Steel River Newcastle Pty Ltd ATF The Athlete's Foot Parramatta Unit Trust T/A The Athlete's Foot Parramatta

Case •

[2010] FWA 3539

•

7 MAY 2010

No judgment structure available for this case.

[2010] FWA 3539


FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Steel River Newcastle Pty Ltd ATF The Athlete's Foot Parramatta Unit Trust T/A The Athlete's Foot Parramatta
(AG2009/23622)

Wholesale and retail trade

COMMISSIONER MCKENNA

SYDNEY, 7 MAY 2010

The Athlete's Foot Parramatta Employees Enterprise Agreement 2009.

[1] On 22 December 2009, Steel River Newcastle Pty Ltd ATF The Athlete’s Foot Parramatta Unit Trust T/A The Athlete’s Foot Parramatta (“the applicant”) filed an application, pursuant to s.185 of the Fair Work Act 2009 (“the Act”), seeking the approval of an enterprise agreement titled The Athlete’s Foot Parramatta Employees Enterprise Agreement 2009 (“the Agreement”).

[2] There was no appearance by or on behalf of the applicant at the initial listing. When the matter was next listed, Mr A Bland, solicitor, appeared for the applicant. I raised various preliminary matters with Mr Bland about the application and the Agreement. Mr Bland was well-placed to provide information about the Agreement, given his submission he drafted the document. In light of the matters I raised, Mr Bland requested that the matter be stood over for approximately one month for a further mention. In the meantime, Mr Bland filed written submissions in relation to some of the matters I had raised.

[3] Upon the scheduled relisting of the matter, Mr S Thomson of the applicant company appeared with Ms Firmager. Mr Thomson submitted he proposed to appear in the proceedings on his own behalf. The mention was, at Mr Thomson’s request, converted to a short hearing on the matters I had raised initially with Mr Bland. Mr Thomson and Ms Firmager submitted that they relied on the materials filed by Mr Bland. They also elaborated some matters in oral submissions.

[4] The matter was then stood-over pending the filing of proposed written undertakings.

[5] The proposed undertakings were filed about one month thereafter, after a number of follow-up inquiries by my Associate.

[6] I instructed my Associate to request that Mr Bland provide three annexures referred to in his written submissions, but which had not been filed with the submissions. Those annexures were identified in the submissions as follows:

  • “Annexed hereto and marked with the letter “A” are the Appointment of Bargaining Representative forms completed by the affected employees of the employer confirming the appointment of the abovenamed representative on [date]”.


  • “Annexed hereto and marked with the letter “B”, is a copy of a prepared spreadsheet demonstrating the calculation of rates provided for in Schedule 1 of the Agreement together with a supporting statement by way of explanation of how these rates were calculated.”


  • “Annexed hereto and marked with the letter “C” is a copy of the Athletes Foot Parramatta Policy in respect of annual leave.”


[7] Mr Bland was advised, on my instructions, that if the attachments were not provided by 12.00 noon on 6 May 2010, I would proceed to publish my decision on the basis of the materials and submissions already filed or made.

[8] As to this, Mr Bland replied by email dated 5 May 2010:

    “We do not have [Annexure B, a prepared spreadsheet demonstrating the calculation of rates provided for in Schedule 1 of the Agreement together with a supporting statement by way of explanation of how these rates were calculated] but for the commissioners information the hours were calculated as follows.

    The total number of hours for the fortnight’s typical roster was calculated. The appropriate loadings for Thursday night (time plus ¼), Saturday (time Plus ¼ and Sunday (time plus 1/2 ) together with casual loadings on Saturday.

    This was divided by the number of hours worked in the fortnight to get the relevant figure.

    We believe, and other members of FWA, have agreed with this, that this is an appropriate method of calculating the flat rate that would apply.

    We shall arrange for the documents to be forwarded tomorrow.”

[9] By further email dated 6 May 2010, Mr Bland wrote:

    “Regarding annexure A [the Appointment of Bargaining Representative forms], we do not rely on this annexure.

    Attached is the annual leave policy [Annexure C]”.

[10] Hence, two annexures referred to in Mr Bland’s submissions were not, in the end, filed in support of this application for approval – namely, the appointment of bargaining representative forms (Annexure A), and the spreadsheet demonstrating the calculation of rates in Schedule 1 of the Agreement and the supporting, explanatory statement (Annexure B).

DOCUMENTATION IN SUPPORT OF APPLICATION

The Form F16 (Application for Approval of Enterprise Agreement) and Forms F18 – (Declaration of Employee Organisation in Support of Application for Approval of Enterprise Agreement)

[11] Clause 4 of the Form F16 (Application for Approval of Enterprise Agreement) requires information about the details of any employee organisations that were bargaining representatives for the Agreement. The Form F16 contained the names and contact details of two persons who, as I note below, appear to be employees of the applicant - rather than representatives of an employee organisation.

