Vesco Foods Pty Ltd T/A Vesco Foods
[2014] FWC 7819
•6 NOVEMBER 2014
| [2014] FWC 7819 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Vesco Foods Pty Ltd T/A Vesco Foods
(AG2014/7419)
DEPUTY PRESIDENT GOOLEY | MELBOURNE, 6 NOVEMBER 2014 |
Application for approval of the Vesco Foods Pty Ltd (Production Employees, Western Australia) Enterprise Agreement 2014.
[1] Vesco Foods Pty Ltd applied for approval of the Vesco Foods Pty Ltd (Production Employees, Western Australia) Enterprise Agreement 2014.
[2] Ms Simone Carter, the Human Resources Manager of Vesco, filed a Statutory Declaration in support of the application. Mr Martin Pritchard from the Food Preservers’ Union of Western Australia, Union of Workers, as a bargaining representative for the Agreement, filed a statutory declaration and did not disclose any disagreement with the statutory declaration filed by Ms Carter. The Union sought to be covered by the Agreement.
[3] The relevant award for the purpose of the Better Off Overall Test is the Food, Beverage and Tobacco Manufacturing Award 2010 1.
[4] The statutory declaration filed by Vesco advised the rates of pay were higher than the Award and that the loading paid for all time worked between 10pm and before 6am was higher than the Award.
[5] The statutory declaration advised that the less beneficial provisions were:
Overtime which is not paid until an employee works more than 40 hours. Thereafter overtime is paid as follows:
Hours in excess of 12 hours per day and on Sunday - double time.
Shift work:
There is no annual leave loading.
[6] While not included in the statutory declaration, the Agreement provides for work on a public holiday to be paid three times the employee’s base rate and if an employee has worked more than four years the Agreement has a more generous redundancy package when compared to the National Employment Standards.
[7] A number of less beneficial provisions were not included in the information provided in the statutory declaration. For example, the Agreement provides that ordinary hours of work can be performed on a Saturday without the payment of any penalty. Ordinary hours of work can be worked at any time and while penalties exist for working between 6pm and 10pm under the Award for day workers all time worked outside the span of hours is paid at overtime rates.
[8] This is of course a matter of concern, as it calls into question the quality of the information provided to employees about the Agreement. It is also concerning as the Commission is entitled to expect the statutory declaration filed by the employer and endorsed by a union bargaining representative to accurately list the more beneficial provisions and the less beneficial provisions in the Agreement..
[9] On 23 September 2014, I wrote to Vesco and outlined my concerns that the Agreement may not pass the Better Off Overall Test. A hearing was conducted and Vesco provided undertakings to address my concerns. A further hearing was then conducted. At that hearing I advised Vesco and the bargaining representative that the undertakings provided did not satisfy my concerns. The rates of pay for Level 1 and Level 2 employees, being the Award rates of pay did not compensate employees for the less beneficial provisions in the Agreement. Additionally, employees in all classifications could, when working particular rosters, be worse off under the Agreement when compared to the Award. As a result further undertakings were provided.
The Fair Work Act 2009 requirements
[10] The Act sets the criteria for assessing the Agreement. 2 If the Commission has a concern that the Agreement does not meet the requirements of sections 186 and 187 of the Fair Work Act 2009, then the Commission may approve the Agreement if it is satisfied that the undertakings provided by the employer meets its concerns. Those undertakings must not cause financial detriment to any employee covered by the agreement or result in substantial changes to the agreement.3
Does the Agreement pass the better off overall test?
[11] The Agreement and the Award provide for rates of pay as follows:
Agreement | Award | |
Level 1 | 16.87 | 16.87 |
Level 2 | 17.34 | 17.35 |
Level 3 | 18.4 | 18.02 |
Level 4 | 19.32 | 18.64 |
Level 5 | 20.28 | 19.64 |
Level 6 | 21.37 | 20.25 |
[12] The rates at Level 1 and Level 2 are at or below the Award rates of pay. S.206 of the Act ensures that the rate of pay in the Agreement cannot fall below the relevant Award rate of pay. It cannot be said that these rates are higher than the Award.
[13] Under the Agreement an employee at Level 1 or Level 2 would need to work at least 6 public holidays before the benefit of the increased public holiday penalty compensated the employees for the non payment of annual leave loading.
[14] The Agreement provides that employees can work ordinary hours of work on Monday to Saturday and no penalty applies for work on Saturday. The Award provides at clause 30.2 that day workers can work ordinary hours on Saturday but a day worker who works ordinary hours on a Saturday is paid at 150%. For each classification, an employee, who works 7.6 hours per day Tuesday to Saturday, is paid less under the Agreement compared to the Award.
[15] It was submitted that weekly employees work Monday to Friday and if they work on Saturday they would be paid overtime. However there is nothing in the Agreement which prevents employees being rostered to work Tuesday to Saturday.
[16] Further, the calculations provided by Vesco to support its submission that employees at Level 3 and above are better off under the Agreement, miscalculate overtime payable under the Award. The spreadsheets provided have employees working Monday to Saturday and work on Saturday is overtime. The spreadsheet has overtime worked on a Saturday under the Award at 150% whereas the Award provides that overtime is paid at 150% for the first three hours and double time thereafter. When this is factored into the calculations, employees are not better off under the Agreement.
