Thomas Foods International Murray Bridge Pty Ltd

[2020] FWCA 3202

[2020] FWCA 3202

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Thomas Foods International Murray Bridge Pty Ltd
(AG2020/1110)

THOMAS FOODS INTERNATIONAL MURRAY BRIDGE PRODUCTION EMPLOYEES ENTERPRISE AGREEMENT 2020

Meat Industry
COMMISSIONER PLATT	ADELAIDE, 23 JUNE 2020

Application for approval of the Thomas Foods International Murray Bridge Production Employees Enterprise Agreement 2020.

[1] An application has been made for approval of an enterprise agreement known as the Thomas Foods International Murray Bridge Production Employees Enterprise Agreement 2020 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act) by Thomas Foods International Murray Bridge Pty Ltd (Thomas Foods). The agreement is a single enterprise agreement.

[2] The matter was allocated to my Chambers on 1 May 2020.

[3] On 6 May 2020, I conducted a telephone conference with the parties to seek clarification about aspects of the Agreement and invited the Applicant to address these matters (which were detailed in an ‘issues list’ attached to the notice of listing) including through the provision of an undertaking. The conference was attended by Thomas Foods and its representative, the Australasian Meat Industry Employees Union (AMIEU) and Employee Bargaining Representatives. The AMIEU raised a number of objections to the approval of the Agreement including better off overall test (BOOT) concerns and whether the group was fairly chosen.

[4] Thomas Foods was invited to provide an undertaking and a hearing was scheduled to allow for the determination of whether the group was fairly chosen and any outstanding issues.

[5] Thomas Foods subsequently provided an undertaking and the parties conferred so as to prepare an agreed statement of facts and narrow the issues in dispute.

[6] The following material was submitted prior to the hearing:

•  A statement of agreed facts. 1 This document included correspondence between the parties and material concerning an application for a bargaining order (B2020/180) and Deputy President Anderson’s decision2 with respect to that bargaining application.

•  Correspondence dated 12 June 2020 from Thomas Foods representative concerning the positions of the parties, the conduct of the hearing and details of matters resolved and matters outstanding. 3 The outstanding matters from the perspective of Thomas Foods and the AMIEU was the number of ordinary hours permitted under the proposed Agreement, the ‘group fairly chosen’ objection and the need to supply a revised signing page. The correspondence noted the concerns expressed by the Commission as to BOOT issues.

•  Submissions on the outstanding matters on behalf of Thomas Foods. 4

•  A revised undertaking dated 17 June 2020. 5

•  AMIEU submissions as to matters excluding BOOT issues dated 14 May 2020. 6

•  AMIEU submissions as to BOOT matters dated 14 May 2020. 7

•  AMIEU reply submissions dated 28 May 2020. 8

[7] Despite the information contained in Exhibit TF2, it appeared to me that the AMIEU had not yet been satisfied as to the BOOT partly as a result of concerns with the maximum number of ordinary hours that could be worked.

[8] Prior to the hearing, I reviewed the material and provided a revised ‘issues list’ to the parties with comments on the matters outstanding, and the content and form of the undertaking. I also provided a copy of BOOT modelling prepared by the Commission’s Agreements Team. This modelling suggested that the key BOOT issues arose from the maximum number of ordinary hours per week, and overtime arrangements for casual and part-time employees. 9

[9] On 17 June 2020, a hearing was conducted by telephone for final determination of the matter. Mr Andrew Herbert of counsel with Mr Michael Foley of Norman Waterhouse Lawyers appeared on behalf of Thomas Foods together with Ms Morna Young, Mr Sam Jones and Ms Kym Gallard. Mr Mark O’Loughlin, Mr Graham Smith and Ms Sharra Anderson appeared on behalf of the AMIEU and Mr Eric Baker, Mr Wayne Hodges and Mr Abdullatif Karamaz appeared as individual employee bargaining representatives (collectively referred to as the employee bargaining representatives).

[10] With respect to the concerns held about the Agreement prescribing more than 38 ordinary hours per week, it became evident that this was due to a drafting issue and was resolved by way of undertaking.

[11] The remaining issues (excluding BOOT, genuine agreement and group fairly chosen) were resolved by way of clarification of the obligations contained in the reference Award and/or revisions to the undertaking.

[12] After the conclusion of the hearing, Thomas Foods submitted an undertaking in the required form dated 17 June 2020. The undertaking deals with the following topics:

•  The phrase ‘Agreement Ordinary Hours’ will be read as ‘Agreement Usual Hours’.

•  In relation to clause 3.2 (Industrial action), the word ‘life’ is substituted with the word ‘term’.

•  In relation to clause 6.5 (Abandonment of employment), an employee may be terminated with notice or payment in lieu as required by the Act.

•  In relation to clause 7 (Classification and higher duties), if an employee is required on any day or shift to perform duties of a classification higher than those of the classification in which they are usually engaged, they will be paid for the whole day or shift.

