.
Considering all the terms and conditions in the Agreement including the beneficial entitlements and detriments which we have outlined above and the undertakings which we have accepted, we are satisfied that the Agreement passes the BOOT as required by s 186(2)(d) of the FW Act. In reaching our conclusion we have had particular regard to the higher rates of pay and range of increased leave entitlements conferred by the Agreement which, we consider, are such as to leave each award covered employee and reasonably foreseeable employee better off overall when compared to the awards at test time.”
Quite clearly satisfaction that a particular agreement passes the BOOT is a matter upon which reasonable minds might not agree. Parliament left this global assessment to the Commission as a specialist tribunal (see One Key Workforce Pty Ltd v CFMMEU and Another [2018] FCAFC 77 at [100] and [105], (2018) 262 FCR 527 at 547-548).
Section 186(1) requires the Commission to approve an agreement if the member is satisfied of certain matters, including being satisfied that the Agreement passes the BOOT. Applying the BOOT could involve questions of fact and could involve also questions of interpretation of award terms and/or agreement terms.
In the Decision the Deputy President:
(a)resolved an evidentiary dispute about duties and responsibilities of store managers, assistant managers and duty managers (at [4]-[7]);
(b)applied those factual findings to the terms of the Retail Award (at [8]-[23]);
(c)resolved a dispute about the meaning of the phrase "a section or department" in the Retail Award classification structure (at [11]);
(d)interpreted the part-time provisions of the Retail Award (at [25]), by reference to the current and earlier terms of the Retail Award and earlier decisions of the Commission (at [15]-[22]);
(e)found that the part-time provisions in the Agreement must be compared to the part-time provisions of the Retail Award rather than the casual provisions (at [27]), a finding made against the agreed position of the SDA and ALDI; and
(f)identified certain detriments by comparing the Agreement terms to Retail Award terms and then, by way of a global assessment, found that each of the identified detriments is outweighed by the higher rates of pay (at [30]-[38]), finding:
“I have taken the other detriments as against the award into account. Nevertheless, my assessment is that they are outweighed by the higher rates of pay that employees will receive under the Agreement as compared to what they would receive if the awards applied to them. I have conducted a global assessment in relation to each employee in the manner required by s 193A. I am satisfied that each award covered employee, and each reasonably foreseeable employee for the Agreement would be better off overall if the Agreement applied to the employee that if the relevant modern award applied to the employee. The Agreement therefore passes the BOOT.”
Permission to appeal
The SDA’s written submission summarised its case for permission to appeal:
“It is respectfully submitted that permission should be granted because the public interest is engaged. In that regard, the Agreement covers over 2,000 workers, and is cast in near identical terms to three other agreements which cover Aldi, the SDA and members of the SDA. Further, the appeal engages with issues of wide import including how the BOOT is to be applied to flexi-permanent employees. The appeal also concerns novel issues including the weight to be given to non-monetary or contingent entitlements in applying the Better Off Overall Test.”
ALDI contended that permission should not be granted because, it said, the case raises no matters of general importance, the Deputy President clearly understood the task he was required to undertake with respect to reaching a state of satisfaction as to whether the Agreement passed the BOOT, and that there is nothing novel about the matters raised on appeal.
Whilst we accept that there is some force in ALDI’s argument, we have decided to grant permission because the appeal raises matters of importance to persons outside of the immediate parties. Further, this appeal is the latest in a long series of contested matters between the SDA and ALDI. Many of the provisions challenged by the SDA are not new to the employees covered by the Agreement or new to the ALDI workforce more generally. We have also decided to grant permission to appeal in the hope of preventing future litigation as and when new agreements are made and come to the Commission for approval.
Ground of Appeal 1 – The Work and Classification of Duty Store Managers
Appeal Ground 1 attacks the Deputy President’s findings of fact regarding the work of Duty Store Managers and, perhaps, the Deputy President’s interpretation of the classification grades in the Retail Award, viz:
“1. The Deputy President erred in finding that Duty Managers were appropriately to be classified under the Agreement as equivalent to General Retail Industry Award 2020 ("GRIA") Level 3 Retail Employees. The Deputy President should have found that Duty Managers were more properly to be classified (and consequently benchmarked for all relevant purposes of the Better Off Overall Test ("BOOT")) as GRIA Level 6 Retail Employees.”
In the proceedings below the SDA argued that the classification matchmaking by ALDI was incorrect. Ultimately there was only one contested management classification because the SDA conceded that the higher management classifications are better off overall even if they were wrongly classified by ALDI. The one controversial classification was Duty Store Manager. Both the SDA and ALDI led evidence about the duties and responsibilities of Duty Store Managers.
The SDA relied on evidence from Mr Amin, who has worked as an industrial officer for the SDA since 2021 and says he has "extensive experience and knowledge of supermarkets."
ALDI led evidence from Mr Magdalani who has been employed by ALDI for 16 years. Mr Magdalani was appointed to the position of Director – Store Operations in the Dandenong region in 2016. Before 2016 Mr Magdalani worked in roles that were the equivalent of the current Relieving Shift Manager, Duty Store Manager, Assistant Store Manager and Store Manager.
