1
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Mitolo Group Pty Ltd
(AG2014/1736)
Agricultural Industry
DEPUTY PRESIDENT BARTEL
ADELAIDE, 31 OCTOBER 2014
Application for approval of The Mitolo Group Horticultural Production Employees Collective
Agreement 2014
[1] An application for approval of an enterprise agreement known as the Mitolo Group
Horticultural Production Employees Collective Agreement 2014 (the Agreement) has been
made by Mitolo Group Pty Ltd (the employer). The application has been made pursuant to
s.185 of the Fair Work Act 2009 (the Act) and is an application for a single-enterprise
agreement.
[2] The National Union of Workers (the NUW), being a bargaining representative for the
Agreement, has filed a Form F18 Statutory Declaration. The NUW opposes approval of the
Agreement, contending that:
The modern award identified by the employer in the application for approval, the
Horticulture Award 2010 (the Horticulture Award)1, does not cover the employees
bound by the Agreement;
The correct award is the Storage Services and Wholesale Award 2010 (the Storage
Services Award)2; and
The Agreement does not pass the better off overall test (BOOT) when measured
against either of the above awards.
[3] The NUW also contends that the employer has attempted to portray the Agreement as
being aligned with the work under the Horticulture Award by the late inclusion of additional
types of work performed under the Agreement. This was said to be in contrast with the scope
of the Agreement as set out in the Notice of Representational Rights (the NRR) issued in
advance of the negotiations.
[4] The employer rejects these arguments and contends that the nature of the work
performed by its employees and the locations at which the work is performed fall within the
scope of the Horticulture Award. Further, it is submitted that the Agreement passes the BOOT
against both of the awards in issue.
[2014] FWC 7682 [Note: An appeal pursuant to s.604 (C2014/7871) was
lodged against this decision - refer to Full Bench decision dated 21 April
2015 [[2015] FWCFB 2524] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB2524.htm
[2014] FWC 7682
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[5] The Agreement covers employees located at Angle Vale Road, Virginia (the Angle
Vale Road site), north of Adelaide. It was negotiated between the employer, the NUW and
fourteen (14) nominated employee bargaining representatives. One of the employee
bargaining representatives, Ms Kay Rault, opposed approval of the Agreement, essentially on
the same grounds as the NUW. The remaining employee bargaining representatives supported
the approval of the Agreement.
[6] The NUW called Dave Garland, union official, who was involved in negotiations for
the Agreement from May 2014. Ms Rault also gave evidence. The Employer called evidence
from Ms Paula Hentschke, Group Human Resource Manager and Francesco Mitolo,
Managing Director of the Mitolo group of companies (“the Mitolo Group”). The following
employee bargaining representatives gave evidence in support of the approval of the
Agreement: Matthew Seidl, Louise Blythman, Loraine Checker and Susan Sykes (“the
representatives in support”). The witnesses also provided written statements. Other
documents, admitted or appended to written submissions, are referred to where relevant.
[7] The evidence of the witnesses is referred to in the discussion that follows. While there
is some factual dispute around the process of negotiation of the Agreement, the NUW does
not oppose approval of the Agreement on these grounds. In the main, these disputed facts are
not relevant to the issues that fall for determination: the primary issue is whether the
Agreement passes the BOOT. In order to make this assessment, the Commission must
determine the relevant modern award for employees bound by the Agreement.
The award coverage issue
The Mitolo Group
[8] The employer is one of a number of companies within the Mitolo Group. There are at
least four employing entities within the Mitolo Group, including the employer; Mitolo
Management Pty Ltd; Mitolo Vineyards Pty Ltd; and Maranello Trading Pty Ltd.
[9] The employer has approximately 190 employees, predominantly involved in handling
potatoes and onions on site. An Agronomist, a Seed Manager, a Technical Manager and a
Work Health and Safety Coordinator are also engaged at the site and provide services to other
companies within the Mitolo Group. The site itself is owned by two Mitolo Group holding
companies.
[10] Mitolo Management Pty Ltd employs the Group Human Resources Manager
(Ms Hentschke) and the Chief Financial Officer, both of whom provide services across the
Mitolo Group. Mitolo Vineyards Pty Ltd employs vineyard workers in the Riverland.
Maranella Trading Pty Ltd employs Farm Managers and workers3 at farms owned by the
Mitolo Group, primarily in the Riverland and at Pinnaroo. Several farms in close proximity to
the employer’s Angle Vale Road site are operated by Maranella Trading Pty Ltd, although
only few if any workers are based there. Some employees of the employer perform work on
these properties.
[2014] FWC 7682
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The scope of the Agreement and the work performed
[11] The parties to the Agreement are identified in Clause 2 as the employer and
“... Horticultural Production Employees located at Angle Vale Road, Virginia SA 5120 and
properties as assigned as covered by the Classification Structure of this Agreement”.
[12] The integration of the employer within the overall operations of the Mitolo Group, is a
principal argument of the employer in support of its view that the Horticulture Award is the
relevant modern award. This integration includes employees working on Mitolo Group farms
and the operations of the seed shed at the Angle Vale Road site and is reinforced by the
Objectives of the Agreement, which includes the following:
“5. OBJECTIVES OF THE AGREEMENT
...
5.2. The terms of this Agreement are aimed at providing, in a competitive market place,
facilities that are engaged principally in horticultural production including seed
treatment, preparation, trials and harvest and washing, grading, quality checking and
packing of horticultural crops that aligns with the vision and goals of the Company. The
Company and its Employees recognise the contribution of all parties to this Agreement
in setting a framework for increased productivity and profitability, for the long-term
security of Employees.
...
5.5 ...”
[13] The classification structure of the Agreement comprises five levels, each of which
includes a General Description, Indicative Duties, Points of Entry and Promotional Criteria.
The classifications are closely aligned to the classifications under the Horticulture Award in
terms of the number of levels and the classification descriptions. The General Description of
each level is identical to that of the Horticulture Award and is not replicated. The indicative
duties of each level contain some modifications, additions and/or deletions from the
equivalent classification in the Horticulture Award. The most significant difference is the
inclusion within the Agreement of Indicative Duties relating to the seed shed, which are
highlighted in bold type:
“Level 1 Employee
...
Performs general labouring duties;
Fruit or vegetable picking, thinning or pruning;
Operates small towing tractor engaged in transfer of produce bins and other
containers;
Performing a range of housekeeping tasks and participates in 5’s activities in
premises and grounds;
Sorting, packing or stacking of produce where this requires the exercise of minimal
judgement;
[2014] FWC 7682
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Horticultural crop and seed grading with less than 3 months experience that
requires the exercise of minimal judgement;
Performs basic recording functions related to work performed at this level;
Provides assistance within the scope of this level to other Employees as required;
May be undertaking structured training to enable entry into Level 2
...
Level 2 Employee
...
Performing a range of tasks involving the set up and operation of production
and/or packing, stacking or labelling equipment;
Repetition work on automatic, semi-automatic or single purpose machines or
equipment;
Performing minor maintenance/assembling/dismantling using basic written,
spoken and/or diagrammatic instructions in a production environment;
Sorting, packing or stacking of produce;
Horticultural crop and seed grading with more than 3 months experience
and is able to demonstrate competency in grading techniques including but
not limited to varieties, product defects, and is able to grade to customer
specifications;
Cutting, treating and fertilising seed;
Maintains simple records and performs basic data entry;
Uses hand trolleys, pallet trucks or other mechanical or power driven lifting or
handling devices not requiring a licence;
Operates tractors with engine capacity of up to 70 kW;
Cleaning and sanitising of horticultural production equipment and environs in
accordance with HACCP plans and cleaning schedules;
Housekeeping duties beyond the scope of Level including but not limited to staff
amenities i.e. toilets and lunch areas;
General and routine product testing;
Provides assistance within the scope of this level to other Employees as required;
Assists in the provision of on-the-job training in conjunction with supervisors,
tradespersons or trainers; including
May be undertaking structured training to enable entry into Level 3
...
Level 3 Employee
...
Driving motor lorries or forklifts;
Operates tractors with engine capacity of over 70 kW;
Minor maintenance of plant;
Assists in the training, instruction and coordination of Employees;
Records detailed information on production and quality indicators;
Provides assistance within the scope of this level to other Employees;
[2014] FWC 7682
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Undertakes further training so as to enable advancement to Level 4
...
Level 4 Employee
...
Using precision measuring instruments;
Operation of pre-packaging machinery including but not limited to machine run
out, change over, set up and coding, loading of packaging consumables, operation
and monitoring;
Inventory and store control;
Licensed operation of all appropriate materials handling equipment;
Basic engineering and fault handling;
Basic non-trades maintenance involving the use of tools and equipment within
the scope of this Agreement;
Water and temperature testing, chemical application and adjustments for
produce washing processes;
Licensed and certified to operate engine driving and crane driving operation;
Performs quality checks on the work of others;
Quality assurance/control;
Accurate data entry for the coding and wrapping of graded and packed produce
in accordance with customer specification and company requirements;
Assists in the provision of on-the-job training
Monitors variables affecting production yields, detects errors, investigates causes
and recommends collective/preventative action;
Provides assistance within the scope of this level to other Employees;
Exercises good interpersonal communications skills;
Undertakes further training so as to enable advancement to Level 5
...
