1
[2013] FWC 3495
DECISION
Fair Work Act 2009
s.185—Enterprise agreement
ALDI Foods Pty Ltd
(AG2013/307, AG2013/319, AG2013/400)
ALDI MINCHINBURY AGREEMENT 2012, ALDI STAPYLTON
AGREEMENT 2012, ALDI DERRIMUT AGREEMENT 2012
Retail industry
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT SYDNEY, 3 JUNE 2013
Applications for approval of the ALDI Minchinbury Agreement 2012, ALDI Stapylton
Agreement 2012 and ALDI Derrimut Agreement 2012 - fairly chosen - geographically,
operationally or organisationally distinct - genuinely agreed - consistency with National
Employment Standards - better off overall test.
[1] These are applications by ALDI Foods Pty Ltd (ALDI) for the approval of three
enterprise agreements known as the ALDI Minchinbury Agreement 2012 (the Minchinbury
Agreement), the ALDI Stapylton Agreement 2012 (the Stapylton Agreement) and the ALDI
Derrimut Agreement 2012 (the Derrimut Agreement) (collectively, the Agreements). The
applications were made pursuant to s.185 of the Fair Work Act 2009 (the Act). The
Agreements are single-enterprise agreements.
[2] In 2011, ALDI applied to Fair Work Australia (FWA) for the approval of three
enterprise agreements covering substantially the same subject matter and employees as the
Agreements. These applications were dismissed by Commissioner McKenna in March 2012,1
and the Commissioner’s decision was upheld by a Full Bench.2 The Agreements were
negotiated to replace the enterprise agreements that were not approved. In the Declarations in
support of the applications for approval, ALDI indicates that the Agreements were negotiated
between the parties with the benefit of these decisions and with a view to ensuring compliance
with the legislation.
[3] Declarations in respect of the applications were received from the Shop, Distributive
and Allied Employees Association (SDA) and various branches of the National Union of
Workers (NUW) and the Transport Workers’ Union of Australia (TWU). The SDA supports
the approval of each agreement. The NSW branches of the NUW (NUW-NSW) and the TWU
(TWU-NSW) oppose the approval of the Minchinbury Agreement. The Victorian branch of
the TWU (TWU-Vic) opposes the approval of the Derrimut Agreement, while the Victorian
branch of the NUW seeks to be covered by the Derrimut Agreement but has not indicated
1 [2012] FWA 161.
2 [2012] FWAFB 9398.
AUSTRALIA FAIR WORK COMMISSION
[2013] FWC 3495
2
whether or not it supports approval. The Queensland Branch of the TWU (TWU-Qld) opposes
the approval of the Stapylton Agreement. Ms Lynette Pearson, an employee bargaining
representative in respect of that agreement, has written to the Fair Work Commission (the
Commission) expressing concerns about it.
[4] The requirements that must be met before the Commission can approve an enterprise
agreement are set out in ss.186 and 187 of the Act:
“186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1) If an application for the approval of an enterprise agreement is made under section
185, the FWC must approve the agreement under this section if the requirements set out in this
section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings
(see section 190).
Requirements relating to the safety net etc.
(2) The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been
genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi enterprise agreement:
(i) the agreement has been genuinely agreed to by each employer
covered by the agreement; and
(ii) no person coerced, or threatened to coerce, any of the employers to
make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the
interaction between the National Employment Standards and enterprise agreements
etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see
section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off
overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment
Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen
(3) The FWC must be satisfied that the group of employees covered by the agreement
was fairly chosen.
[2013] FWC 3495
3
(3A) If the agreement does not cover all of the employees of the employer or employers
covered by the agreement, the FWC must, in deciding whether the group of employees
covered was fairly chosen, take into account whether the group is geographically,
operationally or organisationally distinct.
Requirement that there be no unlawful terms
(4) The FWC must be satisfied that the agreement does not include any unlawful terms
(see Subdivision D of this Division).
Requirement that there be no designated outworker terms
(4A) The FWC must be satisfied that the agreement does not include any designated
outworker terms.
Requirement for a nominal expiry date etc.
(5) The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC
approves the agreement.
Requirement for a term about settling disputes
(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, 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: The FWC 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 the FWC 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).
187 When the FWC must approve an enterprise agreement—additional
requirements
Additional requirements
(1) This section sets out additional requirements that must be met before the FWC
approves an enterprise agreement under section 186.
[2013] FWC 3495
4
Requirement that approval not be inconsistent with good faith bargaining etc.
(2) The FWC 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.
Requirement relating to notice of variation of agreement
(3) If a bargaining representative is required to vary the agreement as referred to in
subsection 184(2), the FWC must be satisfied that the bargaining representative has complied
with that subsection and subsection 184(3) (which deals with giving notice of the variation).
Requirements relating to particular kinds of employees
(4) The FWC must be satisfied as referred to in any provisions of Subdivision E of this
Division that apply in relation to the agreement.
Note: Subdivision E of this Division deals with approval requirements relating to particular
kinds of employees.
Requirements relating to greenfields agreements
(5) If the agreement is a greenfields agreement, the FWC must be satisfied that:
(a) the relevant employee organisations that will be covered by the agreement are
(taken as a group) entitled to represent the industrial interests of a majority of the
employees who will be covered by the agreement, in relation to work to be performed
under the agreement; and
(b) it is in the public interest to approve the agreement.”
[5] The NUW-NSW and TWU-NSW each submitted that aspects of ss.186 and 187 were
not met in relation to the application for the approval of the Minchinbury Agreement. The
NUW-NSW submitted that the part-time provisions of the Minchinbury Agreement do not
satisfy the better off overall test (see ss.186(2)(d), 193); that the public holiday provisions are
inconsistent with the National Employment Standards (NES) (see ss.186(2)(c), 114-116); that
the hours of work provision is inconsistent with the maximum number of hours set out in the
NES (see ss.186(2)(c), 62); and that a clause allowing ALDI to require that employees submit
to a medical examination is a discriminatory and objectionable term and therefore unlawful
(see ss.186(4), 194(a), 195).
[6] The TWU-NSW submitted that the group of employees covered by the Minchinbury
Agreement was not fairly chosen (see s.186(3), (3A)). The submission centred around the
inclusion of warehouse employees and transport operators within the group when roughly
85% of the employees covered by the agreement are retail employees working in ALDI
stores. This was said to disenfranchise transport operators, undermining collective bargaining.
For similar reasons it was said that the agreement was not genuinely agreed to (see
s.186(2)(a)). It was also submitted that the hours of work, annual leave and other leave
provisions are inconsistent with the NES.
[7] In a letter to the Commission, Ms Lynette Pearson, an employee bargaining
representative representing herself in relation to the Stapylton Agreement, contended that the
[2013] FWC 3495
5
vote counting process that she witnessed was not what was described prior to the vote, and
was in breach of the Act. Ms Pearson also raised concerns regarding the makeup of the
workforce similar to those of the TWU-NSW in relation to the Minchinbury Agreement, and
raised various concerns relating to the better off overall test, the NES, and discrepancies
between rates of pay in different States.
[8] ALDI submitted that the Agreements meet the relevant legislative requirements and
should be approved. It was said that each of the Agreements has been approved in a vote by
an overwhelming majority of the employees covered and that the approval of the Agreements
is supported by the union covering most of its employees. In particular, it was submitted that
the group of employees covered by each agreement was fairly chosen, that the Agreements
pass the better off overall test and that the terms of the Agreements do not contravene s.55 of
the Act.
Evidence
[9] Witness evidence was presented in the proceedings by ALDI, the TWU-NSW and the
NUW-NSW.
