1
Fair Work Act 2009
s.604 - Appeal of decisions
Appeal by Shop, Distributive and Allied Employees Association
(C2019/5635)
Appeal by Kmart Australia Limited t/a Kmart
(C2019/5636)
Appeal by The Australian Workers’ Union
(C2019/5771)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT MASSON
COMMISSIONER JOHNS SYDNEY, 11 NOVEMBER 2019
Appeals against decision [2019] FWC 6105 of Deputy President Mansini at Melbourne on 2
September 2019 in matter number AG2018/6995.
Introduction
[1] The Shop, Distributive and Allied Employees’ Association (SDAEA), Kmart Australia
Limited (Kmart) and the Australian Workers’ Union (AWU) have lodged appeals, for which
permission to appeal is required, against a decision made by Deputy President Mansini on 2
September 20191 (Decision) to dismiss Kmart’s application for approval of the Kmart
Australia Ltd Agreement 2018 (Agreement). The SDAEA and the AWU were union
bargaining representatives in the process of negotiating and making the Agreement, and
supported Kmart’s application for approval of the Agreement. The only person which
opposed the approval of the Agreement was the Retail and Fast Food Workers Union
Incorporated (RFFWUI), which acted as a bargaining representative for two employees out of
a total workforce covered by the Agreement of over 32,000.
[2] The Deputy President dismissed the application on the basis that she was not satisfied
that the Agreement was genuinely agreed to by the employees covered by the Agreement, as
required by s 186(2)(a) of the Fair Work Act 2009 (FW Act), because she was not satisfied
that the Agreement was “made” in accordance with s 182(1) on the basis of a finding that
Kmart did not request employees to vote who were employed at the time of the voting process
and would be covered by the Agreement.2 Kmart, the SDAEA and the AWU all contend in
their appeals that this conclusion was in error. Only the RFFWUI opposes the appeals,
notwithstanding that it never raised this issue in the proceedings before the Deputy President.
1 [2019] FWC 6105
2 Ibid at [75]
[2019] FWCFB 7599
DECISION
E AUSTRALIA FairWork Commission
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Legislative framework
[3] An enterprise agreement requires approval by the Commission in order to have legal
effect under the FW Act. Section 186(1) of the FW Act establishes a “basic rule” that, where
an application for approval of an enterprise agreement has been made, the Commission must
approve the agreement if the requirements set out in ss 186 and 187 are met. One of those
approval requirements, set out in s 186(2)(a) and applicable only to non-greenfields
agreements, is that the Commission must be satisfied that the agreement has been “genuinely
agreed to” by the employees covered by the agreement. Section 188 defines when employees
may be considered to have genuinely agreed to an enterprise agreement as follows:
188 When employees have genuinely agreed to an enterprise agreement
(1) An enterprise agreement has been genuinely agreed to by the employees covered
by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement
complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval
steps);
(ii) subsection 181(2) (which requires that employees not be requested
to approve an enterprise agreement until 21 days after the last notice of
employee representational rights is given); and
(b) the agreement was made in accordance with whichever of
subsection 182(1) or (2) applies (those subsections deal with the making of
different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has
not been genuinely agreed to by the employees.
(2) An enterprise agreement has also been genuinely agreed to by the employees
covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning
of subsection (1) but for minor procedural or technical errors made in relation
to the requirements mentioned in paragraph (1)(a) or (b), or the requirements
of sections 173 and 174 relating to a notice of employee representational
rights; and
(b) the employees covered by the agreement were not likely to have been
disadvantaged by the errors, in relation to the requirements mentioned in
paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
[4] Section 188(1)(a)(i) establishes as an element of the genuine agreement requirement
the necessity of compliance (subject to s 188(2)) with the “pre-approval steps” specified in s
180(2), (3) and (5). Section 180 relevantly provides as follows:
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180 Employees must be given a copy of a proposed enterprise agreement etc.
Pre-approval requirements
(1) Before an employer requests under subsection 181(1) that employees approve a
proposed enterprise agreement by voting for the agreement, the employer must comply
with the requirements set out in this section.
Employees must be given copy of the agreement etc.
(2) The employer must take all reasonable steps to ensure that:
(a) during the access period for the agreement, the employees (the relevant
employees) employed at the time who will be covered by the agreement are
given a copy of the following materials:
(i) the written text of the agreement;
(ii) any other material incorporated by reference in the agreement; or
(b) the relevant employees have access, throughout the access period for the
agreement, to a copy of those materials.
(3) The employer must take all reasonable steps to notify the relevant employees of
the following by the start of the access period for the agreement:
(a) the time and place at which the vote will occur;
(b) the voting method that will be used.
(4) The access period for a proposed enterprise agreement is the 7-day period ending
immediately before the start of the voting process referred to in subsection 181(1).
. . .
Terms of the agreement must be explained to employees etc.
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to
the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account
the particular circumstances and needs of the relevant employees.
. . .
[5] Section 181, which is referred to in s 180(1) and (4), provides:
181 Employers may request employees to approve a proposed enterprise
agreement
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(1) An employer that will be covered by a proposed enterprise agreement may request
the employees employed at the time who will be covered by the agreement to approve
the agreement by voting for it.
(2) The request must not be made until at least 21 days after the day on which the last
notice under subsection 173(1) (which deals with giving notice of employee
representational rights) in relation to the agreement is given.
(3) Without limiting subsection (1), the employer may request that the employees vote
by ballot or by an electronic method.
[6] Section 182(1) and (2), which are referenced in s 188(1)(b), provide:
182 When an enterprise agreement is made
Single-enterprise agreement that is not a greenfields agreement
(1) If the employees of the employer, or each employer, that will be covered by a
proposed single-enterprise agreement that is not a greenfields agreement have been
asked to approve the agreement under subsection 181(1), the agreement is made when
a majority of those employees who cast a valid vote approve the agreement.
(2) If:
(a) a proposed enterprise agreement is a multi-enterprise agreement; and
(b) the employees of each of the employers that will be covered by the
agreement have been asked to approve the agreement under subsection 181(1);
and
(c) those employees have voted on whether or not to approve the agreement;
and
(d) a majority of the employees of at least one of those employers who cast a
valid vote have approved the agreement;
the agreement is made immediately after the end of the voting process referred to
in subsection 181(1).
[7] As noted below, the RFFWUI made reference in its submissions to s 172(2)(a), which
provides:
Single-enterprise agreements
(2) An employer, or 2 or more employers that are single interest employers, may
make an enterprise agreement (a single-enterprise agreement):
(a) with the employees who are employed at the time the agreement
is made and who will be covered by the agreement; or …
. . .