Level 5 Employee
...
Inspects products and/or materials for conformity with established operational
standards and approves/passes first off samples;
Raising, planting, treatment and management of farm seed including but
not limited to plant trials;
Operates, sets up and adjusts maintenance functions including (but not limited
to):
Removing equipment fastenings including use of destructive cutting
equipment;
Running adjustments to production equipment;
Operates all lifting equipment;
Basic production scheduling and materials handling within the scope of production
process or directly related functions;
Exercises high level stores and inventory responsibilities;
Provides on-the-job training
[2014] FWC 7682
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Provides assistance within the scope of this level to other Employees”
[14] The produce at the Angle Vale Road site comprises 80% potatoes and 20% onions.
Ninety-five per cent of the total produce is sourced from Mitolo Group owned farms.4 This
produce is transported to the Angle Vale Road site in four tonne bins on Mitolo Group fleet
trucks, which also transport the packaged product from the Angle Vale Road site.
[15] The process undertaken at the site with potatoes involves the removal of foreign
debris; washing; chemical treatment; grading according to specification and customer
requirements; waste removal; and bagging (including labelling with ‘use by’ dates). The
finished product is put into crates and stacked onto pallets before a final quality inspection is
undertaken. Pallets are wrapped and coded and moved to the cool room by forklift to await
dispatch. A similar process, save for washing, takes place for onions.
[16] The production process is mechanised. A filtration/water recycling system is in
operation using water from dams on the Angle Vale Road site. Soil washed off the potatoes is
filtered from the water and deposited on the property. Waste trucks transport large volumes of
wasted potato as feed for Mitolo Group stock or for the stock owned by local farmers.
[17] Company seed is managed on site and this includes seed trials, treatment and cutting
of seed. The seed is dispatched to Mitolo Group properties. Work performed on other
properties includes standing on the back of harvesters grading out rocks and other debris,
waste produce and mud; standing on the back of a planter ensuring even distribution of seed;
and general labouring duties such as weeding and planting trees.5
[18] Emails from Ms Hentschke to Mr Garland in June 20146 identified 188 employees
who will be covered by the Agreement, broken down by title, classification level and number,
as follows:
Horticultural Graders (Level 1 & 2) 84
Product Inspector (Level 5) 6
Potato Wash Operators (Level 4) 4
Wash Labourers (Level 1) 3
Labourers (Level 2) 33
Labourers (packing produce) (Level 1) 18
Produce Tipper (Level 3) 3
CVS Operator (Level 5) 2
In line Grading Quality Control (Level 5) 5
Forklift Drivers (Level 3) 5
Produce Machine Operator (Level 4) 8
Wrap (Coding products) (Level 4) 2
Minor Maintenance (Level 3) 2
Supervisors (Level 5) 8
Seed Shed7
Horticultural Graders/Cutters (Level 1 & 2) 4
Seed Supervisor (Level 5) 1
Seed Labourer (Level 3) 1
[2014] FWC 7682
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Current industrial coverage
[19] The employer and its employees are currently bound by the Mitolo Group Employee
Collective Agreement Process Workers (“the 2008 Agreement”) which is an agreement made
under the Workplace Relations Act 1996, as amended.
[20] At the time the 2008 Agreement was approved, the employer was a respondent to the
South Australian Vegetable Processing (NUW) Award 2003 (“the Vegetable Processing
Award”). This Award became a transitional instrument8 and its coverage was subsequently
incorporated into the Storage Services Award.9 The coverage of the Vegetable Processing
Award was expressed as follows:
“ 6. COVERAGE OF AWARD
This award applies in respect of all persons employed in South Australia in the
vegetable processing industry, including persons engaged in, or in connection with:
6.1 the reception, handling, storing, preparation, packing, distribution, delivery or
forwarding of vegetables; or
6.2 any other processing of vegetables.”
[21] The 2008 Agreement classification structure reflects, in identical terms, the
classification structure of the Vegetable Processing Award. It has some similarity to the
classification structure in the Agreement, with the most obvious difference being the absence
of indicative duties relating to the seed shed and the absence of any reference to work
performed ‘off-site’ in the 2008 Agreement.
The Storage Services Award
[22] The coverage of this Award is set out in Clause 4 and the following sub-clauses are
relevant:
“4. Coverage
4.1 This industry award covers employers throughout Australia in the storage services
and wholesale industry and their employees in the classifications listed in clause 14—
Classifications.
4.2 Notwithstanding clause 4.1, the award does not cover:
(a) an employer to the extent that the employer is covered by another modern
award that contains classifications relating to functions included within the
definition of the storage services and wholesale industry with respect to any
employee who is covered by that award;
...
4.6 Where an employer is covered by more than one award, an employee of that
employer is covered by the award classification which is most appropriate to the work
[2014] FWC 7682
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performed by the employee and to the environment in which the employee normally
performs the work.
NOTE: Where there is no classification for a particular employee in this award it is
possible that the employer and that employee are covered by an award with
occupational coverage.”
[23] “Storage services and wholesale industry” is defined in clause 3 to mean “... the
receiving, handling, storing, freezing, refrigerating, bottling, packing, preparation for sale,
sorting, loading, dispatch, delivery, or sale by wholesale, of produce, goods or merchandise
as well as activities and processes connected, incidental or ancillary.”
[24] The classifications contained within the Award are that of Storeworker Grades 1-4 and
Wholesale Employee Levels 1-4. The classification definitions are set out in Schedule B as
follows:
“Schedule B - Classifications
B.1 Storeworker grade 1
B.1.1 Point of entry
New employee.
B.1.2 Skills/duties
(a) Responsible for the quality of their own work subject to detailed
direction.
(b) Works in a team environment and/or under routine supervision.
(c) Undertakes duties in a safe and responsible manner.
(d) Exercises discretion within their level of skills and training.
(e) Possesses basic interpersonal and communication skills.
(f) Indicative of the tasks which an employee at this level may perform are the
following:
(i) storing and packing of goods and materials in accordance with
appropriate procedures and/or regulations;
(ii) preparation and receipt of appropriate documentation including
liaison with suppliers;
(iii) allocating and retrieving goods from specific warehouse areas;
(iv) basic operation of computer terminal or similar equipment;
(v) periodic stock-checks;
(vi) responsible for housekeeping in own work environment; and
(vii) use of non-licensed material handling equipment.
[2014] FWC 7682
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Steel Distributing employees:
...
B.2 Storeworker grade 2
B.2.1 Points of entry
(a) Storeworker grade 1.
(b) Proven and demonstrated skills (including as appropriate, appropriate
certification) to the level required of this grade.
B.2.2 Skills/duties
(a) Able to understand detailed instructions and work from procedures.
(b) Able to co-ordinate work in a team environment under limited supervision.
(c) Responsible for quality of their own work.
(d) Possesses sound interpersonal and communication skills.
(e) Indicative of the tasks which an employee at this level may perform are the
following:
(i) licensed operation of all appropriate materials handling equipment;
(ii) use of tools and equipment within the warehouse (basic non-trades
maintenance); and
(iii) computer terminal operation at a level higher than that of an
employee at Storeworker grade 1.
Steel Distributing employees:
...
B.3 Storeworker grade 3
B.3.1 Points of entry
(a) Storeworker grade 2.
(b) Proven and demonstrated skills (including as appropriate, appropriate
certification) to the level required of this grade.
B.3.2 Skills/duties
(a) Understands and is responsible for quality control standards.
(b) Possesses an advanced level of interpersonal and communication skills.
(c) Competent keyboard skills.
(d) Sound working knowledge of all warehousing/stores duties performed at
[2014] FWC 7682
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levels below this grade, exercises discretion within scope of this grade.
(e) May perform work requiring minimal supervision either individually or in a
team environment.
(f) Indicative of the tasks which an employee at this level may perform are the
following:
(i) use of a computer terminal for purposes such as the maintenance
of a deposit storage system, information input/retrieval, etc. at a
level higher than grade 2;
(ii) operation of all materials handling equipment under licence;
(iii) development and refinement of a store layout including proper
location of goods and their receipt and dispatch; and
(iv) employee who is responsible for the supervision of and the
responsibility for the conduct of work of up to 10 employees.
Steel Distributing employees:
...
B.4 Storeworker grade 4
B.4.1 Points of entry
(a) Storeworker grade 3.
(b) Proven and demonstrated skills to the level required of this grade.
B.4.2 Skills/duties
(a) Implements quality control techniques and procedures.
(b) Understands and is responsible for a warehouse or a large section of a
warehouse.
(c) Highly developed level of interpersonal and communication skills.
(d) Ability to supervise and provide direction and guidance to other employees
including the ability to assist in the provision of on-the-job training and
induction.
(e) Exercises discretion within the scope of this grade.
(f) Exercises skills attained through the successful completion of an appropriate
warehousing certificate.