[10] ALDI relied upon the evidence of Mr David Zalunardo, the Managing Director of
ALDI’s Preston Region, who was responsible for the enterprise bargaining process nationally.
Mr Zalunardo gave evidence regarding the organisation of the ALDI business. The business is
divided into regions which consist of a distribution centre which services between 50-100
stores within a four to five hour travelling distance. He gave a detailed explanation of the
Minchinbury Region, which consists of a distribution centre and 65 retail stores. He said that
at the time of the ballot for the new agreement, there were 1149 employees with 913
employees in the stores, 166 employees in the warehouse and 70 employees in transport.3 He
also explained the negotiation and bargaining process leading to the making of the
Minchinbury Agreement.
[11] The TWU-NSW presented evidence from two of its officials. Mr Robert Rasmussen, a
TWU organiser, is the official in charge of the yard which ALDI operates out of in
Minchinbury. He gave evidence about the voting of transport operators in the ballot for the
Minchinbury Agreement, based on a survey conducted by the TWU. On the basis of the
survey results, he listed the entitlements which transport operators considered as priorities in
the agreement. Mr Rasmussen referred to various significant differences in occupational and
demographic terms between transport operators and retail workers, including differences
relating to risk of injury at work, age, nature of employment (full-time, part-time or casual),
and earnings. He also explained the history of negotiations for the Minchinbury Agreement
and the involvement of the TWU in the negotiations on behalf of its 21 members at
Minchinbury. Mr Glenn Nightingale was also called by the TWU-NSW to give evidence. Mr
Nightingale is a Senior Negotiator employed by the TWU and was in charge of negotiations
with ALDI for the agreement to cover employees operating from the distribution centre in
Minchinbury. He referred to the course of negotiations for the Minchinbury Agreement and
the attempts by the TWU to get the ALDI representatives to deal with it in a meaningful way.
[12] The NUW-NSW presented evidence from an organiser, Mr James Nero, who is
responsible for the representation of NUW members employed by ALDI at the Minchinbury
3 Affidavit of David Zalunardo, at para 12.
[2013] FWC 3495
6
Distribution Centre. Mr Nero gave evidence about the rosters and bankable hours
arrangements for part-time employees and discussions about these matters in the negotiations
for the Minchinbury Agreement.
Consideration
[13] I have referred above to the relevant legislative requirements for the approval of
enterprise agreements. In general, I am satisfied that the relevant requirements of ss.186, 187
and 188 of the Act have been met in relation to the three agreements, subject to the matters
and objections considered below. When the applications for approval of the Agreements were
listed for hearing, the Notice of Listing indicated that on a preliminary basis the Agreements
appeared to satisfy the relevant legislative requirements for approval. Apart from the specific
objections raised by the unions and Ms Pearson, this position was not contradicted by any of
the parties.
[14] I am satisfied on the basis of the Employer Declarations (Forms F17) provided by
ALDI and the other material before me that all pre-approval steps required by the Act were
taken (see ss.180 and 181) and that notices of employee representational rights were given as
required (see ss.173 and 174). On this basis, subject to the consideration of the objections
raised by the TWU-NSW and Ms Pearson, I am satisfied that the Agreements were genuinely
agreed to by the employees that they cover (see ss.186(2)(a) and 188).
[15] Although the objections of the TWU-NSW and NUW-NSW were mainly raised in
relation to the Minchinbury Agreement, they are also relevant to the consideration of the
Stapylton Agreement and the Derrimut Agreement as all the Agreements have similar terms
and conditions. It was recognised in the proceedings that there is sufficient commonality
between the provisions of the Agreements such that if any of the objections and concerns
raised are such as to prevent approval of the Minchinbury Agreement, the Commission would
be bound to consider them in relation to the other agreements. It is noted however that the
TWU-Vic, which opposed the approval of the Derrimut Agreement, and the TWU-Qld, which
opposed the approval of the Stapylton Agreement, did not appear in the proceedings or
present any submissions to the Commission in support of their objections to the approval of
those agreements.
[16] I now turn to consider the specific objections and concerns raised in relation to the
approval of the Minchinbury Agreement.
Fairly chosen coverage
[17] A single-enterprise agreement that is not a greenfields agreement is made when a
majority of the employees of the employer who will be covered by the agreement and who
cast a valid vote approve the agreement (see s.182(1) of the Act). Subsection 186(3) requires
the Commission to be satisfied that the group of employees covered by the agreement was
fairly chosen. If the agreement does not cover all employees of the relevant employer or
employers, then subsection 186(3A) requires the Commission, in deciding whether the group
was fairly chosen, to take into account whether the group is “geographically, operationally or
organisationally distinct”.
[2013] FWC 3495
7
[18] In Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union,4 a Full Bench
of FWA considered these provisions and stated:
“[10] The Tribunal’s first task under s.186(3) is to establish whether the agreement covers
all of the employees of the employer(s) covered by the agreement. If all of the employees are
covered then s.186(3A) is irrelevant but the Tribunal must still decide whether the group of
employees covered by the agreement (i.e. all of the employers’ employees) was ‘fairly
chosen’. In some circumstances it may not be fair to choose all of the employees of an
employer as the group to be covered by an agreement.5 If all of the employees are not covered
then the Tribunal must make a finding as to whether the group of employees covered by the
agreement is geographically, operationally or organisationally distinct. Absent such a finding
the Tribunal cannot properly perform its statutory task.6 Section 186(3A) provides that the
Tribunal must take that matter (i.e. whether the group is geographically, operationally or
organisationally distinct) into account and give it due weight, having regard to all other
relevant factors. Finally, the Tribunal must state its reasons for concluding that the group of
employees either was or was not fairly chosen.”
[19] The TWU-NSW submitted that the group of employees covered by the Minchinbury
Agreement was not fairly chosen for the purposes of s.186(3) and (3A) of the Act. First it was
said that the agreement applies to three distinct occupational groups of employees, namely
store employees, warehouse employees and transport operators. The agreement provides for
some common provisions applicable to all employees (clauses 1-32) and then provides
specific sets of conditions for store employees, warehouse employees and transport operators
(Schedules 1-8). It was said that the consequence of incorporating the three occupational
groups under one agreement containing separate sets of conditions is that warehouse
employees and transport operators are denied the capacity to participate in bargaining and
have an effective vote. Secondly it was submitted that the group of employees to be covered
by the Minchinbury Agreement is not geographically, operationally or organisationally
distinct. This is because the group of employees includes at least two groups of employees
that are themselves distinct, namely employees employed at the distribution centre and
employees employed in ALDI stores. Thirdly it was submitted that, because the agreement
allows ALDI to transfer employees to other locations or regions to meet the needs of the
business, the group of employees covered is not geographically or operationally distinct.
[20] It is clear from the objects of the Act that there is an emphasis on enterprise-level
collective bargaining, underpinned by good faith bargaining obligations and directed towards
the making of enterprise agreements (see ss.3(f) and 171). Subsection 186(3) provides that the
Commission must, before approving an enterprise agreement, be satisfied that the group of
employees covered by the agreement was fairly chosen. Subsection 186(3A) provides that if
the agreement does not cover all employees of the employer, the Commission must in
deciding whether the group of employees covered was fairly chosen, take into account
whether the group is geographically, operationally or organisationally distinct. Whilst in each
case a decision must be made as to whether the group of employees covered by an agreement
was fairly chosen, it is implicit in the promotion of enterprise-level collective bargaining that
the outcome will usually be the making of enterprise agreements covering most, if not all, of
the employees within an enterprise, even though they might be performing different functions
and in different occupational groups.
