HAIGH'S CHOCOLATES MANUFACTURING AND LOGISTICS ENTERPRISE AGREEMENT 2025

Application for approval of the Haigh's Chocolates Manufacturing and Logistics Enterprise Agreement 2025

[1] Haigh Manufacturing (No. 2) Pty Ltd Atf Haigh Manufacturing Trust (the Employer) has made an application for approval of an enterprise agreement known as the Haigh's Chocolates Manufacturing and Logistics Enterprise Agreement 2025 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

[2] The Agreement will apply to employees who are covered by either the Food, Beverage and Tobacco Manufacturing Award 2020 (FBT Award) or the Storage Services and Wholesale Award 2020 (Storage Award).

[3] The application states that 270 employees are engaged under the Agreement, 191 of those employees cast a valid vote and 165 employees voted to approve the Agreement. The application states that the Employer has 89 casual employees.

[4] The Employer submitted that in respect of the 270 employees invited to vote, a total of 40 were casual employees who were working at the time and eligible to vote consistent with Appeal by Kmart Australia Limited T/A Kmart and Others.[1]

[5] Clause 10.2 of the FBT Award states in relation to casual employees, 'The loading constitutes part of the casual employee's all-purpose rate', while clause 10.4 states, 'Where this award refers to a penalty rate, overtime rate or shift loading as being calculated as a percentage of the ordinary hourly rate, that reference will (for a casual employee) instead be taken to be a reference to the casual ordinary hourly rate if the entitlement is applicable to a casual employee'. The Agreement does not appear to provide for a casual all-purpose remuneration rate apart from clause 27.7 where it is states, 'All overtime performed on a Sunday will be paid at 200% of the ordinary hourly rate. Casual employees are paid at 200% of the casual hourly rate.' The less beneficial terms may result in some casual classifications being not better off overall.

[6] The Employer submitted that in relation to weekend work and shift work, clause 14.13 of the Agreement entitles a casual employee to a loading of 25% on all hours worked. Clause 29 provides for shift work loadings and clause 26.9 onwards provides for penalty rates.

[7] The Employer submitted that a casual employee working shift work will be entitled to the shift work loading and the casual loading on a cumulative basis. A casual employee working weekend work will be entitled to the weekend penalty and the casual loading on a cumulative basis.

[8] Further, the Employer submitted the minimum hourly rates of pay under the Agreement are higher than the minimum hourly rates under the FBT Award for the equivalent classification. Notwithstanding that the Award provides shift work loadings (or in the alternative, weekend penalties) calculated on a compounding basis using the casual hourly rate, a casual employee is still better off under the Agreement in respect of performing the same work.

[9] The Employer submitted that it only engages manufacturing casual employees in Level and provided modelling which shows that a casual employee working one afternoon shift is paid $284.83 under the Agreement, which is higher than the FBT Award payment of $256.30 which would apply for the same work. The Employer also provided modelling which shows that a casual employee working one Saturday shift is paid $376.39 under the Agreement, which is higher than the FBT Award payment of $334.31 which would apply for the same work.

[10] In respect of casual overtime rates, the Employer submitted that under the Agreement, casual employees retain the benefit of the casual loading for all hours worked. The Agreement provides for overtime rates on a compounding basis for casual employees. While not expressly stated, the Employer explained that the entitlement under clause 27.4 for overtime other than on a Sunday is also calculated on the casual hourly rate and provided an undertaking to confirm this.

[11] Clause 11.3 of the Storage Award states, 'When a casual employee works overtime, they must be paid the overtime rates in clause 21.1(d)', while clause 21.1(d) states 'Overtime for casual employees will be paid at the rate of 175% of the minimum hourly rate for the first 2 hours and 225% of the minimum hourly rate after 2 hours. NOTE: The overtime rates for casual employees have been calculated by adding the casual loading prescribed by clause 11.2(b) to the overtime rates for full-time and part-time employees prescribed by clause 21.1(b)'. The Agreement does not appear to provide for a casual all-purpose remuneration rate apart from clause 27.7 which may result in some casual classifications being not better off overall.

[12] The Employer submitted that the Storage Award provides that the overtime penalty for casual employees and casual loading apply on a cumulative basis. However, under the Agreement, casual employees are entitled to overtime compounded on the casual hourly rate, resulting in employees better off overall under the Agreement and provided an undertaking to confirm this.

[13] The Commission raised the following additional issues with the Employer which are relevant to whether employees are better off overall under the Agreement compared to the relevant Award:

1. Clause 28 of the Agreement relating to TOIL states 'A full-time Employee may have up to 8 days of TOIL (pro-rata for part-time Employees) accrued at any one time. If an Employee's TOIL accrual exceeds the maximum limit, the excess TOIL will be paid out at the Employee's ordinary time rates. Should an Employee have unused TOIL at the time of resignation, payment for TOIL will be paid at ordinary time rates in their final pay'. Both the FBT and Storage Awards provide TOIL provisions and stipulate that employees can request payout of TOIL hours at any time, or upon termination, and that in any of these instances such TOIL must be paid out at overtime rates. The Agreement TOIL provision appears less beneficial compared to the FBT and Storage Awards.

2. Clause 30.2 of the Agreement states 'An Employee working on an afternoon or night shift which does not continue for five (5) successive shifts will be paid the relevant afternoon/night shift loading for the five (5) shifts. That is, all shifts worked after the first shift are paid with the shift loading. This penalty is non-cumulative with other penalties and does not apply when the Employee requests and works such an arrangement'. Clause 24.3(e) of the FBT Award states 'Where an employee works on a shift other than a rostered shift, the employee must: (i) if employed on continuous work, be paid at 200% of the ordinary hourly rate; or (ii) if employed on other shiftwork, be paid at 150% of the ordinary hourly rate for the first 3 hours and 200% of the ordinary hourly rate thereafter'. The Agreement's non-continuous shift arrangement/penalties appear less beneficial than the FBT Award which could result in employees being worse off overall.

3. Clause 26.6 of the Agreement states, 'The ordinary hours of work for a full-time Employee shall be an average of 76 hours per fortnight to be worked in shifts of up to ten (10) hours per shift' and clause 12.3 of the FBT Award states 'The ordinary hours for non-continuous shiftworkers will not exceed 8 per shift unless otherwise agreed in accordance with clause 12.5'. The Agreement's maximum hours per day (for FBT Award covered employees) appears less beneficial than the FBT Award which could result in employees being worse off overall.

Section 190 Undertakings

[14] The Employer provided written undertakings to address the above BOOT issues. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the Agreement.

Section 186, 187, 188 and 190

[15] Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.

Section 183 Bargaining Representatives

[16] The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants to be covered by the Agreement.

[17] In accordance with s.201(2), I note that the Agreement covers the AMWU.

[18] The Agreement is approved and, in accordance with s.54 of the Act, will operate from 1 July 2025. The nominal expiry date of the Agreement is 31 July 2027.

[1] [2019] FWCFB 7599.

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