T & R (Murray Bridge) Pty Ltd

[2010] FWA 6658

FAIR WORK AUSTRALIA

DECISION

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

T & R (Murray Bridge) Pty Ltd
(AG2010/11032)

T & R MURRAY BRIDGE PTY LTD FOOD PROCESS WORKER ENTERPRISE AGREEMENT 2010

Meat Industry
COMMISSIONER HAMPTON	ADELAIDE, 16 SEPTEMBER 2010

Application for approval of an enterprise agreement - application opposed by bargaining representative - whether genuine agreement - whether explanation of the agreement and NES reasonable in the circumstances - whether agreement will ensure that employees are better off overall - whether broad stand down provision changes the basis of the comparison with the award - meaning of weekly and daily hire considered - dispute resolution procedure - whether permits access to Fair Work Australia as required - reservations identified - undertakings proposed by employer - views of bargaining representatives sought and taken into account - modified undertakings accepted and became term of agreement - model flexibility and consultation terms to be included - approval requirements met - agreement approved.

BACKGROUND

[1] An application has been made for approval of an enterprise agreement known as the T & R Murray Bridge Pty Ltd Food Process Worker Enterprise Agreement 2010 (the Agreement). The application was made by T & R (Murray Bridge) Pty Ltd (T&R or the employer) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single-enterprise agreement.

[2] The Australasian Meat Industry Employees Union SA and WA Branch (the AMIEU or the Union) is a bargaining representative in relation to the Agreement and has raised a number of concerns with Fair Work Australia regarding the process leading to the making of the Agreement and as to whether it meets certain other approval requirements of the Act. Indeed, the AMIEU opposed the approval of the Agreement.

[3] As a result of a directions conference conducted on 20 July 2010 and subsequent clarification of positions, the AMIEU did not seek to challenge the evidence as filed by T&R in the matter, 1 but rather sought to make submissions regarding its concerns. In that light, both parties have now filed and exchanged a number of written submissions and I have determined the application based upon all of the material presently before Fair Work Australia.

[4] That material includes various responses to comprehensive preliminary findings issued by me on 4 August 2010 and certain undertakings that were then made by the employer in that context. Having considered those undertakings in their various modified forms and the position of the AMIEU and the other bargaining representatives; on 1 September 2010 I approved the Agreement with certain undertakings that are discussed below. 2

[5] In approving the Agreement I advised that I would subsequently publish reasons for my decision, which I now do.

[6] Some of the background to this matter is set out in my decision of 26 February 2010 in relation to an application for bargaining orders as made by the AMIEU pursuant to s.229 of the Act. 3 Orders were issued as a result of that decision requiring T&R to further meet with the AMIEU, to genuinely consider the items, claims and issues being raised by the Union at that time, and to provide the employees with information regarding the import of the National Employment Standards (the NES).4 I will return to the detail of this latter aspect shortly as it is now in issue.

[7] Further discussions took place involving these parties and the other bargaining representatives and in due course the Agreement that is presently before Fair Work Australia was put out for a ballot of employees and endorsed by a valid majority on 17 June 2010.

[8] Even though not raised by the AMIEU, it is necessary that T&R as the applicant in this matter satisfy Fair Work Australia that all of the relevant approval requirements of the Act have been met. Leaving aside for the moment the issues raised by the Union and a number of other matters that I have also raised with the parties, I have considered all of the statutory approval requirements and I am satisfied that all have been met.

[9] This included the process leading to the making of the Agreement and the attainment of genuine agreement with the majority of the employees within the meaning of the Act.

[10] In that light, I will outline and deal with the matters raised by the Union.

THE GROUNDS OF OBJECTION AS RELIED UPON BY THE AMIEU

[11] In correspondence dated 25 June 2010, the AMIEU advised Fair Work Australia that it wished to be heard in relation to the approval application. In so doing, it raised three matters, only two of which it now relies upon. These grounds of objection are as follows:

That T&R did not comply with the s.229 order of Fair Work Australia with respect to the provision of information to employees regarding the import of the NES (the NES objection); and

That the Agreement does not satisfy the better off overall test (BOOT) as established by s.193 of the Act (the BOOT objection).

[12] I will deal with each of these grounds in turn. In so doing, I confirm that the onus for demonstrating that the Agreement should be approved remained upon T&R as the applicant employer.

The NES objection

[13] The relevant s.229 order as made by Fair Work Australia was in the following terms:

“[3] (THAT) T & R advise all relevant employees as to the import of the National Employment Standards on the existing employment conditions and any proposed enterprise agreement as part of any subsequent pre-approval process as contemplated by s.180 of the Act.”

[14] The basis for making that order was summarised in the s.229 decision in following terms:

“[67] I have also made an order requiring T&R to advise all employees as to the import of the National Employment Standards (NES) on the existing employment conditions and any proposed agreement as part of any subsequent pre-approval process as contemplated by s.180 of the Act. I have done so noting that Mr Devey appropriately recognised that there are particular issues arising in this enterprise as a result of the impact of the NES. I consider that the provision of this information is conducive to employees subsequently making a genuine assessment of any proposed agreement, as contemplated by s.188 of the Act.”

[15] The evidence before me confirms that Mr Devey (the employer’s Group Employee Relations and Human Services Manager) had drafted and distributed to employees a notice entitled “Important Notice: The Effect of the National Employment Standards (NES) on your employment”. 5 This notice was posted on all notice boards at the Murray Bridge site on 3 March 2010 and was distributed to all workers entering and leaving that location on the day. Further, the notice was provided to all employees via their pay slips and translated into Mandarin. There is also evidence from both management personnel and workers from the Joint Consultative Committee (the JCC) that the issue was discussed at bargaining meetings and during group discussions with employees prior to the conclusion of the ballot.

[16] As the effectiveness of this notice is in issue, I set out below its full contents:

“IMPORTANT NOTICE

THE EFFECT OF THE NATIONAL EMPLOYMENT STANDARDS (NES) ON YOUR EMPLOYMENT

As many of you would no doubt be aware, with effect from 1 January 2010 the Federal Government introduced the National Employment Standards (NES) to cover everyone employed within what is known as the National Workplace System. This covers everyone employed within the T&R Group of companies and in particular, those at T&R Murray Bridge.

There are 10 NES entitlements:

1. Maximum weekly hours of work - 38 hours per week plus reasonable additional hours.

2. The ability of the employee to request flexible working hours - the employer is not obliged to agree if the grounds for refusal are reasonable.

3. Parental leave and related entitlements (up to 12 months unpaid leave plus other forms of maternity, paternity and adoption leave).