4 [2012] FWAFB 2206.
5 Re ANZ Stadium Casual Employees Enterprise Agreement 2009 [2010] FWAA 3758.
6 Construction, Forestry, Mining and Energy Union v Fair Work Australia (2011) 195 FCR 74 at [102]-[103].
[2013] FWC 3495
8
[21] The Minchinbury Agreement covers all operational employees who are employed in
ALDI’s Minchinbury Region and who would otherwise be covered by modern awards. The
only employees who are excluded are administrative employees and senior managers with
disciplinary responsibilities. In particular, the agreement covers employees in retail stores
served by ALDI’s Minchinbury Distribution Centre, employees in the Distribution Centre,
and employees engaged in transport and distribution operations from the Distribution Centre.
[22] On the evidence in the proceedings, ALDI has traditionally operated each of its
regions as distinct undertakings. Each region has its own Managing Director and group of
operational directors, and operates and reports as an independent profit centre. The only
national function is the buying function, except in relation to fresh produce which is sourced
locally by each region. ALDI’s business development plan, applied internationally as well as
in Australia, is to start with a distribution centre in an area and then to grow the number of
stores serviced by that distribution centre.
[23] The Minchinbury Agreement applies to the various classifications of ALDI’s
employees in the Minchinbury Region. The region is defined in the agreement as the
Minchinbury Distribution Centre and all ALDI stores operating in specified local government
areas. There was some criticism by the TWU-NSW in the proceedings relating to the
exclusion of some local government areas within the general geographical area covered by the
region. However, as explained by Senior Counsel for ALDI, the identification of the
geographical area of coverage for the Agreements by reference to local government areas was
an attempt to provide certainty as to which future stores may be covered having regard to the
complaint by the TWU in the previous proceedings that ALDI ought not have the capacity to
alter the coverage of the agreements as new stores opened. The specification in the
Agreements of the local government areas seeks to identify the areas in which ALDI has any
interest in opening stores during the life of the Agreements.
[24] Having regard to the evidence and submissions in the proceedings, I have come to the
conclusion that the group of employees covered by the Minchinbury Agreement is
operationally and organisationally distinct. ALDI organises its business so as to operate on
regional lines and has sought to have its industrial relationships organised on those same
lines. In relation to the Minchinbury Agreement, the group of employees is operationally
distinct in that they work in the Minchinbury Region, which comprises the Distribution
Centre and stores serviced by that centre. The Region has its own management structure and
functions as a separate profit centre within the ALDI national business.
[25] I have also come to the conclusion that the group of employees covered by the
agreement may be considered to be geographically distinct for the purposes of s.186(3A). The
employees work in the Minchinbury Region, which is in part of New South Wales and has
been identified as generally being north of the M4 motorway and as comprising specified
local government areas. In this way, the group of employees may be described as being
geographically distinct from ALDI’s employees in other regions or parts of the business.
[26] It is recognised however that, as contended by the TWU-NSW, in some respects the
group of employees might not be considered to be geographically and perhaps operationally
or organisationally distinct from other ALDI employees within the region in that some of the
employees are engaged in the Distribution Centre located at Minchinbury and other
employees are engaged in retail stores which may be located some considerable distance away
[2013] FWC 3495
9
from Minchinbury. Whether such groups of employees will be considered to be
“geographically distinct” for the purposes of s.186(3A) will depend upon the nature, scope
and width of the necessary inquiry. For example, it is clear that workers in a distribution
centre in Minchinbury are geographically separated from workers in a retail store that is 100
kilometres away, and that workers in the distribution centre may be organised along different
lines than workers in stores. Indeed such distinctions are recognised in the Minchinbury
Agreement in that there are separate schedules to the agreement setting out the specific
conditions for store employees, warehouse employees and transport operators. However, in
the circumstances of the present matter and for the purposes of the consideration of the
relevant legislative requirements, it is appropriate to focus upon whether the group of
employees covered by the agreement is geographically, operationally or organisationally
distinct from other ALDI employees who are not covered by the agreement. Such excluded
employees would include ALDI employees in other regions throughout Australia as well as
the excluded administrative and managerial employees in the Minchinbury Region. The
inquiry is primarily directed at whether the group of employees covered by the agreement is
geographically, operationally or organisationally distinct from the ALDI employees not
covered. On this basis, it is clear that the group of employees covered by the Minchinbury
Agreement is geographically, operationally or organisationally distinct.
[27] The TWU-NSW also contended that the provisions of the Minchinbury Agreement
relating to the transfer of employees meant that the group of employees covered by the
agreement was not geographically, operationally or organisationally distinct. The agreement
makes provision for the conditions and entitlements of employees who may be required to
work at other locations or within other regions to meet the needs of ALDI’s business (see
clause 10). The new or temporary location must be within a reasonable travelling time from
the employee’s residence. Where an employee transfers on a temporary basis to another
region, the terms and conditions of their employment will continue to be governed by the
Minchinbury Agreement. Where an employee agrees to a permanent transfer, the terms and
conditions of the relevant agreement applicable to the other region will apply.
[28] It is not unusual for provision to be made in agreements to cover the transfer of
employees from one part of a business to another. In this respect the provisions in the
Minchinbury Agreement are not exceptional. Further, it might be expected that such transfers
are not a common occurrence or widespread practice within ALDI’s operations. No evidence
was presented as to suggest otherwise. In my view, the inclusion in the agreement of
provisions relating to the transfer of employees does not change the general characterisation
of the group of employees covered by the agreement or warrant a different finding to that
reached above, namely that the group of employees covered is geographically, operationally
and organisationally distinct.
[29] In deciding whether the group of employees covered by the Minchinbury Agreement
was “fairly chosen”, the Commission must take into account any other relevant considerations
as well as whether the group is geographically, operationally or organisationally distinct. As
the Full Bench in Cimeco7 said:
“[20] It is not appropriate to seek to exhaustively identify what might be the other relevant
considerations. They will vary from case to case and will need to be demonstrated to the
satisfaction of the tribunal. The word ‘fairly’ suggests that the selection of the group was not
7 Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 2206.
[2013] FWC 3495
10
arbitrary or discriminatory. For example, selection based upon employee characteristics such
as date of employment, age or gender would be unlikely to be fair. Similarly, selection based
on criteria which would have the effect of undermining collective bargaining or other
legislative objectives would also be unlikely to be fair. It is also appropriate to have regard to
the interests of the employer, such as enhancing productivity, and the interests of employees in
determining whether the group of employees was fairly chosen.”
[30] It was argued by the TWU-NSW that the inclusion of the different occupational
groupings of employees in the same enterprise agreement provided a basis for finding that the
group of employees covered by the Minchinbury Agreement was not “fairly chosen”. This
was because of the different interests, employment types, demographics, and safety and other
concerns of the stores employees as distinct from the warehouse employees and the transport
operators. However it was not demonstrated on the evidence that there was any significant
prejudice to the transport employees concerned in the negotiations, or that the different groups
of ALDI employees have vastly different interests or concerns and objectives in the
bargaining process, or that the different interests of the various groups of employees were not
able to be taken into account in the bargaining process. Further, it would seem to be contrary
to the general objective of promoting enterprise-level bargaining and the making of enterprise
agreements if such agreements could only be negotiated upon occupational lines.