[12] As to cl.5 of the Form F16, it asks:

    “Were there, to the best of the Applicant’s knowledge, other employee (i.e. non union) bargaining representative for the agreement?”

The answer provided in the employer’s declaration is “No”.

[13] Two Forms F18 (Declaration of Employee Organisation in Support of Application for Approval of Enterprise Agreement) were filed with the application by the applicant. The Forms F18 were completed by the applicant’s “Assistant Manager” and a “Retail Assistant”, rather than by a representative of an employee organisation.

[14] I note Mr Bland submitted these employees were appointed as bargaining agents. Although Mr Bland’s submissions referred to an Annexure “A” said to be the instruments of appointment as bargaining agents, the attachments to the submissions did not include any such documents. Moreover, the submissions left blank the date on which such appointments were said to have occurred, reading “[date]”. Further, in response to the request for Annexure A, Mr Bland has now advised “we do not rely on this annexure”.

[15] Despite Mr Bland’s submissions that the Forms F18 were “completed and executed in accordance with the Act”, the two employees plainly were not representatives of an employee organisation and could not, therefore, appropriately complete such declarations. Moreover, Mr Bland has not provided the appointment of bargaining representative forms referred to in his submissions, leaving open the question of whether any such instruments of appointment were made.

[16] I propose to disregard the Forms F18, although nothing turns on that in terms of the approval of the Agreement itself - other than that they are indicative of the generally defective nature of the materials filed in support of this application for approval.

The Form F17 – Employer’s declaration

[17] Clause 1.3 of the employer’s declaration identifies the name of the employer to be covered by the Agreement as “[Named individual] as Director for Steel River Newcastle Pty Ltd ATF The Athlete’s Foot Parramatta Unit Trust T/As The Athlete’s Foot Parramatta.”

[18] I was concerned about the identification of the employer in cl.1.3 of the employer’s declaration, given that it nominated an individual personally and, added to that, in his specific capacity as a director of the applicant company. This information was also contained in the Forms F18 filed in support of the application for approval.

[19] I am satisfied by the submissions that it is the corporate entity which is relevantly the employer within the meaning of the Agreement itself, rather than, as incorrectly suggested in the employer’s declaration and the Forms F18, the named individual personally in his capacity as a director of the applicant company.

[20] More generally, I note the Form F17 indicated at cl.3.3 that the Agreement does not contain any terms or conditions of employment that are less beneficial than the Shop Employees (State) Award AN120499, a notional agreement preserving a State award (“the reference instrument”). However, that information is incorrect – as there are examples of less beneficial terms and conditions.

[21] The Form F17 also indicated at cl.2.14 that there were no terms of the Agreement that are detrimental to an employee in any respect when compared to the National Employment Standards (“NES”). This information is also incorrect, as there are clauses within the Agreement which would be detrimental to employees in various respects when compared to the NES.

[22] Despite the contention in cl.3.3 of the employer’s declaration the Agreement does not provide any terms or conditions that are less beneficial than the reference instrument, I note the following clauses of the reference instrument:

  • Clause 3(iv) - providing payment of public holidays where employment is terminated on the business day preceding a holiday or holiday. There is no equivalent provision in the Agreement.


  • Clause 4A(b)(i) - providing a daily minimum engagement provision for part-time employees of not less than three hours per day or sixteen per week. There is no equivalent provision in the Agreement, at least as it concerns a minimum daily engagement.


  • Clause 4A(b)(ii) - providing that where a part-time employee’s regular rostered work is in excess of 30 hours per week that the employee shall be deemed to be a full time employee and be paid as such. There is no equivalent provision in the Agreement.


  • Clause 5 - providing a minimum engagement of three hours for casual employees, subject to the proviso that there is a two hour minimum for training new recruits. There is no equivalent provision in the Agreement as there is no minimum engagement for casuals, only a reference to casuals being engaged on an hourly basis.


  • Clause 5(d) - dealing with personal/carer’s entitlements for casual employees. There is no equivalent provision in the Agreement.


  • Clause 5A - this casual conversion clause titled “Secure employment” ensures that casual employees have an opportunity to elect to become full-time or part-time employees. There is no equivalent provision in the Agreement.


  • Clause 10(i) - specifying that the ordinary hours of work shall not exceed 38 per week, to be worked in accordance with the “General Rosters for Five-day Week”. The Agreement disadvantageously provides that the ordinary hours of work shall be 76 hours per fortnight which can be averaged over twelve months, worked between the hours of 8.00am and 9.00pm Monday to Sunday.


