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[2010] FWA 1347
General information, not legal advice.
Fair Work Australia
2010-04-23
Original judgment source is linked above.
s.185 - Application for approval of a single-enterprise agreement
McDonald's Australia Pty Ltd on behalf of Operators of McDonald's outlets
[1] On 23 December 2009, McDonald's Australia Pty Ltd ("the applicant") filed an application, pursuant to s.185 of the Fair Work Act 2009 ("the Act"), seeking the approval of an enterprise agreement titled the McDonald's Australia Enterprise Agreement 2009 ("the Agreement"). At the time the Agreement was made, there were discrete industrial instruments in the States and Territories regulating the minimum pay and conditions of employment for certain classes of employees. The Agreement is intended to cover the applicant itself and licensee operators of all McDonald's retail food outlets across Australia. The application was made in accordance with a single employer authorisation (PR991483).
[2] The Agreement would apply to approximately 80,000 employees employed in all McDonald's outlets. Based on certain statistical information provided by the applicant, the demographic profile of those employees may be summarised as follows:
Employees from non-English speaking backgrounds: 28,800 (36%)
Employees who are Aboriginal and Torres Strait Islander people: 2,400 (3%)
Employees who are not otherwise categorised: 46,400 (58%)
[3] Of the 80,000 employees, 35,249 (44.06% of eligible voters) cast a valid vote in the ballot for the Agreement. Of the 44.06% of employees who cast a valid vote, 31,970 (90.70% of those who voted (39.96% of all eligible voters)) voted in support of the Agreement.
[4] The Shop, Distributive and Allied Employees' Association ("the SDA") was the only bargaining agent in the making of the Agreement. The SDA was closely involved in processes leading to the making of the Agreement now before Fair Work Australia; it supports the approval of the Agreement.
[5] I have concluded that the Agreement is incapable of approval, given the deficiencies in the application and for failure to meet the Act's pre-approval requirements. I would, in any event, decline to approve the Agreement as it fails to meet the no disadvantage test, which was the relevant statutory test given the Agreement was made on 21 December 2009. My reasons for so concluding are dealt with in this decision under the following general headings:
3. Particular matters arising from earlier statement
The matter was listed initially on 19 January and 3 February 2010, when I raised a number of preliminary queries and concerns about the application and the Agreement. On 25 February 2010, I made a detailed statement (the "statement") expressing further concerns about the application and the Agreement. In consequence of some of the matters addressed in that statement, the applicant and the SDA have since acknowledged that the statutory declarations filed in support of this application by the applicant and the SDA are incomplete and inaccurate. Those statutory declarations are the Form F17 (Employer's Declaration in Support of Application for Approval of Enterprise Agreement) and the Form F18 (Declaration of Employee Organisation in Support of Application for Approval of Enterprise Agreement), which indicated the SDA's agreement with the answers given to each question addressed in the employer's declaration.
[6] On the hearing of the matter on 29 March 2010, counsel for the applicant, Mr M Moir, apologised on behalf of the applicant for providing "deficient" and "incorrect" responses in the employer's declaration filed in support of the application, adding that additional material should have been provided. Mr D Bliss, for the SDA, submitted the SDA acknowledged the statutory declaration made on its behalf was not fully accurate and complete, and should have addressed many of the issues which Fair Work Australia had now "correctly identified". He submitted this was unintentional and had not been done in bad faith.
[7] I am bound to say, even noting the apologia from the applicant's counsel, and the position advanced in both submissions and in a supplementary statutory declaration tendered by Mr Bliss, it is, put at its lowest, unsatisfactory that the application for approval of the Agreement should have been brought before Fair Work Australia with such declarations. This is particularly so in circumstances where a major employer represented by a major industrial organisation (namely, the Australian Industry Group ("AIG")) and a major union have been involved in the processes for the application concerning the approval of an enterprise agreement proposed to cover approximately 80,000 employees.
[8] The applicant, while now conceding through its counsel that its employer's declaration in support of the application for approval is deficient and contains incorrect information, still has not properly addressed the matters required of it in any application for the approval of an enterprise agreement. For example, the applicant acknowledges the information provided at cl.3.3 of its employer's declaration is incorrect. Clause 3.3 asks the following question:
"3.3 Does the agreement contain any terms or conditions of employment that are less beneficial than any of the terms and conditions contained in the reference instruments identified in the reference instruments identified in questions 3.1 or 3.2?"
The response provided in the employer's declaration to the question at cl.3.3 was "No". That response is now acknowledged to have been incorrect. In light of that acknowledgment, it was the responsibility of the applicant to provide the information required to be provided at cl.3.4.
[9] Clause 3.4 of the employer's declaration requires that the following information be provided if an agreement contains any terms or conditions of employment that are less beneficial than any of the terms and conditions contained in the reference instrument(s):
"3.4 If the answer to question 3.3 is "Yes", please identify the terms and conditions of the reference instrument that are more beneficial than the agreement, the employees affected and the specific terms in the agreement that bring about the reductions:
[Note: your answer must indicate whether all or only some of the employees are affected and, if only some employees are affected, identify which employees.]"