The Deputy President generally preferred the evidence of Mr Magdalani:
“[6] I accept the evidence of Mr Magdalani and generally prefer it to that of Mr Amin where the two conflict because it was more detailed and focused specifically on the working arrangements at Aldi. Mr Amin spoke of his understanding of the organisation and working arrangements of duty managers in supermarkets generally. Much of his evidence was in the nature of an opinion or a conclusion, rather than a statement of fact…”
The Deputy President assessed the classification level for Duty Store Managers by reference to the evidence relating to those managers and other managers. In the Decision at [3] the Deputy President said: “I will proceed to consider the correct classification of all store managers because the appropriate classification matching for duty store managers should be undertaken in the context of the relevant classification structures as a whole”. On appeal the SDA did not allege that the Deputy President’s approach was erroneous.
The Deputy President ultimately found that Duty Store Managers were correctly matched to Retail Worker Level 3 under the Retail Award, that Store Managers equate to a Level 6 and that Assistant Store Managers are at Level 4 (Decision at [13]). On appeal the SDA did not formally contest the Deputy President's findings in relation to Store Managers and Assistant Store Managers.
In its written submissions the SDA said:
“The evidence compels a conclusion that DSM are appropriately classified at Level 6. They engage in supervisory duties which may include supervision of up to six staff at any one point and twelve staff across a shift. This can be contrasted with a Level 4 retail employee whose indicative tasks may include supervising up to 4 sales staff including themselves and a Level 3 retail employee who is responsible only for providing supervisory assistance to a designated section leader or team leader. As Mr Magdalani volunteered in re-examination, a DSM has sole responsibility for supervision of the store in the absence of a Store Manager or Assistant Store Manager. The categorisation by the Deputy President of DSM under the Agreement as equivalent to Level 3 retail employees under the Award is anomalous. It has the potential to undermine well settled retail industry classifications and is inconsistent with counterpart work classifications among Aldi's major competitors.
Finally, the Commission might conclude that there was simply insufficient evidence to determine the classification that pertains to a DSM under the Agreement. In that event, consistent with the principles articulated above, there would be insufficient evidence or information to rationally conclude that the BOOT was met for this class of employee under the Agreement.”
[Footnotes omitted]
ALDI's written submissions on this appeal ground included the following:
“Mr Amin’s evidence cannot be the basis for a conclusion that the title Duty Store Manager is a term understood and utilised throughout the retail sector as asserted by the SDA. In any event, it does not assist the Commission in determining the correct classification for a Duty Store Manager in ALDI’s operations.
The Deputy President preferred the evidence adduced by ALDI. The Deputy President considered the evidence including the management structure of ALDI’s stores and concluded that Duty Store Managers are correctly matched to a Retail Worker Level 3.”
The SDA’s case in relation to Appeal Ground 1 evolved over the course of the hearing. The case progressed from a general complaint that the Deputy President came to the wrong conclusion regarding the comparator for Duty Store Managers, to the specific proposition that Mr Magdalani’s evidence alone could not have been a basis upon which the Deputy President was satisfied that Duty Store Managers were properly compared to Level 3 in the Retail Award.
Mr Magdalani’s evidence on the topic was as follows:
“Store Managers are not required to hold any formal qualifications. They are held accountable for the performance of the store, including maintaining cleanliness, high presentation standards and achieving optimal operational efficiency outcomes, based on product deliveries and sales.
The Assistant Store Manager provides direct support to the Store Manager in their store in fulfilling the above functions. They do not have direct responsibility for these tasks but can be delegated some of the above tasks by the Store Manager or may perform these tasks in the absence of the Store Manager. Generally. the Store Manager and Assistant Store Manager are rostered on opposite or alternating shifts, to ensure management coverage across all trading hours. The Assistant Store Manager will do the day-to-day running of the shift in the Store Manager's absence but does not take direct responsibility for the achievement of the key functions of the store.
Duty Store Managers have significantly less responsibility than Assistant Store Managers. They do not have any responsibilities to provide feedback to employees and are not responsible for achieving the key performance indicators for the store. They support the day-to-day functions of the store and may open or close the store or supervise employees in the absence of more senior managers.
Store Assistants may be asked to work as a Relieving Shift Manager to fill in during the absence of a Store Manager, Assistant Store Manager and Duty Store Manager. This typically happens about 1 shift per week, based on store management rostering. Relieving Shift Managers support the day-to-day operation of the shift but are not accountable for the outcomes on the shift.”
Mr Magdalani was not cross-examined about this evidence save for some questions about how many store assistants might be operating tills on each shift, and therefore the maximum number of store assistants a Duty Store Manager might be supervising at any one time.
Mr Amin’s evidence was said to contrast with Mr Magdalani’s evidence. Mr Amin’s evidence included the following:
“The stores operated by Aldi and covered by the Agreement are in my experience are more complex than independent small supermarkets or say a boutique clothing store.
Some of the stores are comparable to Woolworths and Coles in size and organisation.
Further, many of these stores have discreet sections for the sale of alcohol and as a consequence are subject to additional legislation and associated regulations e.g. Liquor Control Reform Act 1998.
