1 Fair Work Act 2009 s.185—Enterprise agreement Gray Australia Pty Ltd as trustee for The Gray Family Trust T/A Ceres Farm (AG2018/2112) CERES FARM ENTERPRISE AGREEMENT 2018 & Ors Agricultural industries COMMISSIONER MCKINNON MELBOURNE, 15 FEBRUARY 2019 Application for approval of enterprise agreements in the horticulture industry – whether genuinely agreed – pending changes to the Horticulture Award 2010 - better off overall test – fairly chosen – undertakings required. [1] Application has been made for approval of the enterprise agreements set out in the Schedule to this Decision (the Agreements). The applications were each made pursuant to s.185 of the Fair Work Act 2009 (the Act) by the applicants set out in the Schedule. The Agreements are all single enterprise agreements. [2] The Australian Workers’ Union (AWU) is not a bargaining representative in relation to any of the Agreements but has made submissions to the Commission generally opposing their approval, including because it says they do not pass the better off overall test and were not genuinely agreed. [3] The Agreements were each made at a time when changes to the Horticulture Award 2010 (the Award) were in contemplation in connection with the four yearly review of modern awards.1 The Commission has indicated that the Award will be varied to provide overtime entitlements for casual employees in certain circumstances. Such changes had not been made at the time application for approval of each of the Agreements was made. Were the Agreements genuinely agreed? [4] The applications filed in the Commission are largely identical in terms, with some tailoring to reflect the individual circumstances of each business. Three of the applications are made in support of similar, but different Agreements and their supporting material is 1 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541; 4 yearly review of modern awards – Award stage – Group 3 [2018] FWCFB 1405 at [121] and [2018] FWCFB 6368 [2019] FWC 991 DECISION [2019] FWC 991 2 relevantly different in each case.2 The statutory declarations filed in support of the majority of Agreements also commonly identify ‘higher wage rates’ as an improvement in terms and conditions and indicate that there are no less beneficial terms and conditions compared to the Award. However, an analysis of the Agreements indicates that there are some less beneficial terms and conditions in the Agreements compared to the Award. [5] As the responses provided in the Form F17 statutory declarations filed with the applications were both inadequate, and in some respects, factually incorrect, I sought additional information about the nature and context of the explanation of the Agreement to employees in each case. Further information was subsequently provided by each of the applicants. Hearings were held on 24 January 2019 and 8 February 2019 in relation to the applications. The information now before me counters the notion that employees were told that the proposed Agreements contained no less beneficial terms than the Award in the majority of cases. [6] I am satisfied that the following Agreements were genuinely agreed. The employees who voted to approve these Agreements were employed under the Award at the time. The Agreement, and its likely effect on employees, was explained to them as required by the Act. The explanation dealt with the nature of pending changes to the Award, including in relation to overtime for casual employees, and the rationale for making the Agreement in that context in each case. There are no other reasonable grounds before me to consider that the Agreements were not genuinely agreed. Application Agreement AG2018/2112 Ceres Farm Enterprise Agreement 2018 AG2018/2123 Acadia Farms Enterprise Agreement 2018 AG2018/2165 ADCO Holdings Pty Ltd Enterprise Agreement 2018 AG2018/2215 Ivanhoe Farms Enterprise Agreement 2018 AG2018/2373 BTS Packing Shed Enterprise Agreement 2018 AG2018/2375 Bothkamp Australia Farm Enterprise Agreement 2018 AG2018/2384 Sandowne Farming Enterprise Agreement 2018 AG2018/2492 Desert Farms Enterprise Agreement 2018 AG2018/2817 Kenrose Enterprise Agreement 2018 AG2018/2837 Wallaroo Produce Supplies Enterprise Agreement 2018 AG2018/2850 Moffatt Fresh Produce Enterprise Agreement 2018 AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Enterprise Agreement 2018 AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Enterprise Agreement 2018 AG2018/5531 Dicky Bill Farming Enterprise Agreement 2018 AG2018/5781 Berry North Enterprise Agreement 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 [7] I am also satisfied that the following Agreements were genuinely agreed. The employees who voted to approve these Agreements were covered by an existing enterprise 2 AG2018/3621; AG2018/5235; AG2018/5453 [2019] FWC 991 3 agreement at the time. I am satisfied on the material before me that the Agreement and its likely effect on employees, including differences between their current and proposed terms and conditions of employment, were adequately explained as required. There are no other reasonable grounds before me to consider that these Agreements were also not genuinely agreed. Application Agreement AG2018/2378 Gympie Packhouse Enterprise Agreement 2018 AG2018/2496 Glenellen Enterprise Agreement 2018 AG2018/2654 Gen2 Farming Enterprise Agreement 2018 AG2018/2675 A&A Mango Contracting Enterprise Agreement 2018 AG2018/2693 Hinkler Park Plantation Enterprise Agreement 2018 AG2018/2818 DFI Employment Enterprise Agreement 2018 AG2018/3762 Mortimers Farms Enterprise Agreement 2018 AG2018/5069 Halt for Holts Enterprise Agreement 2018 AG2018/5159 Curino Farm Holdings Enterprise Agreement 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 AG2018/5515 Akers Employment Enterprise Agreement 2018 I am not satisfied that the following Agreements were genuinely agreed. The employees who voted to approve these Agreements are employed either under the Award, or in one case, another enterprise agreement. One of the consequences of making the Agreements is that it will prevent the practical