4. Annual leave - 4 week paid leave each year (cumulative).

5. Personal/Carer’s/Compassionate leave - 10 days paid sick leave each year (cumulative).

6. Community Service Leave - unpaid leave for volunteer work with recognised emergency services and for jury service.

7. Long Service Leave - 1.3 weeks for every completed year of service, pro-rata long service leave after 7-years completed service payable upon termination (conditions apply).

8. Public holidays - a paid day off on a public holiday except where reasonably requested to work.

9. Notice of termination and redundancy pay - up to 4 weeks notice upon termination with an extra week for workers who have 2 years completed service and are over 45 years of age. In addition in the cases of redundancy - up to 16 weeks (conditions apply).

10. Provision of a Fair Work Information Statement - only applies to all new employees.

As at 31 December 2010 (sic), a range of industrial instruments applied to the employment of production workers at T&R Murray Bridge. These included the Federal Meat Industry Award (now repealed with the Approved Modern Meat Industry Award 2010), current and expired Australian Workplace Agreements (AWA’s) and Individual Transitional Employment Agreements (ITEA’s). These all nominally expired on 31 December 2009.

The diversity of each of the terms and conditions in the various industrial instruments meant that different workers may have had different terms and conditions relating to what are now known as the NES (see 1-10 above).

The good news is that as at 1 January 2010, everyone employed at T&R Murray Bridge will have had their sick leave, annual leave and long service leave accruals “preserved” as 31 December 2010 (sic) and will then accrue sick leave, annual leave and long service leave in accordance with the arrangements detailed at points (4), (5) and (7) above, in addition to being entitled to the other NES conditions as detailed above. The preserved entitlements will also be able to be accessed in the normal manner together with the new NES entitlements as they accrue.

In terms of any new site industrial agreement, all aspect of the NES will be contained within any new industrial agreement i.e. the proposed site enterprise agreement.

If anyone required clarification, contact your supervisor or any of the Employee Relations team.

Brian Devey”

The position of T&R

[17] T&R contended that it complied with the relevant order of Fair Work Australia by producing the notice to all staff regarding the import of the NES into the current arrangements and the Agreement. The notice and the other steps taken by the employer to inform the employees about the NES and the then proposed Agreement were said to meet the requirements of the relevant order and the Act.

[18] The employer provided evidence that since the s.229 orders were made, and in addition to the meeting with bargaining representatives, it had also “permitted” the Union, on three occasions to exercise its right of entry functions and attend its premises to conduct discussions with employees in the employer’s canteens on site. It also contended that the AMIEU had ample opportunity to then raise any concerns it may have had with T&R, which, it did not.

[19] Further, it was argued that for the Union to now raise any issue in relation to the notice and the employer’s compliance with the relevant s.229 order shows a clear lack of good faith. That is, the Union had every opportunity to raise any concerns and did not do so. Accordingly, it was the employer’s position that, at the very least, the Union’s submission should be afforded no weight by Fair Work Australia, and further, that the Union, through its conduct, is estopped from now raising the objection.

[20] In that context, T&R contended that if the AMIEU did genuinely have concerns in relation to the notice or the process followed, it was incumbent on the Union to raise these issues in the context of seeking further bargaining orders from Fair Work Australia, rather than waiting for a vote to take place (and hoping that the vote was unsuccessful) and then raising the issue in a bid to persuade Fair Work Australia to refuse to approve the Agreement.

The position of the AMIEU

[21] The AMIEU contended that many of the workers at T&R have only ever worked on Australian Workplace Agreements (AWAs) that have applied since the late 1990’s. It is the Union’s position that many of those workers are not aware of the award conditions or the NES or what either of them mean to their employment or their ability to bargain effectively.

[22] The original purpose behind seeking the relevant s.229 order was said to be so that workers would be able to understand the process of collective bargaining, understand what they had as basic entitlements before they start bargaining, and to be properly informed when voting on an agreement.

[23] The Union contended that the notice provided by the employer is merely a company version of the employee information statement that is already required to be provided to employees and does not explain the import of the NES as far as it impacts on the proposed agreement. Further, it argued that to merely repeat what is already provided by the employee information statement is not sufficient and effectively renders impotent the order of Fair Work Australia on the basis that if the s.229 order only required a further summary of the employee information statement, then it would not need to be made in the first place and would be irrelevant.

[24] The AMIEU submitted that the agreement effectively defeats many of the conditions of the NES and that employees were not in a position to properly assess the situation in order to cast an informed ballot, therefore the employer has not complied with the order of Fair Work Australia.

Did the employer explain the Agreement (including through the provision of information regarding the NES) as required by section 180 of the Act?

[25] Although the involvement of the AMIEU in the process is relevant, given the nature of the approval requirements, I do not consider that the concept of estoppel based on the conduct of parties has any real application in this matter. That is, I am required to consider whether the statutory approval requirements have been met based upon the evidence and material before Fair Work Australia. This includes in this case, consideration as to whether the purpose of the relevant s.229 order was served.

[26] The purpose of requiring the notice regarding the NES to be issued to the employees is outlined in the s.229 decision as referred to above.

[27] Section 188 of the Act provides amongst other matters that for an enterprise agreement to be approved, Fair Work Australia must be satisfied that the agreement has been genuinely agreed to by the relevant employees having regard to specific statutory requirements. It does so in the following terms:

“188 When employees have genuinely agreed to an enterprise agreement

An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:

(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:

(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);

(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and

(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and

(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”

[28] Section 180 of the Act in turn provides as follows:

“180 Employees must be given a copy of a proposed enterprise agreement etc.

Pre-approval requirements

(1) Before an employer requests under subsection 181(1) that employees approve a proposed enterprise agreement by voting for the agreement, the employer must comply with the requirements set out in this section.

Employees must be given copy of the agreement etc.

(2) The employer must take all reasonable steps to ensure that:

(a) during the access period for the agreement, the employees (the relevant employees) employed at the time who will be covered by the agreement are given a copy of the following materials:

(i) the written text of the agreement;

(ii) any other material incorporated by reference in the agreement; or

(b) the relevant employees have access, throughout the access period for the agreement, to a copy of those materials.

(3) The employer must take all reasonable steps to notify the relevant employees of the following by the start of the access period for the agreement:

(a) the time and place at which the vote will occur;

(b) the voting method that will be used.

(4) The access period for a proposed enterprise agreement is the 7-day period ending immediately before the start of the voting process referred to in subsection 181(1).

Terms of the agreement must be explained to employees etc.

(5) The employer must take all reasonable steps to ensure that:

(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and

(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.