  • Clause 10(ii) - this clause specifies the following commencing times and ceasing times:


      • 7.00am to 6.00pm Monday, Tuesday, Wednesday and Saturday.

      7.00am to 9.00pm Thursday and Friday.

      8.00am to 5.00pm Sunday

    As noted in relation to cl.10(i), the Agreement provides hours of 8.00am to 9.00pm Monday to Sunday, thereby constituting an overall disadvantage.

    • Clause 10 (iii) - specifying certain overtime payments where the roster is unexpectedly changed. There is no equivalent provision in the Agreement. The Agreement states: “The roster schedule will be established in cooperation with Employees and will take into account an employee’s wishes as to availability for work. While Athlete’s Foot Parramatta will use its best endeavours to meet an employee’s wishes, it may not always be possible to do so, and we seek Employee understanding and cooperation in this regard”.

    • Clause 10(II) - which specifies the provisions concerning the “General Shop Rosters for Five-day week”. There are no equivalent provisions in the Agreement. This clause provides, for example:

      - that at least once every two weeks, an employee shall be granted two consecutive days off which shall not include the rostered day off;

      - that a long day is nine hours and that the maximum number of ordinary hours which may be worked on one day shall be 11 hours;

      - that if the shop trades on a Sunday, once every four weeks an employee who works ordinary hours on a Sunday shall be given three consecutive days off, which shall include a Saturday and a Sunday;

      - each full-time weekly employee shall be rostered so that the maximum number of hours that shall constitute an ordinary week’s work without the payment of overtime shall not exceed 38 per week (based on four different hours’ configurations);

      - there shall be no less than a ten hour break between finishing work (including overtime) one day or shift and the commencement of work on the next day or shift.

    • Clause 14(a) - specifying that all ordinary hours worked on a Saturday by full-time and part-time employees shall be paid at time and a quarter and specifying additional loadings for casuals working less than 4 hours ($5.90 for adults, $3.90 for employees under 21 years) and $12.00 for engagements exceeding four hours ($12.00 for adults, $6.60 for employees under 21 years). There is no equivalent provision in the Agreement.

    • Clause 14(b) - specifying that all ordinary hours worked by employees on a Sunday shall be paid at the rate of time and one half. There is no equivalent provision in the Agreement.

    • Clause 14(c) - providing that all ordinary hours worked by full-time and part-time employees after 6.00pm on Thursday and Friday shall be paid at time and a quarter. There is no equivalent provision in the Agreement.

    • Clause 15 - specifying overtime entitlements where the hours exceed 38 per week in the formulations contained in cl.10 of the reference instrument and, in the case of a part-time employee, for hours exceeding 30 hours a week. The clause has a reckoning that any portion of less than 30 minutes shall be 30 minutes and any portion of an hour over 30 minutes shall be reckoned as an hour, subject to specified exceptions. It provides for time off in lieu of overtime. The clause also provides for overtime payments for hours worked in the following circumstances (which have no equivalent in the Agreement):

      - before an employee’s regular commencing time on any one day;

      - after the prescribed ceasing time on any one day;

      - outside the ordinary hours of work;

      - where a full-time employee works on a rostered days off or a part-time employee works on a day that employee would not normally work, overtime payments are attracted with a minimum payment of four hours at the overtime rate;

      - where an employee works overtime on a Sunday and that work is not immediately preceding or immediately following ordinary hours, the employee must be paid double time, with a minimum payment of four hours at the overtime rate.

    • Clause 16 - specifying that an employee who works more than five hours must be allowed a meal break of 45 minutes to one hour, subject to an employee agreeing that a meal break of 30 minutes may apply. The Agreement, on the other hand, provides that the meal break shall be “not more than 30 minutes”.

    • Clause 17 - specifying public holiday rates at double time and a half, with a minimum payment of three hours. While the Agreement provides for double time and a half, there is no minimum engagement provision. The reference instrument also has provisions dealing with re-rostering intended to avoid payment for public holidays. There are no equivalent provisions in the Agreement.

    • Clause 18 - this clause of the reference instrument deals with the circumstances where sick leave entitlements are attracted and, at cl.18(iv), specifies the relevant “conditions and limitations”. The Agreement provides that medical certificates are required for single day absences adjacent to public holidays and rostered days off. The Agreement also provides that the applicant reserves the right to deny applications for paid sick leave in certain circumstances not contemplated in the reference instrument.

    • Clause 19 - providing paid blood donor leave for permanent full-time and part-time employees of two hours on four occasions per year. There is no equivalent provision in the Agreement.

    • Clause 20 - providing for three days’ paid bereavement leave, whereas the Agreement provides, in a disadvantageous way, for two days’ paid compassionate leave for bereavement purposes.