The information required at cl.3.4 of the employer's declaration to be provided by any applicant by way of statutory declaration for the approval of an enterprise agreement has not been provided by the applicant in this matter. For example, the applicant has not provided a supplementary statutory declaration properly identifying all the terms and conditions of the reference instruments that are more beneficial than the Agreement; it has not identified the employees affected; and it has not identified the specific terms of the Agreement that bring about the reductions. Further, the applicant has not provided a supplementary statutory declaration identifying, as specified by the notation to cl.3.4, whether all or only some of the employees are affected and, if only some employees are affected, identifying which employees. The submissions for the applicant referred to only selected matters rather than providing the information required at cl.3.4; and, I might add, highlighting by example principally only those matters which assisted the applicant in its claim the Agreement should be approved.
[10] Clause 3.5 of the Form F17 requires the following information:
"3.5 If the answer to question 3.3 is "Yes", please identify the terms in the agreement which may result, on balance, in terms and conditions that are more beneficial to one or more relevant employees than the terms and conditions contained in the reference instruments identified above:
[Note: your answer must indicate whether all or only some of the employees are affected and, if only some employees are affected, identify which employees.]"
I accept the supplementary statutory declaration by Frank McManus, the applicant's Senior Vice President/Director People Resources, tendered on 29 March 2010 and marked as Exhibit 5, identified at least some information required by the Form F17 to be provided by an applicant. However, neither Mr McManus's supplementary statutory declaration nor the two supplementary statutory declarations of Kathryn Allen, National Employment Relations Manager, addressed, for example, the requirement that an applicant "must indicate whether all or only some of the employees are affected and, if only some employees are affected, identify which employees". In this respect, I note there are different arrangements under the Agreement that apply as between Levels 1-2 employees, Level 3 employees and Level 4 employees; and there are discrete and different State-based and Territory-based arrangements concerning numerous aspects of the wages and conditions for employees. As such, the application remains deficient with respect to the provision of information required to be provided by an applicant in support of an application for the approval of an enterprise agreement.
[11] Dealing with the matters in order of clause numbers in the employer's declaration, I note the following further examples of incomplete or incorrect information.
[12] The employer's declaration described at cl.1.5 the work to be done by the employees under the Agreement as follows:
"The preparation, the receipt of orders, cooking, sale, serving or delivery of meals, snacks and/or beverages which are sold to the public primarily to take away or consume in food courts in shopping centres, and other incidental duties."
As can be seen from a plain reading of the classifications in Schedule A of the Agreement, the information provided at cl.1.5 of the employer's declaration is deficient in as much as it describes the work only of Level 1 and Level 2 employees. The information in the employer's declaration makes no reference, for example, to the work of the Level 3 "supervisory" employees and the Level 4 "managerial" employees proposed to be covered by the Agreement.
[13] Clause 2.3 of the employer's declaration requires the identification of the steps taken by the employer to ensure that the relevant employees were given, or had access to, the written text of the Agreement and any other material incorporated by reference in the Agreement. While there is evidence indicating the applicant arranged for the Agreement to be available to employees, there is no information as to if and when, for example, the National Employment Standards ("NES") were provided to employees - some aspects of which are incorporated by reference in the Agreement.
[14] Clause 2.4 of the employer's declaration referred to attached posters said to contain information about the "time and place at which the vote was to occur and the voting methods to be used". The posters were not, however, attached to the employer's declaration - a matter I drew to the applicant's attention at the initial listing. The matters required to be addressed in cl.2.4 of the employer's declaration have now been the subject of two supplementary statutory declarations, which I will return to in more detail later in the decision in relation to pre-approval steps.
[15] Clause 2.12 of the employer's declaration requires the identification of any terms of an agreement that deal with matters contained in the NES. The information provided in the employer's declaration is incomplete, in as much as it identified only the following clauses: 6, 16, 26, 29, 30, 31, 32, 33, 34, 35 and 39. For example, cll.12, 13 and 14 in conjunction with cl.27 of the Agreement deal with hours and related matters; cl.15 deals with notice of termination of employment; and cl.18 deals with minimum weekly wages.
[16] Clause 2.13 of the employer's declaration requires the identification of any terms of an agreement that exclude, in whole or in part, the NES. The employer's declaration asserted there are no such provisions in the Agreement. There appears to be at least one such example. The Agreement provides at cl.29.4 for cashing-out of annual leave, but only for Level 4 employees - thereby, arguably at least, inferentially excluding cashing-out for employees at Levels 1-3.
[17] Although an applicant is required at cl.2.16 of the employer's declaration to provide information as to the details of the geographical, operational or organisational basis for choosing the group of employees to be covered by an agreement when that agreement does not cover all employees, the applicant did not provide any of the information required to be provided. For example, the applicant would have "head office" clerical, administrative and managerial employees who are not covered by the Agreement. Although not all the employees of the applicant or its licensees, or both, are covered by the Agreement, the employer's declaration failed to provide information as to the details of the geographical, operational or organisational basis for choosing the group of employees to be covered by the Agreement. That is, the response provided in cl.2.16 of the employer's declaration, without any further elaboration of the required information, read as follows: "The agreement only covers employees classified in Schedule A of the Agreement."