[31] In general, the interests of different occupational groups of employees may be
accommodated in enterprise-level bargaining, although not all demands of each group might
be able to be achieved in the negotiated outcome. The ability of different groups of workers to
win concessions in negotiations is not necessarily dependent upon whether they bargain
together with other employees in an enterprise for a single agreement or whether they bargain
for a separate agreement. In the present case, and at an early stage in the negotiations for the
new agreements, ALDI indicated that it would not be party to separate agreements for
different parts of its workforce in the Minchinbury Region and that it sought to negotiate one
agreement for the region. ALDI has sought throughout the negotiations to make agreements
on a regional basis similar to the way in which its business is organised and operated.
[32] Having regard to all the submissions and material before me, I have come to the
conclusion that the group of employees covered by the Minchinbury Agreement was fairly
chosen. For the reasons given above, the group of employees covered by the agreement is
operationally and organisationally distinct. I am also inclined to the view that the group is
geographically distinct from other ALDI employees in similar classifications in that they
work in ALDI’s Minchinbury Region, which generally covers that part of New South Wales
north of the M4 motorway. These are factors in favour of finding that the group was fairly
chosen.8 The selection of the group was not based on employee characteristics such as date of
employment, age or gender, and was not arbitrary or discriminatory. The selection was based
on the business model which ALDI has adopted whereby its business is organised and
conducted on a regional basis with stores in a specified area being serviced out of a regional
distribution centre. In the interests of its business, ALDI has sought to have its industrial and
employment relationships conducted and regulated on a similar regional basis and has
negotiated a single agreement for all of its operational staff in the Minchinbury Region.
[33] The inclusion of different occupational groupings of employees in the negotiations and
the coverage of an enterprise agreement is not exceptional and does not per se have the effect
of undermining collective bargaining or other legislative objectives. Indeed, as referred to
8 Ibid at [19].
[2013] FWC 3495
11
earlier, both the legislation and current practice tend to favour the making of enterprise
agreements which cover most, if not all, of the employees within enterprises rather than the
making of separate agreements for different occupational groups. Merely because it is
asserted that some of the transport employees or their union might have priorities which differ
from other ALDI employees or other unions involved in the bargaining process, or that those
employees might have done better in negotiations for a separate agreement, does not of itself
warrant a conclusion that the group of employees was not fairly chosen or that the selection of
the group had the effect of undermining collective bargaining. Although it is fundamental that
employees and their bargaining representatives be able to pursue their respective claims in
negotiations, the outcome of the bargaining will not necessarily be agreement on all claims
made by different groups. This will be so whether the bargaining is conducted on an
occupational or enterprise-level basis.
[34] In this regard, it may be added that there has been no persuasive evidence presented in
the proceedings as to any significant disadvantage or injustice to the non-stores employees in
the negotiation of the Minchinbury Agreement or having regard to the provisions of the
agreement reached. On the evidence, it has not been shown that the transport workers were
denied the opportunity to bargain to improve conditions in areas of concern to them as a result
of the approach to the negotiations or the coverage of the agreement.
[35] Finally, I do not consider that the circumstances of the present matter are akin to those
in which findings have been made that the selection of the group of employees who have
bargained and agreed on an agreement was such as would undermine collective bargaining by
other employees in a manner not compatible with the objects of Part 2-4 of the Act.9
[36] For all the above reasons, I am satisfied that the group of employees covered by the
Minchinbury Agreement was fairly chosen.
Genuinely agreed
[37] For an enterprise agreement to be approved, the Commission must be satisfied that
the agreement has been “genuinely agreed to” by the employees covered by the agreement
(see s.186(2)(a) of the Act).
[38] In the case of the Minchinbury Agreement, the agreement was approved in a vote of
the employees covered by the agreement. The Employer’s Declaration (Form F17) indicates
that, of the 1149 employees to be covered by the agreement, 990 employees cast a valid vote
and 842 of those employees voted to approve the agreement.
[39] It was submitted by the TWU-NSW that, in circumstances where store employees
voted to approve rates of pay and conditions of employment that have no application to them
and apply only to warehouse employees or transport operators, the warehouse and transport
employees were effectively disenfranchised and the agreement cannot be said to have been
genuinely agreed to by the employees covered.
[40] For similar reasons as given above, I do not consider that the warehouse and transport
employees were “effectively disenfranchised” as a result of the coverage of the agreement.
Those employees were able to participate in the bargaining for the agreement and in the
9 See e.g. Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2012] FWAFB 7866.
[2013] FWC 3495
12
negotiations relating to the schedules to the agreement setting out particular conditions
relating to warehouse employees (Schedules 3 and 7) and to transport operators (Schedules 4
and 8). Further, the warehouse and transport employees were able to participate in the vote on
the agreement, which resulted in a significant majority of the employees covered voting in
favour of the agreement. The logic of the TWU-NSW submission might suggest that workers
in different classifications or occupations under an agreement, and where different rates of
pay and/or conditions apply to those classifications, would need to be separately balloted in
relation to such matters before the agreements could be taken to have been genuinely agreed
to by the workers covered. The Act does not require such differentiation in relation to the
voting by employees as to whether to approve an agreement.
[41] Having regard to all the evidence and material before the Commission, I am satisfied
that the Minchinbury Agreement was genuinely agreed to by the employees covered by the
agreement.
National Employment Standards
[42] To approve an enterprise agreement, the Commission must also be satisfied that the
terms of an agreement do not contravene s.55 of the Act, which deals with the interaction
between the NES and enterprise agreements (see s.186(2)(c)). In particular, an enterprise
agreement must not exclude the NES or any provision of the NES or include provisions that
purport to provide lesser entitlements than those provided by the NES (see s.55(1)). A term of
an enterprise agreement has no effect to the extent that it contravenes s.55 (see s.56).
[43] The TWU-NSW and the NUW-NSW submitted that the Minchinbury Agreement
should not be approved because the Commission cannot be satisfied that the agreement does
not contravene s.55 of the Act by excluding certain parts of the NES. In this regard, reference
was made to the provisions of the Minchinbury Agreement relating to hours of work, annual
leave and public holidays.
[44] I now turn to consider those parts of the Minchinbury Agreement which it was
contended contravene s.55 of the Act.
(a) Hours of work
[45] Section 62 of the Act provides that an employer must not require or request an
employee to work more than a specified number of hours in a week, unless the additional
hours are reasonable (s.62(1)). An employee may refuse to work additional hours if the
additional hours are unreasonable. The factors which must be considered in determining
whether additional hours are reasonable or unreasonable include: any risks to employee health
and safety; the employee’s personal circumstances, including family responsibilities; the
needs of the enterprise; and the usual patterns of work in the industry (see s.62(3)).
[46] Clause 12 of the Minchinbury Agreement deals with hours of work. The clause
provides, in relation to full-time employees, that they will be required to work 38 hours per
week plus reasonable additional hours. In relation to such additional hours the clause states:
“The reasonable additional hours to be worked by full-time employees over 38 per week are
agreed with the Employee on commencement. It is ALDI’s policy to be flexible and receptive
to requests from employees to reduce their working hours. Therefore, in accordance with the
[2013] FWC 3495
13
National Employment Standards, where an Employee wishes to reduce the hours they are
required to work, the Employee will identify the basis on which the hours to be worked are
unreasonable. ALDI will not unreasonably deny any Employee’s request to reduce their hours
of work. A pro rata salary will apply to Salaried Employees based on the proportion of a 50
hour week to the hours the Employee works. Hourly Rate Employees will receive the
applicable hourly rate and overtime and penalty rates as set out in the Schedules to this
Agreement. If the Employee and ALDI cannot reach agreement on the hours of work to apply
to the Employee’s position, the Resolution of Disputes provision of this Agreement will be
followed and the parties will agree to Fair Work Australia arbitrating and making a binding
determination to resolve the matter.”