application of pending changes to the Award in relation to overtime for casual employees, foreshadowed by the Commission as referred to above3. While that of itself would not be fatal to the Agreement, because the better off overall test applies at ‘test time’, I am not satisfied on the information before me that adequate steps were taken to explain the nature of those pending Award changes, or the likely effect of the Agreement on employees in relation to those changes, to employees who will be covered by these Agreements. In some cases, it seems to me that employees were also given assurances that the Agreement was based on the Award and/or that their employment conditions would either compensate for future changes or never be less than the Award. The result is that casual employees in this group may not have made an informed choice about whether or not to approve the Agreements. Having regard to the composition of the workforce in each case, it is conceivable that the outcome of the vote would have been different had they done so. Application Agreement AG2018/2557 Newton Orchards of Manjimup Enterprise Agreement 2018 AG2018/3285 Manbulloo Management Enterprise Agreement 2018 AG2018/3519 Tent Hill Employment Enterprise Agreement 2018 AG2018/4727 Motta Produce Pty Ltd Employees Enterprise Agreement 2008 AG2018/5359 Favco Farming Pty Ltd Enterprise Agreement 2018 AG2018/5600 SSS Employment Enterprise Agreement 2018 AG2018/5715 Red Valley Enterprise Agreement 2018 AG2018/5942 Serra Farming Enterprise Agreement 2018 3[2017] FWCFB 3541; [2018] FWCFB 1405; [2018] FWCFB 6368 [2019] FWC 991 4 [8] I am also not satisfied that the greensill and Company Enterprise Agreement 20184 was genuinely agreed. There appears to have been a misunderstanding about the effect of the Agreement in relation to the preservation of the businesses’ existing overtime arrangements. While I have no reason to believe that, as a practical matter, those arrangements will or were intended to change, the Agreement does not provide for them. On the information before me, I am not satisfied that the effect of the Agreement was properly explained to employees. [9] I am not yet satisfied that the Delta Backpackers Enterprise Agreement 20185 was genuinely agreed, because there appears to be a discrepancy in the supporting materials about how many employees were employed at the time the agreement was made. [10] Given my findings above, it is not necessary to deal further with the content of the Agreements referred to in the paragraphs [8] and [9] above. National Employment Standards [11] Two of the Agreements6 contain terms that may exclude the National Employment Standards to some degree. Undertakings have been given to address the concern. Better off overall test [12] The Award is relevant to the assessment of the better off overall test and the ‘test time’ for assessment of the better off overall test in each case is the date on which application for approval of the enterprise agreement was made to the Commission. In this matter, the test times are as follows: Application Agreement Test time AG2018/2112 Ceres Farm Enterprise Agreement 2018 21 May 2018 AG2018/2123 Acadia Farms Enterprise Agreement 2018 21 May 2018 AG2018/2165 ADCO Holdings Pty Ltd Enterprise Agreement 2018 23 May 2018 AG2018/2215 Ivanhoe Farms Enterprise Agreement 2018 28 May 2018 AG2018/2373 BTS Packing Shed Enterprise Agreement 2018 4 June 2018 AG2018/2375 Bothkamp Australia Farm Enterprise Agreement 2018 4 June 2018 AG2018/2378 Gympie Packhouse Enterprise Agreement 2018 4 June 2018 AG2018/2384 Sandowne Farming Enterprise Agreement 2018 4 June 2018 AG2018/2492 Desert Farms Enterprise Agreement 2018 8 June 2018 AG2018/2496 Glenellen Enterprise Agreement 2018 11 June 2018 AG2018/2654 Gen2 Farming Enterprise Agreement 2018 18 June 2018 AG2018/2675 A&A Mango Contracting Enterprise Agreement 2018 19 June 2018 AG2018/2693 Hinkler Park Plantation Enterprise Agreement 2018 25 June 2018 AG2018/2817 Kenrose Enterprise Agreement 2018 26 June 2018 AG2018/2818 DFI Employment Enterprise Agreement 2018 26 June 2018 4 AG2018/2781 5 AG2018/5756 6 AG2018/5235; AG2018/5453 [2019] FWC 991 5 AG2018/2837 Wallaroo Produce Supplies Enterprise Agreement 2018 26 June 2018 AG2018/2850 Moffatt Fresh Produce Enterprise Agreement 2018 26 June 2018 AG2018/3621 Propick Pty Ltd Enterprise Agreement 7 August 2018 AG2018/3762 Mortimers Farms Enterprise Agreement 2018 13 August 2018 AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 14 August 2018 AG2018/5069 Halt for Holts Enterprise Agreement 2018 10 September 2018 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Enterprise Agreement 2018 14 September 2018 AG2018/5159 Curino Farm Holdings Enterprise Agreement 2018 14 September 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 17 September 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 17 September 2018 AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 18 September 2018 AG2018/5453 Atta Farms Enterprise Agreement 2018 28 September 2018 AG2018/5515 Akers Employment Enterprise Agreement 2018 2 October 2018 AG2018/5531 Dicky Bill Farming Enterprise Agreement 2018 3 October 2018 AG2018/5756 Delta Backpackers Enterprise Agreement 2018 12 October 2018 AG2018/5781 Berry North Enterprise Agreement 2018 16 October 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 16 October 2018 Wage rates [13] The AWU submits that the rates of pay in the large majority of the Agreements are, for all practical purposes, equivalent to the Award because the ‘test time’ for the Agreement has now passed and rates of pay will only increase by virtue of section 206 of the Act. In relation to the Curino Agreement, the AWU accepts that the rates of pay will be maintained at $1.00 per hour above the Award rate. It nevertheless submits that other features of the Agreement mean that it does not pass the better off overall test. [14] I agree that wages rates in the Agreements will operate in the manner described by the AWU. As noted above, the better off overall test is to be assessed at the ‘test