    • Clause 24 - specifying certain arrangements when an employee is required to transfer temporarily from one branch to another (for example, such as in the circumstances contemplated in cl.10 of the Agreement), including payment for travelling time and additional travel costs. While the Agreement provides at Schedule 2 for travelling time, it does not provide for the associated travelling expenses.

    • Clause 33 - providing redundancy payments and other provisions which are in accordance with the standard scale that applied in awards of the Industrial Relations Commission of New South Wales. The Agreement, on the other hand, specifies the NES scale - which is inferior to the New South Wales standard scale contained in the reference instrument. The Agreement also contains a number of atypical provisions concerning unilateral determination by the applicant as to when redundancy payments would be made.

[23] Of particular note, the Agreement provides for all-inclusive hourly rates of remuneration for permanent (whether full-time or part-time) employees and casual employees. The rates of pay for casuals are inclusive of all penalties, loadings and other allowances, except as otherwise provided in the Agreement. The casual rates start at $9.09 for employees under 16 years and graduate at the same percentages for juniors as in the reference instrument at various ages to $22.73 an hour for employees aged 21 years.

[24] As to the permanent employees, the rates are similarly inclusive of all penalties, loadings and other allowances, except as otherwise provided in the Agreement. The ordinary rate of pay for permanent employees starts at $7.37 for a Retail Assistant under 16 years and graduates at various ages to $18.43 for employees aged 21 years. An Assistant Manager would, at these same ages, receive $7.50 and $18.76 respectively; and a Manager would, at these same ages, receive $7.61 and $19.04 respectively.

[25] There are no public holiday rates in cl.20 of the Agreement for an Assistant Manager or Manger aged less than 21 years.

[26] Mr Bland submitted that the three pages of a store roster attached to the application could be used as a “tool for determination as to whether the flat rate passes the no disadvantage test”. Despite the submissions that the roster could be used as a tool for determination as to whether the flat rate passes the no disadvantage test, the roster does not demonstrate anything that is of assistance in supporting Mr Bland’s submissions in this respect. Moreover, although Mr Bland’s submissions referred to an Annexure “B”, being “a prepared spreadsheet demonstrating the calculation of rates provided for in Schedule 1 of the Agreement together with a supporting statement by way of explanation of how these rates were calculated”, Mr Bland subsequently advised “We do not have a spreadsheet” - but that the hours were calculated as follows:

    “The total number of hours for the fortnight’s typical roster was calculated. The appropriate loadings for Thursday night (time plus ¼), Saturday (time Plus ¼ and Sunday (time plus 1/2 ) together with casual loadings on Saturday.

    This was divided by the number of hours worked in the fortnight to get the relevant figure.

    We believe, and other members of FWA, have agreed with this, that this is an appropriate method of calculating the flat rate that would apply.”

[27] Whether the flat rate represented a disadvantage as against the ordinary hours and overtime arrangements under the reference instrument would, of course, depend on which rosters an employee would be working, on which days and at which hours; and, for example, how regularly hours were worked attracting overtime or other rates under the reference instrument. I have outlined in the paragraphs above the circumstances in which overtime payments would be attracted for hours worked outside the ordinary hours under the reference instrument.

[28] I note also that the usual concept of “ordinary hours” does not really arise in this Agreement because of the flat hourly rate for all hours worked. However, I do note the spread of actual hours of work have been extended in the Agreement beyond those specified in the reference instrument.

[29] As to casual rates, the flat rate does not appear to have contemplated an amount for the annual leave loading that would have applied to casual shop employees under the reference instrument. That is, casual employees proposed to be covered by this Agreement would have had a residual, statute-based entitlement to proportionate payments with respect to annual leave under the Annual Holidays Act 1944 (NSW), i.e., the ordinary hourly rate, plus the casual loading, plus a payment of 1/12th an hour for proportionate annual leave payments. In this regard, see, for example, the summary of casual pay rates under the Shop Employees (State) Award (324 IG 935, as varied) in the website of the NSW Office of Industrial Relations. That website shows the standard payments applicable in New South Wales by operation of the Annual Holidays Act as it applies to the Shop Employees (State) Award (although the rates under the Shop Employees (State) Award and its notional agreement counterpart have diverged). That is, the hourly rate for casual employees is calculated with the casual loading, plus an additional loading of 1/12th (starting at $1.58 per hour in the case of adult employees) in recognition of payment for annual leave entitlements for casual employees under the Annual Holidays Act. The flat rate in this Agreement does not appear to address the entitlement to payment with respect to annual leave for casual employees and would disadvantage them in that respect.

