[2020] FWCA 665

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Super Retail Group Services Pty Limited T/A Super Retail Group
(AG2018/6883)

SUPER RETAIL GROUP ENTERPRISE AGREEMENT 2018

Retail industry
DEPUTY PRESIDENT LAKE	BRISBANE, 7 FEBRUARY 2020

Application for approval of the Super Retail Group Enterprise Agreement 2018

Introduction

[1] An application has been made under s.185 of the Fair Work Act 2009 (the Act) for the approval of an enterprise agreement known as the Super Retail Group Enterprise Agreement 2018 (the Agreement) by Super Retail Group Services Pty Ltd (the Applicant).

[2] The “parties” to the Agreement are:

• Super Cheap Auto Pty Ltd;

• SRG Leisure Retail Pty Ltd;

• Super Retail Group Services Pty Ltd;

• Rebel Sport Limited;

• subject to the exemptions listed in the Agreement, team members engaged by the above entities to perform work within the classifications contained in the Agreement; and

• The Shop Distributive and Allied Employees Association (the SDA). 1

[3] Below I will firstly outline a relevant chronology of the matter upon it being lodged with the Fair Work Commission (the Commission). I will then outline the outstanding matters that require my determination. I will then consider those matters.

Chronology

[4] The Agreement was lodged for approval with the Commission on 10 December 2018.

[5] On 3 December 2018, the SDA filed with the Commission a Form F18 in relation to the application for approval of the Agreement. The SDA’s Form F18 noted among other things; that it was a bargaining representative for the Agreement; that it did not at that stage support the approval of the Agreement but would support its approval if the Applicant provided certain undertakings; and that it wished to be covered by the Agreement.

[6] On 21 December 2018, the Retail and Fast Food Workers Union (the RAFFWU) sent an email to the Commission’s Member Assist Team (the MAT). This email noted among other things; that the RAFFWU was of the belief that the Agreement was not capable of approval as (in its view) the Agreement did not satisfy the Better Off Overall Test (the BOOT) as some pay rates and conditions in the Agreement were less favourable than those in General Retail Industry Award (2010) (the Award); and that if there was a mention or conference to deal with the application for approval, then the RAFFWU wished to be included in such a mention or conference.

[7] On 6 February 2019, the MAT concluded its analysis of the Agreement and the Agreement was duly allocated to me on 7 February 2019 to determine whether it was capable of approval.

[8] On 1 March 2019, I held a conference with respect to this matter. The Applicant at this conference was represented by FCB Group Lawyers and I granted permission pursuant to s. 596 of the Act for the Applicant to be represented by FCB Group due to the complexity of the matters relevant to the approval or otherwise of the Agreement that remained outstanding. The SDA and the RAFFWU were also present at this conference. It was resolved at this conference that the Applicant would work through the issues identified by the MAT, the SDA and the RAFFWU, which, at that stage, it was suggested by the objectors, were making the Agreement incapable of approval. The intention of these discussions was to confine the issues that the Commission would ultimately have to consider regarding the approval or otherwise of the Agreement, some of which, it was hoped, could be addressed through the provision of undertakings by the Applicant.

[9] On 4 April 2019, I held a further conference for the parties to inform me on how the Applicant’s discussions with the objectors were progressing. Following this conference, it was clear that the Applicant and the SDA were working together on the SDA’s identified issues, some of which overlapped with the RAFFWU’s identified issues. The Applicant was also working constructively on the MAT’s identified issues independently of this process.

[10] On 8 May 2019, I held a further conference to receive an update me on how the Applicant’s discussions with the objectors were progressing. Prior to this conference, the Applicant provided draft undertakings and modelling with respect to the issues that, in the objectors’ view made the Agreement incapable of approval. At this conference, the RAFFWU also outlined its concerns with respect to the Agreement being capable of satisfying the genuine agreement requirement, pursuant to ss. 180(5) and 180(6) of the Act and the decision of the Full Court of the Federal Court in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77 (One Key). 2 At this conference I indicated to the parties that I was satisfied that the Applicant had resolved the issues that had been identified by the MAT.

[11] On 16 May 2019, the RAFFWU provided me with a further general submission on the genuine agreement matter and reiterated in this submission that the Agreement was not capable of approval. In response to the RAFFWU’s further general submission, the Applicant provided a submission on 23 May 2019, addressing the matters raised by the RAFFWU relevant to the genuine agreement issue.

[12] On 10 June 2019, the Applicant wrote to my chambers requesting that further directions be issued in this matter to facilitate, in an expeditious manner, a determination on the BOOT issues identified by the SDA and the RAFFWU and the ‘genuine agreement’ issue being now pressed by the RAFFWU.

[13] On 11 June 2019, I issued directions to the parties requiring submissions from the SDA and the RAFFWU by no later than 4pm on 19 June 2019 on the issues which the objectors considered made the Agreement incapable of being approved. The directions asked for a response from the Applicant to the ‘union’ parties’ submissions by 4pm on 26 June 2019 and indicated that a hearing to determine the outstanding matters that the ‘union’ parties suggested were making the agreement incapable of approval would be set down for early July.

[14] On 19 June 2019, the SDA confirmed that it still pressed four matters which it said made the Agreement incapable of approval, however, conceded that these issues may be satisfied by the Applicant providing further undertakings on these matters. Also on 19 June 2019, the RAFFWU pressed its submissions regarding the genuine agreement issues and also the BOOT issues.

[15] On 8 July 2019, the SDA provided a submission, prior to the scheduled hearing on 12 July 2019 that, upon further discussions with the Applicant and subject to undertakings that it understood the Applicant would be filing with the Commission on 10 July 2019, it now supported the application to approve the agreement. This support was also on the basis that the SDA did not have any objection to the approval on the basis of ‘genuine agreement’. In other words, the SDA did not agree to the RAFFWU’s submission regarding the Applicant being able to satisfy the ‘genuine agreement’ requirement per the decision in One Key.

[16] On 10 July 2019, the Applicant duly filed its submissions; in sum, addressing the RAFFWU’s involvement in matter, the ‘genuine agreement’ issue and the BOOT issues. To assist the Applicant in its argument relevant to the BOOT issues, the Applicant also filed undertakings, which were the basis for the SDA now supporting the approval of the agreement.

[17] On 12 July 2019, I held a hearing in Brisbane to consider the application for approval. Rather than discussing the issues that were, as it was suggested by the RAFFWU, making the Agreement incapable of being approved, the hearing quickly transposed into a debate on the RAFFWU’s involvement in the matter and whether I should exercise my discretion under s.590 of the Act to hear from the RAFFWU at all in relation to its concerns about whether or not the agreement was capable of being approved.

[18] I decided at the hearing, delivering short ex tempore reasons pursuant to s. 590 of the Act to permit the RAFFWU to continue its involvement in the matter relevant to the issues that it had prosecuted to date, but limited only to those matters. These were: the ‘genuine agreement’ matter and the BOOT issues that the RAFFWU indicated were not satisfied by the Applicant providing undertakings.

[19] The Applicant then provided me with a submission that the Commission would benefit from the parties having more time to provide detailed submissions and evidence on these matters. I agreed with this submission and, with the consent of the parties, transposed the hearing into a conference to deal with the programming of submissions on these outstanding matters. I indicated at this conference, and in subsequent written directions sent to parties on the same day, that a submission would be invited from the parties in late August as to whether a further hearing would be required to test the evidence or whether I would be adequately informed so as to consider the submissions and evidence on the papers. No such submission was received from the parties on whether the remaining matters needed to be determined by hearing or on the papers.

[20] On 6 September 2019, my chambers sent out correspondence to the parties that indicated that I had determined that it was my preference that a hearing be held to test the evidence of the Applicant’s witness, Michelle Leigh Hitchener (Ms Hitchener) who had, by this stage, filed two witness statements with the Commission relevant predominately to the ‘genuine agreement’ question. Earlier, the Applicant had informed my Associate that Ms Hitchener would be away for the month of September, so I indicated October to be a suitable month to conduct this hearing.

[21] On 19 September 2019, I held a conference to deal with the conduct of the hearing, including matters such as the date of the hearing, whether the RAFFWU intended on cross-examining Ms Hitchener, whether there was any further evidence that the Applicant intended to lead, and whether the RAFFWU was outside the scope of the its role in the matter that I had afforded it pursuant to s. 590 of the Act to be heard in this matter in relation to its submissions (which it flagged that it might). During the course of the conference, the Applicant made a concession that the Commission otherwise needed to be satisfied on the valid majority and casual cohort issues that Deputy President Mansini had recently grappled with in “the Kmart decision” 3, and that a submission on this point was relevant for the Commission’s full consideration in this matter. The parties consented that the Applicant would provide a submission on this matter by no later than close of business on 2 October 2019 (but this timeframe was subsequently extended to close of business 10 October and was duly submitted on this day). As part of this submission, the Applicant provided evidence from a Ms Hollie Bromley, Workplace Relations Adviser at the Applicant, on the conduct and process of the Applicant during the access period, specifically on the Applicant achieving a valid majority of employees voting for the Agreement to be made.