time’. Whether wages keep pace with underlying modern awards over time is dealt with, as the AWU correctly identifies, by the Act. It is not an impediment to finding that an Agreement passes the better off overall test, although it may be a relevant consideration having regard to the Agreement as a whole. Rates of pay in each of the Agreements were higher than comparable rates of pay in the Award at the test time (albeit that in most cases, the margin is very small). [15] I do not agree with the AWU’s characterisation of terms in the Agreements dealing with the casual loading. In my view, it is clear that minimum rates of pay in the Agreements attract a 25% loading for each hour worked by casual employees and that this loading is not absorbed by future minimum wage increases. [16] In relation to the Propick Agreement, the AWU submits that because it only contains a Level 1 classification, employees will be disadvantaged in comparison to the Award, which requires employees to progress to Level 2 after three months. I agree with the AWU’s submission, noting also Propick’s submission that this was a drafting error. Propick has given an undertaking to address the concern. [2019] FWC 991 6 Time off instead of overtime [17] The AWU submits that provision of time off instead of overtime in the Agreements is inferior to the Award and that the capacity to vary those provisions via policy is of concern. [18] Some of the Agreements provide for time off instead of overtime as the default option for employees, with the election to be paid for overtime only arising if made at the time overtime is offered. In some respects the terms are more beneficial to employees, including because they require time off to be taken earlier than would be required by the Award. Some of the Agreements contain fewer safeguards than the Award but provide the same basic entitlement. As a practical matter, the requirement for the election for payment of overtime to be at the time the work is offered may negate the option entirely, since it is unlikely that at the precise point at which an employee transitions from ordinary hours to overtime, an election of the necessary type will be made and effectively communicated to the employer, and an agreement made in writing to that effect. Such an election should be capable of being made at any time before the overtime is worked, consistent with the Award. [19] All of the Agreements are affected by this concern, except for those set out below. In each case, undertakings have been given to remedy the potential for detriment accruing to employees. Application Agreement AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 [20] In addition, the Ceres Farm Agreement does not provide for accrued time off to be paid out if not taken after a certain period or on termination of employment. An undertaking has been given to address the concern in relation to time off not taken during employment. However, it does not address the concern effectively, including because it does not make sense in the context in which it is intended to appear. [21] As to the capacity for policy changes to the Agreements in relation to time off instead of overtime, relevant Agreements make clear that any such policy cannot be inconsistent with the Agreement, is not incorporated as a term of the Agreement, and can only have effect as a variation of the Agreement if approved by the Commission under the Act. I am not satisfied that the AWU’s concern in relation to future time off policies affects the assessment of the better off overall test. Voluntary additional hours [22] The Agreements below provide for voluntary additional hours to be worked at ordinary time rates of pay. This gives rise to a concern about whether employees will be better off overall. The applicants have given an undertaking that the terms dealing with voluntary additional hours will not apply. Application Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 [2019] FWC 991 7 Hours of work and Sunday overtime [23] The AWU submits that the hours of work for permanent employees in all of the Agreements other than those listed below are inferior to those in the Award, because ordinary hours of work are not restricted to Monday to Friday, including for shift workers. It says the Award does not permit the working of 12 hour shifts and that Agreement terms providing for hours of work to vary from week to week are unclear. The AWU accepts that the days on which ordinary hours can be worked, and the maximum number of hours in each shift, can be altered by the employer and employees in a manner that is consistent with the Agreements. [24] In my view, the Agreements are not less detrimental to employees than the Award in relation to the capacity for ordinary hours to be worked on Saturday or over a period of up to 12 hours per day. However, the Agreements (other than those set out below) permit permanent employees to work ordinary hours on Sunday. Such terms could operate in a way that is detrimental to employees compared to the Award. Undertakings have been given to meet the concern in each case. Application Agreement AG2018/2496 Glenellen Enterprise Agreement 2018 AG2018/2850 Moffatt Fresh Produce Enterprise Agreement 2018 AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5159 Curino Farm Holdings Enterprise Agreement 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 AG2018/5756 Delta Backpackers Enterprise Agreement 2018 [25] The AWU points out that the Ceres Farm Agreement contemplates, but does not specify, the applicable span of hours for the Agreement. That appears to be an inadvertent omission, because in the place where the span of hours is contemplated, the words “to be discussed” appear instead. The omission is one that, without remedy, may result in employees not being better off overall. Ceres Farms has given an undertaking to resolve the concern. Part-time employees – overtime beyond agreed hours [26] The Ceres Farm Agreement does not provide for hours worked in excess of those mutually arranged for part-time employees to be paid at the