(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:

(a) employees from culturally and linguistically diverse backgrounds;

(b) young employees;

[29] Section 187 is also potentially relevant here given that the NES order was made in the context of an application for bargaining orders. It provides relevantly as follows:

“187 When FWA must approve an enterprise agreement—additional requirements

Additional requirements

(1) This section sets out additional requirements that must be met before FWA approves an enterprise agreement under section 186.

Requirement that approval not be inconsistent with good faith bargaining etc.

(2) FWA must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.”

[30] The requirement established by s.188 and s.180 is relevantly that reasonable steps be taken to provide and explain certain matters. Reasonable is not an absolute requirement and whether the steps that were taken are reasonable will depend upon the circumstances.

[31] In this case, many of the employees at T&R have historically been engaged upon AWAs and more lately Individual Transitional Employment Agreements (ITEAs). These operated on all up rate concepts with different working hours arrangements than are to be found in most awards applying in the meat industry. There are also employees who fall into the categories highlighted by s.180(6) of the Act and their particular circumstances required measures (such as the provision of additional information on the NES) that might not in other cases be necessary.

[32] In order for employees to make a reasonable assessment of the proposed enterprise agreement, it was in my view necessary for T&R to confirm that some of the changes and benefits that would be provided by that instrument had their foundation in the NES. That is, they were not dependent upon acceptance of the Agreement. The order did not require T&R to provide a detailed explanation as to the precise import of the NES.

[33] The Agreement does not modify in a negative manner the import of the NES, and of course could not be approved if it did so. As an example, it does provide for 40 hours per week as opposed to the 38 provided in the NES. However, the fact that hours above 38 fall into the consideration of being reasonable additional hours is made tolerably clear in the NES notice. The fact that other new benefits, including those relating to leave have arisen from the NES, is also an implication of the notice as issued.

[34] The evidence also supports T&R’s notion that it did take additional measures to explain the NES and the provisions of the Agreement to the employees in such as manner as to facilitate an informed decision by the employees.

[35] In my view, the provision of the NES notice and more particularly the other measures undertaken by T&R to provide and explain the Agreement to the workforce were sufficient to meet the requirements of s.180 and s.188 of the Act. I am also satisfied that the approval of the Agreement would not contravene s.187 of the Act.

[36] Before leaving the process leading to the making of the Agreement, I note from earlier proceedings involving the parties 6 and from evidence in this matter that many of the employees have been subject to individual agreement-based transitional instruments (AWAs and ITEAs). I am also aware from that evidence that conditional termination agreements have been proposed for these employees.

[37] Item 18 of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 provides the arrangements for these termination agreements. Item 18(7) provides that these agreements are to accompany the enterprise agreement approval application. The conditional termination agreements that have apparently been made with the employees here have not been filed with the application in this matter.

[38] Item 18(8) of Schedule 3 however provides that the transitional instrument terminates when the proposed enterprise agreement comes into operation and the notes to item 18(7) clearly provide that this is effective even if the conditional termination instrument has not been filed with the approval application.

[39] In this regard I would urge T&R to ensure, if it has not already done so, that the employees who have up to this time been subject to the individual agreements are advised in an appropriate manner as to the effect of the approval of the Agreement by Fair Work Australia.

The BOOT objection

[40] I am also required by s.186(2) of the Act to consider whether the Agreement meets the better off overall test (BOOT) in accordance with s.193 as follows:

“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 FWA 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.

FWA 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, FWA 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 FWA 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 FWA was made under section 185.

FWA 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, FWA 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.”

[41] It is common ground that the Meat Industry Award 2010 (the modern award or the award) is the relevant reference instrument for present purposes. There are also relevant transitional arrangements in the award and given the existence of transitional industrial instruments these apply to marginally modify some of the existing modern award provisions on a transitional basis.

The position of T&R

[42] T&R contended that the Agreement met the BOOT and in so doing highlighted what it contended were matters clearly beneficial to the employees.

[43] In terms of the appropriate reference point within the modern award, T&R argued that the daily hire rate was not an appropriate comparison. That is, the employer operated with set rosters and had agreed wage rates that incorporated established overtime hours, public holidays and rest breaks. This it contended was not consistent with the concept of daily hire as operating under the modern award. Further, the stand down provisions within the Agreement were said be consistent with many Enterprise Agreements already approved by Fair Work Australia and were not such as to undermine the presumption of weekly employment (except for casuals).

[44] As to the other matters where the Agreement did not reflect the modern award, the employer argued that the lower overtime rate of 30 percent was to be applied to a wage rate that was already loaded to take account of various factors and was significantly higher than the modern award rates. Further, the casual loading was in line with the modern award and would also be applied to already loaded rates of pay.

[45] In terms of the shift rates, the employer contended that the Agreement applied the proper shift loading to the afternoon shift employees, but based on higher rates, and indicated that it did not roster shift employees past 11.59 pm or in such a manner that night shift loading would be applicable under the modern award. I interpose that some later clarification on this matter was provided.

[46] The employer argued that the 40 hour week under the Agreement meant that the employees were guaranteed the equivalent of two hours overtime per week and that the compensation for this had already been loaded into the pay rates. This also extended to the loaded rates (with the overtime) being used as the basis for the annual leave payments in a manner that was more generous than the modern award.

[47] T&R provided evidence in the form of a comprehensive affidavit from Mr Devey explaining how the loaded rates had been calculated and explaining how the Agreement would be applied in the circumstances evident at T&R.

[48] In summary, the employer contended that the entire package as represented by the Agreement, including the level of the loaded wage rates, meant that all employees would be better off under the Agreement than the modern award.

The position of the AMIEU

[49] The AMIEU contended that the wage rates in the agreement are too low to satisfy the BOOT, given the provisions in the agreement relating to shifts, additional hours above 38 being paid at “ordinary” rates, and the stand down arrangements. In this regard, the Union noted that:

(a) The employer has advised the Union that it considers the additional payments for shifts and additional hours have effectively been subsumed in a higher base wage rate. While obviously it is possible to do this, the Union does not believe that the base wage rates in the Agreement are sufficiently high to fully take these matters into account.

(b) The Agreement specifies employees to be weekly hire employees. However, the “stand down” provisions in the agreement are broader than those found in the award and the Act (and historically, the stand down provisions contained in the various pre-modern awards that applied to the meat industry). 7

[50] In relation to the first aspect, the AMIEU contended that the rates of pay do not compensate adequately for those flexibilities and conditions gained by the employer in the Agreement. These flexibilities and other considerations were said to include: 8

The low rates provided by the Agreement for all overtime to be paid at time plus 30% especially considering that employees get no say in whether or not they will work overtime including on weekends

The loss of paid breaks that would otherwise apply under the award

The low casual loading (the casual loading is being progressively increased in line with transitional arrangements of the modern award)

The provisions for shift workers given that the Agreement does provide a slightly higher rate of pay for afternoon shift workers but then does not meet the award loadings and allows for a shift to be called afternoon shift even though it can be rostered until 4.00 am (where the night shift loading should be considered)

The Agreement provides for a 40 hour week instead of 38

The Agreement provides for all leave to be paid for at the classification rate only instead of including incentives as provided for by the award, and

The fact that the employer can withhold payment of overtime in order to cover contingencies that would otherwise result in stand downs due to livestock availability etc.