[22] In the conciliatory nature of the conference on 19 September 2019, the RAFFWU did not press the necessity to cross-examine Ms Hitchener, but nevertheless indicated that it would be available should the Commission deem it appropriate to test the Applicant’s evidence, or if a further conference was needed to clarify any other matter. It was therefore determined by consent that I would determine the matter on the papers and, if the evidence of Ms Hitchener required further examination, then I would list a hearing. My decision on whether or not to approve the agreement was thereafter reserved following this conference, and subject to the further matters arising from the Kmart decision.

[23] This, however, is not the end of the chronology of this matter. On 11 November 2019, the Full Bench of the Commission handed down its decision on the Kmart decision [[2019] FWCFB 7599]. 4 Later that week, on Friday 15 November, I invited submissions from the parties (and the RAFFWU) on the implications of this decision, specifically on the evidence of Ms Bromley. Parties duly filed their submissions in accordance with my directions that they be filed on 27 November 2019. My decision was thereafter reserved.

[24] In late December 2019, the Applicant and the SDA wrote to my chambers asking for a delay in the publishing of a decision until a time in late January. The rationale for this was that key HR personnel from the Applicant were away over the festive season, which would impede any implementation of the Agreement, should it be approved. I accepted this submission on face value, as did the SDA.

[25] I write this chronology to explicitly detail the steps that I and the MAT have taken since the Agreement was lodged with the Commission for approval. I have also itemised each step that the Commission and the parties have engaged in so as to demonstrate that there is no ‘go slow’ on agreement approvals, and that each step that the Commission has in dealing with agreement approvals, be it from Members such as myself, or the MAT, is a diligent one, so that we can ensure as best we can, agreements made are compliant with the Act.

The outstanding issues

[26] There are three outstanding issues that require my consideration and determination relevant to whether the Agreement must be approved. These are pressed now only by the RAFFWU. They are whether the Agreement:

• was ‘genuinely agreed to’ pursuant to ss.186(2)(a), 188(1)(a)(i) and 188(1)(c) of the Act and the decisions in One Key and CFMEU v Ditchfield Mining Services Pty Ltd[2019] FWCFB 4022 (Ditchfield); and

• was approved by a valid majority of employees employed at the time (given the casual cohort of employees); and

• satisfies the BOOT pursuant to s.193(1) of the Act.

[27] These issues will be duly considered.

Genuine agreement

Statutory provisions and relevant authorities

[28] Pursuant to ss.186(2)(a), 188(1)(a)(i) and 188(1)(c) of the Act, the Commission must be satisfied that the proposed agreement has been ‘genuinely agreed to’ by the employees covered by the proposed agreement. Specifically, the Commission must be satisfied that the employer has taken ‘all reasonable steps’ to ensure that the terms of the proposed agreement and their effect has been explained to the relevant employees in an appropriate manner, taking into account the particular circumstances and needs of the relevant employees (s. 180(5) of the Act).

[29] In its submissions, the Applicant, quoting in large part the decision of the Full Bench of the Commission in Construction Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services [2019] FWCFB 4022(Ditchfield) (at [63] – [72]), outlines the relevant consideration from the relevant authorities that have turned their mind to what constitutes ‘all reasonable steps’ pursuant to s. 180(5) of the Act. These paragraphs in Ditchfield, in part, summarise Flick J’s judgment at first instance in Construction, Forestry, Maritime, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 on the ‘all reasonable steps’ requirement and are also derived from Deputy President Gostencnik’s summary of the ‘all reasonable steps’ requirement in BGC Contracting Pty Ltd [2018] FWC 1466 (at [75 – 77]) and are, substantially, as follows:

(a) whether the employer has complied with the obligations in s.180(5) depends on the circumstances of the case;

(b) whether an employer has complied with s.180(5) requires the Commission to identify and assess the steps taken to ensure that the terms of the proposed agreement and their effect had been explained to the relevant employees;

(i) the steps taken were reasonable in the circumstances; and

(ii) these were all the reasonable steps that should have been taken in the circumstances.

(d) The Commission must then consider the content of the explanation given to ensure that the object of ensuring that (i) the terms of the proposed agreement and (ii) their effect, have been explained to the relevant employees in a manner that considers their particular circumstances and needs including their cultural and linguistic backgrounds and their age;

(e) the number and content of those steps comprising ‘all reasonable steps’ will depend on the circumstances. Some employers may, by reasons of the prevailing circumstances, need to take more or fewer steps than other employers with different agreements, facing different circumstances;

(f) the content of the explanation must enable to relevant employees to cast an informed vote, to know the content of the agreement and to enable them to understand how their terms and conditions might be affected by voting in favour of the agreement;

(g) in order to comply with s.180(5), an employer is not always required to identify detriments in an agreement against the relevant modern award or to provide an analysis between the agreement and the modern award, particularly in circumstances where an existing enterprise agreement applies to the employees in their employment with the employer. Where this is an existing enterprise agreement in place at the time of the explanation, it is relevant to have regard to the manner and content of the explanation of the changes made in the proposed agreement relative to the existing agreement; and

(h) an employer does not fail to comply with the obligation in s.180(5) merely because an employee does not understand the explanation provided.

[30] Further to (h) above, the Full Court in One Key at ultimately concluded that:

“[172] Nevertheless, the primary judge was correct to find that the Commissioner fell into jurisdictional error by failing to have regard to the content and terms of the explanation OKW purportedly provided the employees before they cast their votes. In addition the Commissioner’s decision was affected by jurisdictional error because he failed to appreciate that, in determining whether the relevant employees had genuinely agreed to the Agreement he needed to consider whether they were likely to have understood its terms and effect”.

[31] The question therefore, with regard to ‘genuine agreement’, as was eruditely put by Deputy President Boyce in recent decision is: Are the employees ‘likely’ to have understood the terms and effect of the terms of the proposed enterprise agreement having regard to the steps taken to explain the enterprise agreement to them by the employer? The question is not: Did the employees actually understand or comprehend what was explained to them as a result of the reasonable steps taken? 5

The evidence

[32] The Applicant relies on the witness statements of Ms Hitchener, Head of Workplace Relations for the Applicant, to support its submission that it took ‘all reasonable steps’ to ensure that the terms of the proposed agreement and their effect had been explained to the relevant employees in an appropriate manner.

[33] In Ms Hitchener’s first witness statement, filed with the Commission on 7 August 2019 (First Hitchener Statement), Ms Hitchener outlines the steps taken, through documented evidence, to explain the nature and effect of the Agreement on the employees that would be covered by the Agreement. Annexed to the First Hitchener Statement are a number of supporting documents to assist the Commission with its consideration that ‘all reasonable steps’ were made by the Applicant to explain the terms of the Agreement to the relevant employees and the effect of the terms within the agreement. This documented evidence included copies of:

• the ‘Communication Plan’ for explaining the terms and effect of the Agreement to the Applicant’s employees (MLH-9);

• communications for invitations to attend teleconferences for the Applicant’s ‘Leadership People’ (HR leaders, store managers and area manages) to discuss the Agreement and how the terms of such would be communicated to all the employees of the (MLH-10);

• the ‘Agreement Information Pack’ states to intend to provide information and facilitate discussions [on the Agreement] between management and team members in each workplace (and stated to be displayed in prominent places in all workplaces of the Applicant where there would be employees covered by the Agreement (MLH-11)

• ‘The FAQ’s Document’ providing an overview of the bargaining and voting process, general information of the key benefits to be achieved through the Agreement, and more comprehensive information concerning the more substantial changes in the Agreement, and their effect, proposed within the Agreement (stated to be displayed in every workplace and placed on the Applicant’s intranet page) (MLH-12);

• ‘The Key Changes Poster’ providing an overview of the 15 most significant changes, both beneficial and potentially detrimental, to be achieved through the agreement (stated to be displayed in every workplace and on the Applicant’s intranet page) (MLH-13);

• another poster which identified the top 5 benefits of the Agreement which identified 5 employee roster patterns and the impact that the Agreement would have on those employees (stated to be displayed in every workplace and on the Applicant’s intranet page) (MLH-14);

• an email of 7 November 2018 from Ms Jane Kelly (Ms Kelly), Chief Human Resources Officer of the Applicant, sent to all of the Applicant’s ‘People Leaders’ (HR leaders) reaffirming a direction that the ‘People Leaders’ were to have proactive conversations with team members to help them understand the nature and effect of the Agreement (MLH-15);

• an email of 8 November 2018 from Ms Kelly sent to all of the Applicant’s ‘Store and Clerical Leaders’ (store managers and leaders of the clerical team) reaffirming a direction that the ‘Store and Clerical Leaders’ were to have proactive conversations with their team members to help them understand the nature and effect of the Agreement (MLH-16);

• an email of 12 November 2018 from Mr Peter Birtles, Managing Director of the Applicant, to all team members who would be covered by the Agreement, which, amongst other things, referring to the key benefits to be achieved through the Agreement, providing an overview of the voting process, providing hyperlinks to the Agreement and other supporting material, and encouraging team members to engage directly with HR and management should they require any support in understanding the terms and effects of the Agreement (MLH-17); and

• an email of 13 November 2018 from the EA team to all team members who would be covered by the Agreement, providing them with copies of the Agreement, associated documents, how to vote information and ‘the FAQ’s Document’ (MLH-18).

