1
Fair Work Act 2009
s.306E—Application for a regulated labour hire arrangement order
Application by Shop, Distributive and Allied Employees Association re
Kmart Lytton Distribution Centre
(LH2024/9)
JUSTICE HATCHER, PRESIDENT SYDNEY, 22 NOVEMBER 2024
Application for a regulated labour hire arrangement order in respect of Programmed Skilled
Workforce Pty Ltd in relation to work performed for Kmart Australia Limited at the Kmart
Lytton Distribution Centre.
[1] The Shop, Distributive and Allied Employees Association (SDA) has applied under s
306E of the Fair Work Act 2009 (Cth) (FW Act) for a regulated labour hire arrangement order
to apply to Kmart Australia Limited (Kmart) as the regulated host and Programmed Skilled
Workforce Pty Ltd (Programmed) as the employer. The proposed order would apply in respect
of employees who perform general warehousing and distribution work (GWD work) associated
with retail distribution activities at the Kmart Lytton Distribution Centre (Centre) located in
Lytton in the state of Queensland. Kmart and Programmed do not oppose the application. Both
also consent to the terms of the order proposed by the SDA. No other person has indicated an
interest in the application.
[2] The SDA set out in detail in the grounds of its application the basis upon which it
contends that the Commission is required under s 306E to make the order which it seeks. The
SDA also filed, together with its application, two witness statements in support of its
application. Kmart and Programmed did not file any material.
[3] The evidence before the Commission comprises:
• a witness statement of Justin Power, the Queensland Branch Secretary of the SDA,
dated 24 September 2024; and
• a witness statement of Peter Fordham, an employee of Programmed performing
work for Kmart at the Centre, dated 21 September 2024.
[4] On the basis of the evidence, and the uncontradicted contentions of fact stated in the
application, I make the following findings:
• The GWD work performed at the Centre encompasses order selection, stock
handling processing (such as storing and packing), clerical tasks associated with
[2024] FWC 3238
DECISION
AUSTRALIA FairWork Commission
[2024] FWC 3238
2
warehouse functions, consolidating orders, and the use of tools and equipment such
as loaders and forklifts.
• The following employees perform GWD work for Kmart at the Centre:
o Kmart employees covered by the Kmart Australia Ltd Lytton Distribution
Centre Enterprise Agreement 20221 (Agreement); and
o Agency workers, defined in 7.1(b) of the Agreement as ‘a labour hire
worker, contractor or other person who is not employed by Kmart’, who are
employed by external labour hire employers, one of them being
Programmed.
• Clause 2.1 of the Agreement stipulates that the Agreement is binding upon Kmart,
the SDA and employees engaged in the classifications contained within the
Agreement and who are employed by Kmart at the Centre.
• Programmed employees and other agency workers are engaged by Kmart at the
Centre to perform various duties set out in the classification structure established by
clause 8 of the Agreement. The classifications in the Agreement encompass the
performance of GWD work.
• Programmed employees perform GWD work at the Centre that falls within the
classifications of ‘team member in training’ in clause 8.2 of the Agreement and
‘team member’ in clause 8.3 of the Agreement.
• In accordance with clause 8.2.5 of the Agreement, a ‘team member’ in training may
perform the following indicative tasks:
o Storing and packing of goods and materials, in accordance with appropriate
procedures and/or regulations;
o preparation and receipt of appropriate documentation, including liaising
with suppliers;
o allocating and retrieving goods from specific Centre areas;
o basic operation of computer terminals or similar equipment;
o periodic stock-checks;
o housekeeping in respect of one’s own work environment;
o use of non-licensed material-handling equipment; and
o conduct relating to occupational health and safety.
• In accordance with clause 8.3.2 of the Agreement, tasks performed by a ‘team
member’ include:
o order selection,
o processing,
o clerical, office and/or computer terminal operation;
o conduct concerning occupational health and safety;
o liaising with internal and external stakeholders regarding inventory;
o licenced operation of all appropriate material-handling equipment;
o operating an Isoloader operator; and
[2024] FWC 3238
3
o using tools and equipment within the Centre for basic non-trade
maintenance.