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The Decision
[8] Relevant to the appeals before us, the Deputy President in the Decision gave
consideration to the question framed by her as: “Did Kmart request the employees employed
at the time, who would be covered by the Agreement, to vote?”3 The chronology upon which
this consideration proceeded, as identified in the Form F17 statutory declaration of Suzanne
White, Kmart’s Employee Relations Manager, which accompanied Kmart’s application for
approval of the Agreement, was as follows:
the last Notice of Employee Representational Rights was issued pursuant to s 173 on 7
September 2017;
employees were advised of the time, place and method of the voting process for the
Agreement pursuant to s 180(3) on 12 November 2018; and
the electronic voting process that was used commenced on 21 November 2018 (being
the first date upon which an employee could cast a vote) and concluded on 30
November 2018 (being the last date on which a vote could be cast).
[9] The outcome of the voting approval process, as stated in Ms White’s statutory
declaration, was that there were 32,039 employees entitled to participate in the voting process,
23,110 had cast a valid vote, and 21,191 voted to approve the Agreement. Of the “voting
cohort” of 32,039 employees, 21,881 were casual employees.4
[10] In a way which is critical to the appeals, the Deputy President commenced her
consideration of the question she had identified by construing the relevant provisions of the
FW Act as follows:
“[50] As summarised above, for the purposes of s.188(1)(b), the requirement at
s.182(1) will be met if the cohort of employees asked to vote are the employees who
were employed at the statutorily designated time and who fall within the coverage,
however described, of the Agreement. These are questions of fact to be determined by
reference to the evidence.
[51] ‘The time’ in this context means the period during which the employees were
requested to vote to approve the Agreement. Whether it also includes the 7 (clear) day
statutory access period occurring immediately prior to the vote may not be
conclusively resolved but makes no difference to the outcome in this
case. Accordingly, in the present case, I have taken both periods into account such that
the designated time is the period from 12.00am on 14 November 2018 to 11.59pm on
30 November 2018.”
[11] It is apparent from the above passage that the Deputy President considered that, for the
purposes of s 181(1), the “time” of the “request… to approve the agreement by voting for it”
encompassed the period from the opening to the closing of the electronic voting process (21-
3 Ibid at [50]
4 Ibid at [15]-[16]
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30 November 2018 inclusive) as well as, perhaps, the seven-day access period immediately
prior to this (14-20 November 2018 inclusive).
[12] The Deputy President then dealt with the issue raised by the RFFWUI concerning the
voting process, namely that Kmart had allowed to participate in the voting process casual
employees who were not employed at the relevant time. This issue arises because Kmart
treated as “employees employed at the time” any casual employees “on its books” who had
worked even one shift in the three months prior to the access period,5 as well as 443 former
terminated employees.6 The Deputy President’s conclusion on this issue was as follows:
“[63] Having regard to the above, it is apparent that Kmart cast the net too wide such
that it requested employees to vote who were not eligible within the scope of
ss.188(1)(b), 182(1) and 181(1). However this is not necessarily fatal to the success of
the application in circumstances where it is established that a valid majority of those
who were entitled to vote and did vote approved the agreement despite the error.
[64] In this respect, I accept the evidence derived from Kmart’s payroll system that of
its Voting Cohort 22,587 casuals was [sic] employed at the time because they worked
in either the voting period or the access period between 14 to 30 November 2018.
[65] As the data at Attachment 3 shows, even deducting the ineligible broader pool
from Kmart’s Voting Cohort and assuming all ineligible persons voted and voted yes
to approve the Agreement, the Agreement was approved by a majority.”
[13] The Deputy President next considered whether Kmart had excluded from the voting
process employees who were in fact employed at the relevant time. This consideration
proceeded upon the following facts which were described by the Deputy President as follows
(footnotes omitted):
“[66] Ms White expressly declared the issue as follows:
“The Cohort included new hires, hired during the access period and any new
hires engaged before the CorpVote cut-off date to update the Voter Roll at the
end of 28 November 2018. No further updates were made to the Voter
Roll due to the practicalities of the CorpVote system.” (emphasis added)
[67] It is plain from this statement that a deliberate decision was taken by Kmart to
stop updating the Voter Roll from which its agent, CorpVote, was requesting
employees to vote before the end of the voting period.
[68] This admission is significant given that Ms White also declared her understanding
that the voting cohort should be regarded as including employees employed during the
access period and recruited during the voting period and who would be covered by the
Agreement. To the extent of any generic references in the materials that may appear
inconsistent, I consider the evidence of the cut-off date is specific and consistent with
the objective documentary evidence.
5 Ibid at [55]
6 Ibid at [62]
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[69] The time of the cut-off on 28 November 2018 and the number of employees
engaged after this cut-off date is not before the Commission. The evidence before the
Commission confirms the total number in the Voting Cohort as 32,039. That number
is consistent with the declaration of ballot results, and also Ms White’s declaration of
the number in the final Voter Roll provided to CorpVote on 28 November 2018 said to
include new hires and terminations “between 21 November and 28 November 2018”.
[70] On the evidence, it is therefore apparent that the 32,039 employees in the Voting
Cohort does not include employees who were engaged and worked on at least the last
two days of the voting period (that is, at least 29 and 30 November 2018 and perhaps
also all or part of 28 November 2018).
[71] A number of factors point to the likelihood that this category includes a number
of employees, including: the evidence before the Commission that employees are
engaged and requested to complete paid induction training, from home or in store,
within 24 hours of signing their contract of employment; the data which shows an
increasing workforce in the days leading up to the vote; and Ms White’s evidence of
the difficulty in providing precise data on any given day due to sheer volume of
recruitments and terminations. Accordingly, it is conceivable that there are a number
of employees who worked during the voting period (at least on 29 and 30 November
2018) but who were not requested to vote.”
[14] On the basis of the above facts the Deputy President concluded that “Kmart did not
request employees to vote who were employed at the time of the voting period and would be
covered by the Agreement”.7 The Deputy President regarded this a something which the FW
Act did not contemplate occurring,8 and concluded:
“[75] In the circumstances, and on the evidence that is before the Commission, I
consider that the decision to exclude employees employed at the time and would be
covered by the Agreement means that I am not able to be satisfied that the Agreement
was genuinely agreed to by the employees covered by the Agreement (s.186(2)(a))
because I am not satisfied the Agreement was made in accordance with s.182(1) and
as required by s.188(1)(b).