In my experience the overwhelming majority of supermarkets including supermarkets much smaller than Aldi classify their employees pursuant to the following GRIA classifications:
1.Store Manager: Level 8
2.Assistant Store Manager: Level 6
3.Duty Manager: Level 6
Aldi supermarkets are large shops with hundreds of different products. There are different sections in the shops including that goods are organised in particular ways by reference to their particular characteristics, further there are more defined organisations structures that can be described as a department, e.g. Liquor.
Aldi has advised a different classification pegging to the above that has a flow on impact on the BOOT.
If the classification structure as per para 35 is accepted the detriments in the
Agreement, particularly for duty managers will be amplified.”
In his reply evidence Mr Amin also said:
“In my experience, major supermarket brands generally employ a Duty Manager.
Duty Manager responsibilities include overseeing daily operations, opening and closing stores, ensuring employee productivity, monitoring efficiency of all processes, training and onboarding new team members, and ordinary retail duties e.g. customer service and checkout operations.
Duty Managers are often primarily employed to perform work in the evenings or weekend and public holidays as these are times that the store manager and assistant managers are generally not working.
That is, supermarkets generally trade a wide span of hours across a 7 day period, and the store manager and assistant store manager are unable to be engaged for every trading hour.”
In our view the Deputy President’s approach to considering the comparator Retail Award rate for Duty Store Managers was appropriate and correct.
The Deputy President’s decision to consider the Duty Store Manager classification by reference to the higher management levels was logical and unremarkable. We note that the descriptors in the Retail Award use internal comparators such as “at a higher level than a Retail Employee Level [X]” - which reinforces the appropriateness of the Deputy President’s approach.
We accept that there was evidence upon which the Deputy President formed the requisite satisfaction, although Mr Magdalani’s evidence was not comprehensive about all the tasks performed or the responsibilities assumed by a Duty Store Manager in the absence of a Store Manager. The SDA ultimately accepted that there was some evidence upon which the Deputy President could make a finding, but that the evidence was not sufficient to make the finding that was made. We do not agree. The focus of the Deputy President’s enquiry was the supervisory responsibilities of Duty Store Managers. Mr Magdalani’s evidence was sufficiently directed to that matter to allow the Deputy President to compare the supervisory responsibilities borne by Store Managers and Assistant Store Managers to the duties and responsibilities of Duty Store Managers.
On the evidence below, Duty Store Managers only perform supervisory functions when the Store Managers and the Assistant Store Managers are absent. Duty Store Managers are not responsible for the performance of their store, or a department within their store, and have no responsibility for providing feedback to employees.
It was reasonably open to the Deputy President to find that the limited supervisory functions performed by Duty Store Managers when more senior managers were absent were more appropriately compared to Level 3.
We reject Appeal Ground 1.
Appeal Grounds 2, 3(b), 3(e) and 4 - Flexibility in rostering arrangements
Appeal Grounds 2 to 4 attack the weight afforded to certain factors by the Deputy President as he undertook a global assessment of the provisions in the Agreement compared to the relevant awards.
Appeal Ground 4 supplements grounds 2 and 3 and encapsulates the nature of the SDA’s attack of the Deputy President’s evaluative assessment in applying the BOOT, viz:
“4. Further and/or alternatively to paragraphs 2 and 3, the Deputy President erred in:
(a) failing to give proper or any weight in his findings to matters contended by the SDA; alternatively
(b) taking into account matters and/or giving too much weight to particular matters contended by the Respondent (including mere assertions in the absence of a proper evidentiary case in support), to properly weigh in the assessment of the BOOT.”
Grounds 2, 3(b) and 3(e) attack the weight the Deputy President afforded to comparative differences in rostering arrangements for part-time hourly rate employees, viz:
“2. The Deputy President further erred in finding, pursuant to s186(2)(d) of the Fair Work Act 2009 (Cth) (the "Act") and in the absence of proffered undertakings, that the Agreement passed the BOOT in respect of:
(a)Duty Managers, including for the reason set out in paragraph 1 above;
(b)Part-time 'hourly rate' employees engaged by ALDI under the Agreement as flexible store assistants, limited roster store assistants and fixed roster store assistants, regardless of whether or not those employees were required to be benchmarked for the purposes of the BOOT against permanent part-time or casual employees under the GRIA.”
3. Further to paragraph 2, the Deputy President erred in finding that, in the absence of any proffered undertakings, the BOOT was satisfied, having regard to the proper weight to be accorded the following matters submitted by the SDA to be relevant to the Deputy President's assessment of the BOOT:
…
(b) As to the failure of the Agreement to make provision for rights in the Award in relation to the scheduling of work, the conclusion on the part of the Deputy President that, although the omission of such rights constituted detriments that had to be weighed in the assessment of the BOOT, such identified prejudice was appropriately ameliorated by the obligation of ALDI in the Agreement to take the nomination by employees of rostering preferences into consideration. The obligation of ALDI under the Agreement in relation to rostering rises no higher than an obligation to consider (but, by necessary implication, no obligation to act upon) employee requests. The Deputy President accordingly failed to give proper weight for the purposes of the BOOT to the rostering safeguards accorded employees under the GRIA;
…
(e) As to the finding by the Deputy President in relation to the (as acknowledged) less beneficial overtime provisions in the Agreement, the finding by the Deputy President that the rostering circumstances in which an entitlement to overtime would be triggered if working under the GRIA were "not likely to occur frequently" and where any identified prejudice vis-~-vis the GRIA would be "comfortably" offset by the higher rates of pay (higher than the GRIA) payable to impacted employees at other times. There was no or no satisfactory evidence adduced by ALDI in support of its contention and the Deputy President should not have accepted that the BOOT was not impacted by the acknowledged detriment on the basis of mere assertion.”