• The Agreement includes provisions referable to ‘agency workers’, the definition of
which expression encompasses Programmed’s employees at the Centre. These
include:
o Clauses 8.2.4 and 8.5: service as an agency worker is relevant to the
completion of the training period for a Team Member in Training and for
progression to Team Leader.
o Clause 16.3: Kmart may require agency workers, as well as its own
employees, to perform work in any area of the Centre.
o Clause 16.4: employees of Kmart may be required to assist in the training of
agency workers.
• The Centre receives containers of stock. These containers are exclusively unloaded
by Kmart employees using Kmart-owned Isoloader operators. The containers are
then unpacked and moved by both Kmart and Programmed employees to the
following areas of the Centre:
o Racking (Multi Level Storage);
o Manual Handling (Hand Sortation);
o Non-Conveyable (Non Cons);
o Sorter (Auto Sortation); and
o Dispatch.
• At the Centre, both Programmed and Kmart employees undertake the following
tasks in the same manner and without variation:
o In the Racking area, the operation of high-reach forklifts to place stock on
racks.
o In the Manual Handling area, scanning and placing stock into tubs, as well
as the stacking and movement of goods.
o In the Non-Conveyable area, scanning and placing heavy and bulky items
into store-ready pallets (which are then transported by way of pallet runners
driven by Kmart and Programmed employees to dispatch lanes).
o In the Sortation area, and after stock is manually loaded from pallet runners
and scanned and released into a ‘decline’ lane, the operation of forklifts,
decline lane handling and labelling of packaged pallets.
o In the Dispatch Area, dispatching and loading into trucks containers from
dispatch lanes, scanning and recording of stock and the collation and
placement of cardboard and plastic into a compactor area.
• Programmed employees are allocated operational tasks by Kmart and subject to
Kmart’s operational requirements.
• Programmed employees obey, and perform work at the Centre in accordance with
Kmart’s rules, policies and procedures in the same manner as Kmart employees.
• Programmed employees operate machinery and equipment as instructed by Kmart
and in compliance with Kmart’s occupational health and safety regime.
[2024] FWC 3238
4
• Programmed does not supply machinery or equipment to Kmart but, rather, the
machinery and equipment operated by Programmed employees is either owned or
hired by Kmart.
• Programmed employees wear the same personal protective equipment worn by
Kmart employees, namely hi-vis jackets, safety gloves and steel-capped boots.
• Whilst initial inductions are conducted by Programmed at the Centre, other training
for operational tasks at the Centre is conducted primarily by Kmart but also by
Programmed.
• The competency of Programmed employees following their training is assessed by
both Programmed and Kmart employees.
• There is no distinction between the level or content of the training provided to
Programmed and Kmart employees performing work at the Centre.
• Programmed employees receive offers of hours and shifts through a Programmed
application. Programmed employees use this application to accept and reject shifts.
Programmed employees are expected to advise Programmed of any absences.
• When attending the Centre, Programmed employees ‘clock in and off’ on two
systems, one operated by Programmed and the other operated by Kmart.
• During each shift, there will be separate ‘huddles’ (team meetings) for Programmed
and Kmart employees, but each ‘huddle’ is supervised and conducted by Kmart.
• Once a Programmed employee commences a shift at the Centre, they are supervised
by a Kmart team leader.
• There are Programmed representatives at the Centre, but they do not direct
Programmed employees in relation to the allocation of duties at the Centre, the
manner in which the duties are to be performed or the quality of work.
• Pursuant to clause 14.1 and clause 21.3(b) of the Agreement, a Kmart casual
employee would receive an ordinary hourly rate of $42.60 (inclusive of the casual
loading) if they were a team member in training or $47.18 (also inclusive of the
casual loading) if they were a team member.2 Under the Programmed contract of
employment, however, a Programmed casual employee performing the same work
as a Kmart casual employee covered by the Agreement would receive an ordinary
hourly rate (inclusive of the casual loading) of $35.62, irrespective of the number of
hours worked.
Consideration
[2024] FWC 3238
5
[5] In Application by the Mining and Energy Union3, a Full Bench of the Commission
outlined a number of principles concerning the proper interpretation and application of s 306E.4
I apply, but do not repeat, the principles stated in that decision.