[34] Other than this documentary evidence, the First Hitchener Statement also states that during the moderated telephone conference ‘Store Managers’ and ‘People Leaders’ were instructed to undertake team huddles, team meetings or 1:1’s with their teams prior to the Agreement being voted on so that the terms of the Agreement and their effect could be explained to the team members in a manner which provided them with a sufficient opportunity to review the Agreement and supporting materials, and ask questions if required. 6

[35] The First Hitchener Statement further states that between 13 November 2018 and 18 November 2018, the Applicant required its ‘Store Managers’ and ‘People Leaders’ to conduct local meetings and 1:1 discussions in each workplace of the Applicant to discuss the terms and effect of the Agreement with the relevant team members. 7 It also states that these meetings would provide an opportunity for these team members to raise questions regarding the Agreement.8 Ms Hitchener states that she understands that these meetings occurred in the manner described.9

[36] The First Hitchener Statement further states that – by nature of the work undertaken by the team members being customer service focussed – there was a high degree of proficiency in the English language amongst team members. 10 Ms Hitchener further states that despite this fact, ‘Store Managers’ and ‘People Leaders’ were instructed during teleconferences (see MLH-10) to take special consideration of any team members who may require additional assistance in understanding the terms and effect of the Agreement, together with those employees which may be absent from the workplace for any reason.11

[37] The First Hitchener Statement states that ‘the FAQ’ and ‘Key Changes Poster’ were used as the basis for which management would undertake team huddles, meetings or 1:1 conferences with their teams. Further evidence was led by Ms Hitchener that ‘Area Managers’ had oversight of the ‘Store Managers’ and ‘People Leaders’ to ensure that this communication process was occurring, and that no difficulties or errors in this process was reported by the ‘Area Managers’. Evidence was also led that there was a dedicated telephone advisory service and generic email inbox for team members should they wish to ask for further information about the terms of the Agreement and their effect, or about the voting process. Ms Hitchener provides an example of the responsiveness of the generic email inbox whereby a response was issued to a particular enquiry from the HR Department of the Applicant within 1 hour and 10 minutes of the matter being raised (MLH-19).

[38] Ms Hitchener’s second witness statement, filed with the Commission on 30 August 2019 (Second Hitchener Statement), outlines, for the purposes of the genuine agreement matter, the steps that the Applicant takes to explain the terms of the current enterprise agreement Super Retail Group Enterprise Agreement 2012 (the Current Agreement), to the Applicant’s workforce.

[39] In the Second Hitchener Statement, Ms Hitchener brings to the Commission’s attention the requirement of the Current Agreement to be accessible to all employees (clause 5 of the Agreement). 12

[40] The Second Hitchener Statement also provides documentary evidence of the induction process for new staff, including copies of:

• the template casual ‘Super Retail Group Contract of Employment’ which Ms Hitchener all employees are employed under (MLH-23);

• the retail induction manual for permanent employees which references “employment conditions” (MLH-24);

• the retail induction manual for casual employees which references “pay, work hours” and entitlements (MLH-25);

• the “Retail Cheat Sheet”, an 8-page summary document of the main terms and conditions contained within the Current Agreement (MLH-26); and

• a copy of a screenshot of the Applicant’s intranet displaying where the Current Agreement, induction manuals, supporting material and the “Retail Cheat Sheet” are located on the Applicant’s intranet (MLH-27).

[41] Other than this documentary evidence, the Second Hitchener Statement also states that;

• discussions occur with candidates during the interview process about the terms and conditions of employment; 13

• each employee (including casual employees) receives a welcome email with a copy of their contract of employment and a copy of the Current Agreement; 14

• terms of the Current Agreement are explained to all employees during the induction period; 15 and

• given the requirements of managing a younger workforce, the need may arise, on occasion, to provide additional support and assistance in the explanation of tasks, expectations and entitlements (under the Current Award) so as to ensure their understanding. 16

The RAFFWU’s submissions

[42] The RAFFWU submitted that the Commission cannot be satisfied, on the material filed, that the Applicant took all reasonable steps to explain the terms of the Agreement or the effect of the terms of the Agreement. 17

[43] The broad submissions of the RAFFWU in support of its above position can be summarised as follows:

• the Applicant’s workforce is transient, or, as put by the RAFFWU, it is “highly likely more than half the workforce…was not employed by the applicants at the time the last agreement was voted on”; 18

• the Applicant’s workforce is young (39% being under the age of 21 years of age); 19 and

• the Agreement is complex, with 53 pages and 268 clauses. 20

[44] Specifically, the RAFFWU submitted inter alia that:

• “…the FAQ document exposes that the vast majority of terms simply were not explained – at all”; 21

• [t]here was no analysis comparing any Award term to the Agreement; 22

• [t]here was no detailed analysis comparing the terms of the Agreement with the extant enterprise agreement. 23

• [t]here was no explanation of the terms of the Agreement themselves; 24

• …changes such as expanding the definition of fixed term contracts to include maximum term contracts, changing the definition of casual employment, the grounds for store transfer, the elimination of accident make up pay in Victoria and the elimination of an entitlement to specific parental leave with it being moved to a changeable policy were not explained; 25

• no explanation was provided about a payment for compulsory training; 26

• nothing was explained to employees about travel time in the taking of rest breaks. 27

[45] In summary, the RAFFWU submitted that “there is no evidence before the Commission that all reasonable steps were taken. To the contrary, large parts of a complex document were simply not explained, no explanation drawing comparison with the Award occurred, and the only comparison to the extant agreement was limited to very few terms and deficient.” 28

The Applicant’s submissions

[46] Other than relying on the evidence of Ms Hitchener in its submission that it took reasonable steps to explain the terms and effect of the Agreement to its workforce, the Applicant provides a further submission that all of the steps taken to explain the terms of the Agreement and their effect were reasonable in the circumstances. 29

[47] In summary, the Applicant’s position with respect to the ‘all the steps being reasonable” submission is that:

• because its [the Applicant’s] employees are not employed at a single location, the Applicant necessarily adopted both mass communication and local communication methods in a structured and targeted manner, to explain the terms of the proposed agreement and their effect; 30

• [t]he FAQ document and posters explained the key terms of the proposed agreement and their effects; 31

• [the] ‘People Leaders’ were coached and instructed to conduct team and one-on-one messages to reinforce these messages; 32

• … “there is a very high proficiency in the English language amongst team members required as part of the job to communicate regularly with customers, there are no special circumstances requiring the translation of the content of … explanations; 33

• “since 2003, [the Applicant’s] team members have been employed under successive workplace instruments. A modern award has not ever been applied to any team member that would be covered by the proposed agreement. There have been very minimal practical changers to the form, content and effect of the industrial instruments between the Super Retail Group Enterprise Agreement 2012 and the Agreement.” 34

• unlike the circumstances in One Key and Ditchfield, the Applicant’s “large workforce [is] accustomed to having their terms and conditions of employment regulated under enterprise agreements and represented by the SDA as a default bargaining representative which is a large, well-resourced and sophisticated union.” 35

Satisfaction as to the “genuine agreement” requirement under s.180(5)

[48] The facts and circumstances, along with the nature of any explanation given, mean that what constitutes “all reasonable steps” necessarily varies. The term “all reasonable steps” does not give rise to the requirement for “perfection”. 36 The assessment is, therefore, a value judgment.37 There are no absolute rules about what is required in every circumstance by an Applicant to have done, or not to have done.38 Compliance with s. 180(5) and ss.186(2)(a), 188(1)(a)(i) and 188(1)(c) of the Act varies in each case.39

[49] The matter before me does not share a number of material facts and circumstances that were before the Federal Court in One Key or before the Full Bench of the Commission in Ditchfield. I will firstly briefly explore this proposition.

[50] For one, the workforce that would be covered by the Agreement in this matter is presently covered by the Current Agreement. This case is not one where employees are moving from a modern award that applies to them to an enterprise agreement. The impacted employees are all moving from an enterprise agreement that has passed its nominal expiry date to a new enterprise agreement. The Commission must be satisfied that the Agreement satisfies the BOOT, however, for practical purposes, the employees, if the Agreement is approved, would be moving from the Current Agreement to the Agreement. If the Agreement was voted down or cannot be approved by me, the employees would carry on being covered by the Current Agreement. This approach, as was submitted by the Applicant, has been the way in which the Applicant and its workforce have engaged with their employment terms and conditions since 2003. The material consideration, therefore, is whether the Applicant took all reasonable steps to explain the terms and their effect of the Agreement to the employees from the position that they are currently at with the Current Agreement. This is unlike what the Federal Court had to consider in One Key, and circumstances before the Full Bench in Ditchfield.

[51] There are two further material distinctions between this case and One Key. For example in One Key, unlike in this case, there was:

• no bargaining (which provides at least some interaction between the workforce (or a bargaining representative on its behalf and the employer on employment terms and conditions); and

• an agreement covering classifications in 11 awards with the 3 employees who were voting on the agreement only working in classifications under 2 awards of those 11.

[52] The above circumstances are sufficiently different to the matter before me and what were considered material considerations for the ‘all reasonable steps’ consideration in One Key.