[18] As to Schedule A, I note it reads as follows:
As I will outline later, the terms and conditions of employment for the managerial Level 4 employees are markedly different, and adversely so, from those applicable to the Level 1-3 employees under the Agreement. This raises questions about whether I could be satisfied the "managerial" group was "fairly chosen", within the meaning of s.186(3)-(3A) of the Act, for inclusion in the Agreement - which is one of the purposes for the type of information required by cl.2.16 of the employer's declaration.
[19] Clause 2.17 of the employer's declaration stated the Agreement did not contain any discriminatory terms. However, cl.21.4.7.1 of the Agreement discloses discrimination against same-sex partners. That is, the definition of "dependant" for the purpose of payment of certain allowances relevantly includes only a spouse or de facto spouse, rather than also including a same-sex de facto partner.
[20] Clause 2.30 of the employer's declaration stated the Agreement did not cover any shift workers, whereas the definitions section at cl.3 of the Agreement defines a shift worker, thereby suggesting shift workers are, or could be, covered by the Agreement. After raising this issue, information was provided by Ms Allen in Exhibit 2 as follows:
"6. I refer to clause 2.30 and confirm that in answering that question, I considered whether the Agreement had shift worker terms and conditions and omitted to consider the definition section of the agreement. I confirm that the Agreement does not have any shiftworker provisions except for the definition of shiftworker for the purposes of the annual leave provisions and the NES. McDonald's does not employ any shiftworkers."
As to this, I would simply observe that, to my knowledge, there are McDonald's outlets which operate 24 hours a day, seven days a week, and on public holidays - leaving open the question of who might be expected to work such shifts if it is not employees regularly engaged in shift work and such as those, for example, who are envisaged as receiving the early morning work allowance of 10 per cent for work between the hours of 1.00am and 5.00am under cl.27.3 the Agreement. In Exhibit 4, Ms Allen, in describing the way the applicant proposed to deal with the savings provision in the Agreement for payroll purposes, otherwise referred to "… employees whose regular pattern of work included overnights and/or weekends".
[21] Clause 3.1 of the employer's declaration identified the reference instruments as follows:
" - the Restaurants Industry - McDonald's South Australia/Northern Territory - Award 2000 (AP795822) (referred to hereafter in this decision as "the SA/NT instrument");
The employer's declaration indicated at cl.3.1 that the NSW instrument "includes Tasmania". This advice, on which I originally relied without further checking, was only partly correct. There are two roping-in awards to the NSW instrument. The McDonald's - Shop, Distributive and Allied Employees' Association - NSW (Roping-in No 1) - Award ropes-in seven businesses in New South Wales, including the applicant itself; it simply applied the NSW instrument under roping-in arrangements. However, the McDonald's - Shop, Distributive and Allied Employees' Association - NSW (Roping-in No 2) - Award, ropes-in eight companies, operating over fourteen outlets in Tasmania, as well as "McDonald's Australia Limited, Regional Office, 2 Smith Street, Collingwood, Victoria 3066". The Roping-in Award No 2 does more than rope-in; it applies different conditions concerning wages, public holidays and savings. Clause 3.1.1 of the (Roping-in No 2) - Award provides that in lieu of the wages in cl.16.1.1 of the NSW instrument, the Grade 2 employee rate will be $531.00 (as at 23 March 2006), adjusted in line with the increases applicable to the NSW instrument. Clause 3.1.2 provides the Grade 1 rate of pay will become 90 per cent of the Grade 2 rate, provided that it is no less than then federal minimum wage, in which case the federal minimum wage shall apply.
[22] The employer's declaration also noted, in response to the question at cl.4.3, the following certified agreements operated in relation to the employees prior to the making of the Agreement:
[23] I should note, in this respect, that at the initial listing of this matter on 19 January 2010, one of the first matters I raised with the applicant was to seek clarification as to which reference instruments regulated the pay and conditions of the employees, noting this was a matter that perhaps needed to be addressed more fully, so there could be "absolutely no scope for confusion".
[24] In Ms Allen's first supplementary statutory declaration (Exhibit 2), she declared that McDonald's is aware the pay and conditions of all other employees in New South Wales, Victoria, the Northern Territory, Tasmania, the Australian Capital Territory and South Australia not covered by the reference instruments in cl.5 of Exhibit 2 will have their pay and conditions covered by the SA/NT instrument, the ACT instrument, the NSW instrument and the Victorian instrument. Ms Allen added:
"[7] I confirm that the during [sic] the preapproval period of this Agreement, McDonald's is aware that the pay and conditions of all other employees engaged in Queensland and Western Australia not covered by the instruments in clause 5 or 6 [of Exhibit 2], will have their pay and conditions of regulated [sic] by the Fast Food Industry Award 2010."