[30] I have considered the flat hourly rates proposed in this Agreement for full-time, part-time and casual employees. On the information before me, I have not been satisfied the flat rates adequately compensate for the payments that otherwise would have been attracted under the reference instrument. In an overall financial sense, I consider them to be disadvantageous for employees who typically worked beyond or outside the ordinary hours specified in the reference instrument and the rate does not include the casual annual leave loading. If the flat hourly rate does so compensate, I note Mr Bland did not provide the materials in Annexure 2 of the submissions said to demonstrate this.

[31] The detrimental operation of various other provisions of the Agreement have not been addressed in the employer’s declaration for the purposes of assessment in terms of the no disadvantage test.

PROPOSED UNDERTAKINGS

[32] The applicant has proposed the following undertakings to address a number of issues I raised about the content of the Agreement:

UNDERTAKING

    “I [named individual], director of Steel River Newcastle Pty Ltd [ACN omitted] ATF The Athlete’s Foot Parramatta Unit Trust t/as Athletes Foot Parramatta (Employer), herby give the following undertaking at the request of Fair Work Australia (FWA) in relation to the Agreement lodged on 21 December 2009:

    Clause 10

    I undertake to ensure that an employee will work at a different store where that employee has agreed in writing to do so, and where the request is reasonable, in line with clause 10 of the Agreement.

    Clause 11

    The employer will undertake not to rely upon the words “which can be averaged over 12 month period”.

    The employer will also undertake to replace the word “must” with “shall”.

    Clause 13

    The employer will undertake that the letter of offer will refer to an amount of remuneration which is not lower that that provided for in the Agreement, bearing in mind the adjustments factored in Schedule 1.

    Clause 19.1

    The employer undertakes not to rely on the final paragraph of this sub clause. The employer states that if leave is approved, there will be no decision to overturn that decision.

    In relation to the annual leave cash out provisions, the employer undertakes that any cash out of annual leave consented to will not result in an employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.

    Clause 19.4

    The employer undertakes to comply with the Fair Work Act.

    Clause 19.5

    The employer undertakes not to rely upon the provisions of this clause as it relates to casual employees.

    Clause 21

    The employer undertakes not to rely on the words “for any or no reason” in paragraph 3 of this clause. That part of the clause will read “The notice period does not apply to casual Employees who may be terminated at any moment without notice”.

    If necessary, the employer undertakes not to rely on the final paragraph of clause 21.

    Clause 22

    The employer undertakes that in the event that it employees [sic] 15 employees or more (as defined by the legislation at the applicable time), it will pay severance in accordance with clause 33(4)(i) of the Retail Award, rather than that provided for in clause 22 of the Agreement.

    Clause 32

    The employer undertakes not to rely on the provisions of the first paragraph of the Agreement and acknowledges that an approved agreement is a public document.”

[33] I turn now to consider, in turn, each of the undertakings proposed by the applicant.

Clause 10

[34] I had raised a concern about the potential for the applicant to transfer an employee to another Athlete’s Foot outlet, other than one owned and operated by the applicant itself. I consider the written submissions on behalf of the applicant satisfactorily addressed that matter. I do not consider an undertaking is required in relation to that matter, although one has been proposed.

Clause 11

[35] Clause 11 of the Agreement provides that “the ordinary working hours shall be 76 per fortnight (which can be averaged over a 12 month period), worked between the hours of 8.00am and 9.00pm Monday to Sunday”. This hours provision is obviously problematic given it allows averaging over an entire year. As to this, the applicant has proposed the following undertaking:

    “Clause 11

    The employer will undertake not to rely upon the words “which can be averaged over 12 month period”.”

While this would address the concern I raised, it would represent a significant change to the Agreement on the core issue of the ordinary hours of work

[36] As to undertakings concerning cl.11, the applicant has also proposed an undertaking as follows:

    “The employer will also undertake to replace the word “must” with “shall”.”

It is unclear to me what this undertaking is intended to address, and I note the words “must” and “shall” are generally interchangeable in meaning anyway.

Clause 13

[37] Clause 13 of the Agreement deals with remuneration. It reads as follows:

    “An Employees [sic] Salary or Ordinary Rate of Pay including any commission or bonus incentive will be communicated in a separate letter of offer distributed to each Employee upon commencement of that Employee’s employment.

    All existing Employees will be provided with a separate letter of offer at the commencement of this Agreement outlining their current Salary or Ordinary Rate of Pay including any commission or bonus incentive or other entitlement. Any notification of changes to the remuneration structure will be notified to each relevant Employee individually.

    At all times, Athletes Foot Parramatta guarantees Employees will be paid no less than the minimum wage set by Fair Work Australia.”