[51] In relation to the second aspect, the Union outlined what it contended was the history of the award approach to daily hired employment. This included a number of decisions concerning the introduction and operation of weekly hired and daily hired concepts and the operative provisions of the award. 9

[52] In that light, the AMIEU argued that it was clear from the evidence given by all parties in the relevant award proceedings, and the decisions cited, that regular daily hire was introduced into the industry to cater for stock availability, giving the employer huge flexibility to work around these situations without being held liable for wages. Daily hire employees still have a continuous contract and are entitled to all of the benefits of a permanent contract such as annual leave, sick leave, public holidays, redundancy etc.

[53] Essentially, daily hire employment increasingly has the characteristics of permanent employment, with the exception being that the employer has the right not to employ on a particular day, analogous to a right to “stand down” those employees. In practice, such “stand downs” occur because the employer (for whatever reason) does not have stock for the employees to slaughter and process.

[54] The AMIEU argued it was clear that in the modern award, both full time and daily hire employees have permanent contracts, and are considered to be permanent employees. Further, the clear distinction between the two categories of employment is that while both are permanently engaged, a full time employee must receive an average of 38 hours per week unless there is a strike, a breakdown of machinery or stoppage of work within the industry, while a daily employee can be ‘stood down’ for other reasons including price or supply of stock for slaughter.

[55] Accordingly, the AMIEU has contended that in determining “whether wage rates in the Agreement satisfy the BOOT”, it is necessary to factor in the daily hire loadings found in the modern award.

[56] It argued that where an agreement allows for the flexibility to stand down workers for a part of a day for things other than strikes within the industry, the employees are directly disadvantaged as against the award regardless of whether the employee is deemed to be full time or daily hire. Further, where an agreement allows for the flexibility to stand down workers for a day or days for stock availability then they are directly disadvantaged as against the award if the rates in the agreement do not equate to the award rates for a daily hire employee, that is to say the award full time rates of pay increased by the 10% loading.

[57] It was argued that the reason for the disadvantage is that under the award and the Act, either they could not be stood down and lose pay for periods attributed to stock availability, or alternatively they would have to be daily hire employees and receive the 10% loading in return for that flexibility. This was said to be true regardless of the fact that an agreement may call an employee permanent because both forms of hire are permanent contracts of employment.

Does the Agreement satisfy the Better Off Overall Test?

[58] In accordance with s. 193 of the Act, an agreement passes the BOOT when Fair Work Australia is satisfied that each present and prospective award covered employee would be better off overall if the agreement applied rather than the relevant modern award. In that context, I must also consider the import of the transitional provisions of the relevant modern award. In so doing, it is necessary to consider the different benefits and payments applicable under each instrument, as a step to an assessment of the overall package.

[59] In assessing the BOOT I am required to consider the circumstances as applying at test time, being the date of the application for approval (25 June 2010) (s.193(6)).

[60] I am also obliged to disregard the effect of any individual flexibility agreement operating under the modern award (s.193(2)). There is no evidence of any such award-based arrangements in place here and the Act requires that I, in effect, ignore that prospect for present purposes.

[61] Although the better off overall test requires that I be satisfied that each award covered employee and each prospective award covered employee will be better off overall, it is intended by the Act that Fair Work Australia may apply the better off overall test to classes of employees (s.193(7)).

[62] Accordingly, in my view the BOOT is to be applied objectively having regard to all of the relevant provisions of the Agreement and the reference instrument(s) at the test time as they would apply in the context in which they were agreed. This means that the practical circumstances within the enterprise must be considered; however, given that these circumstances can change and I must also consider the interests of prospective employees, I am required to also assess the application of the Agreement more generally to all classes of employees who may be engaged under its terms if approved.

[63] In that light I will deal firstly with the appropriate reference point for the BOOT (for employees other than casuals) and in so doing, consider the applicability of the daily hire and weekly hire rates within the award for this purpose.

[64] The AMIEU has raised this matter principally on the basis of the stand-down provisions in clause 17 of the Agreement. The Agreement provides relevantly as follows. 10

“17 STAND-DOWN AND RETURN TO WORK ARRANGEMENTS

17.1 You may be stood down without pay on a given day or shift of part of a day or shift in which you cannot be usefully employed.

17.2 In cases where a stand down pursuant to this clause exceeds sixty (60) minutes (cumulative) and we require you to remain at work, we will pay you.

17.3 In cases where a stand down involves the loss of a complete shift or part of a shift you may access your leave bank, banked overtime or annual leave.

17.4 In the event of clause (17.2) above, you will be required to work up to sixty (60) minutes beyond the time you would have normally finished your production hours for the relevant day or shift at normal time rates.

17.5 An additional hour of overtime may be required to fulfil production requirements for a maximum of two (2) hours beyond the time you would have normally finished your production hours for the relevant day or shift.

17.6 Instances necessitating employee stand-down may include, but is not limited to, Australian Quarantine and Inspection Service (AQIS) intervention, machinery breakdown and maintenance, stock availability, loss of essential services or a stoppage of work by any cause, which the company cannot reasonably prevent.

17.7 Stand downs will be approved at a senior management level to ensure consistency.”

[65] The modern award provides relevantly as follows:

“11. Types of employment

11.1 Types of employment

Employees under this award will be employed in one of the following categories:

(a) full-time;

(b) part-time; or

(d) in respect of meat processing establishments only, the category of daily hire employment (including part-time daily hire).

11.2 At the time of engagement an employer will inform each employee of the terms of their engagement and in particular whether they are to be full-time, part-time, casual, daily hire or part-time daily hire.

11.3 The employer and an employee may agree to the transfer of the employee from one category to another.

11.4 In respect to meat processing establishments where daily hire is permitted, if the employer and an employee are unable to agree upon a transfer from one category of employment to another, the employer may require the employee to transfer from:

(a) full-time to daily hire;

(b) daily hire to full-time;

(d) part-time daily hire to part-time,

upon giving to the employee seven days’ notice of such transfer.

12. Full-time employment

A full-time employee is an employee who is engaged to work an average of 38 ordinary hours per week.