[47] Part-time employees under the Minchinbury Agreement work fewer than 38 hours per
week on average and are advised of their contract hours on commencement of work. The
relevant parts of clause 12 provide that ALDI will only vary these hours by agreement with
the employee. The clause further provides:
“It is ALDI’s policy to be flexible and receptive to requests from employees to reduce their
working hours. Therefore, in accordance with the National Employment Standards, where an
Employee wishes to reduce the hours they are required to work, the Employee will identify the
basis on which the hours to be worked are unreasonable. ALDI will not unreasonably deny any
Employee’s request to reduce their hours of work.
If the Employee and ALDI cannot reach agreement on the hours of work to apply to the
Employee’s position, the Resolution of Disputes provision of this Agreement will be followed
and the parties will agree to Fair Work Australia arbitrating and making a binding
determination to resolve the matter.”
[48] The NUW-NSW and the TWU-NSW submitted that the abovementioned provisions of
the Minchinbury Agreement, and similar provisions in Schedules 3 and 7 relating to salaried
warehouse employees, are not consistent with the NES as expressed in s.62 of the Act. It was
said that it cannot be consistent with the NES that additional hours will be agreed at the time
of commencing employment. This is because the criteria to be taken into account in
determining whether additional hours are reasonable or unreasonable include such matters as
the risks to an employee’s health and safety from working the additional hours (s.62(3)(a))
and the employee’s personal circumstances including family responsibilities (s.62(3)(b)), and
these matters might change from day to day or week to week. It was said that it cannot be
reasonable to decide at one point in time how many additional hours it will be reasonable for
an employee to work for an indefinite period into the future without ongoing consideration of
the employee’s personal circumstances. It was submitted that s.62 proscribes an employer
from even requesting that an employee work additional hours unless these hours are
reasonable having regard to the factors in s.62(3). The agreement provides that the additional
hours an employee is required to work are to be set at the commencement of the employment
and subject only to ALDI giving consideration to a request to subsequently reduce those
hours. It was said that it is self-evident that if a person reaches an agreement as part of
obtaining employment with ALDI and that agreement requires a certain number of additional
hours to be worked, the employee cannot refuse to work those additional hours. It was also
said that it is impracticable to provide that an employee can go to the Commission with a
dispute if ALDI is not reasonable and prepared to vary an individual agreement from time to
time.
[2013] FWC 3495
14
[49] The issue of hours of work in the prior agreement was considered in the proceedings
before Commissioner McKenna and the Full Bench.10 The main concern about the hours
provision in that agreement related to the extent to which employees were deprived of the
effective capacity to refuse to work hours in excess of 38 per week in contravention of the
NES. In this regard, 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 agreements may be considered to operate
in contravention of the NES.”
[50] During the appeal proceedings, ALDI offered an undertaking with respect to the hours
provision enabling any dispute to be dealt with by arbitration. The Full Bench considered that
the concern about the hours provision might be addressed by way of an undertaking but noted
that no such undertaking had been provided to the Commissioner.11
[51] In the present proceedings, it was explained by Senior Counsel for ALDI that the
undertaking has been incorporated into the new Minchinbury Agreement in accordance with
the observation made by the Full Bench.12 It was submitted that, in order to meet the needs of
its business and for rostering purposes, ALDI has sought to provide some certainty as to the
additional hours that employees will work. It was said that such arrangements may work to
the benefit of both the employer and employees. The provisions which have been included in
the Minchinbury Agreement provide certainty for ALDI and its employees about hours of
work, and also provide safeguards for workers who wish to reduce the hours they are required
to work on the basis that the additional hours are unreasonable. It was suggested that ALDI
employees, and in particular transport workers, are satisfied with the arrangements in relation
to hours of work whereby they can agree to ordinary hours of up to 50 per week, and would
be concerned about an alteration in their hours of work.
[52] It may be possible to construe s.62 of the Act so that the question of reasonable hours
worked would fall to be determined on, say, a weekly basis. This was in effect what was
contended by the NUW-NSW and the TWU-NSW. However such a construction would not
be permissive of the many regular shift systems whereby employers and employees have
agreed to longer weekly hours of work in order to facilitate, for example, 44 hour weekly
rosters and 12 hour shifts.13 Such a construction would also not be consistent with other
provisions in the NES relating to maximum weekly hours. One of the factors in s.62(3) to be
taken into account in determining whether additional hours are reasonable or unreasonable is:
10 See [2012] FWAFB 9398 at [30]-[42].
11 Ibid at [40], [42].
12 Ibid at [56].
13 See Macpherson v Coal & Allied Mining Services Pty Ltd (No. 2) (2009) 189 IR 50 at 80, where Raphael FM found that
the employer was not in breach of s.226(1) of the Workplace Relations Act 1996, which provided that an employee must
not be required to work more than 38 hours per week plus any reasonable additional hours, by requiring the employee to
work the six additional hours comprised in a new 44 hour roster.
[2013] FWC 3495
15
“(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...”
[53] The reference to a level of remuneration that reflects an expectation of working
additional hours contemplates that the hours may be set some time in advance and not on a
weekly basis. A similar comment may be made in relation to the reference in s.62(3)(g) to the
usual patterns of work in an industry. Further s.63(2) provides that the terms of a modern
award or enterprise agreement may provide for average weekly hours that are in excess of 38
hours if the excess hours are reasonable. These provisions do not sit well with the contention
that s.62 requires a week-by-week determination of the additional hours that an employee
may be required to work.
[54] For these reasons, I am not persuaded that the construction given to s.62 by the NUW-
NSW and the TWU-NSW should be adopted. I have decided that the provisions of the
Minchinbury Agreement relating to the working of additional hours are not inconsistent with
s.62 and therefore do not contravene s.55 of the Act.
(b) Bankable hours
[55] It was also submitted by the NUW-NSW and the TWU-NSW that the bankable hours
arrangements in clause 12 of the Minchinbury Agreement are inconsistent with s.62 of the
Act. The bankable hours arrangements under the agreement are only available to non-casual
hourly rate employees. The evidence is that similar arrangements have been in operation at
ALDI since 2006. The arrangements allow employees to bank hours worked in excess of their
contract hours in a pay period, rather than having the excess hours paid, and to use the banked
hours to reduce the number of contract hours worked in subsequent pay periods. Where an
employee does not work their full contract hours in a pay period and does not have sufficient
“banked” hours, the employee will still be paid for the contract hours but his/her banked hours
balance will go into negative figures and will need to be made up using the employee’s future
excess hours. It was submitted by the TWU-NSW that, in such circumstances, the employee
will be required to work excess hours in future periods without additional pay and irrespective
of whether the additional hours are reasonable. This was said to be inconsistent with s.62 of
the Act.
[56] The submissions of the TWU-NSW and the NUW-NSW in relation to the operation of
the bankable hours provision in the Minchinbury Agreement were not supported by evidence
and would seem to be based on a strained reading or misunderstanding of the provision in the
agreement. The submissions were not well-developed and are difficult to comprehend. The
provisions for bankable hours in the agreement are somewhat similar in nature to provisions
for averaging of hours in various awards and agreements. The provisions make bankable
hours arrangements available to some ALDI employees and provide flexibility for them in
meeting commitments as to working hours whilst maintaining a certain level of income. No
persuasive case has been made out that such arrangements are of their nature contrary to the
NES as set out in s.62.