To provide some context for these appeal grounds:
(a)Store Managers and Assistant Store Managers are employed as salaried employees (per Schedule 1 of the Agreement);
(b)Duty Store Managers can be full-time or part-time and are Hourly Rate Employees (per Schedule 1 of the Agreement);
(c)Store Assistants can be engaged under varying arrangements but all Store Assistants are Hourly Rate Employees (per Schedule 2 of the Agreement); and
(d)Clause 22.1 of the Agreement determines the hours and rostering arrangements for Hourly Rate Employees.
Clause 22.1 of the Agreement is in the following terms:
“22.1 Hours and Rostering
(a)Apart from Casual or Fixed Roster Employees, if you are an Hourly Rate Employee employed on a Full-time or Part-time basis:
(i)at the start of your employment, you and ALDI agree on the Contract Hours to apply to your role;
(ii)you will be rostered to work your Contract Hours as a minimum each Fortnight;
(iii)every hour that you work or are on authorised paid or unpaid leave will count towards your Contract Hours. This includes hours worked, hours on authorised unpaid and paid leave, including public holidays, hours worked as overtime and hours worked on public holidays;
(iv)any hours you work in excess of your Contract Hours in a pay period will be paid at the applicable rate of pay, including any overtime, penalty or shift loading.
(b)Fixed Roster Employees will agree with ALDI the hours and days to be worked in a Week, in accordance with Schedules 2,3 or 4.
(c)Casual Employees will nominate their availability to be rostered prior to the commencement of each roster period.”
The SDA’s written submissions on appeal neatly encapsulated the argument:
“The Deputy President at [15] also accurately contrasted the rostering safeguards for hourly rate employees under the Agreement with those under cl. 10 of the Award:
-Clause 10.1 of the Award provides that a part-time employee is one who is engaged to work for fewer than 38 hours per week and whose hours of work are reasonably predictable.
-Clause 10.5 states that the employer and employee must agree in writing on a regular pattern of work, including the number of hours to be worked on each day of the week (cl. 10.5(a)), and the times at which the employee will start work and finish work each day (cl. 10.5(b)).
-The employer and employee may agree to vary the regular pattern of work on a temporary or ongoing basis (cl. 10.6).
By contrast, under the Agreement:
-Flexible store assistants work up to 10 shifts a fortnight and can be rostered to work at any time on any day of the week (see cl. 3 of Schedule 2).
-Limited roster store assistants work according to a schedule of availability that is agreed on commencement of employment (cl. 4 of Schedule 2).'
-Fixed roster store assistants work agreed hours on agreed days of the week, with agreed start and finish times; days and times of work may be changed unilaterally on notice, but not the number of weekly hours (cl. 5 of Schedule 2).
-DSMs work an average of fewer than 76 hours per fortnight on up to 10 of 14 days, and subject to various arrangements in clause 22 of the Agreement, including in respect of agreed contract hours.
At [32], the Deputy President recognised as detriments the omission from the Award of other award benefits conferring rights in relation to the scheduling of work.
The effect of these differences in rostering arrangements is to afford an hourly rate employee under the Agreement less certainty and predictability about when they will be required to perform their work, than a part-time employee under the Award. The loss of these rostering safeguards are non-monetary detriments which the Deputy President was required to consider and accord appropriate weight for BOOT purposes.
The Deputy President apparently did consider these detriments at [32] and [36] but gave them little or no weight. It is submitted that in so doing, the Deputy President fell into error.”
The Deputy President dealt with these matters under the heading “Part-Time Hourly Store Assistants and Duty Store Managers” (see Decision at [15]-[29]).
The rostering provisions for part-time hourly rate employees under the Agreement are not new - the SDA has challenged these arrangements in other ALDI agreements. In earlier challenges the rostering arrangements were compared to the rostering arrangements for casual employees under the Retail Award.
The Deputy President found that the rostering provisions should be compared to the provisions for part-time employees in the Retail Award rather than casual employees. Neither party on appeal has taken issue this approach.
The hours of work for part-time employees under the Retail Award are reasonably predictable (per clause 10). The Deputy President noted for comparison purposes that the part-time hours of work under the Agreement were also reasonably predictable.
The Deputy President found at [36] that the less flexible part-time provisions of the Retail Award could provide an additional way to earn overtime, which is a benefit not available under the Agreement. However the Deputy President noted that this comparative detriment is moderated by the effect of the part-time employment arrangements in the Agreement being reasonably predictable.
On appeal the SDA argued that the Deputy President’s finding regarding the predictability of part-time employment conditions under the Agreement was erroneous. Even though the SDA accepted that the number of ordinary hours for part-time employees is reasonably predictable, the time at which those hours could be rostered by ALDI was not. The SDA argued on appeal that the predictability of hours was therefore not a mitigating factor.