13. Part-time employment

13.1 An employer may employ part-time employees in any classification in this award.

13.2 A part-time employee is an employee who:

(a) works less than full-time hours of 38 per week;

(b) has reasonably predictable hours of work of not less than four consecutive hours on any day; and

(c) receives, on a pro rata basis, equivalent pay and conditions to those of a full time employee who perform the same kind of work.

13.3 At the time of employment the employer and the part-time employee will agree, in writing, on a regular pattern of work specifying at least:

(a) the hours worked each day;

(b) which days of the week the employee will work;

(d) that the minimum daily engagement is four hours.

13.4 Clause 13.3 does not apply to a meat processing establishment, except for employees of the establishment engaged in retail and/or wholesale sales of fresh meat and ordinary products.

13.5 The terms of any agreement concerning part-time employment or any agreed variation to the terms will be in writing with a copy retained by the employer and a copy provided to the employee.

13.6 All time worked in excess of the hours as mutually agreed will be overtime.

13.7 A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the appropriate weekly rate prescribed in clause 19—Minimum wages.

14. Daily hire

14.1 An employer in a meat processing establishment may employ daily hire or part-time daily hire employees.

14.2 The daily hire employee will be employed by the day or shift or part thereof as the case may be, without breaking service for the purposes of the award and the NES as to payment for public holidays, personal/carer’s leave and annual leave. Employment will terminate at the end of each day or shift on which the employee is employed.

14.3 A daily hire employee may be required by the employer to work no less than 7.6 ordinary hours for each day they are employed.

14.4 A part-time daily hire employee may be required by the employer to work no less than four consecutive hours for each day they are employed.

14.5 Notwithstanding the termination of employment at the end of each day or shift, the engagement of a daily hire employee or part-time daily hire employee will continue until the engagement is terminated.

14.6 Engagement may be terminated by notice on either side as from the end of the ordinary working hours on the day or shift on which notice is given or at any later time specified by the notice.

14.7 An employee who terminates their engagement as from a time prior to the end of the ordinary working hours on any day or shift without having given the notice in accordance with clause 14.6 will not be entitled to payment in respect of any time actually worked on that day or shift.

14.8 A daily hire employee will be paid at the daily rate of 1/5th of the appropriate weekly rate prescribed by clause 19—Minimum wages for the classification in which they are employed plus a daily hire loading of 10% of that daily rate.

14.9 A part-time daily hire employee will receive for the hours worked, on a pro rata basis, equivalent pay and conditions to those of daily hire employees who perform the same work.

14.10 In consideration of the rights conferred, a daily hire employee or a part-time daily hire employee will attend and offer for employment at the normal or other place specified by the employer at the usual starting time on each ordinary day unless notified on a particular day they are not required to attend.”

[66] It is evident from clause 14 of the modern award that a distinction is created between ‘employment’ and ‘engagement’. The engagement in this context forms the ongoing contract between the employer and employee. It is not until the engagement is broken that the contract is terminated.

[67] I agree with the AMIEU that the construction of these clauses allows for a permanent contract to be maintained between the employer and employee, while also allowing flexibility to the employer to not employ an employee on a particular day. In effect, a daily hire employee is required to turn up for work each day unless notified to the contrary by the employer. If so notified, they are not required to report for work, or be paid.

[68] This allows the employer under the award to only pay a daily hire employee for those days on which they are employed thereby negating any requirement to pay for days on which they do not require employees to attend for work. In return, the employee is compensated for the possibility of interruption to work and payment by the inclusion of a 10 percent daily hire loading.

[69] The Act provides the capacity to stand down employees in the following terms in Division 2 of Part 3-5 of Chapter 3:

“Division 2—Circumstances allowing stand down

524 Employer may stand down employees in certain circumstances

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:

(a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

(b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.

Note 1: If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment.

Note 2: An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).

(3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.

525 Employee not stood down during a period of authorised leave or absence

An employee is not taken to be stood down under subsection 524(1) during a period when the employee:

(a) is taking paid or unpaid leave that is authorised by the employer; or

(b) is otherwise authorised to be absent from his or her employment.

Note: An employee may take paid or unpaid leave (for example, annual leave) during all or part of a period during which the employee would otherwise be stood down under subsection 524(1).”

[70] I note that a dispute resolution process is provided by s.526 of the Act however this would not limit the operation of the Agreement (if approved) as proposed by the parties.

[71] On this basis, the Agreement is able to provide for stand down arrangements that operate differently than that established by the Act; by extending or narrowing the basis of such stand downs, or indeed removing the stand down right altogether.

[72] In this case, the basis upon which stand downs may be considered have been significantly extended under the Agreement in comparison with both the legislative and award scheme. However, this of itself does not mean that the Agreement is incapable of approval or that the package should simply be compared with the daily hire rate of the award.

[73] Rather, it is the whole package of Agreement and award conditions that must be compared, including the fact that the weekly hired employees under the Agreement are subject to extended stand-down provisions, and that the award provides benefits to employees, including the 10 percent loading applicable to daily hired employees who share at least some of the features applicable to weekly employment under the Agreement.

[74] In that regard, the fact that stand-down provisions of the same nature as evident here have been part of other enterprise agreements approved by Fair Work Australia 11 is of only limited significance given that it is the entire package in the context of each enterprise that must be considered. Of greater significance is the other benefits and conditions that are provided by the Agreement and the modern award respectively. This includes the fact that there are many elements of the package for the (non-casual) employees that are more consistent with weekly hire employment as contemplated by the award.

[75] Against that background I will now deal with the overall package in the Agreement in the context of the BOOT.

[76] Those matters where the Agreement does not provide conditions and benefits at least equivalent to the modern award include the following:

The stand-down provisions and the “absence” of the daily hired loading that is provided by the award in terms as discussed above

The overtime payment is an additional 30 percent rather than (generally) 50 percent under the award; albeit based upon higher based rates that have been loaded for various factors outlined later

The number of paid breaks has been reduced with a daily 10 minute break being eliminated

The afternoon shift arrangements (although providing a higher hourly rates than under the Award) may extend to hours of the day that would under the award attract higher rates

The establishment of 40 ordinary hours per week as against 38 in the award

The capacity for the employer to require one additional hour at ordinary rates where a stand-down has occurred, and

Work on three public holidays is required without payment additional to the loaded Agreement rate.

