s.739 - Dispute resolution

Alleged dispute about any matters arising under the enterprise agreement and the NES

• [1] On 9 December 2024, the Australasian Meat Industry Employees Union (AMIEU) made an application to the Fair Work Commission (the Commission) under s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute in accordance with clause 16 of the Wingham Beef Exports Pty Limited Enterprise Agreement 2023 (the Agreement).

• [2] The Agreement came into operation on 27 April 2023 and has a nominal expiry date of 20 April 2026. The Agreement covers the AMIEU and Wingham Beef Exports Pty Limited (the Respondent) and its relevant employees.

• [3] The dispute concerns the entitlement of incentive workers who are engaged as slaughterers, boners and slicers, to a 15-minute paid break under clause 18.2 of the Agreement. The AMIEU argues that clause 18.2 guarantees a paid break for all employees, including incentive workers, not just those paid by the hour. The Respondent's position is that because the Agreement provides for two independently operating payment systems - the incentive payment system and the timework payment system - and incentive workers are paid under the incentive payment system, the paid break provided by clause 18.2 does not apply to incentive workers. Instead, the Respondent says that the 15-minute paid break for incentive workers is incorporated into the incentive payments system, and there is no entitlement to a separate paid break.

• [4] The AMIEU claims that the Respondent has failed, over a period of several years, to provide incentive workers with a 15-minute paid break under clause 18.2 of the Agreement. Accordingly, in its application to the Commission, the AMIEU sought to raise its dispute under the Agreement.

• [5] I convened an initial conference with the parties on 22 January 2025. Following that conference, the parties agreed to partake in further discussions in an attempt to resolve the dispute. On 19 February 2025, the AMIEU advised that the dispute remained unresolved and requested that the matter be arbitrated, and directions be issued for the filing of evidence and submissions.

• [6] Clause 16.5 of the Agreement provides that the Commission may deal with the dispute by mediation, conciliation and consent arbitration. The Respondent advised on 7 March 2025 that it does not consent to the Commission arbitrating the matter. Accordingly, the Commission does not have jurisdiction to arbitrate the dispute.[1]

• [7] On 20 March 2025, the AMIEU asked the Commission to make a recommendation answering the question of whether incentive workers are entitled to a paid break. The Respondent objects to the Commission making the recommendation sought by the AMIEU, as it considers that the AMIEU is effectively asking the Commission to answer a question for arbitration and circumvent the consent requirement in clause 16.5 of the Agreement.

• [8] I convened a further conference with the parties on 8 April 2025. I informed the parties that as the requisite consent did not exist for the Commission to arbitrate the dispute, I would not hear evidence from parties. At the conference, the AMIEU pressed its request for the Commission to make a recommendation. I informed the parties that following the conference, I would consider exercising my discretion to make a recommendation. The Respondent sought to provide an aide memoire in support of its position before a recommendation was made, to which I agreed. The aide memoire was received on 11 April 2025.

• [9] During the 9 April 2025 conference I informed the parties that I had reviewed the Form F17 completed by Ms Leanne Yarnold, Human Resource Manager in support of the Respondent's application for the Commission to approve the Agreement. The following is recorded:

Question 10. Does the agreement contain any terms or conditions of employment that are more beneficial than equivalent terms and conditions in the modern award(s) listed in your answer to question 8?

Agreement Entitlement Employees Affected Comment

Clause 18 Meal Internal & Smoko. All employees Employees receive a

15 minutes Smoko Break Paid 15-minute paid rest break

than the award paid rest break per day of 10 minutes

• [10] In the circumstances, absent consent to the Commission arbitrating the dispute, I consider it appropriate to issue a recommendation to assist the parties in resolving the dispute.

• [11] Clause 18.2 of the Agreement provides as follows:

"18.2 Unless otherwise provides or agreed, an employee shall be granted a 15-minute paid break and an unpaid meal interval of not less than 30 minutes at a time decided by the employer during a normal 8 or 10-hour shift."

• [12] The AMIEU states that incentive workers are entitled to have the above paid break within their ordinary hours of work. It submits that the rate for the paid break is to be calculated according to an averaging exercise.