appropriate overtime rate. The omission may operate to the detriment of part-time employees employed under the Agreement. Ceres Farms has given an undertaking to resolve the concern. Shift definitions [27] The following Agreements provide for afternoon and night shift to be adjusted by up to 5 hours at either end of the day without attracting shift penalties. Undertakings have been given in relation to the concern. The effect of the undertakings is to require employers to first comply with terms in their Agreement dealing with Flexibility at Work; that is, by making a valid individual flexibility arrangement. I am satisfied that the undertakings address the [2019] FWC 991 8 concern by negating such arrangements as terms of the Agreements, unless and until an individual flexibility arrangement is made. Application Agreement AG2018/2378 Gympie Packhouse Enterprise Agreement 2018 AG2018/2384 Sandowne Farming Enterprise Agreement 2018 AG2018/2675 A&A Mango Contracting Enterprise Agreement 2018 AG2018/2817 Kenrose Enterprise Agreement 2018 AG2018/2837 Wallaroo Produce Supplies Enterprise Agreement 2018 AG2018/3762 Mortimers Farms Enterprise Agreement 2018 AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Enterprise Agreement 2018 AG2018/5515 Akers Employment Enterprise Agreement 2018 AG2018/5531 Dicky Bill Farming Enterprise Agreement 2018 AG2018/5781 Berry North Enterprise Agreement 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 [28] The Hinkler Park Agreement defines shift work as any work between the hours of 5.00pm and 5.00am. On its terms, it appears to provide for payment of a 15% shift penalty in lieu of hours worked as overtime during this period. This is likely to operate as a detriment to employees. An undertaking has been given but it does not address the concern. Allowances – Level 1 employees [29] The calculation of allowances for Level 1 employees appears less beneficial to employees than the terms of the Award in the following Agreements. Undertakings have been given to meet the concerns in each case. Application Agreement AG2018/2112 Ceres Farm Enterprise Agreement 2018 AG2018/2123 Acadia Farms Enterprise Agreement 2018 AG2018/2165 ADCO Holdings Pty Ltd Enterprise Agreement 2018 AG2018/2215 Ivanhoe Farms Enterprise Agreement 2018 AG2018/2373 BTS Packing Shed Enterprise Agreement 2018 AG2018/2375 Bothkamp Australia Farm Enterprise Agreement 2018 AG2018/2378 Gympie Packhouse Enterprise Agreement 2018 AG2018/2384 Sandowne Farming Enterprise Agreement 2018 AG2018/2492 Desert Farms Enterprise Agreement 2018 AG2018/2496 Glenellen Enterprise Agreement 2018 AG2018/2654 Gen2 Farming Enterprise Agreement 2018 AG2018/2675 A&A Mango Contracting Enterprise Agreement 2018 AG2018/2817 Kenrose Enterprise Agreement 2018 AG2018/2818 DFI Employment Enterprise Agreement 2018 AG2018/2837 Wallaroo Produce Supplies Enterprise Agreement 2018 AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 AG2018/5069 Halt for Holts Enterprise Agreement 2018 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Enterprise Agreement 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 [2019] FWC 991 9 AG2018/5515 Akers Employment Enterprise Agreement 2018 AG2018/5531 Dicky Bill Farming Enterprise Agreement 2018 AG2018/5756 Delta Backpackers Enterprise Agreement 2018 AG2018/5781 Berry North Enterprise Agreement 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 Accident pay [30] The listed Agreements below appear to have less beneficial accident pay terms than those that would apply under the Award. Undertakings have been given in each case to address the concern. Application Agreement AG2018/2378 Gympie Packhouse Enterprise Agreement 2018 AG2018/2384 Sandowne Farming Enterprise Agreement 2018 AG2018/2496 Glenellen Enterprise Agreement 2018 AG2018/2654 Gen2 Farming Enterprise Agreement 2018 AG2018/2675 A & A Mango Contracting Enterprise Agreement 2018 AG2018/2693 Hinkler Park Plantation Enterprise Agreement 2018 AG2018/2817 Kenrose Enterprise Agreement 2018 AG2018/2818 DFI Employment Enterprise Agreement 2018 AG2018/2837 Wallaroo Produce Supplies Enterprise Agreement 2018 AG2018/2850 Moffatt Fresh Produce Enterprise Agreement 2018 AG2018/3762 Mortimers Farms Enterprise Agreement 2018 AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 AG2018/5069 Halt for Holts Pty Ltd Enterprise Agreement 2018 AG2018/5159 Curino Farm Holdings Enterprise Agreement 2018 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Enterprise Agreement 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 AG2018/5515 Akers Employment Enterprise Agreement 2018 AG2018/5531 The Dicky Bill Enterprise Agreement 2018 AG2018/5756 Delta Backpackers Enterprise Agreement 2018 AG2018/5781 Berry North Enterprise Agreement 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 Job search entitlement [31] All Agreements other than those listed below do not provide an equivalent entitlement to the job search entitlement in clauses 11 and 12 of the Award. Undertakings have been given to address the concerns. Application Agreement AG2018/2850 Moffatt Fresh Produce Enterprise Agreement 2018 AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 [2019] FWC 991 10 Public holiday penalties [32] Other than those in the table below, the Agreements are not clear in relation to the applicable rate for calculation of public holiday penalties, including for casual employees. Undertakings have been given to address the concern. Application Agreement AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 Family and Domestic Violence Leave [33] The Agreements listed below each have a test time of 1 August 2018 or later. As a result, they do not reflect amendments to the Award made from that date dealing with family and domestic violence leave. The exception is the Propick Agreement, which incorporates the Award where the Agreement is silent. The absence of such terms in those Agreements may operate to the detriment of employees. Undertakings have been given to address the concern. No undertaking has been given in relation to the Kool Country Agreement or the