[77] Those matters where the Agreement provides conditions and benefits more beneficial than the modern award include the following:

The pay rates are significantly higher than the base rates under the modern award 12 and these rates are designed to compensate for many of the factors outlined above

The junior rates under the Agreement are higher than under the award and the Agreement recognises that juniors who have required competencies are entitled to the appropriate adult wage

The higher base rates are applied for most purposes of the Agreement including the calculation of casual rates and payments for superannuation and paid leave

The annual leave loading of 17.5 percent applies to the loaded pay rates

The additional two “ordinary hours” per week are loaded into the base rates of the Agreement on the basis of the overtime payment under the award (time and a half) and are in effect paid whether worked or not and as above, apply for all purposes

There is a capacity to earn potentially significant production bonuses (although as these are not guaranteed, limited weight can be afforded to this aspect)

The rate for work on (other) public holidays is significantly higher than the award rate for such work, and

Journey accident insurance is provided by the employer.

[78] The above lists are not exhaustive and I have carefully considered the respective packages as they would apply to the various classes of employees including casuals, weekly hired and junior employees, and shift workers. I have done so having regard to the submissions and the extensive evidence now before Fair Work Australia where such is relevant to the issues at hand.

[79] As outlined earlier in this decision, I have ultimately approved the Agreement based upon certain undertakings. These were provided in response to some preliminary findings issued by Fair Work Australia and they were sought in order to confirm the intended operation of the Agreement in certain respects.

[80] In the preliminary assessment as issued to the parties on 4 August 2010 I explained my general approach to the matter, outlined some preliminary findings, and indicated in part as follows:

“[7] In assessing the Agreement package in the context of the proposed rates of pay and other arrangements, I have four concerns about the intended operation of the Agreement. These concerns apply to all employees, but have more potential impact in relation to those current and prospective employees who will be employed in the lower classifications. This is so, as the margin above the award base rates is far less for these classifications and the adequacy of the package in consideration of the award conditions that are not matched, is not as clear in their case.

[8] The four concerns are as follows:

• The capacity for afternoon shift work to extend beyond 12 midnight without any additional payment;

• The broad stand-down provisions and their capacity to undermine the benefits of weekly hired employment;

• The proposed basis of adjustment and review for the wage rates in the Agreement; and

• The operation of the Shut Down Leave Bank in the event of dismissal or other cessation of employment.”

[81] The employer subsequently supplied proposed undertakings and these were then subject to further written submissions from T&R and the AMIEU. Revised undertakings were then also provided by the employer for consideration by Fair Work Australia.

[82] Subject to the concerns being addressed by the undertakings, I was satisfied that the agreement package was such that the requirements of the BOOT would be met in this case. That is, I was on balance satisfied that all of the employees would be better off overall by the approval of the Agreement.

[83] Sections 190 and 191 of the Act provide as follows:

“190 FWA may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under section 185; and

(b) FWA has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2) FWA may approve the agreement under section 186 if FWA is satisfied that an undertaking accepted by FWA under subsection (3) of this section meets the concern.

Undertakings

(3) FWA may only accept a written undertaking from one or more employers covered by the agreement if FWA is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

FWA must seek views of bargaining representatives

(4) FWA must not accept an undertaking under subsection (3) unless FWA has sought the views of each person who FWA knows is a bargaining representative for the agreement.

Signature requirements

(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.

191 Effect of undertakings

(1) If:

(a) FWA approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers a single employer;

the undertaking is taken to be a term of the agreement, as the agreement applies to the employer.

(2) If:

(a) FWA approves an enterprise agreement after accepting an undertaking under subsection 190(3) in relation to the agreement; and

(b) the agreement covers 2 or more employers;

the undertaking is taken to be a term of the agreement, as the agreement applies to each employer that gave the undertaking.”

[84] Five undertakings were finally supplied by T&R that are relevant to the BOOT and these are set out in the approval decision. 13 Without repeating the detail of those undertakings, they clarified the applicability of overtime to production workers if working past 11.59 pm and provided that any rendering or other non-production employees rostered to work between 12 midnight and 6.00 am would be paid the award night shift loading. In addition, an undertaking was provided that narrowed the scope of clause 17.

[85] An additional undertaking was provided concerning the basis upon which wages under the Agreement would be adjusted throughout its life. Finally, confirmation that the Shut Down Leave Bank would be paid out upon the cessation of employment was provided.

[86] Having sought the views of the bargaining representatives 14, including in particular the AMIEU, I accepted these undertakings pursuant to s.190 of the Act. As a result, the relevant undertakings are taken to be a term of the Agreement. In so doing, I have had regard to the fact that elements of these undertakings were not considered by the AMIEU to be appropriate or sufficient for present purposes and that it, for the most part, maintained its BOOT objection.15

[87] In my view, the undertakings substantially dealt with the reservations that I had identified. Further, they bolstered and clarified the provisions of the Agreement and none would disadvantage any employees. I have considered the extent of the undertakings however given their nature, I was on balance also satisfied that they did not substantially change the instrument agreed to by the majority of the workforce, as would otherwise be proscribed by s.190(3) of the Act. 16

[88] The final version of the undertaking dealing with the working hours was in my view sufficient to confirm the intent of the Agreement and to ensure that those employees would otherwise be treated as night shift employees under the award, would retain access to an appropriate shift loading.

[89] In terms of the stand-down arrangements in clause 17, the undertaking significantly narrowed the scope of circumstances that might otherwise lead to the very broad application of this term. However, I accept that it remains wider than the equivalent award provision and I have had regard to such when assessing the overall package.

[90] As to complexity of the undertaking regarding the adjustment of the loaded wages, given that the basis of the calculations is illustrated in evidence now before Fair Work Australia, I consider that it is sufficiently robust and clear to serve the statutory purpose. The undertaking will also ensure that in effect, the value of those award-based conditions that have been incorporated into the agreement rate, are not eroded over the life of the Agreement.

OTHER MATTERS ARISING FROM THE APPLICATION

[91] Although not the subject to objections from the AMIEU, a number of additional matters were raised by me with the parties during the course of the consideration of this matter.

The dispute resolution term

[92] I advised the parties that I considered clause 10 Resolving Workplace Disputes to be deficient in certain respects. In particular, that it applied (only) to “workplace concerns or disputes”.

[93] Clause 10 of the Agreement is in the following terms:

“10 RESOLVING WORKPLACE DISPUTES

You and we will follow this procedure to resolve workplace concerns or disputes.

10.1 Step 1: Discuss the matter with your supervisor, if your supervisor cannot resolve the issue in two (2) working days or you are not satisfied with the response then go to step 2.

10.2 Step 2: Through your Supervisor, provide a relevant Manager or his or her nominee with details of the nature of your problem and any relevant background information to assist in resolution. This may be required in writing. Management will generally respond within five (5) working days. At this stage, you may appoint a representative to represent you. If the matter is not resolved then go to step 3.