• [13] Clauses 24.1 and 24.2 of the Agreement state:

"24.1 Subject to the provision of this clause an employer may, elect to pay employees under an incentive payment system (incentive worker), as an alternative to the time work payment system provided in this agreement (time worker).

24.2 An incentive payment system may apply to the whole of the workplace or enterprise covered by this agreement or a section or sections of such workplace or specified categories of employees within the workplace and, to the extent of any inconsistency, will prevail over the time work payment system provided in this agreement whilst the WBE incentive payment system remains in force."

• [14] Per clause 24.14(a), the incentive payment system is a payment system whereby wages are calculated by direct reference to the amount of work performed by an employee. On the other hand, clause 24.14(b) explains that under the timework payment system, wages are calculated by reference to the time worked by an employee, irrespective of the amount of work actually performed during that time.

• [15] The Respondent contends that clause 24 sets out the payment terms for incentive workers. For example, clause 24.9 specifies the payment of overtime for incentive workers, and clause 24.12 outlines leave arrangements. The Respondent argues that there is no equivalent provision to clause 18.2 within clause 24 of the Agreement. Further, the incentive payment system provided in clause 24 is supplemented by separate Incentive Payment System Agreements made between the Respondent, the AMIEU and the Respondent's Consultative Committee, one of which applies to slaughterers and the other to boners and slicers. These agreements detail who the incentive payment system applies to and how payments are calculated. The agreements also do not contain an equivalent provision to clause 18.2 of the Agreement. Therefore, the Respondent argues that because the incentive payment system applies as an alternative to the timework payment system and prevails over any inconsistency with the timework system, there is no entitlement for incentive workers to receive a separate paid break under clause 18.2 of the Agreement.

• [16] The Incentive Payment System Agreements are made under clause 24.3 of the Agreement. Clause 14 of the Agreement contains provisions relating to the Consultative Committee. Clause 14.15 applies to agreements entered into by the Consultative Committee, the Respondent and the AMIEU, such as the Incentive Payment System Agreements. It states as follows:

Any Agreements entered into and signed by the Consultative, the Company and the Union, shall be binding on the parties, provided that no Agreement shall have the effect to the extent that it operated to reduce any term or condition of employment covered by this Agreement, and provided further that such Agreements shall not contain matters which are prohibited by the Act from being contained in an Enterprise Agreement."

• [17] The AMIEU says that the effect of this clause is that the Incentive Payment System Agreements cannot operate to exclude the entitlement under clause 18.2 to paid breaks for incentive workers. It says that the incentive workers are not pure incentive-based workers. If that were the case, the AMIEU says that those workers could "cut tally" and go home. However, they are not permitted to do so and cannot leave site upon reaching tally. In that sense, they effectively work under a blended time and incentive scheme.

• [18] Additionally, the AMIEU notes that by clause 5.2 of the Agreement, the Meat Industry Award 2020 (the Award) is incorporated into the Agreement. Clause 15.2 of the Award provides a 10-minute paid rest break for slaughterers, boners and slicers. Because the Award is incorporated, the AMIEU argues that the Agreement cannot exclude the entitlement of incentive workers to a paid break under clause 18.2.

• [19] The Respondent, however, says that the Incentive Payment System Agreements provide incentive workers with a 15-minute paid rest break. Firstly, in relation to the Boning Room Payment Agreement for boners and slicers, the Respondent says that the incentive payment system is based on an 8-hour workday. The Boning Room Payment Agreement sets out the formula for the 'Base Daily Production Guarantee', which refers to 8 hours. This is the minimum daily rate boners and slicers are guaranteed to be paid, regardless of the tally they actually produce that day. The Respondent highlights that the relevant clauses of the Boning Room Payment Agreement provide that if an hourly rate is required for any reason, the daily production guarantee may be divided by 8. The Respondent also refers to an Hours of Work Boning Room document, which sets out the typical daily roster. The Respondent says that this is a longstanding roster that has been in place since March 2020. The document states that boners and slicers commence work at 5:30am and finish at 2:20pm; take 3 unpaid relief breaks, a 15-minute paid rest break and a 30-minute unpaid meal break; and perform a total of 464 minutes of actual work, being 441 minutes of ordinary time and 23 minutes of scheduled overtime. This leaves 15 minutes, which the Respondent says is the 15-minute break, to make up the remainder of the 8 hours of paid time. The Respondent notes that the common practice in the boning room is that boners and slicers work the full 8-hour shift, regardless of when they achieve the minimum daily production expectation.