[25] Ms Allen also declared in Exhibit 2 as follows, correcting some of the incorrect numbers and names of the certified agreements originally provided in the employer's declaration:
"I confirm that during the preapproval period of this Agreement. McDonald's is aware that the pay and conditions of the employees covered by the following certified agreements will be in accordance with these agreements:
[26] I doubt the list of reference instruments provided by the applicant is complete. In this respect, I note, first, that a Level 3 employee is classified as including "employees required to exercise trade skills". As such, the Level 3 classification appears to comprehend tradespersons. In this respect, I note all the McDonald's/SDA-specific reference instruments already refer to maintenance workers. That is, the SA/NT instrument, the ACT instrument, the NSW instrument and the Victorian instrument each specifically define an employee as meaning "all crew members and maintenance employees". If it is the case that this Agreement, like all the McDonald's/SDA-specific reference instruments presently provide, is intended to cover maintenance employees, potentially also including tradespersons, the applicant has not identified the reference instruments that would have been applicable to any such employees in Western Australia and Queensland.
[27] Second, by cl.4 of both the SA/NT instrument and the Victorian instrument, their provisions apply only to employees at Grade 1 and Grade 2. By contrast, cl.4 of the ACT instrument applies to Grades 1 and 2 employees, and applies also to a Grade 3 employee - who is defined at cl.4 as being an employee "appointed to the Grade by the Employer who is responsible for training and supervising employees of a lower grade (not including an employee who is required to conduct one on one training crew training)". Similarly, cl.4 of the NSW instrument contains a definition of Grade 1 and Grade 2 employees, as well as a definition of a "Shift Supervisor", being an employee engaged in a supervisory capacity, but not including one-on-one training.
[28] Again, if it is the case the SA/NT instrument and the Victorian instrument cut-out at Grade 2 (now broadly Level 2 under the Agreement), then the applicant has not identified the reference instruments that would have been applicable to employees undertaking supervisory responsibilities at McDonald's outlets in South Australia, the Northern Territory and Victoria of the same type otherwise specifically identified in the ACT instrument and the NSW instrument - that is, the work of Level 3 employees under the Agreement. I doubt the work of employees engaged in basic supervisory roles in fast food retail outlets would have been award-free in South Australian and the Northern Territory (although the position would be less clear for Victoria), in circumstances where their classification of work is not comprehended by the McDonald's/SDA-specific reference instruments.
[29] Third, the Queensland instrument applies to all relevant employees, as defined in cl.1.7, relevantly engaged by "McDonalds Australia Pty Ltd; and the franchises thereof". Clause 3 of the WA instrument similarly applies to all employers throughout Western Australia "who are trading as … McDonalds". On the other hand, the SDA/McDonald's-specific reference instruments, namely the SA/NT instrument, the ACT instrument, the NSW instrument and the Victorian instrument, have named employers either in the principal reference instrument or by virtue of roping-in arrangements. I would expect there would have been at least some new McDonald's outlets which have opened across Australia since the making of the relevant reference instruments and the associated roping-in awards. I do not know, and have not researched, which reference instruments may have applied to employees in more recently-opened McDonald's outlets such as to any newer outlets in South Australia, the Northern Territory and the Australian Capital Territory. In this respect, I note there were at least some examples of names suggesting there are some non-corporate operators of McDonald's outlets. I would expect, in New South Wales for instance, the relevant reference instrument for retail employees working at more recently-opened McDonald's outlets not covered by the NSW instrument would have been the NSW Shop Employees (State) Award as a notional agreement preserving a State award (AN 120499) or, for non-corporate licensees or trusts, the NSW Shop Employees (State) Award 324 IG 935, as varied. In this decision, I will refer, in a short-hand way, to the award and its notional agreement counterpart as the Shop Employees (State) Award - albeit there are, for example, differences in applicable rates of pay.
[30] Last, as to the initiating process itself (Form F16 - Application for Approval of Enterprise Agreement), it specifies as follows in relation to service requirements:
A copy of this application must be served on each employer covered by the agreement, each employee organisation that was a bargaining representative and any other employee bargaining representative of which the Applicant is aware, as soon as practicable after the application is lodged.
A copy of this application must also be brought to the attention of employees covered by the agreement through the usual means adopted by the employer(s) for communicating with employees e.g. posting on employee notice boards or by email to employees where this is the usual method.
[31] At the first listing of this matter, I queried whether the service requirements had been met and was advised all documentation was put on the employee noticeboards in a similar fashion as the other documentation. In Exhibit 2, in response to the query I had raised about service, Ms Allen deposed:
"3. I refer to the Application for Approval of Enterprise Application [sic] ("Form 16) lodged in this matter on behalf of McDonald's Australia Limited on 23 December 2009. I confirm that Form 16 was brought to the attention of all employees by being placed on the electronic notice board being Metime. This is a usual means of communication with the employees and all employees have access to this. In addition, Form 16 was placed on the employee noticeboard in some restaurants."
Evidence by way of a computer screen shot now before Fair Work Australia indicates the Form F16 was posted on "Metime" on 20 January 2010 (Metime was described as an electronic notice board and a common form of communication used throughout outlets, which have consoles for access; and it can be accessed remotely). I note the posting on Metime is recorded as having occurred the day following the initial listing of this matter 19 January 2010, namely, only after I had queried whether the service requirements had in fact been met.