[76] To the extent that this is, at least theoretically, a concern about which an
undertaking may be accepted under s.190 I note that Kmart was afforded every
opportunity but instead requested that the Commission exercise its discretion to
determine the application on the materials that are before it. In any event, it is difficult
to imagine how an undertaking could be framed or crafted as to appropriately satisfy
the Commission having regard to the nature of the concern.
[77] In the alternative, for the foregoing reasons, there may be a question as to whether
the Agreement was “made” in accordance with the Act at all.”
[15] The Deputy President then considered whether the requirement for genuine agreement
could be satisfied by reference to s 188(2), notwithstanding the finding that there had been
7 Ibid at [74](c)
8 Ibid at [72]
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non-compliance with s 182(1).9 The Deputy President concluded that what had been found to
have occurred was not an “error” because Kmart had made a “conscious decision not to
comply”,10 nor was it “minor” given the underlying purpose and nature of the requirement
which had not been complied with.11
[16] The Deputy President went on to make findings as to the whether the other approval
requirements were satisfied. It is not necessary to detail these at this stage, since they are not
relevant to the appeals proper, except to say that the Deputy President found that the other
requirements were either satisfied or were capable of being dealt with by way of undertakings.
We will need to return to those other findings in due course, for reasons which will become
apparent. The Deputy President’s overall conclusion was that the Agreement “must not be
approved” because she was not satisfied that the Agreement was genuinely agreed because of
the exclusion of eligible employees from the voting cohort which had been found to have
occurred.12
Submissions and evidence
[17] The grounds of the appeals of the SDAEA, Kmart and the AWU were, in substance if
not in expression, largely the same. Likewise they covered the same ground, or adopted each
other’s positions, in their written and oral appeal submissions. Therefore it is convenient to
summarise their submissions jointly as follows:
the Deputy President erred in failing to be satisfied that that the Agreement was
genuinely agreed to on the basis of a finding that Kmart did not request employees
who were employed only on 29 and 30 November 2018, and perhaps 28 October
2018, to vote to approve the Agreement;
this error was the consequence of the Deputy President misconstruing s 181(1) as
requiring that employees who were employed after the commencement of the voting
process and prior to its conclusion were to be the subject of an employer request under
that provision;
the request contemplated by s 181(1) is to be directed only to those employees
employed at the time of the request;
the request is a single event which occurs at or prior to the commencement of the
voting process, and the time of the request does not extend to any period after the
commencement of the voting process;
in any event, the number of employees who cast a vote in favour of the Agreement
was on any view sufficient to constitute a valid majority for the purposes of s 182(1),
so that the votes of any excluded employees could not have affected the outcome;
9 Ibid at [78]-[86]
10 Ibid at [83]
11 Ibid at [84]
12 Ibid at [144]-[145]
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the appellants were denied procedural fairness in that the Deputy President did not at
any stage of the proceedings identify the concern which caused her to dismiss the
application;
if the Deputy President had identified her concern, the parties would have been in a
position to address her as to the proper construction of s 181(1) and, further, Kmart
would have been in a position to adduce evidence demonstrating that no employee had
in fact been excluded from the voting process even on the basis of the Deputy
President’s preferred construction of s 181(1);
alternatively, the Deputy President erred in finding that the exclusion of any
employees employed on 28-30 November 2018 was not a minor error for the purpose
of s 188(2) such as to preclude a finding that the Agreement was genuinely agreed to
in accordance with that provision.
[18] Kmart sought leave to tender in the appeal a statutory declaration made by Ms White
dated 8 October 2019. We determined to admit the declaration, over the objection of the
RFFWUI, because we considered (as briefly discussed later) that Kmart was denied the
opportunity to adduce this evidence in the proceedings before the Deputy President and
because it addresses the issue which caused the Deputy President to dismiss Kmart’s
application for the approval of the Agreement. Ms White’s evidence was, in summary, that
she had caused the preparation of a report concerning those employees, if any, who were hired
in the period 28-30 November 2018 and, if they were hired in that period, each employee’s
status, the date they worked their first shift, and the date they completed paid online training
for new hires. The report showed that:
a total of 92 persons were hired in the period: 22 on 28 November 2018, 56 on 29
November 2018, and 14 on 30 November 2018;
all of the 92 were engaged on a casual basis;
none of the 92 worked any shift in the period 28-30 November 2018; and
none of the 92 completed online training modules in the period 28-30 November 2018.
[19] In relation to the last of the points above, senior counsel for Kmart confirmed that in
fact no paid training was undertaken on the days in question, and that Ms White could be
called to give that evidence if necessary. The RFFWUI declined the opportunity to cross-
examine Ms White on her evidence. In the circumstances, we accepted the statement made by
senior counsel as one upon which we could rely.
[20] The RFFWUI submitted that:
the evidence of Ms White ought not be accepted;
the expression “employed at the time” in s 181(1) means employees employed at the
time of the request as well as the employees employed at the time of the making of the
agreement, which are the same group;
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the request referred to in s 181(1) is not a single act occurring at a single point in time;
s 172(2) permits a single-enterprise agreement to be made with the employees who are
employed at the time the agreement is made, which occurs under s 182(2) after the end
of the voting process;
it is therefore clear that the request is made to those employees who make the
agreement, and where the voting process is open for a number of days as here, the
request is maintained during the voting process up until the end;
the Deputy President was accordingly correct in determining that the Agreement was
not made in accordance with s 182(1);
where an agreement is not made in accordance with s 182(1), the application for its
approval becomes otiose, and the issue of the materiality of the excluded votes is not
relevant;
the Deputy President was correct to determine that the deliberate exclusion of
employees from the voting process did not constitute a minor error for the purpose of s
188(2); and
there should be no entertainment of the appeal ground relating to procedural fairness
in circumstances where Kmart continually urged for an urgent decision to be made on
the papers.
Consideration
Permission to appeal
[21] We consider that the grant of permission to appeal in respect of each of the appeals
would be in the public interest for two reasons: first, the appeals raise an important question
concerning the construction of s 181(1) of the FW Act and, second, the decision not to
approve the Agreement directly affects the employment entitlements of a large number of
employees of a major employer in the retail sector. Accordingly, permission to appeal must be
granted in accordance with s 604(2) of the FW Act.
Construction of s 181(1)
[22] As we have earlier set out, the Deputy President’s decision to dismiss the application
for approval of the Agreement was founded on a construction of s 181(1) of the FW Act
whereby “the time” referred to in the provision is to be read as meaning “the period during
which the employees were requested to vote to approve the Agreement”13 (emphasis added).