(g) Indicative of the tasks which an employee at this level may perform are the
following:
(i) liaising with management, suppliers and customers with respect to
stores operations;
[2014] FWC 7682
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(ii) detailing and co-ordinating activities of other storeworkers and
acting in a leading hand capacity for in excess of 10 storeworkers;
and
(iii) maintaining control registers including inventory control and being
responsible for the preparation and reconciliation of regular reports
or stock movement, dispatches, etc.
Steel Distributing employees:
...
B.5 Wholesale employee level 1
B.5.1 An employee performing one or more of the following functions at a wholesale
establishment:
(a) the receiving and preparation for sale and/or display of goods;
(b) the pre-packing or packing, weighing, assembling, pricing or preparing of
goods or provisions or produce for sale;
(c) the display, shelf filling, replenishing or any other method of exposure or
presentation for sale of goods;
(d) the sale or hire of goods by any means;
(e) the receiving, arranging or making payment by any means;
(f) the recording by any means of a sale or sales;
(g) the wrapping or packing of goods for dispatch and the dispatch of goods;
(h) the delivery of goods;
(i) loss prevention;
(j) demonstration of goods for sale;
(k) the provision of information, advice and assistance to customers;
(l) the receipt, preparation, packing of goods for repair or replacement and the
minor repair of goods; and/or
(m) work which is incidental to or in connection with any of the above.
B.5.2 Wholesale employees will undertake duties as directed within the limits of their
competence, skills and training including incidental cleaning
B.6 Wholesale employee level 2
B.6.1 An employee performing work at a wholesale establishment at a higher skill
[2014] FWC 7682
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level than a Wholesale employee level 1.
B.6.2 Indicative job titles which are usually within the definition of a Wholesale
employee level 2 include:
(a) Fork-lift operator;
(b) Ride-on equipment operator.
B.7 Wholesale employee level 3
B.7.1 An employee performing work at a wholesale establishment at a higher level
than a Wholesale employee level 2.
B.7.2 Indicative of the tasks which might be required at this level are the following:
(a) supervisory assistance to a designated section manager or team leader;
(b) opening and closing of premises and associated security; or
(c) security of cash.
B.8 Wholesale employee level 4
B.8.1 An employee performing work at a wholesale establishment at a higher level
than a Wholesale employee level 3.
B.8.2 Indicative of the tasks which might be required at this level are the following:
(a) management of a defined section/department;
(b) supervision of staff;
(c) stock control; or
(d) buying/ordering requiring the exercise of discretion as to price, quantity,
quality etc.”
The Horticulture Award
[25] The coverage of this award is set out within the following clauses:
“4. Coverage
4.1 This industry award covers employers throughout Australia in the horticulture
industry and their employees in the classifications listed in Schedule B—
Classification Structure and Definitions, to the exclusion of any other modern
award.
4.2 Horticulture industry means:
(a) agricultural holdings, flower or vegetable market gardens in connection
[2014] FWC 7682
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with the sowing, planting, raising, cultivation, harvesting, picking,
packing, storing, grading, forwarding or treating of horticultural crops,
including fruit and vegetables upon farms, orchards and/or plantations; or
(b) clearing, fencing, trenching, draining or otherwise preparing or treating
land for the sowing, raising, harvesting or treating of horticultural crops,
including fruit and vegetables.
4.3 Horticulture industry does not mean:
(a) the wine industry;
(b) silviculture and afforestation;
(c) sugar farming or sugar cane growing, sugar milling, sugar refining, sugar
distilleries and/or sugar terminals;
(d) any work in or in connection with cotton growing or harvesting; cotton
ginneries and associated depots; cotton oil mills and the extraction of oil
from seed;
(e) plant nurseries; or
(f) a broadacre mixed farming enterprise as defined in the Pastoral Award
2010.
...
4.9 Where an employer is covered by more than one award, an employee of that
employer is covered by the award classification which is most appropriate to the
work performed by the employee and to the environment in which the employee
normally performs the work.
NOTE: Where there is no classification for a particular employee in this award it
is possible that the employer and that employee are covered by an award with
occupational coverage.”
“Schedule B - Classification Structure and Definitions
B.1 Level 1
B.1.1 Level 1 employee means an employee classified in accordance with the
following criteria:
B.1.2 General description
An employee at this level:
undertakes induction training which may include information on the
enterprise, conditions of employment, introduction to supervisors and fellow
workers, training and career opportunities, plant layout, work and
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documentation procedures, occupational health and safety, equal
employment opportunity and quality control/assurance;
performs routine duties essentially of a manual nature and to the level of
their training;
exercises minimal judgment;
works under direct supervision;
is responsible for the quality of their own work;
is a new employee; or is an existing employee performing work within this
grade who is undertaking training so as to enable advancement to Level 2.
B.1.3 Indicative duties
Indicative of the duties an employee may perform at this level are:
performing general labouring duties;
fruit or vegetable picking, thinning or pruning;
operating small towing tractor engaged in transfer of produce bins and other
containers during harvest;
performing a range of housekeeping tasks in premises and grounds;
sorting, packing or grading of produce where this requires the exercise of
only minimal judgment;
performing basic recording functions related to work performed at this level;
providing assistance within the scope of this level to other employees as
required;
undertaking structured training so as to enable advancement to Level 2.
B.2 Level 2 employee
B.2.1 Level 2 employee means an employee classified in accordance with the
following criteria:
B.2.2 General description
An employee at this level:
has completed up to three months structured training so as to enable the
performance of work within the scope of this level;
works under general supervision either individually or in a team
environment;
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works with established routines, methods and procedures;
performs a range of tasks involving the use of skills above and beyond those
of Level 1 and to the level of their training;
exercises limited discretion;
is responsible for the quality of their own work;
receives training in occupational health and safety standards and practices
relevant to the site;
performs lower level tasks as required without loss of pay unless re-engaged
to perform tasks at predominantly a lower skill level.
B.2.3 Indicative duties
Indicative of the duties an employee may perform at this level are:
performing a range of tasks involving the set up and operation of production
and/or packaging or picking equipment, labelling and/or consumer picking
equipment;
repetition work on automatic, semi-automatic or single purpose machines or
equipment;
assembling/dismantling components using basic written, spoken and/or
diagrammatic instructions in an assembly environment;
irrigation, spraying or pruning under general supervision;
sorting, packing and grading beyond the scope of Level 1 duties;
maintaining simple records;
using hand trolleys, pallet trucks or other mechanical or power driven lifting
or handling devices not requiring a licence;
operating tractors with engine capacity of up to 70 kW;
general and routine product testing;
providing assistance within the scope of this level to other employees as
required;
assisting in the provision of on-the-job training in conjunction with
supervisors, tradespersons or trainers;
undertaking further training so as to enable advancement to Level 3.
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B.3 Level 3 employee
B.3.1 Level 3 employee means an employee classified in accordance with the
following criteria:
B.3.2 General description
An employee at this level:
performs work above and beyond the skills of an employee at Level 2 and to
the level of their training;
works under routine supervision either individually or in a team
environment;
exercises discretion with their level of skills and training;
is responsible for the quality of their own work;
receives training in occupational health and safety standards and practices in
work areas relevant to the site and appropriate to this award;
may perform any lower level task as required without loss of pay.
B.3.3 Indicative duties
Indicative of the duties an employee may perform at this level are:
driving motor lorries or mechanical harvesters or forklifts;
operating tractors with engine capacity of over 70 kW;
minor maintenance of plant;
irrigation, spraying, pruning without supervision;
assisting in the training, instruction and coordination of employees;
recording detailed information on production and quality indicators;
providing assistance within the scope of this level to other employees;
undertaking further training so as to enable advancement to Level 4.
B.4 Level 4 employee
B.4.1 Level 4 employee means an employee classified in accordance with the
following criteria:
B.4.2 General description
An employee at this level:
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performs work above and beyond the skills of an employee at Level 3 and to
the level of their training;
coordinates work in a team environment or works individually under general
supervision;
exercises discretion with their level of skills and training;
is responsible for the quality of their own work;
has knowledge of the employer’s operation as it relates to the production
process;
monitors the application of occupational health and safety standards in work
areas relevant to the site and appropriate to this level;
may perform any lower level task as required without loss of pay.
B.4.3 Indicative duties
Indicative of the duties an employee may perform at this level are:
using precision measuring instruments;
machine setting, loading and operation;
inventory and store control;
licensed operation of all appropriate materials handling equipment;
basic engineering and fault handling;
basic non-trades maintenance involving the use of tools and equipment
within the scope of this award;
licensed and certified to operate forklifts, engine driving and crane driving
operation;
furnace/boiler operator;
performing quality checks on the work of others;
quality assurance/control;
assisting in provision of on-the-job training;
monitoring variables affecting production yields, detecting errors,
investigating causes and recommending collective/preventative action;
providing assistance within the scope of this level to other employees;
undertaking further training so as to enable advancement to Level 5.
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B.5 Level 5 employee
B.5.1 Level 5 employee means an employee classified in accordance with the
following criteria:
B.5.2 General description
An employee at this level:
works above and beyond the skills of an employee at Level 4 and to the
level of their training;
performs work under minimal supervision either individually or in a team
environment;
coordinates and schedules approved work in a team environment;
exercises good interpersonal communication skills;
exercises discretion within the scope of this grade;
possesses and uses a trade qualification in the course of their duties;
has a sound knowledge of the employer’s operation as it relates to the
production process;
undertakes lower level tasks as required without loss of pay.