[32] The applicant has had ample opportunity to put its application to Fair Work Australia in order - but still has not done so. In this regard, I note the final hearing date was scheduled to meet the time-frames agreed by the advocates. I should add that in circumstances where the application for approval comes before Fair Work Australia with the support of the applicant and the SDA, there has been no one to adopt the role of contradictor. Although it would be appropriate for me to receive additional evidence in the witness box, I do not envisage my role in these approval proceedings as one of cross-examiner of persons who had prepared statutory declarations for the purposes of the proceedings, albeit there was evidence that otherwise was deserving of close cross-examination. I have been reliant on the materials and submissions of the applicant and the SDA, and on information that is in the public domain.
[33] I note the SDA has, by way of supplementary statutory declaration, appropriately now confirmed the Agreement does contain terms or conditions that are less beneficial than some of the terms and conditions contained in the reference instruments identified by the applicant in the employer's declaration - thereby rectifying in sworn form the response initially provided. Added to that, the SDA, again entirely appropriately, has, in consequence of the rectification in the supplementary statutory declaration, provided various tables which neutrally detail comparative information concerning the provisions of the Agreement and each of the identified reference instruments. The material provided by the SDA contains information of a general type that would be expected to be provided at cl.7 of the Form F18 by an employee organisation which files a declaration in support of an application for the approval of an enterprise agreement which contains terms and conditions that are disadvantageous apropos the reference instruments.
[34] An acknowledgement that the employer's declaration in support of the application for approval was incorrect and incomplete, attended by an apology by the applicant's counsel, does not, and nor could it, relieve the applicant of the obligation to provide the information required of any applicant in support of an application for approval of an enterprise agreement. The applicant has not put on any supplementary declarations seeking to rectify in sworn form many of the incorrect assertions initially made in the employer's declaration. Further, even with the provision of supplementary statutory declarations, the applicant still has not provided information about a wide range of matters that must be addressed by an applicant in support of an application for the approval of an enterprise agreement. To that extent, the application before Fair Work Australia, even with the supplementary declarations, remains deficient as to the provision of required information. I would dismiss the application for that reason.
Time, place at which vote will occur, and voting method
[35] Section 180(3) of the Act provides that an employer must, by the start of the access period, take all reasonable steps to notify employees of the time and place at which the vote will occur, and the voting method that will be used. As I understand it, principal reliance is placed on the following matters as to compliance with s.180(3):
The posting on Metime of a joint letter from the applicant and the SDA dated 3 December 2009
[36] By co-signed letter dated 3 December 2009, Mr McManus and Mr Joseph de Bruyn, the SDA's National Secretary-Treasurer, wrote to crew members relevantly advising as follows:
"All crew members will also be asked to cast a vote for the new Agreement, within a minimum of seven days after attending an Information Session. The Voting process will occur by Secret Ballot between 17th and 21st December 2009, and this will also be outlined on the crew notice board." [Bold in original]
The letter does not specify the place where voting would be held. Mr Moir submitted it could be strongly inferred from this letter that the place for the voting would be the workplace. To the extent any reliance is placed on this letter as having satisfied the requirements of s.180(3), that reliance is misplaced. The Act does not require that inferences be drawn; it specifies that advice must be provided as to the time and place at which the vote will occur, and the voting method that will be used. This letter does not specify the place for the vote and, therefore, does not meet the statutory requirements.
[37] As to this letter, I note also, first, that it was addressed only to "crew members", rather than to all employees - such as the managerial employees. Second, there is contradictory evidence before Fair Work Australia as to the date the letter was posted on Metime. At cl.14 of Exhibit 4, Ms Allen suggests she ensured the letter was posted on Metime on 3 December. However, the computer screen shot annexed to Exhibit 4 shows a "Letter from McDonald's & SDA to Crew" was added to Metime on "02/12/2009", rather than 3 December 2009.
Employees' electronic access to posters on Metime with voting information
[38] Clause 2.4 of the employer's declaration requires information about "the steps taken by the employer (at least seven days before the start of the voting process) to notify all relevant employees of the time and place at which the vote was to occur and the voting method to be used". In response to this, Ms Allen deposed in the employer's reply:
"From 3rd December 2009, Information Posters (attached) were displayed on the Employee Notice Board [sic] and also available on Metime. These Posters contained information about the time and place at which the vote was to occur and the voting method to be used.
Employees were also informed about this by their managers and the Union during meetings held between 4th December 2009 and 17th December 2009."
[39] The posters referred to in cl.2.4 were not, however, attached to the employer's declaration. I drew this to the applicant's attention at the initial listing. The matters required to be addressed in cl.2.4 have now been the subject of two, subsequent supplementary statutory declarations by Ms Allen. As I have noted earlier, the applicant tendered a supplementary statutory declaration on 3 February 2010 (Exhibit 2) and a further supplementary statutory declaration on 29 March 2010 (Exhibit 4). In Exhibit 2, Ms Allen deposed as follows:
"4. I refer to clause 2.4 of Form F17 and enclose a copy of the information poster referred to in clause 2.4. Now shown to me and attached as Attachment 1 is a copy of the information poster referred to in clause 2." [Bold in original]
Despite the indication in Exhibit 2 there was only one poster, three posters were annexed to the document tendered in proceedings - none of which is marked as Attachment 1. Inquiries made to the AIG have since indicated that all three documents accompanying Exhibit 2 were intended to be Attachment 1 to Exhibit 2. I make the following observations about the three posters, in the order in which they were annexed to Exhibit 2 when tendered.