Atta Farms Agreement. Application Agreement AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/3762 Mortimers Farms Enterprise Agreement 2018 AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 AG2018/5069 Halt for Holts Enterprise Agreement 2018 AG2018/5159 Curino Farm Holdings Enterprise Agreement 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Enterprise Agreement 2018 AG2018/5515 Akers Employment Enterprise Agreement 2018 AG2018/5531 Dicky Bill Farming Enterprise Agreement 2018 AG2018/5756 Delta Backpackers Enterprise Agreement 2018 AG2018/5781 Berry North Enterprise Agreement 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 Casual employees and overtime [34] The AWU submits that casual employees are entitled to overtime under the Award and that the absence of an equivalent entitlement in any of the Agreements means that the Agreements must fail the better off overall test. [35] The AWU also submits that the 12 month averaging period for ordinary hours of work for casual employees is detrimental to them, compared to the Award. [2019] FWC 991 11 [36] In relation to the Propick Agreement, the AWU submits that to the extent that the 25% casual loading is expressed to be in compensation for overtime entitlements, it is detrimental to the Award. [37] A Full Bench of the Commission has considered the terms of the Award in relation to casual overtime.7 In dealing with its observations that casual employees are not presently entitled to overtime under the Award, the Full Bench made the following findings: “(1) Horticultural businesses tend to be price takers for their product, meaning that they have little or no capacity to pass on any increase of significance in their labour costs. Therefore any award variation which significantly increases labour costs would adversely affect profit margins and potentially affect business viability, which ultimately might have adverse employment effects. (2) Casual employees are used extensively to perform seasonal harvesting functions. These functions require extensive hours of work to be performed in relatively short periods of time. Weather events may mean that harvesting time which is lost on particular days must be made up in subsequent days, regardless of which day of the week it is. (3) Casual employees who perform seasonal harvesting work are commonly on work or holiday visas. Their preference is (within reason) to work as many hours, and earn as much income, as they can within a short space of time and then move on. (4) The most likely response of horticultural employers to the imposition of any onerous overtime penalty rate requirement will be to try to avoid its incidence. Most would try to achieve this by reducing the working hours of their casuals to a level which did not attract any overtime payments, and employ more casuals to cover the hours. However this could be counter-productive because it was likely that the lower incomes per worker this would produce would reduce the supply of persons willing to work casually in the industry. The alternatives mentioned were to move to less labour intensive crops or reduce output.” [38] The Full Bench expressed the view that the Award should provide for overtime for casual employees in a way that is a sustainable for the horticulture industry, including without the application of overtime penalty rates to seasonal casual employees who were required, and wanted to, work large amounts of hours in a short period of time. [39] A fair reading of its decision leads to the conclusion that the Full Bench was satisfied that casual employees are not currently entitled to overtime under the Award, including because there was no proper foundation for its calculation, and has decided that this position will be altered to give effect to the modern awards objective. [40] It follows that there was no overtime entitlement for casual employees in the Award at the test time for each of the Agreements, and nor was there any relevant averaging period for ordinary hours of work for casual employees. To the extent that the Agreements do provide for overtime for casual employees, the Agreements are more beneficial than the Award. 7 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541 [2019] FWC 991 12 Casual employees and shift work [41] The AWU submits that the Agreements allow casual employees to work at any time of the day or night without shift loadings or penalty rates. Most of the Agreements do not provide for shift work. [42] I have dealt with the application of overtime penalty rates to casual employees above. [43] A Full Bench of the Commission considered the application of shift work provisions in the Award and decided to maintain the ‘status quo’, which it accepted did not currently extend to casual employees.8 The question was not decided to finality, but the terms of the Award in relation to shift work remain unchanged. For reasons similar to those expressed above, I do not consider that the Award provides for shift work for casual employees. Accordingly, the fact that the Agreements are silent in relation to shift loadings for casual employees is not a detriment for the purposes of the better off overall test. [44] As noted above, the Hinkler Park Agreement provides for shift work, including for casual employees. Payment of shift loading may be a benefit or detriment to employees, depending on when the shift is worked and whether it would otherwise be ordinary time or overtime under the Award. On the information before me, I am not satisfied that employees will be better off overall because of the Agreement’s shift work provisions. Wages on termination [45] The AWU submits that other than those set out below, terms in all of the Agreements extend the timeframe for payment of outstanding wages on termination of employment to 3 days. It says this weighs against a finding that the Agreements pass the better off overall test. I accept that the Agreements extend the requisite timeframe for payment of wages from 0 to 3 days. They also mirror the Award in relation to the payment of wages on termination