[57] The NUW-NSW submitted that the arrangements were, in particular, contrary to
s.62(3)(d), which is one of the factors to be taken into account in determining whether
additional hours are reasonable or unreasonable. However, the bankable hours arrangements
in the agreement provide for the maintenance of the normal pay of an employee (payment for
[2013] FWC 3495
16
the “contract hours”) and either for the banking of additional hours or payment for the
bankable hours in each pay period. The provision does not allow overtime hours to be banked
from one pay period to the next and provides for such hours to be paid in full in the next pay
period after such hours are worked. It also provides for the payment of shift loadings in the
following pay period after the hours are worked.
[58] On my reading of the bankable hours arrangements in clause 12 of the agreement, the
arrangements are supportive of a conclusion that additional hours worked under the
arrangements would be reasonable having regard to s.62(3)(d), contrary to the contention of
the NUW-NSW. However that might be, in any event, whether an employee is entitled to
receive overtime payments etc for working additional hours is only one of the factors in
s.62(3) to be taken into account in determining whether additional hours are reasonable or
unreasonable.
[59] The provisions in the Minchinbury Agreement for bankable hours cannot be read as
excluding any provision of the NES (see s.55(1)). Indeed in some respects the provisions
might be considered to be ancillary or supplementary to the NES or as providing more
beneficial entitlements for employees in the form of flexible working arrangements (see
s.55(4) and (5) and s.63).
[60] On the basis of the submissions and material before me, it cannot be concluded that
the bankable hours provisions in the agreement contravene s.55 of the Act.
(c) Annual leave
[61] Clause 19 of the Minchinbury Agreement makes provision for annual leave. The
clause provides in part that annual leave may be taken only with the agreement of ALDI,
“taking into account business requirements”. It goes on to provide:
“In particular, except by agreement, no annual leave ... may be taken in the two (2) weeks
immediately prior to Christmas Day and in the week immediately prior to Easter Sunday.”
[62] The TWU-NSW submitted that the clause excludes the NES, in particular s.88 of the
Act, by prescribing that the only consideration to be taken into account in determining
whether a period of leave is to be agreed is ALDI’s business requirements, and thereby prima
facie precluding leave from being taken in the two weeks prior to Christmas and the week
prior to Easter.
[63] Section 88 of the Act provides for the taking of paid annual leave as follows:
“88 Taking paid annual leave
(1) Paid annual leave may be taken for a period agreed between an employee and his or
her employer.
(2) The employer must not unreasonably refuse to agree to a request by the employee to
take paid annual leave.”
[64] Section 93 is also relevant to the consideration of the present matter. Subsections 93(3)
and (4) provide:
[2013] FWC 3495
17
“Terms about requirements to take paid annual leave
(3) A modern award or enterprise agreement may include terms requiring an employee, or
allowing for an employee to be required, to take paid annual leave in particular circumstances,
but only if the requirement is reasonable.
Terms about taking paid annual leave
(4) A modern award or enterprise agreement may include terms otherwise dealing with
the taking of paid annual leave.”
[65] Clause 18 of the agreement is clearly intended to restrict the taking of annual leave
during ALDI’s busiest periods. However the restriction is qualified and does not apply where
there is agreement by ALDI. The clause recognises that ALDI will take into account its
business requirements in deciding whether to agree to a request by an employee to take annual
leave. On its face, the clause does not offend s.88(2) of the Act.
[66] Clearly an employer is entitled to take into account the needs of the enterprise in
deciding whether to agree to a request. The fact that the Minchinbury Agreement makes plain
the obvious needs of a retail business, which suggests that agreement on the taking of annual
leave or time off from bankable hours is unlikely at peak operational periods, is not
inconsistent with the legislation. The agreement may include terms dealing with the taking of
paid annual leave (see s.93(4)).
[67] It is noted that an employer is under an overriding obligation, as provided by s.88(2),
not to “unreasonably refuse” to agree to a request to take annual leave. The terms of clause 19
of the Minchinbury Agreement do not preclude such agreement by ALDI, even in relation to
peak operational periods. There is no evidence or material before me to warrant a conclusion
that the obligation in s.88(2) of the Act will not be observed in the case of the Minchinbury
Agreement.
(d) Payment for leave
[68] The provisions dealing with payment of transport and distribution employees when
taking annual leave, personal/carers leave, compassionate leave and jury service leave are set
out in Part C of Schedule 4 of the Minchinbury Agreement. These payments are calculated on
the basis of an employee’s average hours over the period of 12 months.
[69] The NES provides that an employee is to be paid at the employee’s rate of pay for the
employee’s ordinary hours of work in the period of leave: see s.90(1) (annual leave), s.99
(personal/carers leave), s.106 (compassionate leave) and s.111(2) (jury service leave).
[70] The TWU-NSW submitted that the provisions of the Minchinbury Agreement relating
to the payment for leave derogate from the NES, at least for some employees. It was said that
if an employee’s hours of work increase during a 12 month period, the employee will be paid
less than his or her ordinary hours of work at the time of taking leave in accordance with the
averaging approach adopted in the agreement.
[71] It was explained by ALDI that under the monthly payment arrangements in the
agreement (Schedule 4), employees take leave based on their ordinary hours of work
calculated over the previous 12 month period. Under the fortnightly arrangements (Schedule
[2013] FWC 3495
18
8), an employee’s leave is based on the notional shift hours the employee is engaged to work.
The employee receives his/her base hourly rate for each hour of leave taken. In relation to the
specific example relied upon by the TWU-NSW, it was said that ALDI could not conceive
that this could occur. It was submitted that ALDI had no interest in disadvantaging employees
and that in the event that an employee felt disadvantaged there were means available under
the agreement to deal with such a situation.
[72] The provisions of the agreement relating to payment for leave are complex, and in
some respects difficult to understand, and it is not clear whether they contravene the relevant
provisions of the Act relating to payment for leave. However from the submissions it is clear
that there is no intention on the part of ALDI that employees should be disadvantaged under
the agreement in this regard.
[73] In these circumstances the issue raised by the TWU-NSW may be addressed and the
position of employees clarified by an undertaking by ALDI to the effect that the payment to
employees taking leave will be at a rate of pay not less than that provided under the NES. The
undertaking would need to be in accordance with s.190 of the Act and meet the requirements
of the section.
(e) Public holidays
[74] Clause 17 of the Minchinbury Agreement provides for public holidays. The clause
states, in part, that:
“Typically, ALDI will be operating on public holidays and Employees will be requested to work
on such public holidays. Employees should expect that they will be requested by ALDI to
work on a public holiday. Subject to this, s114 of the Act will apply.”
[75] The payment and leave arrangements for public holidays for employees working in
stores, the warehouse, and transport and distribution are set out in various schedules to the
agreement. These arrangements apply in relation to employees who are required or not
required to work on a public holiday.
[76] Section 114 of the Act provides an entitlement for employees to be absent from
employment on a public holiday. It allows an employer to request an employee to work on a
public holiday where this is reasonable (s.114(2)) and a right for an employee to refuse to do
so if the request is not reasonable or the refusal is reasonable (s.114(3)). Subsection 114(4)
sets out the matters which must be taken into account in determining whether a request to
work on a public holiday is reasonable. The factors to be taken into account include:
the nature of the employer’s workplace or enterprise (including its operational
requirements);
the employee’s personal circumstances;
whether the employee could reasonably expect that the employer might request work
on a public holiday;
the payments with respect to work on a public holiday; and
[2013] FWC 3495
19
the amount of advance notice given by the employer when making the request.14
[77] It was submitted by the NUW-NSW that the public holiday provisions of the
Minchinbury Agreement are not consistent with the NES as expressed in s.114. This is
because there is an expectation in the agreement that employees will work on public holidays
and this seeks to displace the operation of the NES provisions in relation to a reasonable
request and reasonable refusal to work on a public holiday. These include consideration of
factors such as the employee’s personal circumstances.