The period referred to was understood by the Deputy President to be constituted by, or
including (together with the access period) the period from the commencement to the
conclusion of the voting process, which in this case was the ten-day period of 21 to 30
November 2018 inclusive. It was on the basis of this construction that the Deputy President
found that Kmart’s exclusion from the voting process of employees who were engaged and
worked on 29 and 30 November 2018, and perhaps 28 November 2018 as well, meant that the
13 Ibid at [51]
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Agreement had not been “made” in accordance with s 182(1). The principal question raised
by the appeals is whether that construction is correct.
[23] Divisions 3 and 4 of Pt 2-4 of the FW Act contain a scheme of provisions concerning
bargaining for, making and applying for approval of enterprise agreements. That scheme
contains a series of time requirements concerning the taking of various steps required as part
of the agreement-making process. The basic chronology established by the scheme was
summarised by Jessup J (with whom White J agreed) in National Tertiary Education Industry
Union v Swinburne University of Technology14 (Swinburne) as follows:
“[22] Putting these provisions together in the chronological order which is implied by
their terms, the following is the scheme contemplated. First, the employer agrees to
bargain or initiates bargaining. Secondly, there is then a period of 14 days during
which the employer gives the representational rights notices to the employees who
were employed when the employer agreed to bargain. Thirdly, bargaining takes place.
Although that process is not directly relevant to the subject here being considered, it
should be noted that at least 21 days must pass after the giving of the last
representational rights notification and the employer’s request under s 181(1). But
there appears to be no outer limit to that period. Fourthly, the employer gives a copy of
the agreement upon which it is proposed that the employees should vote, and other
required materials, to the employees employed at that time. Fifthly, no more than
seven days later, the employer requests the employees who are employed at that time
to approve the agreement by voting for it. Sixthly, when a majority of those employees
who cast a valid vote approve the agreement, the agreement is made.”
[24] It is apparent from the text of s 182(1) that, in respect of single-enterprise non-
greenfields agreements, the making of a request by the employer for relevant employees to
approve an agreement by voting for it under - that is, in accordance with - s 181(1) is a
necessary precondition for the making of the agreement. What constitutes the necessary
“request” for the purpose of s 181 is a little obscure. There is no definition of the term in the
FW Act or the specification of any criteria by which it can directly be assessed when the
request has been made. However there are a number of textual indicators concerning when the
necessary “request” is presumed by the legislation to have occurred.
[25] First, s 180(1) provides that the requirements set out in s 180 (including those
specified by s 180(2), (3) and (5)) must be complied with before the request is made under s
181(1). Because the requirement in s 180(2) pertains during the access period, that implies
that the request must occur at or not before the end of the access period. Section 180(4)
provides that the access period ends immediately before the start of the voting process
referred to in s 181(1), which was interpreted in the Full Bench decision in CFMMEU v CBI
Constructors Pty Ltd15 to mean the end of the calendar day immediately preceding the day on
which the voting process for a proposed agreement commences.
[26] Second, because the requirement in s 180(3) to take all reasonable steps to notify
relevant employees of the time, place and method of the vote must occur by the start of the
access period, and must by virtue of s 180(1) be complied with before the request under s
14 [2015] FCAFC 98, 232 FCR 246
15 [2018] FWCFB 2732
12
181(1), it is clear that this notification does not itself constitute the request but is a separate
and anterior step.
[27] Third, the request that s 181(1) refers to is for relevant employees “to approve the
agreement by voting for it”. In ordinary parlance, a request for something to be done
necessarily precedes the doing of the thing (or the opportunity to do the thing). Therefore, on
an ordinary reading of s 181(1), the contemplated request must precede the voting process in
which relevant employees may comply with the request and vote to approve the agreement, or
not.
[28] Fourth, s 181(2) refers to a request not being “made” until at least 21 days after the last
notice of employee representational rights is given. The word “made”, read in its immediate
context, suggests a single event that may readily be fixed in time for the purpose of the
operation of the 21-day requirement. This receives some confirmation in the Explanatory
Memorandum for the Fair Work Bill 2009, which states (at paragraph 737, emphasis added):
“The access period can run concurrently with the 21-day period referred to in subclause
181(2), so that the shortest period between the day on which an employer gives the
last notice of employee representational rights to its employees and the day that the
employer requests the employees to vote on the agreement is 21 days.”
[29] The reference to “the day” on which the request tends to support the proposition that
the request under s 181(1) is a single event which occurs at a particular point in time.
[30] Fifth, s 181(3) contemplates that the request may encompass the specification of the
method by which the employees are to vote to approve an agreement. This provision presents
some difficulty, in that compliance with s 180(3)(b) requires the employer to have already
identified the voting method before the request is made. However it can at least be said,
reading s 181(3) in a common-sense way, that a request which specifies the voting method
must necessarily precede the voting process in which that voting method is used. The
provision would be nonsensical otherwise.
[31] The above considerations lead us to conclude that the “request” contemplated by s
181(1) is a single act or event which occurs at the end of the access period and immediately
prior to (or perhaps upon) the commencement of the voting process. This is consistent with
the conclusion of Jessup J in Swinburne that the end of the access period “…presumably is the
point in time at which the employer makes the request…” and that the access period is “at its
later boundary, contiguous with the time of the request under s 181”.16 It is also consistent
with the tentative view expressed by the Full Bench in CFMMEU v CBI Constructors Pty
Ltd17 that the “request” aligns with the commencement of the voting process:
“[26] …Section 181(1) only refers to a “request” by the employer that relevant
employees vote to approve the agreement, without saying anything about the nature of
the voting process. This suggests that the voting process starts when the
employer requests that it take place. However what in practical terms constitutes such
a request is obscure, although presumably a request is implicit when the employer
16 [2015] FCAFC 98, 232 FCR 246 at [21] and [25] respectively.
17 [2018] FWCFB 2732
13
begins the conduct of a voting process intended to seek approval of a proposed
agreement that had earlier been notified pursuant to s 180(3).”
[32] Section 181(1) refers to the “request” being directed at employees employed “at the
time” who will be covered by the agreement. On an ordinary reading of the text, the “time”
being referred to is the time of the request, and no party in the appeal contended otherwise.
This was also the conclusion reached by Jessup J in Swinburne: “Those to whom a request
under s 181(1) should be addressed are confined, in my view, to those who are employed at
that time”.18 This must at least encompasses the precise time at which the request is made,
which as earlier stated is to be located at the end of the access period and immediately before
or at the commencement of the voting process. However in ordinary usage the phrase “at the
time” may, depending on the context, also encompass a broader period in which a relevant
event is located. In Swinburne, Jessup J expressed the following view:
“[25] It is not necessary to consider whether employees to whom a copy of the proposed
agreement was given under s 180 should, or may, be included within the requested
group under s 181. The present case does not depend on such fine distinctions.