B.5.3 Indicative duties
Indicative of the duties an employee may perform at this level are:
inspecting products and/or materials for conformity with established
operational standards and approves/passes first off samples;
operating, setting up and adjusting maintenance functions including (but not
limited to):
removing equipment fastenings including use of destructive cutting
equipment;
running adjustments to production equipment;
operating all lifting equipment;
basic production scheduling and materials handling within the scope of
production process or directly related functions;
exercising high level stores and inventory responsibilities;
providing on-the-job training;
providing assistance within the scope of this level to other employees.”
[2014] FWC 7682
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The cases presented on award coverage
[26] Before turning to the NUW’s case it is convenient to turn to the ‘integration’
argument. It was submitted that the companies within the Mitolo Group were interrelated and
interdependent and that communications, management, staff, equipment and resources were
exchanged between the employer and other properties to achieve optimum product and yield.
[27] Ms Hentschke started that in the past year, 12 Angle Vale Road employees have
performed work at farms in close proximity to the Angle Vale Road site and which are owned
by the Mitolo group. The employees are a mix of permanent staff and contract backpackers
and work is performed during harvest (October to January) and seeding (July to August). In
each case the employees’ primary duties are based at the Angle Vale Road site.10
[28] No employees who performed farm work in the past year gave evidence, but each of
the representatives in support described work on Mitolo Group farms in the period
2008-2010. The evidence of the work they performed11 aligns with the evidence of
Ms Hentschke as to the activities currently undertaken on farms by employees of the
employer.
[29] Ms Hentschke stated that seed management at the Angle Vale Road site is expanding
as the Mitolo Group sources more seed internally and less from outside suppliers. She stated
that the seed shed currently requires more staff than the loading/dispatch area.12
[30] Mr Seidl stated that Supervisors, the Production Coordinator and certain other
employees communicate with Farm Managers by phone and email from time to time in
relation to issues such as high levels of wastage, with a view to facilitating a higher quality
product.13
The case for the NUW
[31] Mr Portelli, for the NUW, submitted that the employer attempted to modify the
Agreement to align it with the Horticulture Award only after Mr Garland raised a concern that
the employer was wrongly using this award as the relevant industrial instrument. He
contended that the references within the Agreement to the requirement to work on other
properties and the broadening of the Objectives clause in 5.2 of the Agreement only occurred
very late in the negotiation process. The NRR issued to employees more narrowly identified
the employees to be covered by the Agreement as “... employees that undertake duties
involved in the washing, quality grading, packing, stacking and movement of produce located
at Angle Vale Road Virginia.”
[32] Mr Portelli referred an email exchange between Mr Garland and Ms Hentschke where
Ms Hentschke stated, on 6 June 2014, that there was no requirement for travel by employees
covered by the Agreement, but then subsequently included a travel clause. In support of the
position that the employer subsequently expanded the scope of the Agreement to include
off-site work, Mr Portelli also referred to Mr Garland’s evidence that Mr Seidl had previously
advised him that the scope of the Agreement concerned employees who worked at the Angle
Vale Road site.
[2014] FWC 7682
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[33] I interpose that I can see nothing sinister in Mr Seidl’s description of the scope of the
Agreement, which is factually correct. He did not state that employees worked exclusively at
the Angle Vale Road site, although his evidence indicates that he was also alive to the
possibility that Mr Garland would interpret his statement in this manner.14
[34] In relation to the issue of award coverage, Mr Portelli advanced the following
position:
• The work performed by the employees at the Angle Vale Road site was akin to
“preparation, handling, storage and distribution of produce for wholesale” and
therefore within the coverage of the Storage Services Award;
• The employees engaged in the seed shed and employees who perform work on Mitolo
Group farms are only a very small proportion of the total employees under the
Agreement. The vast majority are involved in grading, packing storage and
distribution of produce at a storage and processing facility;
• The roles of Grader, Washer, Labourer and Quality Control fit within the classification
structure of the Storage Services Award. “Preparation” of produce, as referred to in the
definition of the “storage services and wholesale industry”, comfortably includes the
processes of grading and washing produce.
• The evidence indicates that product is ‘stored’ at the Angle Vale Road site for one or
more days although it is conceded that the majority of produce is dispatched on the
same day as it is processed.
[35] Mr Portelli submitted that the coverage of the Horticulture Award is limited to
agricultural holdings, flower and market gardens, farms, orchards and plantations. References
to picking, packing, storage etc, must be conducted within such properties.
[36] He highlighted that no produce is grown at the Angle Vale Road site and the employer
has a negligible farm presence. It is the related companies within the Mitolo Group that are
dedicated to the cultivation, planting and growing of crops and other ‘on-farm activities’. The
small number of employees who work on the nearby properties do as a secondary role to their
main work at the Angle Vale Road site. Mr Portelli contended that the evidence of Mr Seidl
concerning communications with the farms on matters such as the quality of the produce was
not a substantial activity.
[37] Mr Portelli also referred to the decision in Zancott Recruitment Pty Ltd (Zancott)15 in
support of its position that the Storage Services and Wholesale Award applies. The subject
matter of Zancott concerns an application pursuant to s.319 of the Act in relation to a transfer
of business from Rural Harvest Farms Pty Ltd (Rural) to Zancott Recruitment Pty Ltd. Rural
operated a vegetable processing business and the parties agreed that the Storage Services
Award was the relevant modern award. I note that the issue of Award coverage was not the
subject of any submissions or consideration in Zancott and conclude that it has limited weight
for this reason.
[2014] FWC 7682
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Ms Rault’s case
[38] As noted earlier, Ms Rault supported the submissions of the NUW.16 She is engaged
as a Grader, a position she has held since she commenced in 2010. Ms Rault outlined the
processes undertaken at the Angle Vale Road site (about which there is little or no dispute).
She also outlined the negotiation of the Agreement and attached to her witness statement the
minutes of a meeting on 13 June 2014 which outlined ‘last minute adjustments’ made by the
employer including changes to the Objectives of the Agreement and the inclusion of several
references to work undertaken in the seed shed.17
[39] She submitted that the Angle Vale Road site was a stand-alone production facility
with no connection to the farm operations of the Mitolo Group. She did however
acknowledge that, contrary to her written statement, work is performed on farms by
employees based at the Angle Vale Road site. Ms Rault also addressed aspects of the
remuneration under the Agreement which she viewed as unfair, and said this view was shared
by the employees she represented and others who had approached her.
[40] Under cross-examination Ms Rault was taken through the processes and work
undertaken at the Angle Vale Road site in some detail.18 In relation to the issue of storage,
she accepted that 90% of potatoes may be dispatched on the same day as they are graded, but
maintained that onions could be stored for several days and that they are “in the queue to be
processed”.19
[41] She agreed that 40%-50% of the produce is dispatched to the Coles Distribution
Centre and this produce has same day turnaround. In response to a proposition put to her that
the employer is part of an integrated farming operation, Ms Rault agreed, but stated that
“... the company might be integrated but the workers are not”. It is also the case that Ms Rault
was unaware that seed trials are conducted at the Angle Vale Road site. She strongly
disagreed that the work undertaken at Angle Vale Road site was part of the harvesting
process.20
The evidence of the representatives in support
[42] The evidence of each of these representatives canvassed the process of negotiation of
the Agreement and all had, at best, a negative view of the NUW’s involvement in the process.
They each took issue with the position adopted by Ms Rault that the remuneration under the
Agreement was unfair and indicated that Ms Rault’s evidence of the feedback she received
from employees regarding their (lack of) support for the Agreement, did not accord with the
views employees had expressed to them.
[43] Each of the representatives in support was of the view that the Horticulture Award was
the ‘best fit’ for the work they performed and each disagreed that product was ‘stored’ at the
Angle Vale Road site. Mr Seidl stated that 90% of produce was dispatched the same day it
was graded and packed and that storage was limited to placement of produce in a cool room to
keep it at a constant temperature until dispatch.21 He said that produce received which
exceeded orders for the day may be stored for the following day’s orders.
[44] Ms Sykes gave evidence on her working arrangements, the rostering of work and the
release of rosters.22 She supported the evidence concerning the same day dispatch of nearly all
product received and that produce that was excess to orders was dispatched the following day.
[2014] FWC 7682
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Ms Sykes indicated that there had been no major changes in the nature of the work undertaken
at the Angle Vale Road site since she commenced employment approximately six and a half
years ago.23
[45] Ms Sykes also provided a written submission in which she takes issue with several of
the NUW’s contentions. She submitted that the work performed at the Angle Vale Road site is
part of the horticultural business of the Mitolo Group and the cycle commences and ends at
the Angle Vale Road site. She stated that the terminology used by the NUW and in the
Storage Services Award, such as the “preparation of produce” and “storage” are not terms
used by the employer or employees to describe the processes undertaken.