[78] There is no substance to the objection made by the NUW-NSW in relation to the
public holiday provisions in the agreement. The submission is based on a misreading of both
the relevant legislative provisions and the agreement. In particular, clause 17 of the
Minchinbury Agreement indicates that employees should expect that they will be requested to
work on public holidays and refers to the application of s.114 of the Act. The need for a
request for employees to work public holidays, the indication as to the likelihood of such
requests being made and reference to s.114 in the public holidays clause in the agreement are
consistent with the provisions of the NES relating to the entitlement to be absent from work
on public holidays. In particular, it is clear that an employee may refuse a request to work on
a public holiday in circumstances contemplated by s.114(4) of the Act.
Conclusion as to NES issues
[79] For all the reasons given, I am satisfied that the Minchinbury Agreement, and in
particular the provisions considered above relating to hours of work, annual leave and public
holidays, do not contravene s.55 of the Act. This is with the exception of the provisions in the
agreement relating to payment for leave. As a result of the concern identified, the agreement
cannot be approved without an acceptable undertaking by ALDI dealing with payment for
leave.
Part-time employees and the better off overall test
[80] The Commission cannot approve an enterprise agreement unless it is satisfied that the
agreement passes the better off overall test (BOOT) (see s.186(2)(d) of the Act). Section 193
of the Act provides when an enterprise agreement passes the BOOT. As the Full Bench of
FWA explained in Armacell Australia Pty Ltd,15
“[41] The BOOT, as the name implies, requires an overall assessment to be made. This
requires the identification of terms which are more beneficial for an employee, terms which are
less beneficial and an overall assessment of whether an employee would be better off under the
agreement.”
[81] As referred to earlier, on my preliminary examination of the Minchinbury Agreement,
the agreement passed the better off overall test (and the other requirements of the Act relating
to approval). This conclusion was reached having regard to a consideration of the entitlements
of employees under the agreement, including rates of pay which are considerably higher than
those provided under relevant modern awards. The conclusion was not challenged in the
proceedings except by the NUW-NSW in relation to part-time employees.
14 See s.114(4) of the Act for the full list of matters which must be taken into account.
15 [2010] FWAFB 9985.
[2013] FWC 3495
20
[82] Clause 12 of the Minchinbury Agreement provides that employees may be engaged to
work on a full-time, part-time, limited roster or casual basis. Part-time employees work for
less than 38 hours per week and receive pro rata entitlements under the agreement. They may
be salaried or hourly rate employees. Hourly rate part-time employees are advised on
commencement of employment of their contract hours and these hours can only be varied by
agreement with the employee.
[83] The NUW-NSW submitted that the part-time provisions of the agreement do not meet
the requirements of the better off overall test. This is because employees, and in particular
part-time warehouse employees, do not have the benefit of the significant industrial
protections provided by clause 11 of the Storage Services and Wholesale Award 2010,16 such
as the specification in writing as to the hours to be worked each day, the days of the week the
employee will work and the starting and finishing times each day. It was also said that
overtime payments under the agreement only apply where the hours exceed the ordinary hours
specified for full-time employees whereas under the modern award, overtime is paid for all
time worked in excess of the hours as mutually agreed (clause 11.3(f)). The NUW-NSW
referred to the criticisms of the part-time provisions in the prior agreement by Commissioner
McKenna and noted that these findings were not overturned by the Full Bench on appeal.17 In
this regard, it is noted that the Full Bench considered that the Commissioner’s concerns could
have been addressed through undertakings.18
[84] It was submitted by ALDI that the approach urged by the NUW-NSW in relation to
the better off overall test was plainly wrong, in that it suggested that if an award provides non-
monetary benefits then equivalent benefits must be provided by an agreement for it to pass the
test and that recourse may not be had to higher monetary benefits under the agreement in
order to satisfy the test. In any event, it was submitted that the NUW-NSW failed in its
submissions to take account of the non-monetary benefits available to part-time employees
under the agreement, including the provision in clause 12 for rosters to be developed at least a
week in advance having regard to the needs of the business and the requests of employees. It
was said that it is preferable to enable employees to work the hours they choose rather than to
compensate them for working hours they do not wish to work.
[85] In relation to monetary benefits, it was submitted by ALDI that if the employees did
not meet the award definition of part-time employees and were regarded as casual employees
for the purposes of the modern award and the application of the better off overall test, then
they would be entitled under the award to none of the non-monetary benefits referred to by
the NUW-NSW and would receive a rate of pay almost 30 per cent less than a part-time
employee under the agreement. Further, it was explained by ALDI that, following the
comments of the Full Bench, a provision was included in clause 13 of the Minchinbury
Agreement which states that the remuneration of each classification of employee has been set
to ensure that employees are better off overall under the agreement than they would be under
the relevant modern award. The provision allows for a process whereby an employee who is
of the view that they are not better off overall may request a comparison. If the employee and
ALDI cannot reach agreement following this process, the matter can be referred to the
Commission for arbitration.
16 MA000084.
17 [2012] FWAFB 9398 at [43]-[49].
18 Ibid at [49].
[2013] FWC 3495
21
[86] The better off overall test requires that each of the employees and prospective
employees covered by an agreement be better off overall than under the relevant modern
award. The test is not a line-by-line test, but is directed at a consideration as to whether an
agreement results in the employees being better off overall. In the present case, this involves a
consideration as to whether the entitlements of part-time employees under the Minchinbury
Agreement will, on balance, result in a reduction in their overall terms and conditions of
employment. In relation to reductions in specific terms and conditions, the inquiry is directed
at whether such reductions are remedied, in an overall sense, by other more beneficial
provisions in the agreement.19
[87] As stated earlier, it was indicated to the parties that I had reached a preliminary view
that the Agreements satisfied the relevant legislative requirements for approval. In relation to
the better off overall test, the assessment followed a consideration of the agreement and the
relevant modern awards, and of the materials provided to the Commission by ALDI in the
Form F17 documentation, including the comparisons of the provisions of the awards and the
agreement, and spreadsheets comparing rates of pay for typical rosters under the modern
awards with rates paid under the agreements.
[88] In the proceedings, the NUW-NSW did not provide calculations of the entitlements of
part-time employees under the agreement or other material as would demonstrate that those
employees would not be better off overall under the agreement as compared with the modern
award. Having considered all the submissions, I am satisfied that, despite the differences
between some of the non-monetary entitlements under the modern awards and the agreement,
when considered overall the agreement passes the better off overall test. The reduction in
some award entitlements is remedied, in an overall sense, by other more beneficial provisions
in the agreement, especially when the higher rates of pay are taken into account.
Medical examinations
[89] Clause 25 of the Minchinbury Agreement provides that employees may be required to
undergo a medical examination where there is concern about their capacity to perform the
inherent requirements of their jobs. The clause is in the following terms:
“The Employee may be required to submit to a medical examination (including testing for
alcohol and other drugs) by a medical practitioner nominated by ALDI, where ALDI has
concerns about an Employee’s capacity to perform the inherent requirements of their job.
ALDI may nominate a medical practitioner chosen by the Employee. The medical examination
will be related to aspects of the Employee’s health relevant to their employment. The
Employee will be required to provide written authority to the nominated medical practitioner
authorising them to provide a confidential report about the results of the medical examination
and discuss these results with ALDI management. The Employee will also receive a copy of
the report.”
19 See Liquor, Hospitality and Miscellaneous Union v Ausco Martin Pty Ltd [2010] FWAFB 6214 at [19]. This decision
concerned the “no disadvantage test” applied under the Workplace Relations Act 1996 and transitional legislation.
