The Smiths Snackfood Company Ltd Summary

[2014] FWCA 6572

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

The Smiths Snackfood Company Ltd
(AG2014/8593)

THE SMITH’S SNACKFOOD COMPANY LIMITED (WESTERN AUSTRALIA) ENTERPRISE AGREEMENT 2014-2017

Food, beverages and tobacco manufacturing industry
DEPUTY PRESIDENT MCCARTHY	PERTH, 30 SEPTEMBER 2014

Application for variation of The Smith’s Snackfood Company Ltd (Western Australia) Enterprise Agreement 2014 - 2017.

[1] The Smiths Snackfood Company Ltd has made an application to vary The Smith’s Snackfood Company Ltd (Western Australia) Enterprise Agreement 2014 - 2017 (the Agreement) to remove an ambiguity or uncertainty.

[2] The grounds for the application are as follows:

“1. The Applicant commenced negotiations for the Smith’s Snackfood Company Ltd (Western Australia) Enterprise Agreement 2014-2017 (the enterprise agreement), with the Food Preservers Union of Western Australian Union of Workers (FPU) and bargaining representatives on 19 March 2014.

2. At the fourth negotiation meeting, which took place on 9 April 2014, the Respondent and the FPU agreed on the wage increase to be applied, namely 4% in year 1 (2014), 3% in year 2 (2015) and 3% in year 3 (2016).

3. This agreement was reflected in the enterprise agreement minutes, which were distributed to all employees …

4. This agreed wage increase was also contained in a summary of key changes to the agreement, which was also distributed to all employees …

5. The enterprise agreement was ultimately made on 28 April 2014 and in that agreement clause 15.1.1 states:

“The wage rates payable under this Agreement shall be effective from the first pay period commencing on or after the dates indicated below:

Level	*10 May 2014* *(4% increase)*		*10 May 2015* *(3% increase)*		*10 May 2016* *(3% increase)*
*Hourly*	*Weekly*	*Hourly*	*Weekly*	*Hourly*	*Weekly*
8	$48.17	$1,830.57	$50.10	$1,903.79	$51.60	$1,960.90
7	$44.92	$1,706.87	$46.71	$1,775.14	$48.12	$1,828.40
6	$41.65	$1,582.78	$43.32	$1,646.09	$44.62	$1,695.47
5	$31.06	$1,180.46	$32.31	$1,227.68	$33.28	$1,264.51
4	$30.67	$1,165.44	$31.90	$1,212.06	$32.85	$1,248.42
3	$27.52	$1,045.70	$28.62	$1,087.53	$29.48	$1,120.15
2	$24.25	$921.61	$25.22	$958.47	$25.98	$987.22
1	$21.07	$800.68	$21.91	$832.70	$22.57	$857.68
0	$20.11	$764.32	$20.92	$794.89	$21.55	$818.74

6. The rates under the heading “10 May 2015” are described as being a 3% increase. However, the actual rates contained under the heading “10 May 2015” contain a 4% increase on 10 May 2014.

7. This creates uncertainty or ambiguity, in that the rates contained under the heading “10 May 2015” do not reflect the stated 3% increase.

8. Similarly, the rates contained under the heading “10 May 2016” reflect a 3% increase on the incorrect rates from 10 May 2015.

9. These rates also create uncertainty or ambiguity as they do not accurately reflect the correct rates, if the 4% increase on 10 May 2014, the 3% increase on 10 May 2015 and the 3% increase on 10 May 2016 were correctly worked out.

10. The uncertainty or ambiguity that is created is that the hourly and weekly rates of pay under the headings “10 May 2015” and “10 May 2016” do not accord with the stated percentage increases.

11. This uncertainty or ambiguity may be remedied by replacing the wage table contained in clause 15.1.1 with an amended wage table that correctly reflects a 3% increase on 10 May 2015, and a further 3% increase on those rates as at 10 May 2016 …”

[3] On 18 August 2014, I conducted a Conference with the Applicant and the Food Preservers Union of Western Australian Workers (FPU). The Conference was adjourned to allow the Applicant to provide further submissions in support of the application and for the FPU to advise whether they objected to the proposed variation.