However, and although the question was not argued, I would be disposed to the view
that the “time” referred to in s 180(2)(a) is the whole of the “access period”. Since that
period is, at its later boundary, contiguous with the time of the request under s 181, the
better view may be that such employees should be so included.”
[33] We would likewise prefer an approach whereby the “time” of the request referred to in
s 181(1) encompasses the whole of the access period and is to be equated to the “time”
referred to in s 180(2)(a). As earlier stated, s 180(1) obliges the employer to comply with the
requirements set out in the section, and the evident policy purpose of that obligation and the
specific requirements in s 180(2), (3) and (5) is to ensure that before a vote upon a proposed
agreement commences, the employer has taken all reasonable steps to ensure that employees
have access to a copy of the agreement, have had it explained to them, and have been
informed of the time, place and method of the vote. These steps may broadly be characterised
as directed at endeavouring to ensure that there is an “informed electorate” which is capable
of genuinely agreeing to a proposed enterprise agreement. That statutory purpose would
obviously be best achieved if those employees to whom a request may be directed under s
181(1) constitute the same group of employees in relation to whom the requirements of s
180(2), (3) and (5) apply. Conversely, the achievement of that purpose would be undermined
if employees to whom these requirements did not apply because they were not employed at
the time referred to in s 180(2)(a) could nonetheless be requested to vote to approve a
proposed agreement pursuant to s 181(1).
[34] It is evident that the requirements in s 180(2), (3) and (5) operate in respect of the
same cohort of employees. Section 180(2) establishes a defined term, “the relevant
employees”, in relation to whom the requirement in that provision operates, and the same term
is then used in respect of the requirements in s 180(3) and (5) despite the fact that the
requirements operate at different times. “Relevant employees” are (in s 180(2)(a)) “the
employees employed at the time who will be covered by the agreement”. This is the same
formulation as is used in s 181(1), albeit that the “time” referred to is “during the access
period”. In this connection, it is noteworthy that the Explanatory Memorandum says (at
paragraph 732):
18 [2015] FCAFC 98, 232 FCR 246 at [24]
14
“The relevant employees are the employees employed during the access period that will
covered by the agreement. This may include new employees that commence
employment during that period.”
[35] In relation to the obligation to provide access to the proposed agreement, the
Explanatory Memorandum also states (at paragraph 740):
“There may also be situations where an employee commences employment or
returns to work during the access period. For example, a new employee may
commence employment during the access period or an existing employee who was
leave, such as maternity leave, may return to work during the access period. In
situations such as these, the employer must take all reasonable steps to ensure that the
employee is given a copy of the agreement and other materials on the day the
employee commences employment or returns to work. FWA will consider whether
the employer took all reasonable steps to ensure that relevant employees were given
access to the agreement during the access period in deciding whether to approve the
agreement.”
[36] The above passages indicate an express acknowledgement that the constitution of the
workforce may change during the access period and an intention to accommodate this by
ensuring that new employees are included in the fixed cohort of employees to whom the s 180
requirements relate. It is also implicit that if new employees engaged during the access period
will form part of the fixed cohort of “relevant employees” for the purpose of the s 180
requirements, this cohort will not crystallise until the end of the access period. That is the
same time at which the employer may, pursuant to s 181(1), make a request that employees
employed at that time who will be covered by the agreement vote to approve it. This supports
the conclusion that the requirements in s 180(2), (3) and (5) and the request that may be made
pursuant to s 181(1) once these requirements have been complied with operate by reference to
the same cohort of employees.
[37] In the Decision, the Deputy President determined that those to whom a request might
be directed under s 181(1) includes employees first engaged in the period from the
commencement of the voting process until its end, and also casual employees who worked in
that period but who did not work during or at the end of the access period. The basis of that
approach is not identified in the Decision. It was not arrived at through any process of the
proper construction of s 181(1). The Deputy President made reference19 to Swinburne and to a
Full Bench decision which summarised the effect of Swinburne, CFMMEU v Noorton Pty Ltd
t/a Manly Fast Ferry,20 but neither of these decisions provides any support for the approach
taken by the Deputy President. It is, with respect, logically nonsensical that a request for
employees to vote to approve a proposed agreement remains operative on an ongoing basis
even after voting has already commenced and even, perhaps, after a majority have already
voted to approve the agreement and it has therefore been “made” in accordance with s 182(1).
Such an approach would defeat the purpose of s 180, since it would allow newly-engaged
employees to vote who had not been given access to the agreement or have it explained to
them. It would also give rise to the practical difficulty, where there is an extended voting
period, that an employer would have to continually add to the “roll” of voters and provide
19 [2019] FWC 6105 at [22]
20 [2018] FWCFB 7224 at [19], [23]
15
with a means of voting any new employees who are engaged up until the very end of the
voting process. That practical difficulty is amply illustrated in this case whereby Kmart,
which erroneously took the same approach as the Deputy President, attempted to add to the
voting cohort employees employed on or after 21 November 2018, but could not reach a
practical solution as to how employees employed on or after 28 November 2018 could be
added to the electronic voting system and therefore introduced an arbitrary cut-off date. We
consider it unlikely that the FW Act intended to establish a hitherto unknown and novel
process of voting whereby the “roll” of voters is not closed when voting commences, but may
be added to as voting continues.
[38] We note the references to s 172(2)(a) and s 182(2) in the submissions of the RFFWUI.
Section 172(2)(a) is not without difficulty, but it is best understood as doing no more than
identifying with whom an employer is taken to make a single-enterprise non-greenfields
agreement. It does not prescribe to whom a request under s 181(1) is to be directed. Section
182(2) is not relevant because it is concerned with multi-enterprise non-greenfields
agreements.
[39] We conclude therefore that the Deputy President adopted an incorrect construction of s
181(1) which caused her to erroneously dismiss the application for approval of the Agreement
on the basis that employees employed on 29 and 30 November 2018 and perhaps 28
November 2018 had been denied an opportunity to vote in contravention of the statutory
requirement. Such employees, if they were not employed by Kmart at the “time” referred to in
s 181(1) as we have earlier construed it, did not have any entitlement to participate in the
voting process.
[40] The conclusion we have reached makes it unnecessary to determine the other grounds
of appeal, including the grounds alleging a denial of procedural fairness. It is sufficient to say
that if the issue which caused the Deputy President to dismiss the application for approval of
the Agreement had been squarely identified as a matter of concern to Kmart, it would have
been in a position to adduce the evidence of Ms White which it adduced before us. As earlier
explained, that evidence demonstrates that no employee hired in the period 28-30 November
2018 worked any shift or undertook any paid induction training during that period. Even on
the Deputy President’s construction of s 181(1), which we have found to be in error, no
employee was denied the opportunity to vote on the basis surmised in paragraph [71] of the
Decision.