[53] Another material factor, I find, is the size and configuration of the Applicant’s workforce. In this regard, I agree with the Applicant’s submission that, due to the Applicant having approximately 600 retail establishments geographically dispersed in every state and territory of Australia (employing some 10,145 employees), it necessarily adopted both mass and local communication methods to explain the terms of the proposed agreement and their effect, which accords with a submission of the Applicant. This circumstance is unlike the very small workforce in One Key or the geographically isolated workforce in Ditchfield, where, for example in Ditchfield, a Mine Manager was based full time on site and available to discuss the agreement in that case with the relevant employees.

[54] On this basis, I would further consider that the question as to whether ‘all reasonable steps’ were taken is different in this matter as opposed to the circumstances in One Key and Ditchfield. Or to put it more clearly, the Applicant in this instance, due to the size of its workforce and the geographic dislocation of its workforce, should, in my consideration, be afforded the appropriate regard in the Commission’s satisfaction that it took ‘all reasonable steps’ to explain the terms of the Agreement and their effect to its workforce.

[55] I also agree with the Applicant’s submission that there was, or would likely be, a high proficiency in the English language amongst its team members who would be covered by the Agreement. This is due to the nature of the work performed by the employees who would be covered by the Agreement. I accept the submission that there were no special circumstances requiring the content of the explanations to be translated for any employee, given the inherent requirement of outfacing customer service roles in Australian companies to be proficient in the English language (and no evidence of such request was duly made and/or denied). This supports the view that the Applicant undertook “all reasonable” steps, at least, in the manner of its communication with its employees. It does not speak to the substance of the explanation.

[56] Further, I place consideration on the evidentiary material that I have before me. Due to protracted process undertaken in considering this matter, I have had the benefit of receiving two very detailed witness statements from Ms Hitchener, which have enabled me to consider the “all reasonable steps” question holistically and with evidence over and above the statement provided for in the Applicant’s Form F17. I have permitted a contradictor to make submissions in relation to that evidence, which I have equally considered thoroughly.

[57] Finally, there is at least some merit in the submission (that it is worth noting) that there was “a large, well-resourced and sophisticated union” (as put by the Applicant), the SDA, representing a significant portion of the Applicant’s workforce in the bargaining and voting process. While the obligation under the Act is solely on the employer to satisfy the ‘all reasonable steps’ requirement to explain the terms of the Agreement and their effect, the inclusion of a union in the case before me is, unlike the circumstances in One Key and Ditchfield (where there was no default bargaining representative), and therefore no other entity contradicting the employer in bargaining, or more relevantly, no other entity communicating to the workforce about what the terms and conditions would be in those matters with respect to the Agreement. Whilst not necessarily a consideration for me and by no means determinative, it is worth noting. The SDA supports the approval of the Agreement.

[58] I am satisfied on the evidence before me, and the circumstances in this case, that ‘all reasonable steps’ were taken by the Applicant to explain the terms of the Agreement to the Applicant’s employees.

[59] This satisfaction, with regard to the explanation of terms, is based on the evidence before the Commission that:

• there was a comprehensive communication plan (with subsequent and regular teleconferences with ‘Leadership People’ to check-in on the implementation of this plan) to communicate the terms of the Agreement to the workforce and this communication plan was, on the evidence, discharged and enacted in full. 40

• the communication plan (referred to above) included discussions between management and team members in each workplace (including on a 1-1 and team-level basis), and there was clear direction provided to the ‘People Leaders’ to have proactive discussions with the relevant employees in the workforce to explain the Agreement; 41

• the documentary material being, the ‘Agreement Information Pack’, the ‘FAQ’s Document’, the ‘Key Changes Poster’ demonstrate an explanation of the terms of the Agreement and outline the substantial changes between the Current Agreement and the Agreement. These documents were, on the evidence, prominently displayed in all of the Applicant’s stores and were on the Applicant’s intranet page which was accessible for all employees of the Applicant.

• the email sent by Mr Peter Birtles, Managing Director of the Applicant, on 12 November 2018 provided a link to all employees of the Agreement, other information, and encouraged the team members to engage directly with HR and management should they require support in relation to understanding the Agreement; 42

• the email sent by the EA team on 13 November 2018 to all employees provided them with a copy of the Agreement and also included the ‘FAQ’s document’; 43 and

• there was a dedicated telephone advisory service and generic email service for any employee of the Applicant’s to enquire further about any of the information or the material. 44

[60] That said, the Full Bench of the Commission in Ditchfield goes further and spells out, relevantly, that consideration is also required about what, if any, explanation has been given to employees about the effect of those terms at paragraphs [75] – [79]:

“[75] That information might be sufficient to support satisfaction that the terms of the Agreement were relevantly explained, but it says nothing about what if any explanation had been given to employees about the effect of those terms.

[76] The Deputy President’s conclusion as to satisfaction in relation to s.180(5) of the Act is at [58] of the Decision, which is earlier set out in this decision. At [52] of the Decision, the Deputy President distinguishes the decision in One Key Workforce (No 2). The Deputy President reasoned that in One Key Workforce (No 2) there were no face-to-face meetings, the agreement for approval covered classifications in 11 awards, and the three employees voting on the agreement only worked across two awards and could not give informed consent in regard to occupations and industries in which they did not work. He concluded that those circumstances, or anything similar, do not exist in this application.

[77] So much is correct, but, respectfully, there are further matters that require consideration. In One Key Workforce (No 2), the Full Court made several observations about the quality of the explanation required in order to comply with s.180(5) of the Act, and the Commission’s approach to assessing compliance. It is important to remember that the Full Court said of the Commission’s approach that

“[i]n order to reach the requisite state of satisfaction that s.180(5) had been complied with, the Commission was required to consider the content of the explanation and the terms in which it was conveyed, having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement”. [Full Bench’s emphasis, citations omitted]

[78] As to the absence of information about the content of the explanation that had been given, the Full Court observed, inter alia, that

“[t]he absence of that information meant that the Commission was not in a position to form the requisite state of satisfaction. Put differently, without knowing the content of the explanation, it was not open to the Commission to be satisfied that all reasonable steps had been taken to ensure that the terms and their effect had been explained to the employees who voted on the Agreement or that they had genuinely agreed to the Agreement”. [Full Bench’s emphasis, citations omitted]

[79] As should be evident from the terms of s.180(5) of the Act, the content of the explanation required is twofold. First, there must be an explanation of the terms of the Agreement. Secondly, the effect of those terms must be explained.”

[61] The Commission is therefore required to consider the content of the explanation and the terms in which it was conveyed having regard to all the circumstances and needs of the employees and the nature of the changes made by the Agreement.

[62] A review of the evidentiary material confirms, and I find, that the Applicant has explained the effect of the terms of the Agreement to its employees. The explanation of the terms is not perfect, but it is nevertheless, on my finding, sufficient to satisfy the statutory requirements. I have come to this conclusion for the following (non-exhaustive) reasons:

• The ‘FAQ Document’, 45 a copy of which was provided to all employees of the Applicant via email, available on the Applicant’s intranet and posted in prominent positions in all of the Applicant’s stores, provides the employees of the Applicant with substantial information about the changes from the Current Agreement to the Agreement, including outlining many benefits for making the Agreement, but explaining – as a detriment – why public holiday and overtime rates would be going down. The ‘FAQ Document’ also explains, among other things:

• the top five benefits in the Agreement including: increases to pay; the introduction of Saturday penalty rates; new travel and laundry allowances and paid tea breaks increasing to 15 minutes);

• other benefits including: that the rates are more than 5% higher than the General Retail Industry Award 2010; that minimum shift times for casuals and for training would be 3 hours; there being greater flexibility to accrue annual leave prior to taking it; expanding the definition of immediate family to acknowledge long term arrangements of foster children; and access to all of Super Retail Group’s benefits including team member discounts and paid parental leave;

• the effect of the laundry and travel allowances;

• why different employees are receiving different pay increases and which employees are receiving higher pay increases;

• why Saturday rates are going up;

• the new span of ordinary hours; and

• why the term of the Agreement is now 4 years.

• the ‘Key Changes Document’, 46 a copy of which was available on the Applicant’s intranet and posted in prominent positions in all of the Applicant’s stores, similarly provides the employees of the Applicant with substantial information about the changes from the Current Agreement to the Agreement, including outlining many benefits for making the Agreement. The ‘Key Changes Document’ also explains, among other things, the changes from the Current Agreement to the Agreement, including:

• the inclusion of Saturday penalties [in the Agreement];

• the inclusion of late night and Saturday penalties for casuals;

• the introduction of a laundry and travel allowance (and an explanation of same);

• the increase of paid tea breaks to 15 minutes;

• increased minimum shifts for casuals and mandatory training to 3 hours;

• an increase in Sunday penalties, then a decrease (disclosing a detriment)

• outlining the maximum permissible hours;

• the span of ordinary hours changing (consistent with the explanation in the ‘FAQ Document’;

• the meal allowance increasing;

• the removal of Victorian Accident Make Up Pay (and explaining why it is being removed) but also grandfathering this provision for those covered under it (disclosing a detriment);

• that all training is considered voluntary, unless specified otherwise (and signalling that compulsory training is paid for);

• the inclusion of casual conversion clauses;

• the inclusion of secondment provisions; and

• that the Agreement is for a term of 4 years, not 3.