The combined effect of clauses 22 and 24 and Schedules 1 and 2 of the Agreement are that ALDI can give part-time hourly rate employees two weeks’ notice to change the times at which hours are to be worked. This predictability argument was not put to the Deputy President at all, however the SDA nonetheless said on appeal that the Deputy President should have identified this detriment for himself and placed significant weight on the detriment.
Ultimately the SDA submitted that the Deputy President did not put enough weight on the detriment arising from the loss of predictability of when hours are to be worked, recognising that the Deputy President did recognise a different detriment related to the more flexible rostering arrangements under the Agreement.
The SDA relied on the reasoning in ReLoaded Rates Agreements [2018] FWCFB 3610 at [114]:
“What the emphasised passages in the above extract from Hart demonstrate is that the assumption cannot readily be made that non-monetary or contingent entitlements in an agreement have the same value to all employees, because that value may differ depending upon the personal circumstances of each individual employee. In some cases, it may be possible to precisely identify the categories of employees who do and do not benefit from a particular entitlement - such as the examples of leave for reservists, blood donors and bush fire brigade volunteers referred to in the Hart decision. In other cases, such as flexibility in working hours or time off in lieu of overtime, it will not be possible to precisely identify who will benefit, although it may be possible as in Hart to make some broad generalisations. A contingent benefit, such as enhanced redundancy pay, may provide a potential benefit for most or all employees, but a realistic assessment will need to be made about the likelihood of that benefit crystallising during the period in which the agreement for which approval is sought is likely to remain in operation. In all cases, even where the beneficiary of an enhanced entitlement in an agreement may be identifiable, it is likely to be difficult or impossible to assign any monetary value to the entitlement. Thus, where an agreement involving a loaded rate structure is involved, it is not likely that a non-monetary or contingent benefit will compensate for any significant detriment in direct remuneration for all affected existing or prospective employees.”
The SDA submitted that the same reasoning can and should be applied with respect to the loss of nonmonetary entitlements. Citing the consideration of the Full Bench in the Personal/carer's leave test case - Stage 2 [1995] AIRC 2396 the SDA submitted that for some employees the loss of the rostering safeguards will be of significant value:
“… part-time work needs to be clearly distinguished from casual employment. While the provision of pro rata benefits is one means of providing such a distinction other measures are also needed. In particular part-time work provisions should specify the minimum number of weekly hours to be worked and provide some regularity in the manner in which those hours are worked.
Regularity in relation to hours worked is an important feature of part-time employment. In the absence of such regularity reduced hours of work may not be conducive to reconciling work and family responsibilities. For example, if hours of work are subject to change at short notice it can create problems for organising child care as these arrangements generally require stable hours and predictable timing.”
The SDA argued that because the Deputy President did not refer to the loss of predictability of when hours would be worked in his reasoning the Deputy President therefore made an appealable error in failing to consider this detriment.
The base hourly rates (for Monday to Friday between 7:00am and 6:00pm) are significantly higher than the equivalent rates under the Retail Award:
(a)full-time rates for Duty Store Managers are 22.7% higher;
(b)full-time store assistants rates are 17.8% higher;
(c)flexible store assistants rates are 17.8% higher;
(d)limited roster store assistants rates are 11% higher; and
(e)fixed roster store assistants (who do not have the same comparative detriment) are paid slightly higher than the award rates.
When hourly rates for flexible store assistants (who are the most exposed to potential detriment) are compared across different days and times of the week, the hourly rates under the Agreement are between 11.2% and 35.4% higher than the Retail Award.
The gravamen of the SDA’s case below and on appeal is that the non-financial comparative detriments under the Agreement are not outweighed by the monetary benefits.
The Deputy President correctly identified the detriment regarding flexible rostering arrangements in relation to the potential loss of overtime benefits. Whilst we are reticent to entertain arguments on appeal that were not put at first instance, we accept that there is a further detriment arising from the flexible rostering arrangements, being the reduced predictability about when hours might be worked because ALDI can change those hours with two weeks’ notice.
We have difficulty accepting that the Deputy President’s alleged “failure” to identify and consider a detriment in a roll-over provision, that was not identified or relied upon by the SDA, is an appealable error. However the point is moot because we do not accept that this additional detriment alters the outcome of the BOOT or means that the Deputy President’s discretion miscarried in his evaluative BOOT assessment. Even if it was an error, it was not a material error that requires intervention on appeal.
The SDA could not explain how or why the consideration of this additional detriment would be the difference between the Agreement passing the BOOT or not. In part this shortfall in the SDA’s case is understandable because the SDA’s grounds of appeal were more broadly cast. The SDA argued that each or most of the identified comparative detriments should have been given more weight by the Deputy President, and if greater or more appropriate weight had been given to each of the comparative detriments then the Deputy President’s overall conclusion should have or could have been different.
We have not accepted any of the SDA’s contentions about the weight applied to the other identified detriments (see below). The rostering flexibility detriment identified in the appeal is of a similar nature to the detriment considered by the Deputy President – both detriments relate to slightly different elements of the predictability of hours.