[38] I was concerned about the second paragraph of cl.13 of the Agreement, as it appeared to involve new “offers” concerning remuneration being given to existing employees in conjunction with the proposed approval of this Agreement, coupled with unilateral changes to the remuneration structure involving commissions, bonuses or other entitlements. It would be speculative as to whether any such proposed offer would do anything other than, as indicated in the third paragraph, provide that employees would not be paid less than the national minimum wage of $14.31 per hour.

[39] Mr Bland in his written submissions said:

    “Clause 2 of the Agreement together with Schedule 1 are intended to give context to the clause 13 remuneration provisions so that upon commencement of employment (or the Agreement) an employee whose status and nature of employment is [sic] confirmed in writing by way of letter of offer will by reference to Schedule 1, be able to determine their applicable rate of pay.”

[40] Ms Firmager submitted all that was intended by cl.13 was that the letter would refer to a new employee’s terms of employment and there would be nothing other than congratulations. When I pointed out that the clause also referred to existing employees, Ms Firmager submitted that the letter of offer would apply only to new staff.

[41] The proposed undertaking concerning cl.12 reads as follows:

    “Clause 13

    The employer will undertake that the letter of offer will refer to an amount of remuneration which is not lower that that provided for in the Agreement, bearing in mind the adjustments factored in Schedule 1.”

My concerns have not been addressed by this proposed undertaking as it concerns existing employees. Moreover, Ms Firmager’s submission that the provisions of cl.12 would not be applied to existing employees is not addressed in this undertaking.

[42] Further, this undertaking gives the clause a different effect in as much as the clause refers to national minimum wages for both new and existing employees, whereas the proposed undertaking refers to rates under the Agreement itself – thereby representing a significant change.

Clause 19.1

[43] Clause 19.1 of the Agreement provides for the cancellation of approved annual leave. The undertaking in this respect reads as follows:

    “The employer undertakes not to rely on the final paragraph of this sub clause. The employer states that if leave is approved, there will be no decision to overturn that decision.”

[44] The cashing out of annual leave provisions in the Agreement are contrary to the NES, in relation to the retention of a minimum balance. The undertaking in this respect reads as follows:

    “In relation to the annual leave cash out provisions, the employer undertakes that any cash out of annual leave consented to will not result in an employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.”

[45] This undertaking would appear to address the concerns I had raised, but, arguably at least, may constitute a significant change. I note also that the revocation provision in the Agreement was directly in conflict with cl.5.7 of the applicant’s Leave Policy - which stated that once annual leave has been approved, it may not be revoked.

Clause 19.4

[46] Clause 19 of the Agreement deals with parental leave, relevantly stating only that “Employees will be entitled to unpaid maternity, paternity leave or adoption leave of 52 weeks after 12 months of continuous service with Athlete’s Foot Parramatta”. As to this, the proposed undertaking reads:

    “The employer undertakes to comply with the Fair Work Act.”

This undertaking would appear to address the concerns I had raised, albeit in a fairly bald way. As I have noted elsewhere in the decision, the applicant’s Leave Policy refers to “the Company’s Parental Leave Policy”, but there was nothing to suggest the parental leave policy was ever provided to employees. It is still not in evidence.

Clause 19.5

[47] Clause 19.5 deals with long service leave. It states that “This clause does not apply to casual Employees”, whereas the Long Service Leave Act 1955 (NSW) does confer long service leave entitlements on casual employees. Mr Bland submitted that long service leave will be in accordance with “the NES”. The proposed undertaking otherwise reads:

    “The employer undertakes not to rely upon the provisions of this clause as it relates to casual employees.”

I do not consider that this proposed undertaking addresses the concern I had raised in as much as it does not satisfactorily acknowledge that eligible casual employees have long service leave entitlements under the Long Service Leave Act.

Clause 21

[48] Clause 21.1 deals with termination of employment, providing at the second paragraph that a casual employee “may be terminated at any moment without notice for any or no reason.” As to this, the proposed undertaking reads:

    “The employer undertakes not to rely on the words ‘for any or no reason’ in paragraph 3 of this clause. That part of the clause will read ‘The notice period does not apply to casual Employees who may be terminated at any moment without notice’.”

This undertaking would appear to address the concern I had raised. I note, however, the tenor of clause tends to suggest that an employee, including a regular and systematic employee, may be peremptorily dismissed – rather than addressing notice for casuals under the Agreement. In any re-making of the enterprise agreement, it would be appropriate to re-cast the equivalent clause to more specifically address notice requirements.