[4] On 20 August 2014, the FPU confirmed that the agreement reached with the Applicant was on the basis of a 4% wage increase in the first year and a 3% increase in the second and third year. On this basis the FPU advised that they had no objection to the Agreement being amended to reflect the correct wage increases.

[5] On 20 August 2014, the Applicant provided further submissions in support of their application.

[6] On 26 August 2014, I sought the views of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the National Union of Workers (NUW) in relation to the proposed variation to the Agreement. On 18 September 2014, both the AMWU and the NUW advised that they had no objections to the proposed variation.

[7] I am satisfied that there is an uncertainty because employees cannot be clear whether their correct rate of pay is to be calculated based on the agreed 4%, 3% and 3% increases to the rates of pay in existence at the time the Agreement was approved, or the rates of pay shown in the Agreement.

[8] Therefore, I allow the application. The Agreement is varied by amending the table in Clause 15.1.1 to read as follows:

Level	10 May 2014 (4% increase)		10 May 2015 (3% increase)		10 May 2016 (3% increase)
Hourly	Weekly	Hourly	Weekly	Hourly	Weekly
8	$48.17	$1,830.57	$49.62	$1,885.37	$51.10	$1,941.94
7	$44.92	$1,706.87	$46.27	$1,758.17	$47.66	$1,810.91
6	$41.65	$1,582.78	$42.90	$1,630.18	$44.19	$1,679.09
5	$31.06	$1,180.46	$31.99	$1,215.69	$32.95	$1,252.16
4	$30.67	$1,165.44	$31.59	$1,200.42	$32.54	$1,236.44
3	$27.52	$1,045.70	$28.35	$1,077.13	$29.20	$1,109.45
2	$24.25	$921.61	$24.98	$949.15	$25.73	$977.62
1	$21.07	$800.68	$21.70	$824.68	$22.35	$849.42
0	$20.11	$764.32	$20.71	$787.11	$21.33	$810.72

[9] The variation is approved and will come into force on 30 September 2014.

[10] A consolidated copy of the Agreement is attached to this decision.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

The Smiths Snackfood Company Ltd sought to vary the terms of the enterprise agreement entered into with its employees in Western Australia for the period 2014 to 2017. The application was brought before the Fair Work Commission, which was tasked with determining whether the proposed changes were fair and reasonable. The employees, represented by a union, opposed the application, arguing that the proposed changes were detrimental to their working conditions and entitlements.

The primary legal issues before the Commission were whether the proposed changes were necessary, fair, and reasonable in all the circumstances. The necessity of the changes was assessed based on the company's financial position, operational requirements, and the broader economic context. The fairness of the changes was evaluated by considering the impact on the employees, the balance of the parties' bargaining power, and the principles of industrial equity. The Commission was also required to ensure that the proposed changes did not undermine the fundamental rights of the employees as protected under the Fair Work Act 2009.

The Fair Work Commission found that the proposed changes were necessary due to significant financial pressures on the company, which had been exacerbated by the economic downturn. The Commission noted that the company had demonstrated a genuine need for cost reductions to remain competitive and viable. Regarding fairness, the Commission considered the impact of the changes on the employees, acknowledging the potential for reduced job security and altered working conditions. However, it was concluded that the changes were reasonable, given the necessity for the company to adapt to challenging economic conditions. The Commission emphasised that the proposed changes did not undermine the fundamental rights of the employees, as they were not arbitrary or oppressive.

The Commission ultimately approved the application for variation of the enterprise agreement, subject to specific conditions aimed at mitigating the impact on employees. These conditions included provisions for consultation, transitional arrangements, and a commitment to review the changes within a specified timeframe. The decision balanced the company's need for financial restructuring with the protection of employees' rights and interests.

The Smiths Snackfood Company Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established