Viterra Operations Pty Ltd T/A Viterra
[2018] FWCA 3147
•4 JUNE 2018
| [2018] FWCA 3147 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Viterra Operations Pty Ltd T/A Viterra
(AG2018/10)
VITERRA DOOEN AGREEMENT 2017
Storage services | |
COMMISSIONER HAMPTON | ADELAIDE, 4 JUNE 2018 |
Application for approval of the Viterra Dooen Agreement 2017.
[1] An application has been made for approval of an enterprise agreement known as the Viterra Dooen Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act) by Viterra Operations Pty Limited (Viterra). The Agreement is a single-enterprise agreement.
[2] The Agreement is designed to cover Viterra’s operations at Dooen, in Western Victoria. The Australian Workers’ Union (AWU) has members who are engaged at the facility and initially opposed the approval of the Agreement, including by contending that certain matters were not apparently addressed in the Form F17 Statutory Declaration and that the Agreement did not meet the Better Off Overall Test (BOOT) of s.193 of the Act. The BOOT objections initially raised by the AWU primarily concerned the provisions of the Agreement as they would apply to casual employees.
[3] In addition, the AWU sought to be covered by the instrument in the event that it was approved. The AWU did not participate in the proceedings convened to deal with this matter but I have had regard to the issues raised in its initial position.1 Further, as will become clear, the AWU has now accepted certain proposed undertakings provided to the Commission by Viterra and contended that the Commission should accept them as part of the approval of the Agreement.
[4] On receipt of the application, the Commission raised a number of issues with the applicant employer and a series of responses was provided. In due course, on 24 May 2018, the matter was assigned to the Commission as presently constituted to deal with the application.
[5] On 30 May 2018, I conducted a hearing of the parties to seek clarification about aspects of the Agreement. In light of the additional information provided about the process leading to the Agreement, and subject to certain other matters set out below, I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.
[6] Without dealing with all of those requirements, I find that the process leading to the endorsement of the Agreement by a valid majority of employees was consistent with the requirements of the Act. This includes that the Notice of Employee Representational Rights was issued at the time that the employer initiated the bargaining; and that all relevant employees were given a genuine opportunity to vote on the Agreement having been provided with the requisite information, and advised of the required details. The Agreement was also genuinely made as required by the Act.2
[7] As outlined earlier, the Commission has raised some points of clarification about the apparent operation of the Agreement itself in light of the statutory approval requirements including the interaction with the National Employment Standards (NES) and the BOOT.
[8] The employer subsequently provided further clarification of the parties’ intentions and proposed formal written undertakings which are appended to the Agreement as approved. These undertaking are responsive to the relevant concerns raised by the Commission as they relate to ss.186 and 187 of the Act.
[9] Without dealing with each of the issues, I observe that the undertakings:
• Confirm that the company policies and procedures are not incorporated as terms of the Agreement – this means that the terms of the NES will operate by virtue of the operation of the Act and such policies or procedures which may be applied to support the terms of the Agreement cannot contravene those minimum provisions and, by virtue of clauses 2.1.3 and 4.4 of the Agreement and the operation of the Act, cannot operate to reduce the express terms of the Agreement itself;
• Confirm the full and correct name of one of the Superannuation funds cited in clause 5.6.1;
• Ensures that clause 7.6 Absence from Duty/Abandonment of Employment of the Agreement will not be inconsistent with the relevant elements of the Act;
• Confirms arrangements for the morning shift loadings;
• Defines shiftworker for the purposes of s.87(1)(b) of the Act; and
• In effect, ensures that the redundancy provisions in clause 11.7 are consistent with the minimum provisions of the NES.3
[10] I have ultimately not required undertakings in relation to the hours of work for casual employees under clause 6.1 and related provisions of the Agreement. This issue arises from the requirement in s.186(2)(c) that the terms of an enterprise agreement must not contravene s.55 of the Act, which deals with the interaction between the NES and an enterprise agreement. The NES makes provision for maximum weekly hours and related matters in s.62 and s.63 of the Act.
[11] The hours of work in clause 6.1 of the Agreement are stated to be an average of 40 hours per week, however, for reasons set out below, this is not of itself inconsistent with the maximum weekly hours and reasonable additional hours requirements of the NES. Sections 62 and 63 of the Act provide as follows:
“Section 62 Maximum weekly hours
Maximum weekly hours of work
(1) An employer must not request or require an employee to work more than the following number of hours in a week unless the additional hours are reasonable:
(a) for a full-time employee--38 hours; or
(b) for an employee who is not a full-time employee--the lesser of:
(i) 38 hours; and
(ii) the employee's ordinary hours of work in a week.