[41] For the reasons set out above, we uphold the appeals and quash the Decision.
Re-determination of the application for approval of the Agreement
[42] It is necessary; in light of the conclusion we have reached concerning the appeals, for
Kmart’s application for approval of the Agreement to be re-determined. We consider that the
most convenient course is for us to undertake this task ourselves. The issues associated with
the application were fully litigated before the Deputy President and in her Decision the
Deputy President expressed her views concerning all of the contested statutory approval
requirements notwithstanding the basis upon which she dismissed the application. That
enables us to deal with the approval requirements in an efficient manner and without further
delay.
Genuine agreement
16
[43] In relation to that element of the genuine agreement requirement in s 188(1)(b), there
remains an issue to be dealt with arising from the fact that Kmart erroneously included in the
voting cohort persons employed after the start of the voting process on 21 November 2018 up
to 28 November 2018 who had not been employed immediately before the commencement of
the voting process or during the access period. It is necessary to consider whether this error is
capable of affecting the conclusion that a majority of employees who were eligible to vote in
accordance with s 181(1), and who voted, cast a valid vote to approve the Agreement. The
reported outcome of the vote (in the Form F17 statutory declaration of Ms White) was that
23,110 employees voted, and 21,191 of those voted in favour of approval of the Agreement.
We were advised by senior counsel for Kmart, and we accept, that its records disclosed that
1,422 employees who were employed after the voting process commenced but had not been
employed at the time of the request/access period were included in the voting cohort. That
being the case, it is clear that Kmart’s error could not have affected the overall result and that
the Agreement was made in accordance with s 182(1).
[44] In relation to the other elements of the genuine agreement requirement set out in s
188(1) that were in contest, the Deputy President found that Kmart had:
taken all reasonable steps to give the notice of employee representation rights in
accordance with s 173(1);21
taken all reasonable steps to ensure employees were given or had access to
incorporated materials during the access period in accordance with s 180(2);22 and
appropriately explained the terms and effect of the Agreement to relevant
employees in accordance with s 180(5).23
[45] We agree with and adopt these findings. We are satisfied as to all the elements of
genuine agreement prescribed by s 188(1). Accordingly we are satisfied that the Agreement
was genuinely agreed to by the employees covered by it as required by s 186(2)(b).
Better off overall test
[46] The record of proceedings below show that a number of concerns in relation to
whether the Agreement passed the BOOT were raised with Kmart, and that in response Kmart
offered a number of undertakings to address these concerns. The Decision identifies the
concerns that were addressed by the undertakings as follows:
“[141] In addition to the less beneficial terms details above, Kmart’s Proposed
Undertakings have been offered to address 10 less beneficial terms identified in the
Agreement regarding:
a) Definition of the adult rate of pay;
b) Payment of wages on termination;
21 Ibid at [89]-[98]
22 Ibid at [99]-[103]
23 Ibid at [104]-[107]
17
c) First aid allowance;
d) Uniform allowance;
e) Overtime rates of pay – day work team members;
f) Public holidays;
g) Requests for flexible work;
h) Day work and night work shift changes;
i) Union matters (right of entry);
j) Rates of pay as at the test time.
[47] The undertakings that were offered are set out in Attachment 5 to the Decision, and
need not be reproduced here. The Decision records that the SDAEA and the AWU supported
acceptance of the undertakings, but that the RFFWUI opposed them (for reasons not
identified in the Decision).
[48] We agree with and adopt the conclusion that the presence in the Agreement of the less
beneficial terms identified in the passage from the Decision above gives rise to a concern that
the Agreement does not pass the BOOT approval requirement in s 182(2)(d). Our provisional
view is that the undertakings offered address the concern insofar as these terms are concerned
and are not likely to cause financial detriment to any employee covered by the Agreement or
result in substantial changes to the Agreement. Although the bargaining representatives for
the Agreement (the SDAEA, the AWU and the RFFWUI) have already responded to these
undertakings as recorded in the Decision, for more abundant caution we will provide them
with a further opportunity to express their views concerning the undertakings to ensure that
the requirement in s 190(4) is satisfied.
[49] Additional to these matters, the Deputy President identified two other provisions in the
Agreement which she characterised as less beneficial terms which were not addressed by the
undertakings and which caused her to maintain a concern in respect of satisfaction of the
BOOT. The first was clause 7.8 of the Agreement, which concerns superannuation.
Relevantly it provides:
7.8 Superannuation
7.8.1 Kmart shall be a participating employer of the Retail Employees
Superannuation Trust (REST) and shall participate in accordance
with the Fund Trust Deed.
7.8.2 Kmart shall contribute monthly to REST on behalf of each eligible
team member the required level of superannuation contribution by
low.
7.8.3 At the commencement of this Agreement the required contribution
by low is 9.5% of ordinary time earnings. Ordinary time earnings
shall be calculated in accordance with subsection 6(1) of the
Superannuation Guarantee (Administration) Act 1992.
. . .
7.8.7 If, during the life of this Agreement, Kmart becomes obligated by law
to provide choice of fund for the team members to whom this
Agreement applies, Kmart shall make contributions on behalf of any
team member who nominates an alternate fund to the fund so
18
nominated in accordance with this clause. REST shall remain the
default fund for the purposes of this clause. Where a team member
nominates an alternative fund, references to REST in this clause, shall
in that event be read as the alternate fund so nominated.
[50] It may be noted that clause 7.8.7 is a provision which (if the Agreement was approved)
would not have current effect, but is a contingent provision which would take effect upon
certain legislative changes occurring.
[51] The reference award for the purpose of the BOOT in relation to the application for
approval of the Agreement is the General Retail Industry Award 2010 (Award). Clause 22 of
the Award relevantly provides:
22. Superannuation
22.1 Superannuation legislation
(a) Superannuation legislation, including the Superannuation
Guarantee (Administration) Act 1992 (Cth), the Superannuation
Guarantee Charge Act 1992 (Cth), the Superannuation Industry
(Supervision) Act 1993 (Cth) and the Superannuation (Resolution of
Complaints) Act 1993 (Cth), deals with the superannuation rights and
obligations of employers and employees. Under superannuation
legislation individual employees generally have the opportunity to
choose their own superannuation fund. If an employee does not choose
a superannuation fund, any superannuation fund nominated in the
award covering the employee applies.
(b) The rights and obligations in these clauses supplement those in
superannuation legislation.