•  In relation to clause 10 (Representation during dispute), an employee may be represented during any or all steps in the process.

•  Clause 12.1.9 is added which provides overtime penalty rates for casual employees who perform more than the normal working hours assigned to a particular shift, or more than 152 hours in a 28 day period.

•  Clause 12.3 will provide overtime penalty rates for part-time employees who perform more than the normal working hours assigned to a particular shift, or more than 152 hours in a 28 day period.

•  In relation to clause 13 (Overtime), any work performed by an employee in addition to the Agreement Usual Hours or outside the spread of hours under the Award for a meat processing establishment will be paid overtime rates, unless particular rates of pay are provided under clauses 13.2 to 13.8.

•  In respect of better off overall issues relating to an employee who works a 3 Saturdays in a 3 week roster cycle under roster Option 2 or Option 3, the Applicant has provided a system consistent with that in Shop, Distributive and Allied Association v Beechworth Bakery Employee Co Pty Ltd T/A Beechworth Bakery (Beechworth). 10

•  In respect of better off overall issues relating to the Applicant introducing or varying a roster option or varying weekly rosters under clause 13, the Applicant has provided a system consistent with that in Beechworth. 11

•  Clause 16.1.3 is amended to ‘the unavailability of adequate numbers of suitable livestock, where the unavailability is caused by any reason for which the Employer cannot reasonably be held responsible’.

•  Clauses 16.3 and 16.4 will not be relied upon and a new clause 16.3 will state ‘During a period of stand down, employees may access annual leave at full pay or twice as much annual leave at half pay upon written request’.

•  Clause 20.2(a) of the Award, cold temperature allowance, applies to all employees except to employees to whom clause 12.5.4 of the Agreement applies.

•  Clause 21 (Community service leave) will be applied in accordance with the National Employment Standards (NES) and Agreement clause 21, whichever is most beneficial.

•  Clause 25 (Paid compassionate leave) will not be applied in a way which is contrary to Part 2-2 Division 7 Subdivision C of the Act.

•  In relation to clause 27, the Long Service Leave Act 1987 (SA) applies to employees to the exclusion of the Federal Meat Industry (Processing) Award 2000 (Cth).

•  In relation to clause 29 (Job search entitlement), the job search entitlement under Award clause 35.2 will be applied.

•  Clause 31 (Deduction of outstanding money) will not apply.

•  In relation to clause 32 (Redundancy pay) the Applicant may apply to the Commission to reduce or remove any obligation to pay redundancy pay if the Applicant obtains other acceptable employment.

•  The Applicant will provide employees with uniforms as outer working clothes and will launder those uniforms without charge to the employees.

[13] With respect to the remaining issues Thomas Foods and the AMEIU largely relied on their written submissions. Some verbal submissions were made by the employee bargaining representatives.

Better Off Overall Test

[14] It should be noted that the BOOT is against the Meat Industry Award 2010 and Thomas Foods (at the relevant location) operates a meat processing establishment.

[15] In its first correspondence with the parties, the Commission raised BOOT concerns in respect of:

•  the maximum number of ordinary hours (40 hours per week)

•  the non-payment of casual loading on overtime

•  overtime for part-time employees

•  the arrangement of hours for some of the seven rosters defined in the proposed Agreement when contrasted to entitlements under the reference Award

•  the Agreement did not appear to appropriately deal with higher duties payments, provision of a clothing allowance, job search entitlement and Public Holiday penalties

[16] The AMIEU submissions as to BOOT highlighted the following concerns:

•  The mandating of 40 ordinary hours per week

•  Classification matching

•  Reduced penalties (including overtime and Public Holidays)

•  A disagreement on modelling calculations used by Thomas Foods to determine the application of the BOOT

•  The restrictions imposed on the application of the cold work allowance

•  The removal of the overtime provision where less than 5 successive shifts have been worked

•  The removal of paid breaks

•  Overtime rates for part-time and casual employees after 38 hours work has been performed

•  The operation of the stand down provision

[17] The undertaking dated 17 June 2020 deals with the following matters relevant to the BOOT:

•  The ordinary hours per week are a maximum of 38 averaged over a 4 week period 12

•  Employees who perform higher duties for the whole day at the higher rate 13

•  Part-time and casual employees who work more than the normal working hours or in excess of the limit on ordinary hours will be paid overtime 14

•  Work performed outside the Award spread of hours, or the Agreement Usual Hours will be paid at overtime rates unless clauses 13.2 to 13.8 of the Agreement apply 15

•  The Award cold temperature provision will be applied other than where clause 12.5.4 applies 16

•  Thomas Foods will provide and launder uniforms without charge 17

•  A Beechworth undertaking has been provided in respect of certain applications of Rosters 2 and 3 and any variation of those rosters 18

[18] The rates of pay contained in the Agreement are approximately 7.75% to 51.52% above the Award. Thomas Foods contends that any disadvantage compared to the Award is compensated by the increased wage rates and that the allegations in respect of classification matching are without evidence or foundation.