Employee may refuse to work unreasonable additional hours
(2) The employee may refuse to work additional hours (beyond those referred to in paragraph (1)(a) or (b)) if they are unreasonable.
Determining whether additional hours are reasonable
(3) In determining whether additional hours are reasonable or unreasonable for the purposes of subsections (1) and (2), the following must be taken into account:
(a) any risk to employee health and safety from working the additional hours;
(b) the employee's personal circumstances, including family responsibilities;
(c) the needs of the workplace or enterprise in which the employee is employed;
(d) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;
(e) any notice given by the employer of any request or requirement to work the additional hours;
(f) any notice given by the employee of his or her intention to refuse to work the additional hours;
(g) the usual patterns of work in the industry, or the part of an industry, in which the employee works;
(h) the nature of the employee's role, and the employee's level of responsibility;
(i) whether the additional hours are in accordance with averaging terms included under section 63 in a modern award or enterprise agreement that applies to the employee, or with an averaging arrangement agreed to by the employer and employee under section 64;
(j) any other relevant matter.
Authorised leave or absence treated as hours worked
(4) For the purposes of subsection (1), the hours an employee works in a week are taken to include any hours of leave, or absence, whether paid or unpaid, that the employee takes in the week and that are authorised:
(a) by the employee's employer; or
(b) by or under a term or condition of the employee's employment; or
(c) by or under a law of the Commonwealth, a State or a Territory, or an instrument in force under such a law.”
Section 63 Modern awards and enterprise agreements may provide for averaging of hours of work
(1) A modern award or enterprise agreement may include terms providing for the averaging of hours of work over a specified period. The average weekly hours over the period must not exceed:
(a) for a full-time employee--38 hours; or
(b) for an employee who is not a full-time employee--the lesser of:
(i) 38 hours; and
(ii) the employee's ordinary hours of work in a week.
(2) The terms of a modern award or enterprise agreement may provide for average weekly hours that exceed the hours referred to in paragraph (1)(a) or (b) if the excess hours are reasonable for the purposes of subsection 62(1).
Note: Hours in excess of the hours referred to in paragraph (1)(a) or (b) that are worked in a week in accordance with averaging terms in a modern award or enterprise agreement (whether the terms comply with subsection (1) or (2)) will be treated as additional hours for the purposes of section 62. The averaging terms will be relevant in determining whether the additional hours are reasonable (see paragraph 62(3)(i)).”
[12] As relied upon by Viterra in written submissions4 the Full Bench of the Commission considered the issue of whether enterprise agreements can provide for weekly hours in excess of 38 per week in ALDI Foods Pty Ltd v Transport Workers' Union of Australia; National Union of Workers, NSW Branch [2012] FWCFB 9398. The Full Bench said:
"[41] The agreement provisions create the potential for employees to contract to work in excess of 38 hours per week. Of itself, this does not represent an impediment to the approval of the agreements provided the NES safeguards are observed. However,to the extent that any employee who has contracted to work more than 38 hours in a week is then unable to alter that arrangement to meet a particular personal circumstance, and the issue is incapable of resolution other than at the discretion of ALDI, the agreement may be considered to operate in contravention of the NES."5
[13] Further, Viterra contends as follows:
“8.10 Casual employees are not "contracted" to work 40 hour per week under the terms of the Agreement. Casual employees are engaged on an hourly basis with a minimum of four hours per work period. Unlike permanent employees who are obliged to work a certain number of hours per week, casual employees are free to accept or reject any hours offered to them. Where a casual employee is offered 40 hours in a week and is happy to work those hours, no unreasonableness arises. For any casual employee who does not want or is not able to work 40 hours in a week, there is no requirement for them to do so.
8.11 The effect of clause 6.1.2 of the Agreement is that the maximum "ordinary hours" for a casual will be an average of 40 per week, which as a result means a casual will not be paid overtime rates until they work more than 40 hours in a week (instead they will receive their ordinary hourly rate which is loaded to ensure it passes the BOOT- see paragraph 8.6 of our 13 April 2018). However, it does not oblige them to actually work on average (or ever) 40 hours per week.”6 (footnotes omitted)
[14] In the context of this workplace and these particular provisions, I accept this proposition. This means that the provision is not of itself contrary to s.62 or s.63 of the Act. The hours of work for casual employees are not in practice averaged over a period and the provision does not oblige them to work beyond 38 hours per week. That is, the provision describes the maximum ordinary hours of work as an average but does not provide actual hours for casuals and the averaging operates in practice only for the full-time employees, who are given a Rostered Day Off (RDO). I would observe that should the provisions be applied in practice contrary to this proposition (such as to contract casual employees or otherwise require them to work beyond 38 hours without regard to the considerations in s.62(3)), this would create concerns as to whether that conduct was in breach of s.62 of the Act. However, that is not of itself a barrier to approval of this enterprise agreement given my findings about the provision itself.