22.2 Employer contributions
An employer must make such superannuation contributions to a
superannuation fund for the benefit of an employee as will avoid the employer
being required to pay the superannuation guarantee charge under
superannuation legislation with respect to that employee.
. . .
22.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to
make the superannuation contributions provided for in clause 22.2 to another
superannuation fund that is chosen by the employee, the employer must make
the superannuation contributions provided for in clause 22.2 and pay the
amount authorised under clauses 22.3(a) or (b) to one of the following
superannuation funds or its successor:
(a) the Retail Employees Superannuation Trust (REST);
(b) Sunsuper;
19
(c) Statewide Superannuation Trust;
(d) Tasplan;
(e) MTAA Superannuation Fund;
(f) any superannuation fund to which the employer was making
superannuation contributions for the benefit of its employees before 12
September 2008, provided the superannuation fund is an eligible choice
fund and is a fund that offers a MySuper product or is an exempt public
sector scheme; or
(g) a superannuation fund or scheme which the employee is a defined
benefit member of.
[52] In relation to the capacity of employees to make a choice of superannuation fund
under clause 7.8 of the Agreement as compared to clause 22 of the Award, the Deputy
President said:
“[127] …The Award expressly nominates a list of funds that may be applied to Award-
covered employees if they have not made their own choice of fund in accordance with
the superannuation legislation. The Award enables a choice to be made under the
superannuation legislation and otherwise supplements the legislation by narrowing the
applicable funds for Award-covered employees in circumstances where no such
choice is made. Under the Agreement there is only one superannuation fund into
which employee contributions are paid.”
[53] The conclusion stated by the Deputy President is obviously correct and we adopt it.
The issue then becomes whether, for the purpose of an analysis as to whether the Agreement
passes the BOOT, the lack of employee choice as to their superannuation fund renders clause
8.7 less beneficial than clause 22 of the Award. In this respect the Deputy President said
(footnotes omitted):
“[128] As the better off overall test requires an identification of more and less
beneficial terms, the question remains as to whether the superannuation provision is
less beneficial, and if so, the weight to be attributed to this issue in making an overall
assessment of whether employees are better off overall.
[129] The absence of evidence in relation to this issue has not assisted the Commission
in reaching the necessary satisfaction as to the better off overall test. Whilst it was
Kmart’s view that it is ‘not appropriate for the Commission to require any evidence
about the performance of the superannuation fund, including REST’, the difficulty in
assessing this condition as more or less beneficial to employees, in the absence of any
evidence, was raised directly at the hearing, with Kmart ultimately choosing not to file
any evidence that may have assisted the Commission on this issue.
[130] To the extent that Kmart asks the Commission to rely on s.193(7) to ‘assume’
employees are better off overall in the absence of any evidence, that submission is
misplaced. Section 193(7) permits the Commission to make assumptions about certain
20
classes of employees being better off overall (rather than requiring the Commission to
inquire into each individual employee’s circumstances) however the Commission is
still bestowed with the obligation to reach the level of satisfaction in relation to each
class of employee and the applicant ultimately bears the onus of achieving that
satisfaction.
[131] The Award itself describes the choice that may be made under the
superannuation legislation (preserved by its terms) as an ‘opportunity’ strongly
suggesting a benefit in the ability to exercise that choice.
[132] The Financial System Inquiry included a recommendation to ‘provide all
employees with the ability to choose the fund into which their Superannuation
Guarantee contributions are paid’ based on its findings of the detrimental impacts of
restrictions on choice of fund including additional fees through maintenance of
multiple funds, the longer term impact on superannuation savings and the particular
vulnerabilities of casual employees to restrictions on choice.
[133] On the materials before the Commission regarding the superannuation provision
in the Agreement, I am only able to objectively conclude that the Agreement’s
restriction on the choice of superannuation fund that would otherwise exist under the
Award is a less beneficial term. On one view this may be non-monetary and
accordingly difficult to quantify. It may be monetary to the extent that the performance
of the REST fund is less than what an employee might otherwise prefer or that
employees required to have multiple funds are required to pay multiple fund fees.
Whether the detriment is properly characterised as monetary or non-monetary, the
potential for a class of employee or prospective employee to suffer it as against the
Award is real notwithstanding the difficulty in its quantification.
. . .
[142] Even if the Proposed Undertakings were accepted, they do not adequately
address all of the less beneficial terms in particular the removal of choice of
superannuation fund. In circumstances where the value of the objectively verifiable
benefits under the Agreement is the minimum possible above Award for certain
classes of employees and/or prospective employees to be covered, and in the absence
of materials to persuade the Commission otherwise, on an overall assessment I am not
able to be satisfied that employees and prospective employees are better off overall
under the Agreement than if the Award applied.”
[54] We agree that the presence of clause 8.7 in the Agreement gives rise to a concern
(within the meaning of s 190(1)(b) and (2)) that the Agreement does not pass the BOOT, in
circumstances where, for at least some classes of employees, the Agreement is apart from
clause 8.7 only more beneficial overall than the Award by a fairly narrow margin. We
emphasise that the identification of a concern in relation to whether a particular agreement
meets an approval requirement in s 186 or s 187 does not necessarily involve a final
determination about the issue; it is sufficient that there is an apprehension or perturbation that
the requirement in question may not be satisfied.
[55] Our concern in relation to clause 8.7 does not arise from any issue concerning the
relative performance of different superannuation funds, as touched upon in paragraphs [129]
and [133] of the Decision. The retirement benefits that might ultimately be produced by
different superannuation funds for particular employees, in many cases decades after a
21
particular enterprise agreement has ceased to operate, is a matter too remote and incapable of
sensible prediction to bear upon the BOOT. Further, the existence of an employee right of
choice cannot be any guarantee that the employee will choose the superannuation fund which
will ultimately best serve the employee’s financial interest, since it equally allows for bad
choices and choices made with insufficient information.
[56] Rather, our concern arises from the particular circumstances of Kmart’s workforce,
two-thirds of which are casual employees. Our assessment, having regard to the general
characteristics of employment in the retail industry, is that it is likely that a significant
proportion of such casual employees have previously had other casual employment or have a
second job. In that context, a choice of funds may be a benefit so that the casual employee can
seamlessly remain in a single superannuation fund rather than having two or more funds
arising from different jobs with all the inconvenience and additional administration costs that
this involves. To this extent, we agree with the some of the matters adverted to in paragraphs
[131]-[133] of the Decision. However, against this, it is necessary to acknowledge, as Kmart
submitted, that s 32C(6)(h) of the Superannuation Guarantee (Administration) Act 1992
provides that a contribution to a fund made under or in accordance with an enterprise
agreement constitutes compliance with the employee choice of fund requirements of that Act.