[46] Ms Checker works in the production area making up cartons. She also undertakes
some grading work and work in relation to the operation of the crate machine. She stated that
from time to time she opens produce that would have been packed the day before.24
[47] Ms Blythman works primarily as a grader. She gave evidence of her hours of work
and also confirmed the evidence of Ms Checker in relation to some stock having been
prepared the day before.25
[48] Some of the representatives in support expressed concern that their security of
employment would be threatened if the Storage Services Award was found to apply, because
it could lead to increased costs for the employer. It is appropriate to record that I accept that
these concerns are genuinely held, although no submission was put by or on behalf of the
employer that security of employment is in issue.
The case for the employer
[49] Ms Hentschke filed written submissions in response to the submissions of the NUW.
In large part these submissions were based on the evidence she provided at the hearing and in
her witness statements.26
[50] In addition to the ‘integration’ argument set out earlier, she restated her view that the
work of the employer falls within the definition of “horticulture industry” as set out in the
Horticulture Award and that the classifications within this award are more relevant to the
work of the employees than the Storage Services Award.
[51] Ms Hentschke stated that:27
“Horticultural industry means ‘sowing, planting, raising, cultivating, picking, packing,
storing, grading, forwarding or treating of horticultural crops including fruit and
vegetables’.
At the Property the Employer carries out the following activities:
Sow – seed and variety trials
Plant- we plant seed and variety trials
Pack- we pack graded and treated produce
Grade- we grade produce
Forward- we dispatch our produce to markets and distribution centres
[2014] FWC 7682
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Treat – we treat our seed and produce with food safe chemicals and seed growth
chemicals”
[52] She disputed that the work of grading produce is “preparation for sale”, on the basis
that the role of graders includes determining which product is saleable.
[53] She also submitted that the employer’s operations were “... connected with the
operation of an on farm enterprise, namely the Mitolo Group which grows, harvests and
produces 95% of its own produce.”28 Ms Hentschke relied on the Horticulture Award 2010
Fact Sheet issued by the Fair Work Ombudsman, which includes the following passage:
“Does the award cover packing sheds operating off-farm as a separate business?
The definition of horticulture industry is limited to ‘on-farm’ operations therefore
while operations of a packing shed can be covered by the Horticulture Award the
packing shed has to be operated in connection with an on-farm enterprise.”
[54] In relation to the NUW’s submission that the employer included the “horticultural’
features of the Agreement after the issue of award coverage was raised by the NUW on
21 May 2014, Ms Hentschke submitted that the employer researched and took advice on the
issue of Award coverage before the issue was raised by the NUW. The content of the
Agreement reflects the actual work performed, and the classification structure of the
Agreement generally reflects the Vegetable Processing Award, which reflects the Horticulture
Award classification structure.
[55] The description of the scope of the Agreement as set out in the NRR was in broad
terms consistent with advice received from the Australian Industry Group (AIG). The travel
provision was inserted in accordance with advice from AIG concerning the BOOT
requirement of the Act.
[56] Mr Duggan, of counsel for the employer, filed a Closing Outline. In relation to
sub-clauses 4.2(a) and 4.2(b) of the Horticulture Award, Mr Duggan submitted that:
The use of the phrase “upon farms, orchards and/or plantations” in sub-clause
4.2(a) is broader in meaning than “on farms, orchards and/or plantations” and
encapsulates something that it is connected to farms, orchards and/or plantations,
including because it is in the vicinity;
The Angle Vale Road site was a “farm”, defined in the Oxford Dictionary to mean
an area of land and its buildings used under one management for either the growing
of crops or the rearing of animals;
In the alternative, the activities of the employer are connected with a farm because
they are within the vicinity of, and/or integrated into the activities of farms owned
by the Mitolo Group;
Sub-clause 4.2(b) does not include a reference to “upon farms, orchards and/or
plantations”, indicating that the Horticulture Award has a broader application than
that advanced by the NUW;
[2014] FWC 7682
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In the further alternative, the activities undertaken by the employer reflect the
activities canvassed in sub-clause 4.2(a).
[57] Mr Duggan referred to several enterprise agreements which used the Horticulture
Award as the relevant modern award and he submitted that this does not support the NUW’s
narrow interpretation of the Horticulture Award. It is convenient to deal with this submission
now. There was no discussion in any of the decisions about the relevant modern award. It is
apparent that one of the agreements specifically covers work on farms and one does not
identify the relevant modern award but does include the activities of “irrigation, spraying and
pruning” which tends to indicate that vegetables and/or fruit are cultivated and grown.
I acknowledge that one of the enterprise agreements appears to be limited to the packing and
processing of fruit which is sourced from nearby properties.29 At best, these agreements may
indicate that there is some confusion about which modern award applies to particular
operations.
[58] Mr Duggan referred to several decisions in support of his argument that the Storage
Services Award is not the relevant modern award and these are discussed later in this
decision.
Consideration of award coverage
[59] I accept the employer’s submission that the fact that late adjustments were made to
the Agreement is not relevant to a consideration of the correct modern award. If the
adjustments made by the employer are an accurate reflection of the work performed, they
should be considered.
[60] My consideration of the three decisions relied upon by the employer is as follows.
The National Union of Workers v Comit Farm Produce Pty Ltd30
[61] This decision concerns an interpretation of the General Storeworkers, Packers
Wholesale Sellers and Distributors Award31 (the SA Award), by the Industrial Relations
Court of South Australia. The specific matter for interpretation was whether Comit Farm
Produce Pty Ltd (the respondent or Comit) employees were within the scope of the SA
Award. Comit is the previous name of the employer in the present proceedings.
[62] Mr Mitolo, who at the time was the General Manager of Comit, gave evidence in the
proceedings, including a detailed description of the work performed at the Angle Vale Road
site. Relevant passages of the transcript were appended to Mr Mitolo’s witness statement in
the present proceedings.32
[63] The scope of the SA Award relevantly provided that:
“This award shall be binding on all persons engaged in the business of selling wholely
by wholesale merchandise of every description and the industry of the occupations of
persons engaged in receiving; storing; packing; dispatching and/or assembling goods
and merchandise whether as employers or employees, and whether members of an
association or not.”
[2014] FWC 7682
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[64] “Storeworker and/or packer” was defined by reference to the performance of any or all
of a number of identified functions “with regard to goods whether partly or wholly
manufactured and materials”.
[65] His Honour concluded that the SA Award was concerned with work done in a store
and that the operation at Angle Vale Road, “... has no purpose of storage involved”.33
He continued that:
“... it does seem to me in the context of ... [case citation omitted] the fact that there is no
specific reference to primary produce or vegetables, [reference omitted] and the
strength of Ms. Layton’s argument that this is really part of the harvesting of the
market gardens the award was not intended to regulate work inside Comit Farm’s
premises.”
[66] Mr Duggan submitted that the employer’s business has not changed in any significant
way since this decision was made and that the employees covered by the Agreement do not
work in a store or wholesale establishment. He further submitted that grading “is an integral
aspect of the harvest of a farming operation”.34
[67] The SA Award contained no reference to “produce” within its scope, only reference to
goods and merchandise. His Honour concluded that goods and merchandise do not include
‘produce’ and that this was reinforced by the definition of “storeworker and/or packer” which
referred to activities relating to “partly or wholly manufactured goods”.35
[68] It is also noteworthy that the respondent at that time owned land at Waikerie on which
potatoes and onions were grown and which were then transported to Angle Vale Road for
processing. As such the growing and harvesting of produce on farms was conducted within
the respondent’s business.
The National Union of Workers, South Australian Branch v Comit Farm Produce Pty Ltd36
[69] This decision concerned an interpretation of the South Australian registered rules of
the NUW and specifically whether the rules cover persons who were sought to be bound by a
draft award known as the General Packers - Primary Produce - Award. I am unclear as to its
relevance to the present proceedings. The decision held that the rules of the NUW did not
cover primary produce, but were limited to goods and merchandise. No argument was
advanced in the present proceedings as to the ability of the NUW to cover the employees at
the Angle Vale Road site and I note that subsequent proceedings before the Australian
Industrial Relations Commission concluded that employees of Comit Farm Produce Pty Ltd
came within the rules of the NUW.37
The Australian Workers’ Union v Coffey International Pty Limited (Coffey)38
[70] This decision concerns an appeal against the approval of an enterprise agreement and
is relied upon by Mr Duggan in support of his argument on the interaction between the
Horticulture and Storage Services Awards, and in support of his submission that, to the extent
that both Awards otherwise cover the employees, sub-clause 4.2(a) of the Storage Services
Award operates to exclude its application in these circumstances.
[2014] FWC 7682
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[71] The basis of the appeal in Coffey was the Commissioner’s decision at first instance to
utilise the Manufacturing and Associated Industries and Occupations Award 2010 (the
Manufacturing Award) as the relevant modern award for the purposes of applying the BOOT
to the Coffey Materials Testing Services Agreement 2012-2016.
[72] The AWU argued at first instance and on appeal that the Building and Construction
General On-site Award 2010 (the On-site Award) was the relevant modern award. This is an
industry award while the Manufacturing Award is a hybrid industry and occupational award.