• the posters, stated to have been prominently displayed in the stores of the Applicant, also serve to explain the effect of the Agreement, focussing mainly on the benefits of a vote in favour. 47

• another poster which identified the top 5 benefits of the Agreement and identified 5 common employee roster patterns and the impact that the Agreement would have on those employees, stated to be displayed in every workplace and on the Applicant’s intranet page, provides an explanation of the changes that would occur under the Agreement as against the Current Agreement; 48 and

• team meetings and 1:1 face-to-face meetings were had with team members to explain to them further the terms and effect of the Agreement and what the changes all meant in practical terms. 49

[63] It must be said that these communications focus primarily on explaining the beneficial changes between the Current Agreement and the Agreement. However, as the Full Bench reflected on in Ditchfield, there is no express legislative requirement for an employer to raise any less beneficial provisions of an agreement with employees in providing an explanation as to the terms of an agreement or the effect of those terms…”[m]uch will depend on the circumstances of a given case”.

[64] The RAFFWU have, for the Commission’s benefit, tried to be helpful in identifying, in its view, some less favourable terms in the Agreement vis-à-vis the Current Agreement, which it suggests were not explained. Expressly, this includes, in the RAFFWU’s submission, the Agreement (vis-à-vis the Current Agreement) expanding the definition of fixed term contracts to include maximum term contracts, changing the definition of casual employment, changing the grounds for store transfer, the elimination of accident make up pay in Victoria, and the elimination of a specific parental leave entitlement, with it being moved to a changeable policy and more.” I wish to make some brief comments on what the RAFFWU have identified.

[65] The RAFFWU’s submission of the ‘Elimination of Accident Make Up Pay in Victoria’ not being explained is without merit. Firstly, the Applicant confirms, in its Key Changes Document’, that all those who are presently covered by this entitlement would be grandfathered by this clause. Secondly, and in any event, the Applicant discloses that this provision is being removed in the Agreement (and why), which the Applicant outlines is consistent with changes to the Award (see the ‘Key Changes Document”). 50 The RAFFWU’s submission in this regard, and the veracity in which it is argued, is disingenuous in light of the clear documentary evidence provided by the Applicant that it was made known to the workforce that this entitlement would be going, in line with the Award, with an explanation as to why this would be the case.

[66] With respect to RAFFWU’s submission on regarding the Applicant not explaining the “expan[sion] of the definition of fixed term contracts to include maximum term contracts”, I find this submission similarly lacking in merit. For all intents and purposes with respect to how ‘fixed term contract’ and ‘maximum term contract’ should be interpreted in the Agreement, I consider a maximum term contract to be fixed term contract. There is no distinction made in this clause or in any definitional section of the Agreement which distinguishes these two contractual arrangements. They are practically one and the same. This submission is a red-herring as the definitional change is of no consequence to the workforce. Any explanation to the workforce, in my view, would have only confused them, as the drafting of this clause may have done to the RAFFWU, and admittedly, to me, on first reading.

[67] I find also the RAFFWU’s submission regarding a lack of explanation regarding the change to the casual employment definition to be baseless. If anything, it can be said that the employer is merely doing housekeeping work with respect to this definition. It confirms an entirely unremarkable proposition that casuals employees are employed on “an hourly basis, without an expectation of regular, systematic or long-term employment”, and notes that “a 25% casual loading” is payable on a casual’s base rate, a similarly unremarkable observation.

[68] The store transfer provision identified by the RAFFWU is largely the same as it was in the Current Agreement, with the inclusion of an arguably more beneficial term for employees that any store transfer, or relocation, will be considered in light of an employee’s residence and not where they presently work (as is the case in the Current Agreement). If an employee resides on the Gold Coast, but works in a Brisbane store of the Applicant’s, any relocation would firstly consider stores of the Applicant’s in the Gold Coast. I do not see this as a clause, in these circumstances, as one requiring explanation in any manner of detail.

[69] With regard to the parental leave policy being changed from a right under the Agreement to a changeable policy and this not being explained, there is some merit in this submission, and this has required my consideration and further exploration. Having undertaken this, I am satisfied that this change was not necessarily required to be expressly outlined to the team members for three reasons: firstly, the clause is more inclusionary (altering the word maternal to parental), secondly, the clause is remarkably more beneficial for employees in that it confers a right to paid parental leave after one year of continuous service (and not two which is the case under the Current Agreement) and thirdly, as has been explained to me, the terms between the parental leave policy as under the Agreement and what was in the Current Agreement are entirely the same otherwise, that is, for practical purposes, nothing changes for the employees. I am satisfied for these reasons that there need not be a forensic explanation into this change. As for any concern about it being a changeable policy, as opposed to an entitlement under an agreement, I note that any change to a policy must be done through extensive consultation with the workforce, and thus the affected employees are afforded protection in this way.

[70] I have referred to the other changes between the Current Agreement and the Agreement otherwise not identified by the RAFFWU and am satisfied that the Applicant took “all reasonable steps” to explain the terms of the Agreement and their effect to its employees, given the circumstances.

Did a valid majority of employees employed at the time voted in favour of the Agreement?

Statutory provisions and relevant authorities

[71] The Commission must be satisfied under subsection 181(1) and subsection 182(1) of the Act that a valid majority of employees employed at the time voted in favour of an agreement for an agreement to be approved.

[72] Subsection 181(1) of the Act states as follows:

“181 Employers may request employees to approve a proposed enterprise agreement

(1) [Employers may request employees to approve a proposed enterprise agreement]

An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

… “

[73] Subsection 182(1) of the Act states as follows:

“182 When an enterprise agreement is made

Single-enterprise agreement that is not a greenfields agreement

(1) If the employees of the employer, or each employer, that will be covered by a proposed single-enterprise agreement that is not a proposed greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.

[74] A decision of the Full Bench of the Commission in [2019] FWCFB 7599 (the Kmart Full Bench decision) recently clarified the consideration that the Commission must have with regard to subsections 181(1) and 182(1) of the Act.

[75] The Applicant to these proceedings provides a succinct outline, which I view as correct, of the Kmart Full Bench’s substantial decision (at [31 – 40]) and [43], which I outline below (in summary):

• the proper construction of s. 181(1) of the Act is that the relevant employees entitled to cast a valid vote in relation to the approval of the enterprise agreement are the employees employed by the employer during the access period and immediately before (and perhaps upon) the commencement of the voting period;

• to the extent that persons who were not employed during the access period were allowed to cast a vote, such an error is only relevant if it could have affected the overall result that a valid majority of employees had approved the making of the enterprise agreement.

The evidence of Ms Hollie Bromley

[76] In aiding the Commission’s satisfaction that a valid majority of employees employed at the time voted in favour of the Agreement, a witness statement was submitted by Ms Hollie Bromley (Bromley Statement), a Workplace Relations Coordinator at the Applicant.

[77] The Bromley Statement states that Ms Bromley’s tasks included conferring with the Applicant’s outsourced ballot service provider, CorpVote Pty Ltd (CorpVote). Ms Bromley details the engagement process with CorpVote at some length. 51

[78] Relevantly, however, Ms Bromley states as follows:

“Provision of employee data

23. I have reviewed my emails, and the Super Retail Group’s Systems, and can confirm that employee data was provided to CorpVote in the following manner:

i. on 9 November 2018 an initial voter roll was provided to CorpVote which provided the details of 10,016 team members who were employed by Super Retail Group at the time and would be covered by the Agreement;

ii. on 17 November 2018 a subsequent voter roll was provided to CorpVote which provided the details of 152 new starters, as well as identifying 22 employees whose employment had subsequently ceased.

24. The information provided to CorpVote, as outlined above, contained the data of 10,146 team members who were considered to be employed and covered by the agreement at the time. I have recently been informed that the information provided by CorpVote indicated that there were 10,145 eligible employees. I have no knowledge as to how this small discrepancy arose although can confirm that at no time prior to or during the Voting Period did CorpVote confirm the total number of eligible employees which would have enabled the discrepancy to be identified.

25. Despite the established processes contained within Voter Ballot Process and Ballot Plan no further information was provided to CorpVote concerning new starters and or terminations from 17 November 2018.

…

28. Having considered this matter, I cannot offer any explanation as to why new starter/termination information was not provided to CorpVote after 17 November 2018 as intended, other than being a case of genuine oversight and administrative error.

New Starter/Termination Employee Data

29. I have recently received Super Retail Group’s Systems and can confirm that:

i. 5 team members commenced working for Super Retail Group, and actually performed a shift, in the period of 17 November 2018 to 19 November 2018 inclusive. The data relating to these employees was not provided to CorpVote;

ii. 44 team members commenced working for Super Retail Group, and actually performed a shift, within the voting period. The data relating to these employees was not provided to CorpVote; and

iii. 75 team members ceased working for Super Retail Group between 17 November 2018 and 26 November 2018. The data relating to these employees was initially provided to CorpVote, however, CorpVote was not subsequently informed that the employment of these employees ceased.