[49] No proposed undertaking has been provided concerning the penultimate paragraph of cl.21 (c.f. s.172(1)(c) concerning authorised deductions under an enterprise agreement and s.324(1)(b) of the Act concerning deductions authorised by an employee in accordance with an enterprise agreement). However, it seems to have been dealt with in the undertakings, albeit by reference to an incorrectly identified paragraph. As to this, Mr Bland submitted the intent of the fifth clause was that that an employee leaving during the notice period would not be entitled to a payment in lieu of notice:

    “If necessary, the employer undertakes not to rely on the final paragraph of clause 21.”

It is unclear how this undertaking is proposed to deal with the issues identified, given the opening, qualifying words “If necessary”. This undertaking is unsatisfactory.

Clause 22

[50] The provisions concerning redundancy entitlements under the Agreement are inferior to those under the reference instrument (which contains the standard from the New South Wales jurisdiction). Mr Bland submitted this did not relevantly arise as a disadvantage, as the applicant does not have more than 15 employees and does not have any present intention to expand the number of employees. He submitted the applicant was prepared to apply the redundancy provisions under the reference instrument in the event that it employs 15 or more employees prior to termination by redundancy.

[51] Clause 22 of the Agreement also purports to bestow on the applicant the “right to decide not to make a severance payment” and to unilaterally determine not to make severance payments in circumstances such as sale of the business where the new employer offers the employee terms and conditions which are similar or no less favourable than the Agreement; or if the applicant “procures an offer of comparable alternative employment from a third party, irrespective of whether or not the Employee accepts this offer”. Under the reference instrument, an application would have had to have been made to the Industrial Relations Commission of New South Wales, as specified in cl.33(4)(iii) and (v), seeking an order to be relieved of the obligation to make redundancy payment. Similar provisions are contained in s.120 of the Act as to the NES Scale.

[52] As to cl.22, the proposed undertaking is:

    “The employer undertakes that in the event that it employees [sic] 15 employees or more (as defined by the legislation at the applicable time), it will pay severance in accordance with clause 33(4)(i) of the Retail Award, rather than that provided for in clause 22 of the Agreement.”

[53] This undertaking refers, first, to the “Retail Award”, when there is no relevant industrial instrument of that name. Assuming, however, this is intended to mean the reference instrument, the undertaking is otherwise unsatisfactory. The assessment of the no disadvantage test is an objective one, to be considered in terms of the different instruments, not matters of the type referred to by Mr Bland concerning the applicant’s intentions concerning staffing numbers. To the extent Mr Bland referred to s.122(3) of the Act concerning the operation of one aspect of the redundancy provisions, the Agreement does not contain the same protections as those contemplated in the Act. Moreover, the undertaking does not deal with those provisions of the Agreement which purport to allow the applicant unilaterally to determine not to make redundancy payments.

[54] I do not consider the proposed undertaking concerning the redundancy provisions to be satisfactory.

Clause 32

[55] The first page of the Agreement, which sets out an index of the clause numbers and titles, contains the words “STRICTLY CONFIDENTIAL, STRICTLY CONFIDENTIAL, STRICTLY CONFIDENTIAL”. Moreover, cl.32 of the Agreement states that “The content of the Agreement and details of Employee remuneration, are strictly confidential.” As to the concerns I raised in relation to this, the applicant has proposed the following undertaking:

    “The employer undertakes not to rely on the provisions of the first paragraph of the Agreement and acknowledges that an approved agreement is a public document.”

The undertaking may address the concern I raised about the future operation of the Agreement. I note in passing, however, it leaves open the question of how employees could have purported to discuss the content of the Agreement during the access period with, for example, an external bargaining agent.

CONSIDERATION

Deficient application

[56] As I noted earlier in the decision, the Form F17 contains incorrect information. For example, it does not properly identify at cl.2.12 all matters within the Agreement which deal with matters contained in the NES, and otherwise asserted at cl.2.14 that there were no terms of the Agreement that were detrimental than the NES. Significantly, the employer’s declaration at cl.3.3 incorrectly asserted the Agreement does not contain any terms or conditions that are less beneficial than the reference instrument. The employer’s declaration does not identify the terms and conditions that bring about the reductions, as required by cl.3.4; and it does not, at cl.3.5, identify the terms of the Agreement which may result, on balance, in terms and conditions that are more beneficial to one or more relevant employees than the terms and conditions in the Agreement.

[57] Given the deficiencies in the application before Fair Work Australia, I am not satisfied the application could, or ought, be considered capable of approval.

Pre-approval requirements

[58] Clause 2.3 of the Form F17 requires information as to the steps taken by the employer (at least seven days before the start of the voting process) to ensure that the relevant employees were given, or had access to, the written text of the Agreement and any other material incorporated by reference in the Agreement. As to this, the answer provided was:

    “All staff were provided with a copy of the agreement on 1st December 2009 by email and a Frequently Asked Question [sic] sheet was made available in store.”