[6] I am satisfied, for the purposes of s 306E(7) of the FW Act, that the SDA is an
organisation entitled to represent the industrial interests of employees of Kmart employed to
perform work at the Centre pursuant to the Agreement. Accordingly, the SDA is entitled to
apply for a regulated labour hire arrangement order under s 306E of the FW Act by operation
of s 306E(7)(c).
[7] I am further satisfied that the requirements of s 306E(1) of the FW Act, which must be
satisfied to enliven the obligation to make a regulated labour hire arrangement order, are met.
Specifically, on the evidence before me, I am satisfied that:
(a) Programmed supplies its employees to perform GWD work for Kmart at the
Centre.
(b) The Agreement would apply to Programmed’s employees who perform work for
Kmart at the Centre if Kmart were to employ these employees directly to
undertake the same kind of work.
(c) Kmart is not a small business employer.
[8] For the purposes of s 306E(1A) of the FW Act, I am satisfied that the performance of
work is not and will not be for the provision of a service, rather than the supply of labour. In
forming this view, I have had regard to the matters set out in subsection (7A). In relation to the
matters set out in s 306E(7A), I make the following findings:
(a) There is no evidence that Programmed has any involvement in matters relating to
the performance of work by its employees working at the Centre apart from its
limited role in inductions and training.
(b) The evidence indicates that Kmart directs, supervises and controls the
Programmed employees who are supplied to perform work at the Centre. Kmart
supervisors direct, instruct and monitor the work of Programmed employees, and
determine the duties to be performed by Programmed employees. Programmed
notifies its casual employees of the hours which they are offered to work for
Kmart at the Centre.
(c) Programmed employees assigned to perform work at the Centre operate the
machinery and equipment of Kmart and are subject to the same policies,
procedures and directions as Kmart employees.
(d) There is no evidence that Programmed is or will be subject to industry or
professional standards or responsibilities in relation to the work of its employees
supplied to Kmart.
[2024] FWC 3238
6
(e) The work undertaken by Programmed employees at the Centre involves the
operation of machinery and equipment but does not involve work of a specialist
or professional nature.
[9] Having regard to the considerations referred to in s 306E(7A) of the FW Act, it is clear
that the performance of work by Programmed employees supplied to Kmart at the Centre is not
and will not be for the provision of a service, rather than the supply of labour. I am satisfied
that Programmed supplies labour to Kmart.
[10] In relation to s 306E(2) of the FW Act, I am not satisfied that it is not fair and reasonable
in all the circumstances to make a regulated labour hire arrangement order as sought by the
SDA. Section 306E(2) requires the Commission to have regard to the matters listed in
subsection (8) in relation to which submissions have been made. In this case, no submissions
were made in relation to any of the matters listed in subsection (8). Accordingly, I am not
required to have regard to those matters.
[11] In those circumstances, I am required by s 306E of the FW Act to make the regulated
labour hire arrangement order the SDA seeks. I will publish the order together with this
decision, setting out the matters specified in s 306E(9) of the FW Act. The operative date of the
order will be 2 December 2024, consistent with s 306E(9)(e)(ii).
PRESIDENT
Appearances:
D Gaffy for the Shop, Distributive and Allied Employees Association.
M Zoetbrood for Programmed Skilled Workforce Pty Ltd.
N Barkatsas with C Candiloro for Kmart Australia Limited.
Hearing details:
Sydney by video link using Microsoft Teams (directions):
8 October.
Printed by authority of the Commonwealth Government Printer
LH200012 PR781558
THE FAIR WORK FAI COMMISSION THE
[2024] FWC 3238
7
1 AE518088.
2 Pursuant to clause 8.5(a) of the Agreement, ‘[p]rogression from the Team Member in Training classification, to the Team
Member classification, after at least 494 hours (equivalent to three (3) months’ full-time employment) will be automatic
subject to clauses 8.2.3 and 9.2, and a satisfactory occupational health and safety appraisal determined by Kmart in relation
to the Employee’s performance of tasks specified in the Position Description’.
3 [2024] FWCFB 299.
4 Ibid [8]–[17].
https://www.fwc.gov.au/documents/decisionssigned/pdf/2024fwcfb299.pdf