[40] The first, unmarked poster accompanying Exhibit 2 does not provide information about the "time and place at which the vote was to occur and the voting methods to be used". I will refer to this poster in the decision as "Poster #1". Poster #1 advises only as follows:
Following the information session you will be given the opportunity to vote by secret ballot. Voting session times will be displayed on the staff notice board. Voting will not start before 14 December 2009."
[41] The second, unmarked poster accompanying Exhibit 2 is not concerned with advice about the time and place at which the vote was to occur and the voting methods to be used. It conveys advice only about information sessions. I will refer to this poster as "Poster #2"
[42] The third, unmarked poster accompanying Exhibit 2, which I will refer to as "Poster #3", provides the following advice:
All employees will be asked to cast a vote by Secret ballot in their Restaurant between 17th and 21st December 2009. Voting takes place at least seven days after attending an Information Session, or after Agreement documents have been posted on your crew notice board.[My bolding]
1. Voting is not compulsory. However, all employees must have the opportunity to vote
2. Voting slips & further info will arrive at your restaurant with the Red Bag delivery on 14th December 2009
3. Between the 14th and 17th December each employee will be provided ONE voting slip
4. Voting slips cannot be replaced if they are lost!
5. Employees will need to sign that they have received a voting slip
6. Voting is by Secret Ballot, so voting slips are anonymous
7. One McHappy Day Donation Bucket will be selected, labelled & used as the Ballot Box
8. The Ballot Box will be kept in the Restaurant Manager's office, and employees will be allowed to vote anytime from 17th-21st December 2009
9. The Ballot Box will be closed at 5pm on 21st December 2009
10. The vote will then be counted and recorded by the Restaurant Manager/Licensee and 2 employees"
[43] Hence, Poster #3 accompanying Exhibit 2 provides advice to employees that they would be asked to vote between 17 and 21 December 2009 and that the voting would take place (on an indeterminate date): (a) at least seven days after attending an information session; or (b) after Agreement documents have been posted on the crew notice board. Within the same document, however, employees were otherwise advised voting would be allowed any time from 17-21 December 2009. Despite what seems to be somewhat of an internal contradiction on the face of the document, I accept the information in Poster #3 provided information that would satisfy the requirements of s.180(3) of the Act.
[44] There is, however, conflicting evidence before Fair Work Australia about the date the posters, relevantly including Poster #3, were said to have been accessible on Metime. Ms Allen's third statutory declaration providing information for the purposes of cl.2.4 of the employer's declaration (Exhibit 4), contradicts the employer's declaration and Exhibit 2, at least as to the date steps were said to have been taken to provide access to relevant information on Metime.
[45] First, in the employer's declaration, Ms Allen declared that from 3 December 2009, information posters were displayed on Metime - albeit without attaching the posters. Second, in Exhibit 2, in the course of providing the posters that had not been attached to the employer's declaration, Ms Allen deposed as follows:
"4. I refer to clause 2.4 of Form 17 and enclose a copy of the information poster referred to in clause 2.4. Now shown to me and attached as Attachment 1 is a copy of the information poster referred to in clause 2.4." [Bold in original]
Three posters were attached, none of which, as I have noted earlier, was marked as Attachment 1 - but which I have treated in this decision as Poster #1, Poster #2 and Poster #3 respectively.
[46] However, in Exhibit 4, Ms Allen deposed as follows:
"16. … I took measures on the 7th December 20009 [sic] to upload onto Metime the "Store Posters" advising of the voting method and procedure and a document entitled "It's time to Vote". Attached to this declaration and marked with the letters "D" and "E" respectively is a copy of the "Store Posters" and the "It's time to Vote" outline." [Bold in original; my underlining]
[47] Attachment D to Exhibit 4 is the same as Poster #1, relevantly advises that "Voting will not start before 14 December 2009". Further, unmarked posters accompanied Exhibit 4, relevantly including Poster #2 and Poster #3, together with another unmarked poster - which I will refer to as Poster #4. The full text of Poster #4 reads:
[48] In the employer's declaration, as supplemented by Exhibit 2, Ms Allen declared Poster #1, Poster #2 and Poster #3 were available on Metime from 3 December 2009. In Exhibit 4, Ms Allen declared that Attachment D to Exhibit 4 (which is the same poster as Poster #1) was placed on Metime on 7 December 2009. It may, however, be the case that, consistently with the advice from the AIG that all three unmarked attachments to Exhibit 2 were intended to be Attachment 1, then, by extension, Poster #1 together with the unmarked Poster #2 and Poster #3 were collectively intended to be Attachment D to Exhibit 4. Further inquiries to the AIG resulted in the electronic transmission to chambers of the documents in what, I had expected, was supposed to be the intended order. However, the number of pages tendered as attachments in the proceedings totalled twelve, whereas the number of pages forwarded electronically totalled fifteen.
[49] The dates provided in the employer's declaration as supplemented by Exhibit 2 (declaring the document or documents were posted to Metime on 3 December 2009) and Exhibit 4 (declaring the document or documents were posted to Metime on 7 December 2009) are irreconcilable. There is no suggestion in the evidence that arrangements were made by the applicant to post the same materials on Metime twice.