10.3 Step 3: With or without your representative, either party may then request independent mediation by a mutually agreed and qualified mediator. Both parties shall bear the costs of the mediator equally. If mediation is unsuccessful a party may opt for step 4.

10.4 Step 4: When steps 1-3 are exhausted, either party may then apply for a hearing with Fair Work Australia to conciliate or arbitrate the dispute if mutually agreed by the parties.”

[94] Section 186(6) of the Act requires that for approval an agreement must provide for a dispute settlement term as follows:

“Requirement for a term about settling disputes

(6) FWA must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows FWA, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

Note 1: FWA or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).

Note 2: However, this does not prevent FWA from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).”

[95] This means that, amongst other matters, an enterprise agreement must contain a dispute resolution term that provides a procedure to deal with disputes about any matters arising under the agreement and in relation to the NES.

[96] Where an agreement expressly incorporated the terms of the NES, a dispute resolution term that referred only to matters arising under the Agreement could be said to also cover the NES. However, that is not the case in the Agreement under consideration and the application of clause 10 to the scope of matters required by s.186(6) of the Act is not clearly established.

[97] Further, as is clear from the Full Bench in Woolworths Ltd trading as Produce and Recycling Distribution Centre 17 it is essential that the Agreement provision establishes a procedure that requires or allows Fair Work Australia (or another independent body or person) to settle disputes about any matters arising under the agreement. The Act does not require that particular powers are given to Fair Work Australia (or the other body) but it is essential that it be empowered to deal with the matters.

[98] Step 3 of the Agreement procedure raised some significant concerns including that there is no requirement that the mediator be an independent person. On that basis, the parties need to rely upon the reference of the matter to Fair Work Australia in order to meet the requirements of the Act. Step 3 could also in my view operate to prevent a matter in dispute coming to Fair Work Australia such as when the parties could not agree upon the mediator due to costs or other considerations.

[99] Accordingly, I invited the relevant parties to make formal undertakings that the terms of clause 10 Resolving Workplace Disputes of the Agreement will be applied to disputes about any matters arising under the agreement and in relation to the NES. Further, that nothing in Step 3 of the procedure would prevent a matter being referred to Fair Work Australia where it remained unresolved.

[100] The employer subsequently provided two undertakings 18 confirming in effect that the procedure would apply to all workplace disputes, including disputes relating to the terms and conditions of the Agreement and in relation to the NES and that Clause 10.3 would be applied so as to enable the disputing parties to access Fair Work Australia to assist in the resolution of a workplace dispute.

[101] Having sought the views of the bargaining representatives including the AMIEU, I accepted these undertakings pursuant to s.190 of the Act. As a result, the above undertakings are also taken to be a term of the Agreement.

The flexibility term

[102] Clause 35 of the Agreement also provided a follows:

“35 WORKPLACE FLEXIBILITY

An employer and employee covered by this agreement may upon mutual agreement make an individual flexibility arrangement to vary the effect of terms of the agreement if and when special circumstances arise pursuant to the Fair Work Actand NES.”

[103] T&R initially contended through its declaration filed in this matter that this was intended to be the flexibility term as required by the Act but in a later submission accepted that the model provision should be applied.

[104] The Act relevantly provides as follows:

“202 Enterprise agreements to include a flexibility term etc.

Flexibility term must be included in an enterprise agreement

(1) An enterprise agreement must include a term (a flexibility term) that:

(a) enables an employee and his or her employer to agree to an arrangement (an individual flexibility arrangement) varying the effect of the agreement in relation to the employee and the employer, in order to meet the genuine needs of the employee and employer; and

(b) complies with section 203.

Effect of an individual flexibility arrangement

(2) If an employee and employer agree to an individual flexibility arrangement under a flexibility term in an enterprise agreement:

(a) the agreement has effect in relation to the employee and the employer as if it were varied by the arrangement; and

(b) the arrangement is taken to be a term of the agreement.

(3) To avoid doubt, the individual flexibility arrangement:

(a) does not change the effect the agreement has in relation to the employer and any other employee; and

(b) does not have any effect other than as a term of the agreement.

Model flexibility term

(4) If an enterprise agreement does not include a flexibility term, the model flexibility term is taken to be a term of the agreement.

(5) The regulations must prescribe the model flexibility term for enterprise agreements.

203 Requirements to be met by a flexibility term

Flexibility term must meet requirements

(1) A flexibility term in an enterprise agreement must meet the requirements set out in this section.

Requirements relating to content

(2) The flexibility term must:

(a) set out the terms of the enterprise agreement the effect of which may be varied by an individual flexibility arrangement agreed to under the flexibility term; and

(b) require the employer to ensure that any individual flexibility arrangement agreed to under the flexibility term:

(i) must be about matters that would be permitted matters if the arrangement were an enterprise agreement; and

(ii) must not include a term that would be an unlawful term if the arrangement were an enterprise agreement.

Requirement for genuine agreement

(3) The flexibility term must require that any individual flexibility arrangement is genuinely agreed to by the employer and the employee.

Requirement that the employee be better off overall

(4) The flexibility term must require the employer to ensure that any individual flexibility arrangement agreed to under the term must result in the employee being better off overall than the employee would have been if no individual flexibility arrangement were agreed to.

Requirement relating to approval or consent of another person

(5) Except as required by subparagraph (7)(a)(ii), the employer must ensure that the flexibility term does not require that any individual flexibility arrangement agreed to by an employer and employee under the term be approved, or consented to, by another person.

Requirement relating to termination of individual flexibility arrangements

(6) The flexibility term must require the employer to ensure that any individual flexibility arrangement agreed to under the term must be able to be terminated:

(a) by either the employee, or the employer, giving written notice of not more than 28 days; or

(b) by the employee and the employer at any time if they agree, in writing, to the termination.

Other requirements

(7) The flexibility term must require the employer to ensure that:

(a) any individual flexibility arrangement agreed to under the term must be in writing and signed:

(i) in all cases—by the employee and the employer; and

(ii) if the employee is under 18—by a parent or guardian of the employee; and

(b) a copy of any individual flexibility arrangement agreed to under the term must be given to the employee within 14 days after it is agreed to.

204 Effect of arrangement that does not meet requirements of flexibility term

Application of this section

(1) This section applies if:

(a) an employee and employer agree to an arrangement that purports to be an individual flexibility arrangement under a flexibility term in an enterprise agreement; and

(b) the arrangement does not meet a requirement set out in section 203.

Note: A failure to meet such a requirement may be a contravention of a provision of Part 3-1 (which deals with general protections).

Arrangement has effect as if it were an individual flexibility arrangement

(2) The arrangement has effect as if it were an individual flexibility arrangement.