[17] Casual employees do not have a minimum call under the Agreement. Under the Award, casual employees have a minimum call of four hours though by agreement that can be less than four hours. Further under the Award, provided certain criteria are met, casuals can convert to full time or part time employment.
[18] It is also not clear whether casuals are paid overtime or other penalties payable under the Agreement. If a casual employee is entitled to overtime and other penalties under the Agreement it is not clear whether the casual employee gets these in addition to the casual loading.
[19] Part time employees under the Agreement are provided with a minimum call of six hours per day and 20 hours per week as determined by the roster system. The days on which a part time employee works can be changed by Vesco. Under the Award part time employees must have an agreement about the starting and finishing times, and the hours and days on which the part time employee works. This can only be varied by agreement. If a part time employee works hours outside of these hours the employee must be paid overtime.
[20] It was submitted that part time employees are only employed at Level 3 and above and that given the guarantee of a minimum of six hours per day and 20 hours per week the employees are better off. There is nothing in the Agreement which prevents part time employees from being employed at Levels 1 or 2.
[21] Whilst I would be prepared to accept that employees may accept less certainty about the days of work, in exchange for a greater number of hours of work and a minimum call of six hours, the failure to pay employees overtime for working outside of their contracted hours, until the employee has worked 40.1 hours per week, weighs against a finding that this class of employees are better off. A part time employee classified as a Level 3 who works six hours and is then directed to work an additional two hours under the Agreement is paid $147.20 per day whilst under the Award is paid $162.18 per day.
[22] Having regard to these matters, I am not satisfied that the Agreement passes the better off overall test.
The Undertakings
[23] Vesco has provided the following undertakings to address some of these issues.
1. “Although the expectation is that the employees will earn more than the Award, the Company gives an undertaking that all employees covered by the Agreement will earn one dollar more than at the term of the agreement than they would under the Award.”
[24] It is not clear what this undertaking means. Does it mean that over the life of the Agreement employees will earn one dollar more or over a week employees will earn one dollar more? Assuming that it is one dollar per week, I do not consider earning one dollar per week more than the Award will mean employees will be better off under the Agreement. Under the Agreement employees are only entitled to a 10 hour break between shifts if they work more than 12 hours in one day; the employer can direct an employee to take annual leave in circumstances where the Award would not permit the employer to direct the employee to take annual leave; there is no casual conversion provisions in the Agreement; there is no requirement in the Agreement for the employer to replace damaged clothing, spectacles and hearing aids; under the Agreement superannuation is not required to be paid during periods of workers compensation; and there is no minimum call for overtime on a Saturday, Sunday or Public Holiday. I do not consider one dollar a week is sufficient to compensate employees for these less beneficial provisions.
2. “We believe that part time employees are not disadvantaged under the Agreement as they are paid at Grade 3 or higher with a guaranteed 6 hour minimum and 20 hours minimum per week whereas the Award guarantees a minimum of 3 hours per shift and no minimum hours per week. All rates of pay for Grade 3 and up are higher than the Award rate. Employees agreed that these provisions are superior to the Award.”
[25] It is not clear if this is an undertaking that all part time employees will be classified at Level 3 and above. If they are then, while I would accept that employees may be better off under an agreement which guarantees them six hours per shift and 20 hours per week, that Vesco can direct them to work additional hours without overtime payments until the employees have worked more than 40.1 hours, means that they would be worse off under the Agreement. Assuming that the undertaking that employees will earn $1 more than the Award would apply, for the reasons outlined above I would still not be satisfied that the employees are better off.
3. “The grade 1 rate is to be increased to $16.92 and the grade 2 rate to $17.39.”
[26] While this undertaking resolves the problem that the Agreement rates are at or below the Award rates, the rates are not sufficient to compensate employees for the less beneficial provisions in the Agreement and for the reasons outlined above I am not be satisfied that the employees are better off.
4. “The Company will ensure that all casual employees will be engaged for a minimum call of 4 hours on every occasion that they are required to work.”
[27] This undertaking satisfies my concern about the minimum call for casual employees. If a casual employee’s entitlements to overtime and penalty rates is calculated on the base rate without the casual loading then they will not be better off as the casual loading in the Award is included in the casual employee’s all purpose rate.
Other undertakings
[28] While other matters were raised with Vesco, I have accepted that the undertakings provided in relation to them, would satisfy my concerns and they were not a consideration in my decision.
Conclusion
[29] For the reasons outlined above, I have therefore decided not to approve the Agreement. Even with the undertakings provided, I am not satisfied that the employees are better off under the Agreement when compared to the Award.
DEPUTY PRESIDENT
Appearances:
S Carter on behalf of Vesco Foods Pty Ltd.
M Pritchard on behalf of Food Preservers’ Union of Western Australia, Union of Workers.
Hearing details:
2014.
Melbourne:
30 September and 15 October.
1 MA000073
2 See sections.186, 187, 188.
3 Section 190.
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