[50] It is possible the applicant did take steps to place "Poster #3" on Metime - which contained information that, as I have noted, would probably meet the requirements of s.180(3) of the Act. However, I cannot be satisfied as to which date information posters were said to have been posted on Metime - albeit I note that neither date would offend the access period requirements. I cannot be satisfied as to whether one or more documents, pertinently Poster #3, was or were posted on either of the dates.
[51] The applicant's evidence before Fair Work Australia concerning the s.180(3) pre-approval steps is in disarray. I reiterate my earlier comment that the applicant has had ample opportunity to put its application in order. I do not propose to speculate about which document or documents was or were posted on Metime and on which date or dates, in circumstances where there is irreconcilable, conflicting evidence from a declarant who has now provided no fewer than three statutory declarations addressing pre-approval steps concerning advice to employees about the time of the vote, the place at which the vote will occur and the voting method. It suffices to say the evidence in this respect is unreliable.
Employees' access to advice re voting information through local management
[52] Ms Allen deposed at cl.17 of Exhibit 4 it was her understanding that "all employees were informed by Licensees and Restaurant Managers as to the time, place and method of voting prior to the 10th December 2009." This is hearsay, and improbable at that. I do not to propose to accept Ms Allen's evidence in this respect as supporting the proposition that 80,000 employees (including, for example, those on annual leave, parental leave, sick leave, long service leave or workers' compensation-related absences; or those who were intermittent casuals) were all informed individually or collectively by the managers and licensees of the time place and method of voting prior to 10 December 2009. The managers and licensees may have been, for example, tardy or too busy to provide this advice or immediately post documentation on notice boards, despite instructions from the applicant. Nothing otherwise turns on Ms Allen's understanding that reminders about the vote were displayed on "ticker tape" messages at the "drive-thru" outlets.
Employees' access to advice re voting information through information sessions
[53] In my statement, I noted Exhibit 2 did not assist the applicant in establishing it had met the requirements of s.180(3). In short, Ms Allen initially declared that such information was conveyed to employees at meetings held as late as 17 December 2009. As this was the date the vote commenced, the access period requirements for this step had not been met. To the extent Exhibit 2 sought to clarify the date on which this particular information was brought to the employees' attention, I noted that it matters not, in terms of the Act's pre-approval requirements concerning this application, whether this information was conveyed to at least some employees at meetings held during a period from a start date of 4 December 2009 to as late as either 17 December 2009 (as in the employer's declaration) or, alternatively, as late as 14 December 2009 (as in Exhibit 2). If at least some employees were advised in meetings held as late as 14 December 2009 about the time, place and method of voting scheduled to commence on 17 December 2009, then the application cannot be approved because that information was provided during the access period, as defined in s.180(4) of the Act.
[54] McDonald's availed itself of the opportunity to provide clarification about dates information was conveyed to employees in circumstances where I had raised a query about the response initially provided in cl.2.4 of the employer's declaration. In so clarifying, Ms Allen declared that notification within the meaning of s.180(3) of the Act was conveyed to employees at meetings held over a period from a start date of 3 December 2009 to as late as 14 December 2009. As noted in the statement, I have already accepted the evidence in Exhibit 2, which was prepared for the very purpose of seeking to provide clarification as to the timing of pre-approval requirements for the purposes of s.180(3) as to the response initially given in cl.2.4 of the employer's declaration. That being the case, the applicant cannot rely on the information sessions as having satisfied its obligations concerning the timing as to voting advice, because the primary sessions (as opposed to the additional sessions) were scheduled to as late 14 December 2009.
[55] In this ballot, only 35,249 out of 80,000 employees cast a valid vote for the Agreement (albeit with a strong majority of that group of voters - 31,970 - voting in support of the Agreement). This low voter participation rate, comprising less than 40 per cent of the eligible employees, may well be attributable to the deficiencies in the methods of communicating the advice to employees about the ballot. Equally, however, it may well have been the result of voter apathy.
[56] In conclusion, on this topic, I am not requisitely satisfied as to if and when the employees may have been given access, for the purposes of s.180(3) of the Act, to voting information on Metime (with Poster #3 being the only document which might reasonably be considered to provide any relevant information that would satisfy statutory requirements, albeit it contains what might be viewed as internally-contradictory information). I have the evidentiary spectacle of statutory declarations from the same deponent providing different dates (either 3 December or 7 December 2009) as to when information posters were said to have been accessible on Metime; and also now have evidence that a fourth poster was accessible on 7 December 2009. I am not otherwise satisfied on the improbable, hearsay evidence that "all" employees would have been informed by local managers of this information within the time-frames specified in the Act, if at all. Further, in the statement I had otherwise already accepted Ms Allen's evidence that some employees were not informed about the voting arrangements until meetings held as late as 14 December 2009. As such, I am not satisfied the applicant appropriately provided information to employees for the purposes of s.180(3) of the Act. I would dismiss the application for that reason alone.