However both the no disadvantage test and the better off overall test require a broadly similar process of identifying the
terms of an agreement that are more and less beneficial than those of the relevant award, leading to an overall assessment.
“While the BOOT is expressed in different terms to the NDT, each involves a global assessment”: Modern Awards
Review 2012 - Award Flexibility [2013] FWCFB 2170 at [134]. See also the authorities cited at footnote 70 of that
decision.
[2013] FWC 3495
22
[90] The NUW-NSW submitted that this clause contains unlawful content (see ss.186(4),
194(a) and 195(1)) and objectionable terms (see ss.12 and 194(b)). It was also submitted that
the clause is objectionable as it would entitle ALDI to rely on a subjective test in requiring a
medical examination without the identification of a health condition that impacts on an
employee’s ability to perform his or her job. It was said that there are no safeguards to ensure
that the referral is based on health-related issues.
[91] I do not consider that clause 25 is an unlawful term as referred to in s.186(4) of the
Act. The clause enables the employer to require an employee to submit to a medical
examination where there are concerns that the employee cannot perform the inherent
requirements of their job. On the face of the clause, it does not discriminate against any
employee on the basis of any of the grounds or reasons referred to in s.195(1) of the Act (see
also s.351). No evidence was adduced in the proceedings to suggest that such a clause has
been applied by ALDI in such a discriminatory way or that this clause is likely to be applied
in such a way. In circumstances where there was such a concern, or any other concerns about
the inappropriate application of the clause, then recourse might be had to the dispute
procedure in the agreement. There are also remedies provided under the Act in relation to
unlawful conduct.
Conclusions on the Minchinbury Agreement
[92] For all the above reasons, I have decided that the Minchinbury Agreement may be
approved. In particular, on the basis of the material which was lodged in support of the
application for approval, and having considered the submissions and evidence relating to the
objections made by the TWU-NSW and the NUW-NSW, I am satisfied that:
the agreement has been genuinely agreed to by the employees covered by it;
the terms of the agreement, with the exception of the provisions relating to payment
for leave, do not contravene s.55 of the Act;
the group of employees covered by the agreement was fairly chosen; and
the agreement passes the better off overall test.
[93] I am also satisfied that the agreement meets the other requirements for approval set out
in ss.186, 187 and 188 of the Act.
[94] Accordingly, and provided there is an acceptable undertaking dealing with the concern
relating to the provisions dealing with payment for leave, I have decided that the Minchinbury
Agreement will be approved.
[95] The undertaking should be provided to the Commission within seven days from the
date of this decision, with a copy forwarded to each bargaining representative for the
agreement. After seeking the views of the bargaining representatives (see s.190(4)), I will
decide whether to accept the undertaking and to approve the agreement.
[2013] FWC 3495
23
The Stapylton Agreement
[96] Both the TWU-Qld and Ms Pearson opposed the approval of the Stapylton Agreement.
The TWU-Qld did not make any submissions in the proceedings. Ms Pearson wrote to the
Commission with concerns and observations about the agreement. The concerns relate to the
ballot process for the approval of the agreement, differentials in pay between warehouse
workers under the agreement and similar workers in other States, discrimination against
warehouse employees compared to stores workers in voting for the agreement, inaccuracies in
the spreadsheets provided to the Commission concerning the better off overall test, and the
use of the wrong modern award in relation to warehouse employees.
[97] Ms Pearson wrote to the Commission on 14 April 2013 about her concerns. Her email
concluded that she would leave the matter in my hands. After the proceedings on 16 April
2013, in which Senior Counsel for ALDI responded to the various concerns raised by Ms
Pearson,20 a copy of the transcript was forwarded to her. On 2 May 2013 Ms Pearson
provided submissions and additional information regarding her concerns and objections.
[98] I have considered the various matters raised by Ms Pearson. In relation to the counting
process for the vote to approve the agreement, Ms Pearson attended the ballot count and made
various comments and complaints about the process. These concerns are outlined in her
submissions and were addressed in the proceedings by ALDI. I am not persuaded that the
concerns raised would warrant any inference that the agreement was not genuinely agreed to
by the employees covered. In this regard, I note that no issues have been raised in relation to
the vote or the counting process by the SDA or any of the other unions concerned. The Form
F17 lodged by ALDI states that, of the 1267 employees to be covered by the Stapylton
Agreement, 1045 employees cast a valid vote and 852 voted to approve the agreement. Even
if the concerns raised by Ms Pearson about the counting process were substantiated, they
would not result in any change to the outcome of the vote for the agreement, namely that a
significant majority of the employees who cast a valid vote approved the agreement.
[99] In relation to the concern raised by Ms Pearson about differential rates for ALDI
warehouse employees under different agreements, this is an outcome of the bargaining
process and not a matter relating to the approval of the agreement by the Commission. As to
the relevant modern awards, I am satisfied that the appropriate awards have been identified
and applied for the purposes of the better off overall test.
[100] Ms Pearson also raised concerns about the spreadsheets provided to the Commission
by ALDI comparing rates of pay under the modern award and the agreement for typical
rosters worked by ALDI employees in the Stapylton Region and pointed to discrepancies
between the spreadsheet for a warehouse operator on a 65 hour contract and an earlier
spreadsheet for such a worker previously provided to her. The explanation for the difference
would seem to relate to the hours worked in the different examples. The earlier spreadsheet
was forwarded to Ms Pearson in December 2012 with a request for her to advise ALDI if she
had any questions or concerns. The spreadsheets were also provided to the SDA and the
spreadsheets for transport operators were provided to the TWU with a similar request. No
issues were raised at that time or now by the unions or Ms Pearson about the examples not
being reflective of rosters regularly worked or that the calculations based on them were
20 See transcript at PN710-721.
[2013] FWC 3495
24
wrong. There is no basis therefore to revisit the consideration as to whether the agreement
passes the better off overall test.
[101] The issues raised by Ms Pearson concerning whether the group of employees covered
by the agreement was “fairly chosen” are similar to those raised by the TWU-NSW and the
NUW-NSW in relation to the Minchinbury Agreement and have been addressed earlier in this
decision.
[102] For similar reasons as given in relation to the Minchinbury Agreement, I am satisfied
that the relevant statutory requirements have been met in relation to the approval of the
Stapylton Agreement.
[103] Accordingly, and provided there is an acceptable undertaking dealing with the concern
relating to the provisions for payment for leave, I have decided that the Stapylton Agreement
will be approved.
Derrimut Agreement
[104] The TWU-Vic opposed the approval of the Derrimut Agreement, but did not make any
submissions in the proceedings. The SDA supports the approval of the agreement. The
Victorian branch of the NUW seeks to be covered by the agreement but did not appear in the
proceedings or indicate whether or not it supports approval.
[105] For similar reasons as given in relation to the Minchinbury Agreement, I am satisfied
that the relevant statutory requirements have been met in relation to the approval of the
Derrimut Agreement.
[106] Accordingly, and provided there is an acceptable undertaking dealing with the concern
relating to the provisions for payment for leave, I have decided that the Derrimut Agreement
will be approved.
SENIOR DEPUTY PRESIDENT
[2013] FWC 3495
25
Appearances:
G Hatcher Senior Counsel with A Perigo of counsel for ALDI.
M Gibian of counsel for the TWU.
S Mueller for the NUW.
P Walker for the SDA.
Hearing details:
2013.
Sydney:
April 16.
Final written submissions:
ALDI, 18 and 22 April 2013.
TWU, 19 April 2013.
Printed by authority of the Commonwealth Government Printer
Price code G, PR537462