In upholding the decision at first instance, the Full Bench considered the interaction between
the relevant awards based on their respective coverage and the exclusions from coverage.
[73] Adopting Coffey as authority for the employer’s submissions on the interaction of the
two awards in the present case is problematic, not least because of the different form of
expression used in the coverage clauses of the relevant awards in Coffey. In my view, Coffey
does not shed any light on the interaction of the Storage Services and Horticulture Awards.
Approach to award coverage
[74] The determination of the relevant modern award for the employer and the employees
covered by the Agreement is a question of fact and law. The facts as to the work performed at
the Angle Vale Road site are not in dispute and any dispute concerning the processes and
activities that are undertaken is of negligible or no weight. The characterisation of the
employer’s operations and the relevance of the employer’s position within the broader
business of the Mitolo Group essentially form the basis of the parties’ competing submissions
on the relevant modern award.
[75] In my view, it is the characterisation of the employer’s operations that is paramount in
determining the appropriate industry in which it operates.39 The extent of any involvement of
the employer in horticultural activities and whether those activities fall within the coverage of
the Horticulture Award are the key issues in determining whether that is the relevant modern
award for the purposes of the BOOT. To place undue emphasis on the operations of other
related companies and the relationship of the employer to those companies may result in
insufficient weight being attached to the true nature of the employer’s business.
[76] In relation to the coverage of the Horticulture Award, I am unaware of any authority
for the proposition advanced by Mr Duggan that the word “upon” in the phrase “upon farms,
orchards and/or plantations” has a broader meaning than “on”. The Oxford Dictionary refers
to “upon” as the same as, or a more formal expression for the word “on”.
[77] That being the case, the interpretation of sub-clause 4.2(a) of the Horticulture Award
is that “horticulture industry” means agricultural holdings, flower or vegetable market gardens
in connection with the activities of sowing, planting, raising, cultivation, harvesting, picking,
packing, storing, grading, forwarding or treating of horticultural crops and this includes fruit
and vegetable on farms, orchards and/or plantations.
[78] While a number of the activities undertaken at the Angle Vale Road site are included
within the activities in the definition of “horticulture industry”, the important qualification on
those activities, namely where they are undertaken, is not met in any substantial way.
[2014] FWC 7682
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[79] The Ombudsman’s Fact Sheet states clearly that the horticulture industry is limited to
on-farm activities. It is within this context that the advice that, “the packing shed has to be
operated in connection with an on-farm enterprise” are to be construed.
[80] I have had regard to the decision in National Union of Workers.40 It concerns an
application by the NUW to add “LUCRF” to the list of default superannuation funds in clause
21.4 of the Horticulture Award. In support of its application, the NUW relied on the fact that
LUCRF was nominated as a default fund in two award-based transitional instruments, namely
the Vegetable Processing Award and the Storage Services - Fruit Packaging - Victoria -
Award 2002.
[81] Senior Deputy President Hamberger identified that it was necessary to determine
whether the respondents to the transitional instruments employ persons covered by the
modern award. His Honour stated at [9] that:
“During the hearing there was some discussion about whether the coverage of the
Horticulture Award 2010 extends beyond the ‘farm gate’. Having examined the
transcript of the consultations before Commissioner Lewin that led to the development
of the modern award I am satisfied that the reference to ‘upon farms, orchards and/or
plantations’ should be regarded as qualifying all the activities listed in the preceding
paragraph. The phrase ‘including fruit and vegetables’ merely emphasises that these
products are included in the concept of ‘horticultural crops’. The effect of this
construction is that the modern award only covers activities such as picking, packing,
storing etc. to the extent those activities happen on farms, orchards and/or plantations.”
and he concluded at [12] that:
“... while there may be some overlap, the coverage of the two transitional instruments
extends beyond the coverage of the Horticulture Award 2010. In particular, those
transitional instruments cover activities that occur well beyond the farm gate. Such
activities would be covered by the Storage Services and Wholesale Award 2010.”
[82] I respectfully agree with this conclusion. The distinction between the common
activities in the two modern awards is the environment in which they are undertaken.
[83] It follows that I am not persuaded by the employer’s argument that sub-clause 4.2(b)
the Horticulture Award operates to expand the coverage of the horticulture industry because it
does not specify that the activities listed therein must be undertaken upon a farm, orchard
and/plantation. In my view there is no need for such a qualification in the context of the
activities identified. Sub-clause 4.2(b) is confined to activities associated with “... preparing
and treating land for the sowing, raising, harvesting or treating of agricultural crops”.
[84] I accept the evidence and submissions of the employer and representatives in support,
that the indicative duties in the classifications under the Horticulture Award are more aligned
with the activities undertaken by employees. Nonetheless, the classification definitions in the
Storage Services Award are capable of covering the work performed by employees, including
at B.1.2(f)(i); B.2.2(e)(i); B.3.2(a); B.3.2(f)(iv); B.5.1(b); B.5.1(g); and B.6.2(a) of the
classification schedule.
[2014] FWC 7682
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[85] In relation to the activities undertaken in the seed shed and the work of employees on
Mitolo Group owned farms in the vicinity of the Angle Vale Road site, I have reached the
following conclusions. The operation of the seed department is an important element in the
horticultural activities of the Mitolo Group, however in the context of the employer’s
operations it is of lesser weight. The staff dedicated to the seed trials and other seed related
activities represent only a small proportion of the total employees covered by the Agreement
(at best 6 out of 188 employees or just over 3%).
[86] The main resources of the Angle Vale Road site are directed to the washing, grading,
treatment, and packing of potatoes and onions. The resources directed to these activities
include the work of employees directly undertaking this work and those in supervisory and
quality control positions; machinery and equipment associated with these activities including
hoppers, conveyer belts, grading lines, bagging machines and the water recycling and
filtration system; the employees involved in the maintenance of this equipment/system; the
movement of produce within the site; and the cool rooms for produce awaiting dispatch. The
substantial character of the employer fits within the definition of “storage services and
wholesale industry” as defined in the Storage Services Award.
[87] The seed department would not come within the coverage of the Horticulture Award
for the reasons outlined earlier in relation to the employer’s operations more generally, that is,
the environment in which this work is performed does not meet the definition of “horticulture
industry”.
[88] In relation to employees performing work on the Mitolo Group owned farms, the
evidence indicates that 12 employees performed work on farms in the past year and that this
work is secondary to their primary work at the Angle Vale Road site. In my view this work is
not of sufficient status in the overall operations of the employer to bring the employer within
the coverage of the Horticulture Award - the characterisation of the employer’s business
relates to its operations as a whole and not to the work (or some of the work) of a small
proportion of its employees.41
[89] This conclusion also deals with Mr Duggan’s argument concerning the operation of
sub-clause 4.2(a) of the Storage Services Award, which is in the following terms:
“4.1 This industry award covers employers throughout Australia in the storage services
and wholesale industry and their employees in the classifications listed in clause 14—
Classifications.
4.2 Notwithstanding clause 4.1, the award does not cover:
(a) an employer to the extent that the employer is covered by another modern
award that contains classifications relating to functions included within the
definition of the storage services and wholesale industry with respect to any
employee who is covered by that award;”
[90] I have determined that the Horticulture Award does not apply to the employees who
perform work on Mitolo Group owned farms and therefore sub-clause 4.2(a) has no work to
do. The construction advanced by Mr Duggan would result in the ‘dog wagging the tail’
where the performance of some work on farms by a small number of employees would
[2014] FWC 7682
29
determine award coverage that is at odds with the substantial character of the employer’s
enterprise.
[91] Finally, there is the issue of whether produce is ‘stored’ at the Angle Vale Road site.
The storing of produce, goods or merchandise is one of the identified activities within the
definition of the “storage services and wholesale industry”, but it is not a requirement that all
the identified activities be performed by an employer to be brought within the definition. The
activities are disjunctive, albeit that they collectively define the “storage services and
wholesale industry”.
[92] As such, I do not consider that it is necessary to determine this issue, however given
the emphasis placed on it by the parties I make the following observations. In my view the
produce is stored, albeit for a short time of up to 3 days, in the sense that it is placed
somewhere pending dispatch. The more relevant issue is the weight that attaches to this
particular aspect of the operation in the context of the overall characterisation of the Angle
Road site. On this issue my conclusion would be limited weight, having regard to the totality
of the activities undertaken and the same day turnaround of the clear majority of produce that
is delivered to the site.
[93] I have concluded that the Storage Services Award is the relevant modern award for the
purposes of applying the BOOT. This conclusion is based primarily on the fact that the
employer’s operations do not fit within the definition of “horticulture industry” which in turn
defines the coverage of the Horticulture Award. Notwithstanding that the Angle Vale Road
operation has a commercial relationship with, and is connected to the horticultural operations
of the broader Mitolo Group, the substantial character of the Angle Vale Road site falls within
the definition of the “storage services and wholesale industry”.