Employer contravenes flexibility term in specified circumstances

(3) If section 203 requires the employer to ensure that the arrangement meets the requirement, the employer contravenes the flexibility term of the agreement.

Requirement relating to termination of arrangement

(4) If the arrangement does not provide that the arrangement is able to be terminated:

(a) by either the employee, or the employer, giving written notice of not more than 28 days; or

(b) by the employee and the employer at any time if they agree, in writing, to the termination;

the arrangement is taken to provide that the arrangement is able to be so terminated.”

[105] Although it was intended to operate subject to the Act, it is clear that clause 35 of the Agreement does not meet the specific statutory requirements and as a result I noted in the approval decision that the model flexibility clause is taken to be a term of this Agreement in accordance with s.202(4) of the Act.

The consultation term

[106] Section 205 of the Act requires that an enterprise agreement provide for consultation on certain matters as follows:

“205 Enterprise agreements to include a consultation term etc.

Consultation term must be included in an enterprise agreement

(1) An enterprise agreement must include a term (a consultation term) that:

(a) requires the employer or employers to which the agreement applies to consult the employees to whom the agreement applies about major workplace changes that are likely to have a significant effect on the employees; and

(b) allows for the representation of those employees for the purposes of that consultation.

Model consultation term

(2) If an enterprise agreement does not include a consultation term, the model consultation term is taken to be a term of the agreement.

(3) The regulations must prescribe the model consultation term for enterprise agreements.”

[107] The declaration filed in support of the application cites clauses 8 and 9 as meeting this requirement. These provisions establish a general (and appropriate) obligation to consult with the workforce on a variety of matters including Occupational Health and Safety, operational issues, procedures and policies. The Agreement provision does not in my view meet the particular requirements for consultation as expressly required by s.205 of the Act.

[108] I did consider whether the modern award provision (clause 9) would apply given that it is not expressly excluded by virtue of clause 5.2 of the Agreement. 19 However, I do not consider that this is the effect of the present Agreement and the parties were invited to confirm how the requirements of section 205 were to be met.

[109] Although not strictly required given the operation of s.205(2) of the Act, the employer also subsequently provided an undertaking recognising the model consultation term.

[110] As with each of the undertakings outlined in this decision, this has been noted in the approval decision and is taken to be a term of the Agreement. I have also noted the inclusion of the model consultation term within the Agreement approval decision as required by s.201(1) of the Act.

AMIEU to be covered

[111] The AMIEU, being a bargaining representative for the Agreement, has given notice under s.183 of the Act that (if approved) it wants the Agreement to cover it. In accordance with s.201(2) of the Act I have noted in the approval decision that the Agreement covers the organisation.

CONCLUSIONS

[112] I was satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval had been met.

[113] The Agreement was therefore approved and, in accordance with s.54 of the Act, operates from 8 September 2010. The nominal expiry date of the Agreement is 7 September 2014. As outlined earlier, a separate approval decision has already been issued by Fair Work Australia ([2010] FWAA 5481).

COMMISSIONER

Written submissions:

T&R Murray Bridge Pty Ltd

2010

19, 28 July

12, 18, 23, 31 August

The Australasian Meat Industry Employees Union

2010

20, 30 July

16, 27 August

1 The evidence includes affidavits from Mr Jason Morris, Plant Employee Relations and Human Services Manager, Mr Darren Hyde, Food Process Worker and member of the Joint Consultative Committee (the JCC), Mr Ashleigh Paul, Beef Boner and member of the JCC, Mr Peter Hancock, Plant Production Manager, and Mr Brian Devey, Group Employee Relations and Human Services Manager.

2 [2010] FWAA 5481 as issued on 1 September 2010.

3 AMIEU v T&R (Murray Bridge) Pty Ltd [2010] FWA 1320.

4 PR994119.

5 BRD1 as attached to the affidavit of Mr Devey.

6 Including those associated with the decision in AMIEU v T&R (Murray Bridge) Pty Ltd [2010] FWA 1320.

7 Taken from particulars filed by the AMIEU on 20 July 2010.

8 Taken from AMIEU written submissions as filed on 23 July 2010.

9 The authorities cited included: Aust Timber Workers’ Union v John Sharp and Sons Ltd (1920) 14 CAR 811; Wool and Basil Workers’ Federation of Aust v WM Angliss and Co (Aust) Pty Ltd (1932) 31 CAR 846 at 854; Waterside Workers Federation of Australia v Commonwealth Steamship Owners Association (1942) 47 CAR 3; Food Preservers Award (1961) 99 CAR 340; AMIEU v Central Queensland Meat Export Co (Aust) Pty Ltd [1999] FCR 775.

10 Although not directly raised by the AMIEU I have also considered the context created in part by clause 23 Shut Down and Shut Down Leave Bank and the other provisions concerning the engagement, suspension and termination of employment.

11 Gundagai Meat Processors - Maintenance Enterprise Agreement 2010 AG2010/1052; Turi Foods Pty Ltd and NUW Enterprise Agreement 2009 AG2009/14281; Inghams Enterprises (Sorell) Enterprise Agreement 2009 AG2009/14098; AWX Meat Processing Enterprise Agreement (City of Brisbane) 2009 AG2009/18961 were cited by T&R as examples.

12 The loaded Agreement rates are in the order of 30 percent at the highest classification and 11 percent at the lowest classification level for day workers and in the order of 35 percent and 6.4 percent respectively for afternoon shift workers. These figures do not take into account the impact of the transitional provisions of the modern award which increase in some areas the extent of “over-award” payments represented by the Agreement rates.

13 Undertakings 1 to 5 as set out in [2010] FWAA 5481.

14 There were a number of individual employee bargaining representatives and on each occasion, these representatives were supplied with a copy of all orders and findings of Fair Work Australia and submissions and proposed undertakings. An opportunity to make comment on the proposed undertakings was provided to these representatives as well and the AMIEU.

15 As set out in written submissions dated 16 and 27 August 2010.

16 In so finding I have had regard to the considerations arising from the extent and nature of proposed undertakings discussed by me in Delcorp (SA) Pty Ltd T/A De Luca's On The Park [2010] FWA 2952 at pars [27] and [28].

17 [2010] FWAFB 1464, 26 February 2010 per Giudice J, Acton SDP and Hampton C.

18 Undertakings 6 and 7 as set out in [2010] FWAA 5481.

19 Clause 5.2 of the Agreement expressly excluded certain terms of the modern award however in light of the absence of an express incorporation of other award terms, the “non-excluded” terms do not form part of the Agreement - see s.57 of the Act.

Printed by authority of the Commonwealth Government Printer

[2010] FWA 6658

16 SEPTEMBER 2010