30. My review undertaken confirms that due to genuine oversight or administrative error 49 team members commenced working for Super Retail Group and performed a shift between 17 November 2018 and 26 November 2018, however, their details were not included in the voter roll information provided to CorpVote.

31. My review undertaken also confirms that due to genuine oversight or administrative error the details of 75 team members were provided to CorpVote, however, their employment with Super Retail Group ceased between 17 November 2019.

Casual Employees Employed at the Time of the Vote

32. I have also recently undertaken a review of the casual team member data provided to CorpVote.

33. Data concerning a total of 6,904 casual team members was provided to CorpVote on the dates outlined above. I have recently been informed that the information provided by Super Retail Group to the Fair Work Commission identified that there were 7,048 casual employees who were eligible to vote, I have no knowledge as to where this figure was sourced, however, I have reviewed the data provided to CorpVote and can confirm that data relating to 6,904 casual team members was provided.

34. Further assessment indicates that of those casual team members, a total of 2,100 did not work a shift during the Voting Period (Casual Cohort).

35. A further assessment of the Casual Cohort was undertaken of the e-Tivity time and attendance system to determine those team members within the Casual Cohort who worked during the period of 12 – 19 November inclusive (Access Period).

36. The assessment undertaken indicates that a total of 726 casual team members who make up the Casual Cohort worked at least one shift during the Access Period.

37. A further assessment undertaken indicates that a total of 945 casual team members who make up the Casual Cohort worked at least one shift in the 3 months before the beginning of the Access Period.” 52

Applicant’s submissions

[79] The Applicant submitted that, in accordance with s. 180(4) of the Act, the access period began on 12 November 2018 and ended on 19 November 2018. The voting period for the Agreement began on 20 November 2018 and ended on 26 November 2018. 53

[80] According to the Applicant, there would be two classes of employees which may be affected (for the purposes of the valid majority assessment) in light of the Kmart Full Bench decision, based on the Bromley Statement. 54

[81] These would be, according to the Applicant, the 5 employees who commenced working for the Applicant and performed a shift between 17 November 2018 and 19 November 2018 (i.e. during a part of the access period) but did not have the opportunity to cast a valid vote to approve the Agreement. It would also be the 75 employees who ceased working for the Applicant between 17 November 2018 and 26 November 2018 (which overlaps with the access period (17 November 2018 – 19 November 2018) but had been wrongly included in the voter roll (although the exact number who had ceased employment during the access period is not clear) and therefore may have cast a valid vote to approve the Agreement. 55

[82] The Applicant submitted that the Kmart Full Bench decision found that, nonetheless, where an employer has wrongly allowed some employees to vote, or wrongly excluded some employees from exercising such an opportunity, if it would not have made a difference to whether a valid majority of employees employed at the time of the access period had approved the agreement, then the Commission may still approve the Agreement. 56

[83] To this effect, the Applicant’s submissions are that during the ballot, 5,376 employees casted a valid vote and 5,015 employees voted to approve the Agreement. The Applicant thereafter submitted that given the small number of employees who were either wrongly included or excluded from casting a vote, it is clear that it would have made no difference to whether a majority of employees had voted in favour of the Agreement. 57

The Applicant’s submissions on the casual cohort issue

[84] The Applicant submitted, with regard to the casual cohort issue, and based on the evidence of Ms Bromley, that 1,374 casuals could be considered ineligible to vote on the basis that they were “on the books” but did not work during the voting period as well as the access period. On this point, the Applicant submitted that in the event that these 1,374 casual employees are deemed ineligible to vote, and assuming that all such persons voted to approve the agreement, at the time of the vote 4,002 employees would have cast a valid vote (amounting to a 40% participation rate) with 3,641 employees voting to approve of the agreement (91% approval rating). 58

[85] The Applicant concluded its submission by saying that even if the Commission deducted the ineligible broader pool from the voting cohort and, assuming all ineligible persons voted and had voted to approve the Agreement, the Agreement was still approved by a valid majority of employees eligible to vote. Or, put another way, the inclusion of ineligible casual employees who were not employed at the time of the vote in the voting cohort made no practical difference to the outcome of the vote. 59

The SDA’s submissions

[86] The SDA’s submissions with regard to the valid majority issue is substantially on all fours with the Applicant’s submissions.

The RAFFWU’s submissions

[87] After the Bromley Statement had been filed with the Commission, the RAFFWU relevantly submitted the following with respect to the valid majority matter: 60

“Net Too Wide

3. Contrary to the submission of the SDAEA, the evidence does not disclose the number of casual employees who worked during the access period. This is a foundational element in the determination of the employees who were employed at the time. That foundation flows from Swinburne, Norton and Kmart.

4. The evidence identifies that there were 10,145 employees purportedly employed at the time. Some 6,904 of those employees were casual team members. 2,100 of those persons did not work a shift during the voting period which was the period from the close of the access period to the close of the vote. 726 of the 2,100 worked at least one shift during the access period.

5. There is no evidence of the number of persons employed on a casual basis who were in the 6,904 and did not work in the access period. We know that the Applicant erroneously considered all “active” casual employees as being “employed and covered by the agreement at the time.”

6. The evidence of the applicant is that it has no specific policy or requirement for the determination of an “active casual”. It is manifestly clear that it must include persons who did not undertake work during the access period. We can derive from the evidence of the applicant that 1,374 of the 2,100 ‘casual cohort’ who did not work during the voting period also did not work during the access period.

7. The only evidence before the Fair Work Commission is that 726 of the 6,904 persons engaged on a casual basis did perform work during the access period. It is patently clear at least 1,374 of the remaining 6,178 did not work during the access period. This leaves 4,804 persons for whom the Fair Work Commission cannot know whether they worked during the access period.

8. The applicant seeks for the Fair Work Commission to consider the group of 6,178 as employed on an ongoing basis contrary to Norton. The evidence simply doesn’t permit such an inference.

9. 5,015 are said to have voted in favour of the agreement. We know 1,374 persons were offered votes who were not entitled to vote. There is no evidence of the status of 4,804 other persons as to their entitlement to vote. In circumstances where the Fair Work Commission cannot be satisfied that 6,178 persons were entitled to vote having been given a vote, we submit the agreement cannot be approved.

Net Too Narrow

10. In relation to the “net too narrow” issue, the evidence directly discloses that 5 persons were excluded from voting despite being engaged during the access period. This evidence is express7.

11. Contrary to the submission of SDAEA and the Applicant8, Kmart does not stand for the proposition that casting the net too narrow “creates no impediment to approval”. To the contrary, the specific appeal ground put before the Kmart appeal was not found and the original decision with respect that issue not overturned.

12. To the contrary, in the Kmart decision the Full Bench went to some length to identify the particular importance of employees who commence work during the access period to be included in the vote process. RAFFWU notes neither SDAEA nor the applicant identify the paragraph in Kmart they purport stands for the permissibility of casting the net to narrow.

13. We submit that by casting the net too narrow, the applicant fatally harmed its application. To put it another way, the agreement was not made with the employees employed at the time.

…”

Consideration

[88] Put simply, I accept the submissions of the Applicant and the SDA. I accept their construction of the Kmart Full Bench decision over that of the RAFFWU.

[89] The access period for the purposes of the proposed agreement was 12 November 2018 – 19 November 2018 (inclusive). The voting period of the proposed agreement was 20 November 2018 to 26 November 2018.

[90] I accept the evidence of Ms Bromley that 5 employees who commenced working for the Applicant during the access period were not afforded the opportunity to vote.

[91] I also accept the evidence of Ms Bromley that 75 employees who ceased their employment with the Applicant in the period of time during the access period and the voting period (17 November 2018 – 26 November 2018) may have been entitled to vote if they had worked at some point during the access period (between 12 November 2018 and 17 November 2018).

[92] According to my interpretation of the Kmart Full Bench decision at [31], an employer’s request to employees to approve an agreement as contemplated by s. 181(1) of the Act “is a single act or event which occurs at the end of the access period and immediately prior to (or perhaps upon) the commencement of the voting process.”

[93] At [33] of the Kmart Full Bench decision, the Full Bench preferred a construction of the Act that employees employed at the time of the request encompassed those employees employed throughout the whole of the access period.

[94] The decision by Kmart to include employees on the roll of eligible voters employed outside of the access period, both prior to its commencement and in the period after the request to approve was made (and the ballot had commenced) was not fatal to Kmart application for approval. At [43] the Full Bench stated as follows:

“In relation to that element of the genuine agreement requirement in s 188(1)(b), there remains an issue to be dealt with arising from the fact that Kmart erroneously included in the voting cohort persons employed after the start of the voting process on 21 November 2018 up to 28 November 2018 who had not been employed immediately before the commencement of the voting process or during the access period. It is necessary to consider whether this error is capable of affecting the conclusion that a majority of employees who were eligible to vote in accordance with s 181(1), and who voted, cast a valid vote to approve the Agreement. The reported outcome of the vote (in the Form F17 statutory declaration of Ms White) was that 23,110 employees voted, and 21,191 of those voted in favour of approval of the Agreement. We were advised by senior counsel for Kmart, and we accept, that its records disclosed that 1,422 employees who were employed after the voting process commenced but had not been employed at the time of the request/access period were included in the voting cohort. That being the case, it is clear that Kmart’s error could not have affected the overall result and that the Agreement was made in accordance with s 182(1).” (emphasis added)

[95] While not expressly considered by the Kmart Full Bench decision, I accept the SDA’s submission that, a fortiori, a similar conclusion could be drawn by the Commission if employees were excluded to vote (through error), but otherwise this number [of excluded employees] could not have affected the overall result of the Agreement. 61

[96] I therefore accept the Applicant’s submission that the exclusion of 5 employees from voting, who otherwise could have voted, and the inclusion of 75 employees to vote, who otherwise may have not have been entitled to vote, is not, of itself, fatal to me being satisfied that the Agreement was made in accordance with s. 182(1).