The BOOT
[94] The BOOT is to be applied at the test time, being the date application was made to the
Commission for approval of the Agreement.42 In this case the application was made on
10 July 2014.
[95] Significant material was provided by the employer in support of its submission that
the Agreement passed the BOOT using the Horticulture Award but limited material or
information was provided in relation to the Storage Services Award.43
Rates of Pay44
[96] The weekly rates payable for full time ordinary hours under the Storage Services
Award and the Agreement are as follows:
[2014] FWC 7682
30
Storage Services Award The Agreement
$ per week
(Storeworkers and Wholesale Employees)
$ per week
Grade 1:
On commencement 684.70
After 3 months 693.30
After 12 months 701.60
Level 1: 650.50
Grade 2 708.10 Level 2(a): under 12 months 669.30
Level 2(b): over 12 months 676.90
Grade 3 729.00 Level 3(a): under 12 months 688.40
Level 3(b): over 12 months 696.00
Level 3(c): Forklift drivers 737.40
Grade 4 751.10 Level 4(a): under 12 months 714.60
Level 4(b): over 12 months 722.20
Level 5(a): under 12 months 757.40
Level 5(b): over 12 months 765.00
[97] Neither party undertook a comparison of the classifications in the Storage Services
Award and the Agreement that illustrated a direct comparison of rates. On the available
evidence and an examination of the classification definitions I have reached the following
view in relation to the comparative base rates of pay (i.e. the rates exclusive of penalty and/or
overtime provisions).
[98] Employees classified at Level 5 under the Agreement (Supervisors, Quality Control
and CVS Operators)45 would fall within either Grade 3 or 4 of the Storage Services Award
and would be better off under the Agreement by between $6.30 per week up to $36.00 per
week depending on the number of employees supervised and the period of service.
[99] The most populated classifications are Levels 1 and 2 of the Agreement, covering
approximately 75% of employees. These employees would be predominantly if not
exclusively classified as Grade 1 employees under the Storage Services Award. Level 1
employees would receive between $34.20 and $51.10 per week less under the Agreement than
the Storage Services Award, depending on their period of service. Level 2 employees under
the Agreement would receive between $15.40 and $24.70 per week less, depending on the
period of service.
[100] Employees classified at Levels 3 and 4 under the Agreement would variously translate
to Grades 2, 3 and 4 under the Storage Services Award. I have reached a preliminary view
that Forklift Drivers would be better off under the Agreement by $29.30 per week and
employees involved in minor maintenance would be between $12.10 and $19.70 per week
worse off under the Agreement, depending on the period of service. However, without further
submissions from the parties I am not inclined to proceed further with a comparison for
[2014] FWC 7682
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employees classified as Levels 3 and 4 under the Agreement. Such positions are relatively few
in number with approximately 10% of total employees in these levels (including the forklift
drivers and minor maintenance employees which I have considered).
[101] On the issue of ordinary rates of pay there are winners and losers. Numerically, more
employees would receive lower rates of pay under the Agreement than would receive higher
rates of pay.
Hours of Work and related provisions
[102] The ordinary hours of work and the related matters of overtime, penalty payments,
shift work and breaks, are set out in clauses 22 to 25 of the Storage Services Award. The
spread of daily ordinary hours; the days of the week on which ordinary hours may be worked;
and the number of daily ordinary hours; may be extended by agreement between the employer
and the majority of employees concerned or between the employer and an individual
employee.46 Such provisions are a feature of other modern awards.
[103] This feature of the award raises the issue of the appropriate ordinary hours provisions
that should be utilised for the purposes of the BOOT. The employer argues that, as the
employees have supported an enterprise agreement which contains extended ordinary hours, it
should be assumed that the same majority support would exist under the relevant modern
award. The NUW disagrees and submitted that employees voted in support of the Agreement
as a whole.
[104] There is merit in the respective positions of the parties. On the one hand the working
of extended ordinary hours is permitted under the Storage Services Award by agreement with
the majority of employees affected and it is the case that a majority of employees have
supported the Agreement including the extended ordinary hours. On the other hand,
acceptance of the package of terms and conditions in the Agreement does not indicate
whether employees actively support expanded hours in total or in part, or whether it is a
measure they are only prepared to accept in order to obtain other benefits under the
Agreement. That is, support of the package is not an indication of how employees may view
the expanded ordinary hours under the modern award.
[105] In Solar Systems Pty Ltd (Solar),47 a Full Bench of Fair Work Australia was
considering an appeal against a decision to refuse to approve the Solar Systems Pty Ltd
Enterprise Agreement 2011, primarily on the basis that it did not meet the BOOT when
assessed against the Manufacturing Award. A number of matters were canvassed in this
regard, but of relevance for present purposes is the discussion around the hours of work
provisions. The Manufacturing Award specifies that the days on which ordinary hours can be
worked is Monday to Friday, but this can be extended to Monday to Sunday by a majority of
employees or an individual reaching agreement with the employer.48
[106] The Commissioner at first instance concluded that the working of ordinary hours on
Saturdays and Sundays under the Agreement was a negative matter in terms of the BOOT.
He considered that this provision represented a requirement that employees work over 7 days
of the week, whereas under the relevant modern award employees could maintain a Monday
to Friday working week if they chose to do so.49
[2014] FWC 7682
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[107] On appeal, the employer submitted that the enterprise agreement implemented what is
permitted under the Manufacturing Award and that the expanded days of work should have
been considered by the Commissioner as a neutral matter for the purposes of the BOOT.
The Full Bench endorsed this position.50
[108] In Scott’s Transport Industries Pty Ltd, Commissioner Cargill reached a similar
view.51
[109] Given the manner in which the Commissioner’s decision was expressed at first
instance, the Full Bench in Solar was not required to consider in any detail the particular
matter raised in the present proceedings, being the appropriate modern award ordinary hours
to use for the purposes of undertaking a comparison of earnings for BOOT purposes.
[110] In the present case, the Commission has the benefit of evidence as to employees’
views on the expanded ordinary hours under the Agreement. The weight of this evidence is in
support of the expanded ordinary hours of work. On this basis, and consistent with the
conservative approach I have adopted generally in considering the application of the BOOT,52
I consider that it is appropriate to use the expanded ordinary hours of work provisions allowed
under the Storage Services Award by agreement between employees and the employer.
The ‘expanded’ provisions are reflected in the table below:
Storage Services Award The Agreement
Ordinary hours of work
Average 38 per week over 4 weeks
Ordinary hours of work
38 hours per week
Monday to Saturday
Up to 10 ordinary hours per day
Span of hours 6.00am to 6.00pm
(day work)
Monday to Saturday
Up to 12 ordinary hours
Span of hours 5.00am to 6.00pm
(day work)
Overtime
150% for the first 2 hours then 200%
Saturday ordinary hours 150%
Saturday overtime at 150%
Sunday overtime at 200%
Public holidays at 250%
Overtime
150% all overtime hours
Saturday ordinary hours at 115%
Saturday overtime at 150%
Sunday overtime at 200%
Public holidays at 200%
Shift work
Early morning (commences between
2.00am and 7.00am) 12.5%
Afternoon shift (finishes after
6.00pm and at or before midnight)
15%
Night shift (finishes after midnight
and at or before 8.30am) 30%
Shift work
Afternoon shift (commences after
1.30pm and before 11.00pm) 15%
Night shift (commences at or after
11.00pm and before 5.00am) 15%
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[111] In terms of remuneration for hours worked, there is a significant deficit under the
Agreement in respect to Saturday work and payment for hours beyond 10 per day. Saturday
work is a regular feature of work at the Angle Vale Road site, while extended shifts in excess
of 10 hours per day tend to be seasonal. The extent of these features in the roster pattern of
individual employees is variable, but the evidence indicates that Saturday work is a regular
feature of most rosters and employees understand that shifts may extend beyond 10 hours per
day to meet operational requirements.
[112] Ms Rault has four years of service and works on three days each week including every
second Saturday. She stated that she worked between 10 and 15 hours per day, but 15 hours
would not be a common shift length.53 She is engaged as a Grader. For the purposes of the
calculations below I have assumed that she is classified as Level 2(b) under the Agreement
and Grade 1 (after 12 months) under the Storage Services Award. I have also assumed that
she works 10 hours per day on 5 weekdays per fortnight and 10 hours on one Saturday per
fortnight, and that no hours are worked which would be classified as overtime or early
morning shift under the Storage Services Award. Ms Rault’s pattern of hours appears to be
fairly typical of the hours of work of graders.
Storage Services Award
5 days at 10 hours at $18.46 per hour = $923.00
1 day at 10 hours at $27.69 per hour (time and a half) = $276.90
Total = $1199.90
Agreement
5 days at 10 hours at $17.81 per hour = 890.50
1 day at 10 hours at $20.48 per hour (115%) = 204.80
Total = 1095.30
[113] Ms Sykes is engaged in a Quality Control position and has six years’ service with the
employer. She is classified as Level 5(b) under the Agreement and works 4 days per week on
a two-weekly rotating roster, including a Saturday every second week. She said that she
averages 35 to 40 hours per week, and on her last rostered Saturday shift she worked
10 hours.54 For the purposes of the calculations I have assumed that Ms Sykes would be
classified as Storeworker Grade 4. The latter classification definition includes the
implementation of quality control techniques and procedures; and requires the ability to
supervise and provide direction to other employees, which is a feature of Ms Sykes’ work.55
I have assumed that her shifts are of 10 hours’ duration.