by post. Given the small timeframe involved, and noting that the timeframes are expressed in calendar rather than business days, I am not satisfied that the difference is should be given much weight. Application Agreement AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 8 4 yearly review of modern awards – Award stage – Group 3 [2018] FWCFB 1405 at [121] and [2018] FWCFB 6368 at [19] [2019] FWC 991 13 Meal breaks and allowances [46] There is no double time penalty for work performed during recognised meal breaks in the Agreements, other than those listed below. The Agreements are less beneficial to employees than the Award in this respect. Undertakings have been given to address the concern. Application Agreement AG2018/2496 Glenellen Enterprise Agreement 2018 AG2018/2818 DFI Employment Enterprise Agreement 2018 AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5069 Halt for Holts Enterprise Agreement 2018 AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 [47] The AWU submits that in the same Agreements, meal allowances are limited to full time and part time employees when working overtime under the Agreement, while the allowance would also apply to casual employees under the Award. The latter submission rests on the AWU submission that casuals can work overtime under the Award, contrary to my findings above. I do not accept the submission. [48] The Hinkler Park Agreement makes provision for a 10 minute paid rest break in circumstances which are potentially less beneficial than the Award. The Moffatt Agreement does not provide for a meal allowance. Undertakings have been given to address both concerns. [49] The following Agreements contain a meal allowance that is lower than the Award meal allowance. Undertakings have been given to address the concern. Application Agreement AG2018/3762 Mortimers Farms Enterprise Agreement 2018 AG2018/3798 Makhoma Farms Pty Ltd Enterprise Agreement 2018 AG2018/5069 Halt for Holts Pty Ltd Enterprise Agreement 2018 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Enterprise Agreement 2018 AG2018/5203 Gundablue Farm Produce Enterprise Agreement 2018 AG2018/5223 Nashy’s Produce Enterprise Agreement 2018 AG2018/5515 Akers Employment Enterprise Agreement 2018 AG2018/5531 The Dicky Bill Enterprise Agreement 2018 AG2018/5756 Delta Backpackers Enterprise Agreement 2018 AG2018/5781 Berry North Enterprise Agreement 2018 AG2018/5782 Kureen Farming Enterprise Agreement 2018 Matters dealt with in the Agreement but not in the Award or legislation [50] The AWU says that certain terms in the Agreements dealing with employer directions, stand down in inclement weather, work distractions and a cap on superannuation have no comparable provision in the Award, and in the case of the superannuation term, may be inconsistent with superannuation legislation. It says these terms weigh against a finding that the Agreements pass the better off overall test. Such terms must also be weighed against terms [2019] FWC 991 14 operating to the benefit of employees, including minimum engagement periods, overtime for casual employees, casual conversion, compulsory arbitration of disputes and employer commitments to safety, health and welfare. [51] The table below summarises the matters identified above in relation to the Agreements. Application Agreement Term subject matter All except AG2018/3621, AG2018/5235 and AG2018/5453 Overtime for casual employees All except AG2018/5235 and AG2018/5453 Employer directions Stand down (inclement weather) Arbitration of disputes Work, health and safety All except AG2018/2215, AG2018/2378, AG2018/2384, AG2018/3621, AG2018/5159, AG2018/5235, AG2018/5453 Superannuation limited to ordinary time earnings AG2018/2215, AG2018/2378, AG2018/2384, AG2018/5159, AG2018/5235, AG2018/5453 Superannuation on all hours worked AG2018/3621 Work distractions Casual conversion and roster limits AG2018/5159 Wages $1 per hour above the Award [52] I do not find terms requiring employees to follow the reasonable and lawful directions of their employers to be detrimental to employees when compared to the Award. It is an ordinary incident of employment and while it may expose employees to a potential breach of the Agreement, it is also beneficial for employees to know clearly what is expected of them. [53] I am also not satisfied that reference to ‘inclement weather’ in stand down terms in the Agreements is detrimental to employees when compared to the Award. Stand down is regulated by the Act. The Agreements give further definition to the phrase “stoppage of work for any cause for which the Employer cannot reasonably be held responsible”, but the fact of inclement weather would not trigger the operation of the term on its own. As would be required under the Act, the employer would still need to establish that it could not reasonably be held responsible for the stoppage before relying on any stand down arrangement to withhold pay. [54] The purported ‘cap’ on superannuation reflects the statutory limit on compulsory superannuation contributions to ordinary time earnings. While I am not satisfied on the material before me that the Agreements are inconsistent with superannuation legislation, that is not a relevant consideration for the purposes of the better off overall test. In any event, in my view the terms are consistent with the Award, and not detrimental to employees. Some of the Agreements provide for superannuation to be paid on all hours worked rather than ordinary time earnings only. For those Agreements, the superannuation term is more beneficial than the Award. [2019] FWC 991 15 [55] Other than the two set out below, each of the Agreements provides for compulsory arbitration of disputes by the Commission where other attempts at resolution have failed. Application Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 [56] Matters that are not dealt with in a modern award might weigh against a finding in relation to the better off overall test in appropriate circumstances. While the margins are small, on balance I am not satisfied that is the case in relation