We are satisfied that the Agreement passes the BOOT. We recognise that for some employees the regularity of part-time hours is an important feature. If the predictability of the times at which hours might be rostered is an essential feature of part-time employment for some employees there are other facilities available under the Agreement. For example, employees with immovable family responsibilities may choose to be a Limited Roster Store Assistant under Clause 3 of Schedule 2 of the Agreement, viz:
“3 Flexible Store Assistants
If you are employed as a Flexible Store Assistant:
(a) you are an Hourly Rate Employee;
(b) you may be rostered to work at any time on any day in a Week from Monday to Sunday;
(c) you will work up to ten (10) shifts per Fortnight; and
(d) your hours will be averaged over a Fortnight.”
The detriment associated with the loss of predictability of the hours during which part-time employees might be rostered is a detriment but not a significant detriment. When considered in the context of the other comparative detriments under the Agreement, and in the context of the wages payable under the Agreement being significantly higher than the award rates, we are satisfied that the Agreement passes the BOOT.
Accordingly we reject Appeal Grounds 2, 3(b), 3(e) and 4.
Appeal Ground 3(a) - Medical examinations
Appeal Ground 3(a) addresses the Deputy President’s findings about clause 14 of the Agreement:
“14 Medical examinations
14.1You may be required to submit to a medical examination by a medical practitioner nominated by ALDI, where ALDI has reasonable concerns about your capacity to perform the inherent requirements of your job.
14.2The medical examination will be related to aspects of your health relevant to your employment, and may include testing for alcohol and other drugs.
14.3You will be required to provide written authority to the nominated medical practitioner authorising them to provide a confidential report about the results of the medical examination and discuss these results with ALDI management. You will also receive a copy of the report.”
The Deputy President dealt with this provision in the Decision at [31]:
“[31] The SDA said that clause 14 of the Agreement contained an unusual and invasive provision in relation to medical examinations which requires employees to attend a doctor if the employer has a reasonable concern about their capacity to perform the inherent requirements of the job, and also to submit to unspecified forms of drug and alcohol testing, without any apparent link to the concern about capacity. The SDA said that the clause also had the effect of requiring employees to waive doctor-patient confidentiality and to provide written authorisation for the release of a report. It submitted that the clause was a serious detriment. Whether the clause is a detriment will depend on an employee’s point of view. Some employees may regard the arrangements as invasive, but others may not. The clause can be seen as beneficial, as it provides free medical services (Aldi confirmed that it must pay for them) which might detect medical concerns bearing on an employee’s ability to do their job and facilitate their successful treatment. Further, the clause must be read sensibly and in its entirety; contrary to the SDA’s submission, each of the subclauses is to be understood as being referrable to a reasonable concern about the employee’s capacity to perform the inherent requirements of the job.”
Appeal Ground 3(a) is as follows:
“3. Further to paragraph 2, the Deputy President erred in finding that, in the absence of any proffered undertakings, the BOOT was satisfied, having regard to the proper weight to be accorded the following matters submitted by the Appellant to be relevant to the Deputy President's assessment of the BOOT:
(a) As to the obligation under the Agreement to, inter alia, waive patient-doctor confidentiality in the context of mandated medical examination to which the employees can be directed (let it be assumed, reasonably) to submit and which are paid for by ALDI, the finding by the Deputy President that this requirement was (or could be) a benefit rather than a detriment because some employees might consider it to be beneficial. This is not the proper test for identifying a prejudice in relation to which a BOOT consideration is enlivened. If it be accepted that a term in a proposed agreement can be seen to visit a prejudice, vis-~-vis the Award, on at least some employees, the Deputy President was obligated to assess that prejudice in respect of those impacted employees. The Deputy President acted upon the wrong test, namely that a term of an Agreement is not required to be taken into account for BOOT purposes if some employees might consider it to be beneficial in their particular circumstances;”
The SDA submitted that clause 14 only has work to do for employees who object to a medical examination and the provision of a confidential report to ALDI management. In applying the BOOT such employees would be worse off than if the Retail Award applied because there is equivalent requirement in the Retail Award.
Clause 14 contains significant safeguards or conditions:
(a)the requirement to submit to a medical examination only arises when ALDI has reasonable concerns about an employee’s capacity to perform the inherent requirements of their job;
(b)the medical examination can only be related to aspects of the employee’s health that are relevant to their employment; and
(c)any medical report created remains confidential and a copy must be provided to the employee.
It is not controversial that employees are obliged under the common law to comply with lawful and reasonable directions issued by employers. Because of the safeguards included in clause 14, it is likely that if the above conditions are met that a direction to attend a medical examination would be a lawful and reasonable direction. In theory, the detriment that arises from clause 14 is that an employee who refuses to comply with clause 14 is at risk of a pecuniary penalty order under s.546 of the Act if they contravene the Agreement by refusing to submit to a medical examination. Counsel for the SDA quite properly conceded at the appeal hearing that the possibility of an ALDI employee being prosecuted for a contravention of clause 14 is remote and the likelihood that a Court would impose a penalty on an ALDI employee is even more remote.
Although the Deputy President did not consider this detriment, we agree with the Deputy President’s observation that clause 14 “must be read sensibly and in its entirety … [and] each of the subclauses is to be understood as being referrable to a reasonable concern about the employee’s capacity to perform the inherent requirements of the job.”
As such we reject Appeal Ground 3(a).