[15] For reasons alluded to above, the full-time employees are entitled to a RDO every 4 weeks as part of this arrangement and this represents an averaging concept in line with s.63 of the Act. Overtime, in clause 6.3 of the Agreement, applies the relevant considerations established by s.62 of the Act, to overtime work.
[16] In relation to the BOOT, the relevant modern award for present purposes is the Storage Services and Wholesale Award 2010 (the Award). 7 I have considered all of the terms of the Agreement and the terms of the Award as applied to this workplace in the manner required by s.193 as confirmed in the relevant authorities.8 An enterprise agreement will pass the BOOT if the Commission 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. This is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees of an agreement’s application compared to the application of a relevant modern award. In this case there are various advantages and some disadvantages to the employees concerned arising from the provisions of the Agreement. These include rates of pay that are more beneficial than the Award for all employees and different arrangements concerning the hours of work and related matters. The increased rates of pay flow through to the various loadings and penalty payments provided by the Agreement and I have taken this into account when assessing those provisions which are less beneficial than those provided by the Award.
[17] Having considered all of the terms of the Agreement and the Award I am satisfied that each different class of employee will be better off overall with the approval of the Agreement. This includes the casual employees where the “loaded” rate of pay and other provisions more than compensates for the (potential) additional ordinary hours of work and revised shift and overtime arrangements that are to apply under the Agreement.
[18] I confirm that I have not accepted a proposed undertaking about the apparent conflict in the definition of night shift between clause 6.8.3 and clause 1.5 of the Agreement. I consider that this uncertainty should not be resolved by accepting a unilateral undertaking about the intended meaning. Rather, the issue should be considered having regard to any application that might be made to remove the ambiguity or uncertainty.9 Further, I note that neither alternative definition leads to any concerns about the BOOT and that although it was offered in response to concerns about the uncertainty within the Agreement, those concerns do not directly relate to one of the relevant approval requirements.10 I also observe that accepting an undertaking to adopt one of the alternative provisions could lead to employees suffering financial detriment (depending upon the view taken about the proper application of the Agreement and any variation) which would be contrary to s.190(3)(a) of the Act. The explanation provided by Viterra, referring to the custom and practice at the worksite and the terms of the existing enterprise agreement, is however consistent with the proposition that the employer has taken reasonable steps to ensure that the terms of the Agreement, and the effect of those terms, were explained to relevant employees.11
[19] I have sought the views of the bargaining representatives about the revised proposed undertakings.12 The AWU accepted the revised undertakings and urged the Commission to adopt them.13 The individual employee bargaining representative, Mr Wollermann, did not raise any concerns with the Commission. 14 The undertakings, either individually or in combination, do not result in substantial changes to the Agreement15 and I do not consider that there is a risk that any employee will be disadvantaged or suffer financial detriment.16 As a result, I have accepted the undertakings pursuant to s.190 of the Act, and with the approval of the instrument, the appended undertakings are taken to be a term of the Agreement.
[20] The AWU, 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 approved Agreement covers the AWU.
[21] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 11 June 2018. The nominal expiry date of the Agreement is 30 June 2020.
COMMISSIONER
1 The AWU was included in all written exchanges between the Commission and the representative of the applicant employer and notified of the hearing in this matter.
2 Section 188 of the Act.
3 Sections 119 and 120 of the Act.
4 Viterra written submission’s dated 11 May 2018.
5 See also Construction, Forestry, Mining and Energy Union v Ron Southon Pty Ltd (20160 261 IR 194 at [45].
6 Ibid.
7 This was not disputed by the AWU.
8 See for example: Hart v Coles Supermarkets Australia Pty Ltd[2016] FWCFB 2887 at [6]; Shop Distributive and Allied Employees Association v ALDI Foods Pty Ltd (2016) FCAFC 161 at [163] and Shop, Distributive and Allied Employees Association v Beechworth Bakery Employee Co Pty Ltd t/a Beechworth Bakery[2017] FWCFB 1664.
9 Section 217 of the Act.
10 Section190(1) requires that the concern relates to the approval requirements set out in section186 or section187of the Act.
11 Section 180(5) of the Act. See also: One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77.
12 The revised proposed undertakings were provided by the Commission to the AWU and an individual employee bargaining representative following the hearing and both were afforded an opportunity to provide any views.
13 Email submission dated 1 June 2018.
14 By contact made with the Commission on 4 June 2018.
15 See the discussion of what might represent substantial change in Perth Access Scaffolding Pty Ltd [2016] FWC 8042 at [12] and [13].
16 Section 190(3) of the Act.
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