to the Agreements. Alteration of employment status [57] The AWU says the Agreements (other than those listed below) permit employers to unilaterally convert permanent employees to casual or piecework employees. I agree that such a term may operate to the detriment of employees in circumstances where a change is made without their agreement and there is no equivalent provision in the Award. Application Agreement AG2018/2850 Moffatt Fresh Produce Enterprise Agreement 2018 AG2018/3621 Propick Pty Ltd Enterprise Agreement AG2018/5235 Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 AG2018/5453 Atta Farms Pty Ltd Enterprise Agreement 2018 [58] There is also an apparent error in the terms dealing with alteration of employment status in the Curino Agreement and the Gundablue Agreement, which purport to apply to both permanent and casual employees. Those Agreements only apply to casual employees. [59] An opportunity for undertakings to address the concerns set out above will be provided. Conclusion in relation to the better off overall test [60] I am not satisfied that the better off overall test is met in relation to the Hinkler Park Agreement. [61] The assessment of the remaining Agreements in relation to the better off overall test, and whether the undertakings given can be accepted, will be finalised once the opportunity for further undertakings has been provided. Fairly chosen [62] Information was sought from relevant applicants about why the Curino Agreement and the Gundablue Agreement are limited in scope to casual employees (and in the latter case, piece workers). A similar issue arises in relation to the Moffatt Agreement, the Nashy’s Produce Agreement and the Delta Backpackers Agreement. [63] I am satisfied on the material before me, and consistent with the observations of the Full Bench referred to earlier in this decision, that the horticulture industry has a particular reliance on casual employment during peak and harvest periods because of the seasonal nature [2019] FWC 991 16 of produce and the need to plant and harvest at times that are responsive to the surrounding environment. Such labour requirements are often only able to met by reliance on short term, casual employment. For that reason, many employers only engage casual employees to do the work that will be covered by the Agreements. [64] Context is important in considering whether a group of employees was fairly chosen. I am satisfied that there is a legitimate business rationale for the choice to cover casual employees only under the Agreements referred to above, having regard to the nature of the business and the workforce in each case. Pending changes to the Award in relation to overtime for casual employees are such that the applicants for those Agreements foresee adverse effects both for their business and the available working hours of their employees. Those consequences have been explained to employees, who have endorsed the Agreements. A concern of the same kind does not arise in relation to permanent employees, whose entitlements are unaffected by the proposed changes. [65] Of the remaining Agreements, each applies to the workforce generally, as opposed to a distinct group of employees. [66] I am satisfied that the group of employees to be covered by each of the Agreements was fairly chosen. Capacity to make the Agreement [67] One of the Agreements is made by what appears to be a partnership in Western Australia.9 If that is the case, it may not be able to make an enterprise agreement under the Act. An opportunity will be provided for submissions on the question. Disposition [68] The applications for approval of the Agreements in the table below are dismissed. Application Agreement AG2018/2557 Newton Orchards of Manjimup Enterprise Agreement 2018 AG2018/2693 Hinkler Park Plantation Enterprise Agreement 2018 AG2018/2781 Greensill and Company Enterprise Agreement 2018 AG2018/3285 Manbulloo Management Enterprise Agreement 2018 AG2018/3519 Tent Hill Employment Enterprise Agreement 2018 AG2018/4727 Motta Produce Pty Ltd Employees Enterprise Agreement 2008 AG2018/5359 Favco Farming Pty Ltd Enterprise Agreement 2018 AG2018/5600 SSS Employment Enterprise Agreement 2018 AG2018/5715 Red Valley Enterprise Agreement 2018 AG2018/5942 Serra Farming Enterprise Agreement 2018 9 AG2018/2373 [2019] FWC 991 17 [69] The remaining applicants will be afforded one final opportunity to provide undertakings or further information in support of their applications on the matters described in the table below, and in relation to whether the undertakings now given can be accepted. Any such material is to be forwarded to chambers.mckinnon.c@fwc.gov.au within 7 days of this Decision. Application Agreement Issue AG2018/2112 Ceres Farm Enterprise Agreement 2018 Undertaking in relation to time off instead of overtime AG2018/5235 and AG2018/5453 Kool Country Packers Ballandean Enterprise Agreement 2018; Atta Farms Pty Ltd Enterprise Agreement 2018 Undertaking in relation to family and domestic violence leave AG2018/5756 Delta Backpackers Enterprise Agreement 2018 Revised Form F17 and supporting information confirming the number of employees employed at the time and who will be covered All except AG2018/2850, AG2018/3621, AG2018/5235 and AG2018/5453 Undertaking to deal with alteration of employment status, including to correct apparent errors in the Curino Agreement and the Gundablue Agreement COMMISSIONER Appearances: Thursday 24 January 2019 L. Caminiti for Nangiloc Colignan Farms Pty Ltd S. Bryant for Glenellen Pty Ltd P. Buchanan for Pitson Holdings Pty Ltd trading as Delta Backpackers and F. Buchanan & P.M. Buchanan trading as Sandowne Farming A. Bayntun for Gen2 Farming Pty Ltd P. Zadro for Saratoga Holdings Pty Ltd and Uni-Fact Pty Ltd trading as Hinkler Park Plantation [2019] FWC 991 18 J. Patane for C Patane & J Patane & J.M Patane & M.S Patane trading as Wallaroo Produce Supplies M. Piccone for Manbulloo Management Pty Ltd L. Mildren for Tent Hill Employment Pty Ltd R. Mortimer for Mortimers Farms Pty Ltd J. Warren for Makhoma Farms Pty