Appeal Ground 3(c) – Overtime Rates
Clause 9.2(a)(i) of Schedule 2 of the Agreement sets the overtime rate for full-time, flexible and limited roster store assistants at 150% regardless of how many overtime hours are worked in a day. The comparable provision in the Retail Award sets overtime at 150% for the first three hours of overtime per day and 200% thereafter.
The Deputy President accepted at [33] that there was a “measure of disadvantage” however employees working more than three hours overtime in a day is not likely to occur frequently, and any detriment is comfortably offset by the higher rates of pay:
“The SDA said that the Agreement did not provide for overtime at 200% after the first three hours, but instead a flat 150% rate for all overtime hours, and that store managers and store employees would be worse off when working overtime beyond 3 hours under the Agreement, as compared to their position under the Retail Award. Storage workers were also said to be worse off under the Agreement as compared to the Storage Award, which prescribes overtime of 200% after 2 hours. Ms McNaughton said that overtime beyond 3 hours was unlikely to arise because this would require hourly rate store employees to work more than 12 hours on a shift and Aldi did not employ any full-time duty managers or store assistants; further most employees were employed on 40 to 60 contract hours per fortnight and it was unlikely that they would work more than 76 hours a fortnight (or 80 hours for storage workers). The SDA contended that this was not an improbable situation and that Ms McNaughton was not able to provide precise numerical data about the incidence or likelihood of excess overtime. It is possible that employees will work in ways that would have seen them trigger the higher rate of overtime under the award but I do not consider this is likely to occur frequently and in my view the detriment will be comfortably offset by the higher rates of pay applicable at other times. As I understand it, the SDA’s BOOT concern in respect of the overtime rate was not confined to part-time employees and applied also to full-time employees. Again, one would not reasonably expect the second pay tier of overtime to be triggered frequently. But I accept that there is a measure of disadvantage here.”
Appeal Ground 3(c) is in the following terms:
“3. Further to paragraph 2, the Deputy President erred in finding that, in the absence of any proffered undertakings, the BOOT was satisfied, having regard to the proper weight to be accorded the following matters submitted by the Appellant to be relevant to the Deputy President's assessment of the BOOT:
…
(c) As to the less beneficial entitlement to overtime (accepted by the Deputy President to be a detriment), the finding by the Deputy President that the circumstances giving rise to the detriment would not occur frequently and would in any event be "comfortably offset by the higher rates of pay applicable at other times". There was no or no satisfactory evidence adduced by ALDI in support of its contentions on this issue and the Deputy President should not have accepted that the BOOT was not impacted by the acknowledged detriment on the basis of mere assertion;”
Once again the provisions challenged by the SDA are not new to the employees covered by the Agreement or new to the ALDI workforce more generally.
As above, the SDA challenged the evidentiary foundation for the Deputy President’s conclusion that any detriment arising from the relevant overtime provisions “will be comfortably offset by the higher rates of pay applicable at other times”. The SDA led no evidence at first instance about the prospective likelihood or retrospective frequency of employees reaching the three-hour overtime trigger. ALDI led evidence from its bargaining representative Ms McNaughton about the likelihood that employees would reach the three-hour threshold. The SDA challenged that evidence by way of cross-examination, focusing on Ms McNaughton’s evidence that neither she nor anyone from ALDI had investigated the frequency of employees working more than three hours of overtime in the Dandenong Region.
The Deputy President acknowledged the SDA’s criticism of Ms McNaughton’s evidence and formed the view that the detriment, if there be any, is not likely to arise frequently.
Because the payment of overtime at 200% under the Retail Award only arises on a per-incident basis, and the higher ordinary wage rates under the Agreement are paid on an ongoing basis, the Deputy President was necessarily required to assess the likely frequency of employees working more than three hours overtime per day. In crude terms, employees under the Agreement receive rates that are approximately 15% higher than the Retail Award for each hour worked each week, and might miss out on an additional 50% of one hours pay if they do a fourth hour of overtime from time to time.
The Deputy President correctly concluded that any detriment that might arise is comfortably offset by the higher rates of pay. We reject Appeal Ground 3(c).
Appeal Ground 3(d) – Breaks between shifts
The Deputy President’s reasoning at [34] is self-explanatory:
“The SDA submitted that the breaks provided to store managers under clause 9.2 of Schedule 1 of the Agreement give employees a 30-minute unpaid rest break, whereas clause 16 of the Retail Award provide for paid breaks. I note this difference. The SDA also said that clause 9.3 of Schedule 1 does not provide workers with a ‘break loading’ in cases where they are not provided with the 10-hour break between shifts that is found in clause 16 of the Retail Award. But this is a contingent and relatively minor matter. The union noted also that clause 6 of Schedule 1 allowed Aldi to change an employee’s additional hours of work, however the clause requires a commensurate adjustment to remuneration, and of course additional hours remain subject to the rules in the National Employment Standards (NES) surrounding the 38- hour week plus reasonable additional hours.”
Appeal Ground 3(d) attacks the Deputy President’s assessment that different meal break arrangements and the loss of the break loading for store managers are contingent and relatively minor matters:
“3. Further to paragraph 2, the Deputy President erred in finding that, in the absence of any proffered undertakings, the BOOT was satisfied, having regard to the proper weight to be accorded the following matters submitted by the Appellant to be relevant to the Deputy President's assessment of the BOOT:
...