[59] However, there is nothing in the employer’s declaration suggesting that the applicant provided to the employees copies of, or access to, the policies incorporated in the Agreement - such the annual leave policy referred to in cl.19.1. As to this, Mr Bland submitted “We are instructed that a copy of this policy was distributed as a supplementary document to the Agreement prior to the vote taking place”. However, that is not suggested in the employer’s declaration and no amended declaration or supplementary declaration was provided to substantiate this submission.

[60] Moreover, even if the annual leave policy was provided, it, in turn, cross-references at cl.11 to “The Company’s Parental Leave Policy”. There is no suggestion the applicant’s parental leave policy was provided to employees and, I note, the parental leave provisions of the Agreement are minimalist – simply reading: “Employees will be entitled to unpaid maternity, paternity leave or adoption leave of 52 weeks after 12 months of continuous service with Athlete’s Foot Parramatta”.

[61] Clause 2.4 of the Form F17 requires information about the steps taken by the employer (at least seven days before the start of the voting process) to notify all relevant employees of the time and place at which the vote was to occur and the voting method to be used. As to this, the answer was (without identification of the date the email was sent):

    “Emailed all staff with details of when and where the vote would take place”

The employer’s declaration does not indicate that the employees were given advice of the voting method to be used, despite the requirement thereto in s.180(3) of the Act. There is nothing further before Fair Work Australia to suggest this requirement was met.

[62] Clause 2.5 of the employer’s declaration requires specification of the steps taken by the employer to explain the terms of the Agreement, and the effect of those terms, to relevant employees. As to this, the answer was:

    “A Bargaining Representative was appointed. All staff were given a copy of the proposed Agreement & Q&A Sessions were open with Store Owners”

I note that while this response suggests only one bargaining representative was appointed, Mr Bland’s submissions suggested that there were two bargaining agents – although, in the end, Mr Bland did not file the instruments of appointment initially referred to in his submissions. In any event, the appointment of a bargaining agent and the mere provision of the Agreement do not relevantly arise so as to satisfy the employer’s obligation to explain the terms of the Agreement, although I accept the “Q&A Sessions” with the “Store owners” may well have satisfied that obligation.

[63] Clause 2.5 of the employer’s declaration states that “Your answer must include information on the manner in which the explanation took account of the particular circumstances and needs of the relevant employees (For example, where the employees were from a non-English speaking background, were young employees or did not have a bargaining representative)”. The statistical information at cl.4.1 of the employer’s declaration advises there were eight employees from non-English speaking backgrounds and three employees who are aged under 21 years. Despite the fact the Form F17 indicates that information “must” be provided about the manner in which the explanation took account the particular circumstances and needs of employees such as young employees or employees from non-English speaking backgrounds, there is no information thereto in the employer’s declaration.

[64] Having regard to the foregoing matters, I am not satisfied the pre-approval steps have been met.

No disadvantage test

[65] As noted earlier, the employer’s declaration incorrectly asserted there was no disadvantage as against the reference instrument. Further, the employer’s declaration does not identify matters which may off-set those disadvantages, so as to allow a proper consideration of the matters said by the applicant to satisfy the requirements of the no disadvantage test – which was the relevant test given the Agreement was made during the bridging period.

[66] Thus, there is nothing before Fair Work Australia to address the disadvantages as against the advantages – save for the store roster, which, Mr Bland submitted, could be used as a “tool for determination as to whether the flat rate passes the no disadvantage test”. As I have noted earlier, the store roster does not assist in that respect and I have not been satisfied the flat hourly rate would adequately satisfy the no disadvantage test. Moreover, nothing, or nothing of substance, has been advanced to address all other disadvantages arising from a comparison of the reference instrument and the Agreement (with the principal exception of the submission that the disadvantageous redundancy scale did not create a disadvantage because the applicant employs fewer than 15 employees and the applicant does not intend at present to increase its number of employees).

[67] All things considered, I am not satisfied the no disadvantage test has been met.

Proposed undertakings

[68] I have outlined the proposed undertakings and my assessment of them earlier in the decision. While some of the proposed undertakings are satisfactory, not all of them address the concerns about various aspects of the Agreement. Moreover, the undertakings, if accepted, otherwise represent a significant change on some core matters.

CONCLUSION

[69] Having regard to the deficient application, the pre-approval requirements, the no disadvantage test and the proposed undertakings, I am not satisfied this Agreement is capable of approval.

[70] I decline to approve the Agreement.

COMMISSIONER

Appearances:

Mr A Bland, solicitor, BlandsLaw

Mr S Thomson, director, with Ms Firmager

Hearing details:

2010

Sydney

January 28 (no appearances);

February 4;

March 9.

Final written submissions:

6 May 2010



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