[97] With respect to the casual cohort, I also accept the Applicant’s and the SDA’s submissions over the RAFFWU’s.

[98] I accept the evidence of Ms Bromley that 6,904 casual employees were permitted to vote on whether to approve the Agreement. 62 Ms Hitchener evidence is also to this effect.63

[99] I accept the evidence of Ms Bromley that 2,100 casual employees make up the casual cohort, 64 or 2,156 if I take the evidence of Ms Hitchener.65

[100] The Full Bench in Kmart, in the paragraph extracted above, ultimately found that on the evidence before them, the voting error could not have effected the overall result. As such, the Full Bench was satisfied that the Agreement was made in accordance with s.182(1) of the Act. The Full Bench have not included the mathematics that have led to their conclusion.

[101] However, assuming the worst case scenario, on Ms Hitchener’s evidence, 2,202 casual employees did not work, for whatever reason, during the access period and were not entitled to vote. Removing this entire group from the voting, results in the total number of votes received equalling 3,174 and the total number of votes in favour equalling 2,813. This is an approval rate of 88.63%.

[102] On the casual cohort consideration, I do not consider that this class of employee has altered the outcome of the Applicant achieving a valid majority, pursuant to s. 182(2) of the Act. Ultimately, therefore, I am satisfied that a valid majority of employees employed at the time voted in favour of the Agreement.

[103] Further, and in the alternative, the Kmart Full Bench decision ultimately did not address Deputy President Mansini’s finding at first instance that a ‘minor technical or procedural error’ under s. 188(2)(a) of the Act only arises if there is a deliberate decision not to comply with the requirements of the Act. Ultimately, I find that I have a sufficient basis to be satisfied that the Applicant did not make a deliberate decision to wrongly include employees on, or wrongly exclude employees from, the voter roll, but that the discrepancies merely arose out of inadvertent errors.

[104] I therefore conclude that the Applicant’s errors in relation to the voting cohort were minor technical or procedural in nature and did not impact on whether a valid majority of eligible employees had voted in favour of the Agreement. I rely upon s. 188(2) in my satisfaction that the Agreement has been “genuinely agreed to”.

BOOT

[105] Section 193 of the Act deals with the BOOT. It reads:

“193 Passing the better off overall test

When a non greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

When a greenfields agreement passes the better off overall test

(3) A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each prospective award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

[106] The BOOT is an evaluative determination, not to be conducted via a line by line analysis. 66 It is an assessment that requires consideration of the advantages and disadvantages of an enterprise agreement to award covered employees and prospective award covered employees. There will invariably be some advantages to making an agreement, as there will likely be some disadvantages. An enterprise agreement may pass the BOOT even if some award benefits have been reduced, so long as they are more than offset by the benefits of the enterprise agreement.67 Ultimately the application of the BOOT is a matter that involves the exercise of discretion and it is a value judgment.68

[107] The Agreement contains terms which are more beneficial than the Award. As the Applicant readily communicated during the bargaining process, access and voting period to its employees, pay rates above the Award (albeit in some cases only modestly), allowances for laundry and travel, paid tea breaks increasing to 15 minutes, and increased Sunday penalties.

[108] Subject to the undertakings provided (wherein the Applicant consulted with great vigour with the SDA to draft [the undertakings]), I am satisfied that the Agreement passes the BOOT.

[109] However, to further assist in my satisfaction, the RAFFWU acted as a contradictor in highlighting, in its view, a number of issues which, it submitted, the Commission would benefit from taking a closer look at in order to be satisfied that the Agreement indeed passes the BOOT. The RAFFWU remains of the view that the Commission cannot be satisfied that the Agreement passes the BOOT due to these issues. I will duly consider each one below and outline why I am satisfied the Applicant satisfies the BOOT. In my determination, I have concluded that some items in the Agreement are not better off as against the Award, however, these are offset by those things which are.

BOOT Analysis

The Agreement analysed against the Award

The RAFFWU BOOT objection

Applicant’s submissions and determination

THE RAFFWU OBJECTION 1

THE WAGE RATES PROVIDED UNDER THE AGREEMENT (AT THE TEST TIME) PAY VERY LITTLE ABOVE THE AWARD.

On the Applicant’s evidence and on the analysis conducted by the MAT (and by the RAFFWU’s own concession), the Commission is satisfied that all employees will be paid at a higher rate wage under the Agreement than under the Award.

Determination: Commission is satisfied with regard to Objection 1. This weighs positively in the Commission’s BOOT assessment.

The RAFFWU Objection 2

The Agreement is detrimental due to the loss of specific rest and meal breaks in the Award, including:

- The right to not to be required to take a rest or meal break within one hour of commencing or ceasing work (clause 31.1) without any equivalent protection other than the first rest break not being within the first hour of work;

- The right to have the time of taking rest and meal breaks and the duration of meal breaks forming part of the roster and subject to the roster provisions of the Award (clause 31.1(e)) without any equivalent protection and a specific acknowledgement that they may be changed other than by agreement or following consultation; and

- The exacerbating of the elements above by the permitting of combined breaks.

The Award states that “an employee cannot be required to take a rest break or meal break within one hour of commencing or ceasing of work.”

The Applicant submitted that the failure of an employer to strictly observe the conditions of c.31.1(c) of the Award does not give rise to the requirement to pay overtime and as such the Applicant submitted that any variation [of the Agreement] against the Award is a neutral consideration when the Commission considers the BOOT.

The Applicant submitted that the Agreement states that a rest break cannot be taken within the first hour of work, and that meal breaks should be taken within the first 5 hours of commencing work “…and after the first rest break.” According to the Applicant, the terms of the Agreement accord with the Award, insofar as it is not possible for an employee to be required to take a meal or rest break within the first hour of commencing work. I accept this submission.

The Applicant then submitted that the Agreement states that a meal break is to be taken within the 5 hours of commencing work. It goes on to say that while an employee may technically be able to take a meal break within the last hour of ceasing work, this is practically limited to employees working of between 5 and 6 hours in duration. In this regard, the Applicant submitted that in the overwhelming majority of circumstances it will not be possible for a meal break to be taken within the last hour of ceasing work. Practically, while this submission does make sense, there is ultimately a detriment under the Agreement as against the Award which I will give due weight in my determination.

With regard to the issue about rest breaks possibly being taken within the last hour of ceasing work, the Applicant submitted that the timing of rest breaks is generally at the election of employees, subject to the approval of the needs of the business. The Applicant then submitted that an employer’s failure to provide breaks in accordance with the Award does not give an entitlement to overtime and as such, this matter should be viewed as a neutral BOOT consideration. I do not accept this submission.

With regard to the timing of rest and meal breaks not forming part of the roster conditions, the Applicant submitted that the failure of the employer to strictly observe the rostering conditions of the Award does not give rise to the requirement to pay overtime, and as such, should be a neutral consideration. I do not accept this submission.

Determination: Regarding all of these submissions, I do accept the RAFFWU’s submission that explanations from the Applicant on the timing of meal and rest breaks have only been made relevant to there being a financial detriment to the employees. There is clearly a change from the conditions in the Agreement and the Award, wherein the Award prescribes certain rights for employees on the time they can take meal breaks. The changed Agreement, may, result in a possible detriment (not financially) employees under the Agreement. This weighs negatively for the Applicant in the Commission’s BOOT assessment.

The RAFFWU Objection 3

The Agreement is detrimental as there are no higher duties rights when an employee is required to cover a manager on a meal break.

The Award states that a higher duties allowance is payable where “employees [are] engaged for more than two hours during one day or shift on duties carrying a higher rate for such day or shift. If engaged for two hours or less during one day or shift, the employee is to be paid the higher rate for the time worked only.”

The Applicant submitted that under the terms of the Award, a higher duties allowance is only payable where a Level 1 retail employee performs the duties of a Level 3 retail employee by undertaking the following duties:

(a) Supervisory assistance to a designated section manager or team leader;

(b) Opening and closing of premises and associated security;

(d) Fitting of surgical corset.

The Applicant submitted on this issue that retail employees covered by the Agreement are not involved in providing supervisory assistance to a designated section manager or team leader and are not required to fit surgical corsets. Accordingly, according to the Applicant, a higher duties allowance would only be payable where a retail team member is responsible for the opening and closing of a retail establishment, or where an employee is responsible for the security of cash. I accept this submission.