[19] A number of the issues raised in the AMIEU’s BOOT submission have been addressed by the Thomas Foods undertaking. The key issues raised in the Commission’s BOOT modelling of the Agreement distributed on 16 June 2020 have also been addressed by way of submissions and the undertaking. I have noted the restrictions on overtime for part-time employees for processing establishments contained in the Award.

[20] I am not persuaded by the AMIEU’s submission that the Agreement fails the BOOT (including a consideration of the information provided as to classification matching).

[21] I am satisfied that the proposed Agreement with the undertaking passes the BOOT.

Genuine Agreement and Group Fairly Chosen

[22] The AMIEU contend (in summary) that the proposed Agreement was not genuinely agreed to as the circumstances were manipulated to allow 30 employees to vote on an Agreement that would cover substantially more employees in the future. In addition, the 30 employees who voted on the proposed Agreement were not fairly chosen in accordance with s.186(3) of the Act in that they do not possess the requisite skills, knowledge or experience to bargain and vote in respect of work that will be performed by future employees in a wider range of classifications. 19

[23] Thomas Foods contend that the Agreement was made in accordance with the requirements of ALDI Foods Pty Ltd v Shop, Distributive and Allied Employees Association, 20 and that the factual circumstances were not analogous to that which occurred in Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd21 (John Holland) or v Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd (One Key).22 All of the current employees at the site are covered by the proposed Agreement and thus were was no group chosen.

[24] The factual circumstances contained in this matter are somewhat unique.

[25] The workplace was significantly impacted by fire in January 2018 and Thomas Foods are undertaking a staged construction of a new meat processing establishment at Murray Bridge about 8 kilometres from the existing site. At present only 30 employees are engaged in meat processing activities, and all of those persons had the opportunity of voting on the proposed Agreement.

[26] The new site requires Council approval, and the first stage is expected to be operational in 2021. Some 200-300 employees will be engaged to perform stock slaughtering. Further stages of the plant will be progressively constructed over the coming years. Upon conclusion, between 1000 and 1500 employees would be engaged.

[27] I am not persuaded that Thomas Foods have manipulated the circumstances to disenfranchise a future workforce. The construction of the new premises is contingent on a number of factors. Whilst the addition of 200-300 employees appears likely during the term of the Agreement, no certainty exists as to the date of completion and the potential employment of a total of 1000-1500 employees.

[28] The facts in this matter are not analogous to John Holland or One Key. This conclusion was also reached by Deputy President Anderson in respect of his decision (based on primarily the same facts) to reject the AMIEU’s application for a bargaining order.

[29] Based on the information before me, I am satisfied that the proposed Agreement has been genuinely agreed to.

[30] I accept the submissions made by Thomas Foods that no group was chosen. This is confirmed by the agreed facts. I do not accept that the Act requires the Agreement classifications to be limited to those persons who were eligible to vote in the circumstances of this case. I am not persuaded that the group of employees to be covered by the Agreement was not fairly chosen.

[31] I turn to the remaining approval considerations

[32] A copy of the undertaking has been provided to the bargaining representatives and I have sought their views in accordance with s.190(4) of the Act. The bargaining representatives that responded, supported the undertaking.

[33] Whilst the undertaking is lengthy and deals with a range of issues, each case will turn on its facts and in respect of this matter I do not believe that the undertaking represents a substantial change to the Agreement. 23

[34] The undertaking appears to meet the requirements of s.190(3) of the Act and I have accepted it. As a result, the undertakings are taken to be a term of the Agreement.

[35] I am satisfied that each of the requirements of ss.186, 187, 188 and 190 of the Act as are relevant to this application for approval have been met.

[36] The Australasian Meat Industry Employees Union, being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) of the Act I note that the Agreement covers this organisation.

[37] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 7 days after the date of approval of the Agreement. The nominal expiry date is 22 June 2024.

COMMISSIONER

 1   Exhibit TF1

 2   [2020] FWC 1772

 3   Exhibit FT2

 4   Exhibit TF3

 5   Exhibit TF4

 6   Exhibit AMIEU 1

 7   Exhibit AMIEU 2

 8   Exhibit AMIEU 3

 9   Per email from my Chambers dated 16 June 2020

 10   [2017] FWCFB 1664

 11   Ibid

 12   Undertaking 2

 13   Undertaking 5

 14   Undertakings 7 and 8

 15   Undertaking 9

 16   Undertaking 13

 17   Undertaking 20

 18   Undertaking 10 and 11

 19   CFMEU v One Key Workforce Pty Ltd [2017] FCA 1266, CFMMEU v Karinjini Rail Pty Ltd[2019] FWCA 6451

 20 [2017] HCA 53

 21 [2015] FCAFC 16

 22 [2017] FCA 1266

 23   See CFMMEU v C & H Acquisition Pty Ltd[2020] FWCFB 3134 para [37], [39]

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