It might be considered paradoxical that a provision of an enterprise agreement which
facilitates satisfaction of the choice of funds requirement in the superannuation legislation is
capable of being characterised as a less beneficial term because it denies a right of choice.
[57] Upon invitation, Kmart proposed an undertaking at the hearing before us which would
address our concern. The undertaking would involve an amendment to clause 7.8.7 as
follows:
7.8.7 If, during the life of this Agreement, Kmart becomes obligated by law to
provide choice of fund for the team members to whom this Agreement applies,
Kmart shall make contributions on behalf of any team member who nominates
an alternate fund to the fund so nominated in accordance with this clause.
REST shall remain the default fund for the purposes of this clause. Where a
team member nominates an alternative fund, references to REST in this clause,
shall in that event be read as the alternate fund so nominated.
[58] The effect of the amendment would be to remove the contingent element of the
provision so that it would become operative immediately upon the Agreement taking effect
and afford employees in the first instance a right to choose their preferred superannuation
fund, with REST operating as the default fund for employees who decline to nominate another
fund. The SDAEA and the AWU supported the acceptance of this undertaking. The RFFWUI
opposed it, although it acknowledged that it would address the identified concern.
[59] Our provisional view is that the proposed undertaking would address our concern and
not be likely to cause financial detriment to any employee covered by the Agreement or result
in substantial changes to the Agreement. We will provide the bargaining representatives with
a (further) opportunity to express their views concerning the proposed undertaking pursuant to
s 190(4).
[60] The Deputy President identified a second provision in the Agreement, concerning the
span of ordinary hours, which she considered detrimental to employees compared to the
Award. Under clause 10 of the Agreement, the span of ordinary hours for day workers is
22
6.00am to midnight Monday-Sunday, and for night shift workers the shift must commence at
or after 11.00pm one day and finish before 5.00am the following day. The pay rate schedules
attached to the Agreement (relevantly) provide for specified higher rates for day work
employees for work performed during 6.00am-7.00am Monday-Friday, 6.00pm-11.00pm
Monday-Friday, 11.00pm-midnight Monday-Friday, 6.00am-7.00am Saturday, 7.00am-
11.00pm Saturday, 11.00pm-midnight Saturday, 6.00am-9.00am Sunday, 9.00am-11.00pm
Sunday, 11.00pm-midnight Sunday and on public holidays respectively. Night shift workers
also receive specified loaded rates for shifts worked Monday-Friday, Saturday, Sunday and on
public holidays respectively.
[61] By comparison, clause 27.2(a) of the Award provides that standard ordinary hours
may be worked within 7.00am-9.00pm, Monday to Friday; 7.00am-6.00pm on Saturday and
9.00am-6.00pm on Sunday. Clause 27.2(b)(iii) provides however that, for retailers whose
trading hours extend beyond 9.00pm Monday to Friday or 6.00pm on Saturday or Sunday, the
finishing time on all days of the week will be 11.00pm. We note that Kmart stores generally
close at 10.00pm at the earliest, and many close at a later time or operate on a 24 hour basis.
Clause 30 of the Award relevantly provides that shiftwork (consisting of shifts starting at or
after 6.00pm on one day and before 5.00am the following day) will be paid at a rate of 130%
Monday-Friday, 150% on Saturday and 190% on Sunday, with the casual loading payable in
addition. The Sunday rate will fall to 175% from 1 July 2020. Clause 29.2 provides that other
work performed outside of the span of hours is to be paid at overtime penalty rates.
[62] The Deputy President said in relation to this issue:
“[139] Again, the absence of evidence including a lack of any scenarios relative to
particular rosters, stores or to classes of employees has not assisted the Commission in
reaching the requisite satisfaction. Again, I do not consider it the Commission’s task
to speculate as to the individual impacts of such provision. However, on the objective
material before the Commission, I conclude that there is a detriment to be considered
in making an overall assessment of the better off overall test.”
[63] We do not, with respect, agree with the Deputy President’s assessment. Financial
modelling undertaken by the Commission’s staff (which was before the Deputy President)
demonstrates that the pay of employees under the Agreement will be more than under the
Award on any pattern of hours that may be worked. There was no dispute about the accuracy
of that modelling. The RFFWUI contended before the Deputy President that there were non-
financial detriments associated with the wider span of hours including “limitations on the
right to refuse to work in the increased span of hours, in addition to matters that related to
what may be described as individual lifestyle preference”.24 However if Kmart was under the
Award, it would be entitled to cover its trading hours using the shiftwork provisions or by
rostering ordinary hours outside the span and paying penalty rates in accordance with clause
29.2, and the Award does not contain any “right to refuse” such work in either case. Further,
for full-time and part-time employees, clause 16.1.4 of the Agreement requires Kmart to take
into consideration employees’ family responsibilities and safe transport home in establishing
or changing rosters. No equivalent provision exists in the Award. We therefore do not
consider that clause 10 of the Agreement, in combination with the other provisions of the
Agreement which we have identified, is to be characterised as a detrimental provision for the
purpose of the BOOT analysis.
24 Ibid at [138]
23
[64] Our conclusion is that, if the undertakings proposed by Kmart are accepted pursuant to
s 190, the Agreement passes the BOOT.
Other approval requirements
[65] We are satisfied that the other applicable requirements of ss 186 and 187 are met in
relation to the Agreement.
Conclusion
[66] We make the following orders and directions:
(1) Permission to appeal is granted with respect to each appeal.
(2) The appeals are upheld.
(3) The Decision ([2019] FWC 6105) is quashed.
(4) Kmart is directed to file and serve a consolidated and signed copy of the
proposed undertakings referred to in this decision within two days of the date
of this decision.
(5) The bargaining representatives (the SDAEA, the AWU and the RFFWUI) are
directed to file and serve any written submissions they wish to make
expressing their views concerning the proposed undertakings referred to in this
decision pursuant to s 190(4) of the FW Act within seven days of the date of
this decision.
VICE PRESIDENT
Appearances:
C O’Grady and M McKenney of Counsel on behalf of Kmart Limited.
W Friend QC and D Bruno of Counsel on behalf of the Shop Distributive and Allied
Employees’ Association.
S Young on behalf of the Australian Workers’ Union.
J Cullinan and M Cornthwaite on behalf of the Retail and Fast Food Workers Union
Incorporated.
OF THE FAIR WORK MISSION THE
24
Hearing details:
2019.
Sydney:
4 November.
Printed by authority of the Commonwealth Government Printer
PR713994