The Applicant submitted that the RAFFWU is incorrect in its application of the Award in that the absence of a manger for an unspecified meal break would not require a team member to be practically appointed as an Assistant Store Manager or Store Manager for that period that would necessitate the payment of a higher duties allowance. According to the Applicant, during such absence, team members would undertake the duties and responsibilities of their associated classification in the absence of a nominated manager. I accept this submission.

Further to the above, the Applicant submitted that undertakings 13 and 14 it has filed with the Commission confirm that retail members engaged under the Agreement shall not be required to perform duties to perform duties typically associated with a retail employee Level 2 or Level 4 – 8, and that for the avoidance of doubt, the payment of the Shift Supervisor Allowance, under the Agreement, is equivalent to circumstances where a Level 1 employee undertakes duties associated with a Level 3 employee under the Award. I accept this submission.

Determination: Commission is satisfied that an employee would not be required to perform the duties of an Assistant Store Manager or Store Manager for a period of an unspecified meal break. Even if the Commission was not and still could not be satisfied that employees would not be required to perform these duties, the undertakings provided by the Applicant ensure that no employee not worse off than what they would be under the Award. This is a neutral BOOT consideration.

The RAFFWU Objection 4

The Agreement lacks a base right to a 12 hour break between shifts and puts in a requirement to apply for and be granted such a right.

The Award states at clause 31.2(a)(b) that an employee shall be granted a 12 hour break between the finishing of work on day and the commencement of work on the next day, otherwise an employee is entitled to double pay until they are released for the requisite 12 hour period.

The Award allows for the 12-hour period to be reduced to 10 hours by “…agreement between an employer and an employee or employees.”

Determination: The Commission is satisfied that the duration of breaks between shifts is a matter than may be varied through the bargaining on, voting on and making of an enterprise agreement. This issue weighs neutrally in the Commission’s BOOT assessment.

The RAFFWU Objection 5

Certain undertakings provided by the Applicant are not sufficient with regard to:

- offsetting casual loading

- compulsory training meetings of less than 3 hours not being paid as overtime

- two consecutive days off per week (or 3 per fortnight) cast as “requestable” rather than default;

- generally a failure to replicate Award classifications and classifications rights.

- casual conversion provisions,

With regard to the offsetting casual loading concern, I am satisfied that the deletion of clause 16 from the Agreement pursuant to undertaking 2 deals with this issue.
Determination: offsetting casual loading clause is not an issue.

With regard to the compulsory training meetings issue, undertaking 14 states as follows: “Compulsory training sessions or team meetings will be limited to one training session or team meeting per month up to two hours duration. Full-time employees will be paid at the ordinary rate of pay even if the training session ot team meeting extends beyond ordinary hours. Where a training session or team meeting takes place on a part-time employee’s normal working day, but extends beyond ordinary hours, the employee will be paid at overtime rates for the period of the training session or team meeting that extends beyond ordinary hours. Casual employees will be paid at overtime rates for any period of a training session or team meeting that extends beyond ordinary hours.

Determination: The Applicant provided modelling to the Commission that employees who undertook training would be better off to the value of $142.46 - $78.98 per month. I accept this evidence and that this weighs positively in the Commission’s BOOT assessment.

With regard to the 2 consecutive days off per week (or 3 per fortnight submission, undertaking 5 now states: “In the alternative to the provisions of clause 17(e)(i) you may request to work your ordinary hours so that you would be provided with two consecutive days off each week or three consecutive days off in a two week period. Any such request will not be refused by the Company.
Determination: Commission is satisfied that this undertaking is now consistent with the Award provisions.
With regard to a failure to replicate award classifications and classification rights, undertakings 17 and 18 state that: Retail Team members engaged under the Agreement shall not be required to perform tasks or duties typically associated with a Retail Employee Level 2 or 4-8 under the General Retail Industry Award 2010 as at the date of this undertaking (17); and For the avoidance of doubt, the duties of a Shift Supervisor, as referenced at clause 220-222, is equivalent to that of a Retail Employee Level 3 under the General Retail Industry Award 2010 as at the date of this undertaking (18).

With regard to the casual conversion provisions, the Commission accepts that the Agreement’s casual conversion clause at 174 is marginally different to the Award’s. There may be some detriment, but it is negligible, based on undertakings 15 and 16 which in large way assist the Commission in its satisfaction that there is no considerable detriment to employees.

Determination: The Commission is satisfied that undertakings 15 and 16 satisfy the Commission that any detriment with respect to this clause is negligible in the BOOT consideration.

[110] While I have determined that meal breaks and the casual conversion clauses are items not better off in the Agreement as compared to the Award, ultimately, employees are made, in my view, better off overall by the increased pay rates and the added allowances as compared to the Award. Overall, the Commission is satisfied that the Agreement passes the BOOT in accordance with s. 193 of the Act.

Conclusion

[111] The RAFFWU’s involvement in this matter has, at times, assisted the Commission in determining whether the Agreement must be approved. I am now satisfied that the Agreement has been made according to the relevant statutory considerations.

[112] For abundant clarity, the Agreement is approved subject to undertakings, I approve the Agreement. I am satisfied that each of the requirements of ss. 186, 187, 188 and 190 as are relevant to this application for approval have been met. The SDA is an employee organisation that will be covered by the Agreement.

[113] The Agreement, in accordance with s. 54 of the Act, will operate from 14 February 2020. The nominal expiry date of the Agreement is 7 February 2024.

DEPUTY PRESIDENT

Appearances

Mr Mark Healy and Mr Michael Seck of counsel, instructed by Mr Nick Tindley and Mr Wes O’Donnell of the law firm, FCB Group Lawyers for the Applicant.

Mr Robert Tonkli for the SDA.

Mr Josh Cullinan for the RAFFWU (given leave to be heard under s. 590 of the Act).

Hearing Date

12 July 2019 in Brisbane

Final Written Submissions

27 November 2019

1 Agreement at [2].

2 One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77.

3 Kmart Australia Ltd [2019] FWC 6105.

4 Appeal by Shop, Distributive and Allied Employees Association; Appeal by Kmart Limited t/a Kmart; Appeal by the Australian Workers’ Union [2019] FWCFB 7599.

5 Downer EDI Mining – Blasting Services Pty Ltd at [73].

6 First Hitchener Statement at [60].

7 Ibid at [65].

8 Ibid.

9 Ibid.

10 Ibid at [66].

11 Ibid.

12 Second Hitchener Statement at [10].

13 Ibid at [12].

14 Ibid.

15 Ibid.

16 Ibid.

17 Written submissions of the RAFFWU dated 28 August 2019.

18 Ibid at [6].

19 Ibid.

20 Ibid at [7].

21 Ibid at [15].

22 Ibid.

23 Ibid.

24 Ibid.

25 Ibid at [16].

26 Ibid at [18].

27 Ibid at [21].

28 Ibid at [24].

29 Written submissions of the Applicant dated 7 August 2019.

30 Ibid at [16(a)].

31 Ibid.

32 Ibid.

33 Ibid at [16(b)].

34 Ibid at [16(c)].

35 Ibid.

36 CFMEU v Shamrock Civil Pty Ltd [2018] FWCFB 1722 at [36].

37 Downer EDI Mining – Blasting Services Pty Ltd at [63].

38 Ibid.

39 Ibid.

40 First Hitchener Statement at [44].

41 See for example the First Hitchener Statement at [60], [62], [68] – [69].

42 Ibid at [63].

43 Ibid at [64].

44 Ibid at [61].

45 First Hitchener Statement (MLH – 12).

46 First Hitchener Statement (MLH – 13).

47 First Hitchener Statement at [52].

48 First Hitchener Statement (MLH – 14)

49 See for example the First Hitchener Statement at [60], [62], [68] – [69].

50 First Hitchener Statement (MLH – 13).

51 Bromley Statement at [7] – [22].

52 Ibid at [23] – [37].

53 Written submissions of the Applicant dated 27 November 2019 at [6].

54 Ibid at [7].

55 Ibid.

56 Ibid at [9].

57 Ibid at [10].

58 Written submissions of the Applicant dated 10 October 2019 at [12] – [14].

59 Ibid at [15].

60 Written submissions of the RAFFWU dated 27 November 2019 at [3] – [13].

61 Written submissions of the SDA dated 27 November 2019 at [12].

62 Bromley Statement at [33].

63 Witness Statement of Michelle Leigh Hitchener dated 24 January 2020 at [9].

64 Bromley Statement at [34].

65 Witness Statement of Michelle Leigh Hitchener dated 24 January 2020 at [9].

66 SDA v Beechworth Bakery Employee Co Pty Ltd T/A Beechworth Bakery [2017] FWCFB at [12]; Armaceli Australia Pty Ltd [2010] FWAFB 9985 at [41].

67 Re Australia Western Railroad Pty Ltd T/A ARG – A QR Company [20111] FWAA 8555 at [8]; NTEIU v University of New South Wales [2011] FWAFB 5163 at [47].

68 TWU v Jarman Ace Pty Ltd [2018] FWCFB 7097 at [28].

Printed by authority of the Commonwealth Government Printer

Super Retail Group Services Pty Limited T/A Super Retail Group

[2020] FWCA 665

7 FEBRUARY 2020

DECISION