In Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi-Lo; the Coles Store Team Enterprise Agreement 2014-17 (the Coles Agreement) came under scrutiny. In particular, matters were raised as to whether or not the employees to be employed under the Coles Agreement were better off under the Coles Agreement or under the General Retail Industry Award 2010.
Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi-Lo;
The Australasian Meet Industry Employees Union v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo [2016] FWCFB 2887
In our blog If the BOOT Doesn’t Fit earlier this year, we examined how the Fair Work Commission (the Commission) would approach applying the ‘better off over all test’ (the BOOT) when considering approving proposed enterprise agreements.
In order to pass the BOOT, the Commission must be satisfied that at the time the proposed enterprise agreement is assessed, that each award covered employee, and prospective award covered employee, would be better off overall under the agreement as opposed to if they were paid under the relevant modern award.
In Duncan Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi-Lo; the Coles Store Team Enterprise Agreement 2014-17 (the Coles Agreement) came under scrutiny. In particular, matters were raised as to whether or not the employees to be employed under the Coles Agreement were better off under the Coles Agreement or under the General Retail Industry Award 2010.
The Coles Agreement had been approved by the Commission in July 2015 when Commissioner Bull was satisfied that it had passed the BOOT following undertakings agreed to by Coles.
In October 2015, the Full Bench of the Commission allowed a part-time Coles employee, Mr Duncan Hart to appeal against the decision of Commissioner Bull. Mr Hart, claimed that the Coles Agreement did not pass the BOOT and used his roster as an example to illustrate that he and other employees were worse off under the Coles Agreement when compared to the modern award.
The Full Bench noted that the Coles Agreement provided employees with a higher hourly rate but lower penalty rates for work performed at night, on weekends and public holidays. Mr Hart relied on typical rosters from two Coles stores to submit that some employees were financially disadvantaged due to their particular rostering arrangements.
Coles submitted that the Full Bench should also take into consideration other benefits provided by the Coles Agreement, including additional penalty rates, rest and meal breaks and other leave entitlements. The Full Bench held that whilst regard should be had to these benefits, it also expressed caution on their monetary value. It was noted that the benefits would not be received or accessed by all employees or apply uniformly to all employees. Rest breaks for example, would depend on the shifts that the employee had been assigned and not all employees would access some leave benefits e.g. defence service leave.
Accordingly, the Full Bench held that it was not satisfied that the Coles Agreement passed the BOOT, noting that part-time and casual employees in particular were likely suffer significant monetary loss. The Full Bench did not consider the other benefits provided by the Coles Agreement would result in each employee and prospective employee from being better off.
Coles has been provided with an opportunity to provide an undertaking to address the Full Bench’s concerns about employees who are employed on a high number of hours that attract penalty rates. If an unsatisfactory order is provided, the Full Bench foreshadowed that an Order would be made to allow the appeal and quash the decision of Commissioner Bull.
The Full Bench decision resulted in increased scrutiny in enterprise agreements for larger organisations including Woolworths and McDonalds. Last week it was reported that some McDonald’s employees were paid less under the enterprise agreement in comparison to the applicable Modern Award (i.e. the Fast Food Industry Award 2010).
The decision highlights that while parties may agree on a rate of pay and other benefits, it is the Commission who ultimately determines and assesses whether the rate of pay and other terms and conditions will result in employees and prospective employees being better off over all under the proposed agreement.
Employers should also take note of the views expressed in this decision as to the value of non-monetary benefits such as rest and meal breaks and additional leave entitlements. Traditionally these non-monetary benefits have been included by employers in the belief that they were of value and therefore of assistance when considering the BOOT – this strategy should now be carefully examined in light of the comments from the Full Bench.
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