• [20] Similarly, for the Slaughter Floor Payment Agreement which applies to slaughterers, the Respondent says that the incentive payment is also based on an 8-hour workday. There is also a 'Base Daily Production Guarantee', which refers to 8 hours and provides that for the purposes of an hourly rate, the Daily Guarantee may be divided by 8. There is a similar Hours of Work Slaughter Floor document which has also been in place since March 2020. It states that slaughterers commence at 6:00am and finish at 2:35pm; take an unpaid 5-minute relief break, a 15-minute paid rest break and a 30-minute unpaid meal break; and perform a total of 464 minutes of actual work which, like for boners and slicers, is comprised of 441 minutes of ordinary time and 23 minutes of overtime, leaving 15 minutes of paid break time. Unlike the boning room, the Respondent says the practice on the slaughter floor is that slaughterers finish at the time the nominated kill total of the day has been achieved, meaning most slaughterers leave at approximately 1:00pm; however, they are still entitled to the Daily Production Guarantee rate.

• [21] The AMIEU however says that the Daily Guarantees only apply where incentive workers do not meet their set tally. This may be due to a machinery breakdown or failure of the Respondent to order a sufficient head of cattle for processing. In these circumstances, the AMIEU says that incentive workers receive the Daily Guarantee rate, as opposed to the set quantum per unit of cattle processed.

• [22] The AMIEU further notes that the Respondent's explanation of the Incentive Payment System Agreements and Base Daily Production Guarantees does not detail the amount of money incentive workers receive for the paid break that the Respondent says is afforded to them. The AMIEU says the reason for this is because the workers do not receive a paid break. Therefore, the AMIEU continues to rely on its construction of clause 18.2 in support of its position.

• [23] It is noted that there are many items within the Agreement to which the Respondent accepts apply to incentive workers, even if not expressly stated. This includes, for example, clause 34 - Preserved Entitlement (previously union picnic day). Incentive workers employed prior to 15 May 2023 are entitled to the additional day of leave or additional payment pursuant to this clause.

• [24] It would appear to me that incentive workers are entitled to the terms contained within the Agreement unless expressly stated not to apply. Nowhere in clause 18.2 of the Agreement is the entitlement to a 15-minute paid meal break expressed to apply to time-based workers only, and not to include incentive workers. I consider that if that was the intention of the parties, it would be expressly stated.

• [25] The Respondent, in seeking to have the Agreement approved, informed the Commission that all employees are entitled to a 15-minute paid break. This information assisted the Commission in its determination in respect of the better off overall test. The Respondent considers that incentive workers are not entitled to a paid 15-minute break but did not inform the Commission of this view when seeking to have the Agreement approved. It is not clear if the Respondent made an error when completing the Form F17. If the Respondent considers that there was an error, the result is that the Commission was arguably misled by the Respondent.

• [26] The Award is incorporated into the Agreement, such that if there is any inconsistency, the Agreement shall prevail over the Award. At the very least, it is my opinion that the Respondent ought to provide to incentive workers a paid 10-minute break in accordance with the terms of the Award.

• [27] With the information presently before the Commission, it is my opinion that incentive workers are entitled to the 15-minute paid break provided for in clause 18.2 of the Agreement.

• [28] I recommend the Respondent immediately commence paying incentive workers for their break, whether that be a payment of 10 or 15 minutes.

• [29] In the absence of consent arbitration by the Commission, the AMIEU is apprised of the avenue available to it to pursue an alleged breach of the Agreement in a court of competent jurisdiction.

[1] Fair Work Act 2009 ss.739(3)-(4).

Printed by authority of the Commonwealth Government Printer