Ltd D. Holt for Halt for Holts Pty Ltd L. Curino for Curino Farm Holdings Pty Ltd A. Nash for AJS Nash & AM Sciandra (Nash) trading as Nashy’s Produce D. Akers for Akers Employment Pty Ltd A. Dalglish for A & A Mango Contracting Pty Ltd J. Nardi for Favco Farming Pty Ltd Enterprise Agreement 2018 A. Coldbeck for Adco Holdings Pty Ltd trading as Go Work P. McLaughlin for Desert Farms Pty Ltd D. Andreatta and Phil Copeland for Kool Country Packers Ballandean Pty Ltd trading as Kool Country Packers and Atta Farms Pty Ltd K. Jowett for Acadia Farms Pty Ltd E. Ziino for Motta Produce Pty Ltd as trustee for Motta Produce Family Trust M. Giblett for Norle Nominees Pty Ltd as Trustee for Newton Bros Family Trust trading as Newton Orchards of Manjimup Friday 8 February 2019 M. Gray for Ceres Farm Enterprise Agreement 2018 S. Smith for Ivanhoe Farms Pty Ltd H. Bloecker for The Partnership of Artemis Agriculture Pty Ltd & David D. Menzel & Karen F. Menzel trading as BTS Packing Shed H. Bloecker for Artemis Agriculture Pty Ltd C. Pitson for Pitson Holdings Pty Ltd trading as Delta Backpackers [2019] FWC 991 19 D. Botha for Greensill and Company Pty Ltd S. Duncan for Kenrose Co Pty Ltd L. Donovan for DFI Employment Pty Ltd S. Moffatt for Moffatt Fresh Produce Pty Ltd S. Lee for Propick Pty Ltd trading as Propick R. Paoli for Gundablue Farm Produce Pty Ltd B. McDonald for Dicky Bill Farming Pty Ltd P. Nguyen for SSS Employment Pty Ltd trading as SSS Strawberries A. Carvalho for Mount Sommerset Pty Ltd trading as Red Valley Pty Ltd M. Inderbitzin for Berry North Pty Ltd trading as Berry North M. Inderbitzin for Waitarere Pty Ltd trading as Kureen Farming A. Serra for Serra Farming Pty Ltd trading as Serra Farming Hearing details: 2018. Melbourne: January 24 and February 8. Printed by authority of the Commonwealth Government Printer <PR704980> [2019] FWC 991 20 SCHEDULE OF AGREEMENT APPLICATIONS No. Application Applicant Agreement 1 AG2018/2112 Gray Australia Pty Ltd as trustee for the Gray Family Trust Ceres Farm Enterprise Agreement 2018 2 AG2018/2123 Acadia Farms Pty Ltd Acadia Farms Enterprise Agreement 2018 3 AG2018/2165 Adco Holdings Pty Ltd trading as Go Work ADCO Holdings Pty Ltd Enterprise Agreement 2018 4 AG2018/2215 Ivanhoe Farms Pty Ltd Ivanhoe Farms Enterprise Agreement 2018 5 AG2018/2373 The Partnership of Artemis Agriculture Pty Ltd & David D. Menzel & Karen F. Menzel trading as BTS Packing Shed BTS Packing Shed Enterprise Agreement 2018 6 AG2018/2375 Artemis Agriculture Pty Ltd Bothkamp Australia Farm Enterprise Agreement 2018 7 AG2018/2378 Pitson Holdings Pty Ltd trading as Delta Backpackers Gympie Packhouse Enterprise Agreement 2018 8 AG2018/2384 F. Buchanan & P.M. Buchanan trading as Sandowne Farming Sandowne Farming Enterprise Agreement 2018 9 AG2018/2492 Desert Farms Pty Ltd Desert Farms Enterprise Agreement 2018 10 AG2018/2496 Glenellen Pty Ltd Glenellen Enterprise Agreement 2018 11 AG2018/2557 Norle Nominees Pty Ltd as Trustee for Newton Bros Family Trust trading as Newton Orchards of Manjimup Newton Orchards of Manjimup Enterprise Agreement 2018 12 AG2018/2654 Gen2 Farming Pty Ltd Gen2 Farming Enterprise Agreement 2018 13 AG2018/2675 A & A Mango Contracting Pty Ltd A&A Mango Contracting Enterprise Agreement 2018 14 AG2018/2693 Saratoga Holdings Pty Ltd and Uni-Fact Pty Ltd trading as Hinkler Park Plantation Hinkler Park Plantation Enterprise Agreement 2018 15 AG2018/2781 Greensill and Company Pty Ltd Greensill and Company Enterprise Agreement 2018 16 AG2018/2817 Kenrose Co Pty Ltd Kenrose Enterprise Agreement 2018 17 AG2018/2818 DFI Employment Pty Ltd DFI Employment Enterprise Agreement 2018 18 AG2018/2837 C Patane & J Patane & J.M Patane & M.S Patane trading as Wallaroo Produce Supplies Wallaroo Produce Supplies Enterprise Agreement 2018 19 AG2018/2850 Moffatt Fresh Produce Pty Ltd Moffatt Fresh Produce Enterprise [2019] FWC 991 21 Agreement 2018 20 AG2018/3285 Manbulloo Management Pty Ltd Manbulloo Management Enterprise Agreement 2018 21 AG2018/3519 Tent Hill Employment Pty Ltd Tent Hill Employment Enterprise Agreement 2018 22 AG2018/3621 Propick Pty Ltd trading as Propick Propick Pty Ltd Enterprise Agreement 23 AG2018/3762 Mortimers Farms Pty Ltd Mortimers Farms Enterprise Agreement 2018 24 AG2018/3798 Makhoma Farms Pty Ltd Makhoma Farms Pty Ltd Enterprise Agreement 2018 25 AG2018/4727 Motta Produce Pty Ltd as trustee for Motta Produce Family Trust Motta Produce Pty Ltd Employees Enterprise Agreement 2008 26 AG2018/5069 Halt for Holts Pty Ltd Halt for Holts Enterprise Agreement 2018 27 AG2018/5159 Curino Farm Holdings Pty Ltd Curino Farm Holdings Enterprise Agreement 2018 28 AG2018/5173 Nangiloc Colignan Farms Pty Ltd Nangiloc Colignan Farms Enterprise Agreement 2018 29 AG2018/5203 Gundablue Farm Produce Pty Ltd Gundablue Farm Produce Enterprise Agreement 2018 30 AG2018/5223 AJS Nash & AM Sciandra (Nash) trading as Nashy’s Produce Nashy’s Produce Enterprise Agreement 2018 31 AG2018/5235 Kool Country Packers Ballandean Pty Ltd trading as Kool Country Packers Kool Country Packers Ballandean Pty Ltd Enterprise Agreement 2018 32 AG2018/5359 Favco Farming Pty Ltd trading as Favco Farming Favco Farming Pty Ltd Enterprise Agreement 2018 33 AG2018/5453 Atta Farms Pty Ltd Atta Farms Enterprise Agreement 2018 34 AG2018/5515 Akers Employment Pty Ltd Akers Employment Enterprise Agreement 2018 35 AG2018/5531 Dicky Bill Farming Pty Ltd Dicky Bill Farming Enterprise Agreement 2018 36 AG2018/5600 SSS Employment Pty Ltd trading as SSS Strawberries SSS Employment Enterprise Agreement 2018 37 AG2018/5715 Mount Sommerset Pty Ltd trading as Red Valley Pty Ltd Red Valley Enterprise Agreement 2018 38 AG2018/5756 Pitson Holdings Pty Ltd trading as Delta Backpackers Delta Backpackers Enterprise Agreement 2018 39 AG2018/5781 Berry North Pty Ltd trading as Berry North Berry North Enterprise Agreement 2018 40 AG2018/5782 Waitarere Pty Ltd trading as Kureen Farming Kureen Farming Enterprise Agreement 2018 41 AG2018/5942 Serra Farming Pty Ltd trading as Serra Farming Serra Farming Enterprise Agreement 2018