Storage Services Award
7 days at 10 hours at $19.74 per hour = $1381.80
1 day at 10 hours at $29.61 per hour (time and a half) = $296.10
Total = $1677.90
[2014] FWC 7682
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Agreement
7 days at 10 hours at $20.13 per hour = $1409.10
1 day at 10 hours at $23.15 (115%) = $231.50
Total = $1640.60
Other provisions
[114] Under clause 11.3 of the Storage Services Award, part time employees have agreed
hours of work and are entitled to overtime for hours in excess of the agreed hours. The
Agreement defines a part time employee as one who is engaged to work an average of fewer
than 38 hours per week. Rosters are posted seven days in advance and start times may vary
(clause 15.3). The evidence indicates that the finishing time for a shift is variable depending
on operational requirements, which are not known in advance.56
[115] No minimum engagement periods are specified within the Agreement for the different
categories of employee, while the Storage Services Award specifies a minimum engagement
of 3 hours for part time employees and 4 hours for casual employees. There is no reliable
evidence on the minimum engagement currently applied or proposed to be applied under the
Agreement if approved.
[116] The circumstances under which a meal allowance is payable are more restrictive under
the Agreement compared to the Storage Services Award and the quantum of the meal
allowance is lower under the Agreement ($15.43 compared to $11.33).
More beneficial provisions
[117] In addition to the more beneficial wage rates for certain classifications of employee
(see earlier discussion), the Agreement provides for increases equivalent to that awarded in
the Annual Wage Reviews effective 1 July 2015, 1 July 2016 and 1 July 2017 plus a further
0.5% on each of these dates. (Clause 18.2)
[118] The following additional provisions of the Agreement are more beneficial than the
Storage Services Award:
• Team Leader Allowance (Clause 19.1): This provision provides for an allowance to be
paid to Team Leaders based on the number of employees they are in charge of, as set
out below. There is no equivalent provision in the Storage Services Award. There is
no classification of Team Leader identified by the employer in the list of positions
provided by Ms Hentschke and as set out in paragraph [18] of this decision. Mr Seidl
variously referred to his position as Team Leader and Supervisor. There is no evidence
that Level 5 Supervisors receive the team leader allowance:
In Charge of % of the standard rate57 pw
2-6 employees 115%
7-10 employees 134%
11-20 employees 191%
More than 20 employees 240%
[2014] FWC 7682
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• If an employee is instructed to work through their meal break he/she is entitled to
overtime at double time until such time as the meal break is taken (clause 26.2).
No equivalent provision exists in the Storage Services Award.
• The Agreement provides for a wet work allowance at 10% of the standard rate for
each hour that wet work is performed, unless the employee is provided with adequate
protection by the employer (clause 19.2.1). No equivalent provision exists in the
Storage Services Award.
• Higher duties are paid for the entire shift if the employee performs the higher level
work for more than 2 hours (clause 22.1). The Storage Services Award has a threshold
of 3 hours before the entire shift is paid at the higher rate (clause 19.1).
Conclusion on BOOT
[119] The calculations set out earlier are conservative in nature. No hours that would attract
overtime under the Storage Services Award have been assumed, even though the evidence
indicates that such hours would be worked from time to time. I have not attempted to
calculate the impact of loss of overtime for part time employees, which is payable under the
Storage Services Award in circumstances where hours of work exceed those agreed between
the employee and employer. In this regard the evidence indicates that finishing times and
daily hours of part time employees working at the Angle Vale Road site are not known in
advance and are variable. Similarly I have not taken into account the application of the 12.5%
early morning shift penalty applicable under the Storage Services Award for work
commencing before 6.00am.
[120] I have concluded that the deficit in certain wages under the Agreement is not
compensated for by the more beneficial terms of the Agreement. The working patterns
underpinning the calculations set out above are typical of those worked by employees in the
lower classifications, with the clear majority of employees engaged on part time contracts of
employment. As the lower classifications are the most populated, the deficit in wages,
including the reduced Saturday penalty payment, is significant for many employees.
I determine that the Agreement does not pass the BOOT and as such the requirement for
approval as set out in s.186(2)(d) of the Act has not been met.
[121] In these circumstances the Commission is required, in accordance with s.190 of the
Act, to give the employer an opportunity to provide a written undertaking aimed at meeting
the Commission’s concern. Any undertaking is required to comply with s.190(3)(a) and (b) of
the Act: that it not cause financial detriment to any employee and does not result in substantial
changes to the Agreement. The views of the bargaining representatives must be taken into
account. Directions to progress this matter are attached to this decision.
[122] I am satisfied that, other than in respect to the BOOT, Agreement meets the statutory
requirements for approval.
DEPUTY PRESIDENT
COMMISSION WORK FAIR 0 1 Las Dary
[2014] FWC 7682
36
Appearances:
Mr A Portelli for the National Union of Workers
Ms K Rault on her own behalf
Mr B Duggan of counsel for Mitolo Group Pty Ltd
Hearing details:
2014.
Adelaide,
August 18, 19 and
September 3.
Final written submissions:
18 September 2014, National Union of Workers
25 September 2014, Ms S Sykes, Employee Representative in Reply
25 September 2014, Mitolo Group Pty Ltd in Reply
25 September 2014, Mitolo Group Ltd Ltd
2 October 2014, National Union of Workers in Reply
Printed by authority of the Commonwealth Government Printer
Price code G, PR557169
1 MA000028
2 MA000084
3 Ms Hentschke suggested that Maranello Farms Pty Ltd employees about 45 workers (at PN2292) while Mr Mitolo
estimated the number at approximately 80 (at PN 2458).
4 PN 2389-2398
5 Ex M3 at para 17
6 Ex NUW1 Attach DH 2 and DH 3.
7 There is some confusion in the evidence of the total number of employees in the seed shed. In her witness statement
Ms Hentshke referred to two permanent employees based there, with an additional staff member being sourced, and
Graders and Labourers “regularly scheduled” to work in the seed shed; Ex M3 at para 21
8 In accordance with Item 2(3) of Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act
2009.
9 Award Modernisation Statement (Stage 3 Awards) [2009] AIRCFB 100
10 Ex M3 at para 11(f) and 27; PN 2137.
11 Seidl PN 1611-1623; Sykes PN1737-46; Blythman PN 1891-99; Checker PN 1954-64.
12 Ex M3 at paras 17(a), 21 and 29(a)
13 PN 1648-1652.
14 PN 1636-1640.
15 [2013] FWC 8865
16 Outline of Argument of Kay Rault, filed 6 August 2014.
[2014] FWC 7682
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17 Ex KR 1 attachment KR 2
18 Ms Rault was asked to comment on a number of photographs of various locations within the Angle Vale Road site and
shown videos of certain work undertaken; Ex M1 and M2.
19 PN 501-503
20 PN 644; PN 672; PN 680
21 PN 1589
22 PN 1710-1722. The working patterns of employees are discussed in more detail later in the decision.
23 PN 1778-1784
24 PN 1948-49; PN 1977-1979
25 PN 1880-84; PN 1888
26 Submissions of Mitolo Group Pty Ltd, filed 25 September 2014; Ex M3 and Ex M4
27 Ibid, at paras 11 and 12
28 Ibid, at para 51
29 Kyndalyn Park and the AWU Enterprise Agreement 2013, [2013] FWCA 8424; Horticultural Division Enterprise
Agreement 2013, [2014] FWCA 1282 at clause 6.1; Mildura Fruit Company Enterprise Agreement [2011] FWAA 2024,
respectively
30 Print I.54/1997, McCusker J
31 An award of the Industrial Relations Commission of South Australia
32 Ex M7 attachment FM1. In answer to a question from the Commission, Mr Mitolo confirmed that the Angle Vale Road
operations today are essentially the same as in 1997, save that there may be some different machines, at PN2412.
33 Supra, at p 9.
34 Employer’s Closing Outline, filed 25 September 2014, at para 37.
35 At p 11
36 Print I.34/1998, McCusker J
37 Print S5823, 10 May 2000.
38 [2013] FWCFB 2894
39 This was the approach adopted by the Full Bench in Coffey.
40 [2010] FWA 8228
41 Dyno Nobel Asia Pacific, PR956868, 14.7.05, Lawler VP, Hamberger SDP, Lewin C; at para 28
42 Sections 193(1) and 193(6) of the Act
43 This was despite a request by the Commission that the BOOT analysis be undertaken against both modern awards, at PN
1441-1453.
44 The rates of pay
45 See data in paragraph [18].
46 Clauses 22.1(c); 22.1(d); 22.2(b) of the Storage Services Award
47 [2012] FWAFB 6397
48 Clause 36.2
49 Ibid, at [24]
50 Ibid, at [25] and [26]
51 [2014] FWC 769 at [54]
52 Conservative in the sense that the best case scenario for the employer has been utilised
53 PN 326- 418
54 PN 1710-1849
55 Schedule B, B.4.2(a) and (d) and PN1725.
56 At PN323.
57 Defined as the rate for classification Level 2(a) of the Agreement