(d) As to the "difference" (the Appellant would submit the "detriment") acknowledged by the Deputy President to exist between the entitlement of store managers under the Agreement to unpaid breaks in circumstances where the same entitlement under the GRIA is to paid breaks, the finding by the Deputy President that these were "contingent and relatively minor matters". There was no or no satisfactory evidence adduced by ALDI in support of its contention and the Deputy President should not have accepted that the BOOT was not impacted by the acknowledged detriment on the basis of mere assertion.”
Appeal Ground 3(d) raises two matters for consideration. Firstly, the SDA submitted that the break loading of 200% cannot merely be dismissed as "contingent" in circumstances where the employer submitted no evidence as to whether and how frequently its rostering practices would enliven this entitlement. ALDI answered this complaint in short compass by referring to spreadsheets it provided as attachments to the Form F17 that showed the typical rosters for Store Managers and Assistant Store Managers and that even when a break of less than 10 hours was provided in the roster, managers were still better off overall.
Secondly, if a manager works a 9 hour shift they must be given under the Retail Award a 30-minute unpaid break and two 10-minute paid breaks. The Agreement provides for a 30-minute unpaid break.
Whilst mathematically managers are ahead because of the higher rates of pay, the SDA argued that “it's not simply a mathematical question, because there's a utility to taking a break that extends far beyond getting 10 minutes' pay.” Any disutility for managers is addressed in clause 9.1 of Schedule 1 of the Agreement:
“As a store management employee you are responsible for deciding when breaks are to be taken during each shift, taking into account your own safety, the safety of other employees and business requirements.”
We reject appeal ground 3(d).
Appeal Ground 3(f) – Annual Leave loading
Appeal Ground 3(f) was as follows:
“3. Further to paragraph 2, the Deputy President erred in finding that, in the absence of any proffered undertakings, the BOOT was satisfied, having regard to the proper weight to be accorded the following matters submitted by the Appellant to be relevant to the Deputy President's assessment of the BOOT:
…
(f) As to the finding by the Deputy President that provision in the Agreement for annual leave loading, whilst acknowledged to be less beneficial than the counterpart provision in the GRIA, was a small difference. There was no or no satisfactory evidence adduced by ALDI in support of its contention and the Deputy President should not have accepted that the BOOT was not impacted by the acknowledged detriment on the basis of mere assertion.”
The SDA conceded that the loss of the 17.5% annual leave loading is swamped by the 15% uplift on ordinary wages. The SDA raised an uncertainty that arises because the Retail Award requires employers to pay an average of shift loadings if that average is higher than 17.5%. Counsel for the SDA properly accepted that any annual leave loading paid at this higher rate would also be swamped by the higher wage rates under the Agreement.
We reject this appeal ground. The Deputy President properly concluded that the annual leave loading provisions in the Agreement were less beneficial than the Award but “the difference is a small one and does not affect my overall conclusion” (at [37]).
Appeal Ground 3(g) – Personal Leave
Appeal Ground 3(g) was as follows:
“3. Further to paragraph 2, the Deputy President erred in finding that, in the absence of any proffered undertakings, the BOOT was satisfied, having regard to the proper weight to be accorded the following matters submitted by the Appellant to be relevant to the Deputy President's assessment of the BOOT:
…
(g) As to a comparison with GRIA casual employees (if that be the appropriate comparator), the finding by the Deputy President that the Appellant had undervalued in its submissions the contingent entitlement of hourly rate employees under the Agreement to personal leave. The Deputy President should have found that personal leave is of its nature inherently contingent (ie it may never need to be taken and it cannot be paid out on termination) and weighed for BOOT purposes the benefit for hourly rate employees in accruing this entitlement accordingly. There was no or no satisfactory evidence that an accrual of personal leave confers a "significant psychological benefit" on employees so as to (as the Deputy President did) accord the entitlement a more significant weight for BOOT purposes than a mere contingent leave entitlement should otherwise be accorded.”
Appeal Ground 3(g) is essentially put in the alternate by the SDA to cover off the possibility that the Full Bench might find that casual employment under the Retail Award is the appropriate comparator for part-time employees under the Agreement. Given our findings above it is not necessary to address this appeal ground.
Appeal Ground 5
Appeal Ground 5 is similarly put in the alternate and falls away. Appeal Ground 5 was in the following terms:
“5. The Deputy President further erred in finding that if (contrary to the Deputy President's findings), part-time 'hourly rate' employees engaged by ALDI in the retail industry under the Agreement could not be considered permanent part-time employees under the GRIA for the purposes of the BOOT, the same category of employees could not in the alternative be considered casual employees under the GRIA for the purposes of the BOOT and would in consequence be considered Award free employees to whom neither the Award nor, a fortiori, any agreement under the Act could apply.”
For the reasons given we grant permission to appeal and dismiss the appeal.
DEPUTY PRESIDENT
Appearances:
J McKenna and P Dean of Counsel, and A Amin for the Appellant.
A Perigo of Counsel and M McNaughton for the Respondent
Hearing details:
2025.
Sydney
January 21, February 13.
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