Ensuring that the terms of the agreement, and the effect of those terms, are explained to the employees
[57] The pre-approval step in s.180(5)(a) of the Act requires that an employer must ensure the terms of the agreement, and the effect of those terms, are explained to the employees. In the statement, I accepted Ms Allen's evidence that at least some employees were not provided with relevant information until they attended information meetings held as late as 14 December 2009 in anticipation of a vote opening on 17 December 2009. Accepting this to be the case, then the application would fail to meet the requirements of the Act, because such information was provided within the access period.
[58] Against that background, the applicant's case now contends it provided access to relevant information as to summary information on Metime in such a way as would otherwise satisfy the pre-approval requirements. I do not accept this to be the case.
[59] The first observation to be made is that the evidence would not lead me to conclude the applicant properly discharged the obligations placed on it as the employer pursuant to s.180(5)(a) of the Act. Section 180 of the Act provides as follows:
"180 Employees must be given a copy of a proposed enterprise agreement etc
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph 5(b), the following are examples of the kinds of employees whose circumstances and need are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(c) employees who did not have a bargaining representative for the agreement."
[60] The applicant relies on a number of documents summarising the Agreement which were posted on Metime to support the contention that it took all reasonable steps to ensure the terms of the Agreement and the effect of those terms, were explained to employees. While it is true certain summary information was posted on Metime, those documents were not the applicant's documents; the documents were the SDA's documents. There is no evidence the applicant itself provided any such information apart from the documents from the SDA that it posted on Metime (except as may otherwise have been orally presented at the information sessions).
[61] The documents in question were adduced in the proceedings as part of the evidence of Mr de Bruyn. The documents are titled as follows:
[62] Mr Moir submitted these summary documents were "jointly prepared and issued" by the applicant and the SDA. He submitted the front page of each document bears the logos of both the SDA and the applicant, such that the summary information was provided not just by the SDA, but was provided by the applicant and the SDA collectively.
[63] Mr Bliss submitted the SDA viewed itself as "partners in the process" of explaining an enterprise agreement it had negotiated. I note there seems to be a continuing, high level of convergence in approach between the applicant and the SDA concerning the Agreement. For example, one of the SDA's summary documents, Exhibit 9-SDA15, contains remarkable similarities to the statutory declaration of Mr McManus in Exhibit 5; passages of both documents are identically worded. Provided the SDA agreed in principle that an agreement should be approved, the SDA would, Mr Bliss submitted, normally stand "shoulder to shoulder" with a company to explain the terms of the agreement and to encourage employees to participate in the process. Mr Bliss submitted that although a union performing the s.180(5)(a) function is not necessarily what the Act requires, the Act requires only that the employer take all reasonable steps to ensure the terms of the agreement and the effect of those terms is explained to the relevant employees. He submitted it would not be inconsistent with s.180(5) of the Act for a union to perform that task in conjunction with an employer.
[64] The summary documents other than Exhibit 9-SDA11, Exhibit 9-SDA14, Exhibit 9-SDA15 and Exhibit 9-SDA16 follow a similar template. The information in Exhibits 9-SDA8, 9-SDA9, 9-SDA10, 9-SDA12, 9-SDA13 is set out in a relatively neutral way over a dozen or so pages, together with some State-specific and Territory-specific information. I have given consideration to whether Exhibits 9-SDA8, 9-SDA9, 9-SDA10, 9-SDA12 and 9-SDA13 might be regarded as documents provided for employees by the applicant, in as much as they all have a cover sheet bearing the applicant's logo and SDA logos. I am inclined to accept Mr Bliss's submission there would be nothing untoward in terms of an applicant satisfying its obligations through, for example, the provision of a statement that was jointly prepared and jointly authorised by an applicant and a bargaining agent. From the following descriptions, however, it can be seen that the summary documents relied on by the applicant as having discharged its obligations under s.180(5)(a) of the Act were not the employer's documents. They were, with two exceptions, unambiguously identifiable as SDA documents rather than joint documents of the applicant and the SDA.
[65] Exhibit 9-SDA8 bears the applicant's logo and the logo of the Newcastle and Northern Branch of the SDA on the cover sheet, but it is signed only by Barbara Newhart, Branch Secretary-Treasurer of the Newcastle and Northern Branch of the SDA.
[66] Exhibit 9-SDA9, for New South Wales generally, bears the applicant's logo and an SDA logo. Is unsigned, but is clearly an SDA document in as much as it includes a page of promotional material for the SDA.
[67] Exhibit 9-SDA10, for the Australian Capital Territory, has the same cover sheet as Exhibit 9-SDA9. It is unsigned, but is also clearly an SDA document given the inclusion of promotional material for the SDA.
[68] Exhibit 9-SDA11, for SA, is a two-page coloured brochure. It has an SDA logo and the applicant's logo, adjacent to a photograph of the Branch Secretary of the South Australian Branch of the SDA, Peter Malinauskas in the company of four employees at a McDonald's counter. The brochure bears Mr Malinauskas's signature next to a further photograph of him. Text at the foot of the second page reads: "McDonald's Agreement 2009 SDA SUMMARY DOCUMENT".
[69] Exhibit 9-SDA12 (for Victoria) and Exhibit 9-SDA13 (for Tasmania) have the same cover sheet as Exhibit 9-SDA9 and Exhibit 9-SDA10. They are unsigned and do not contain any promotional material for the SDA.
[70] Exhibit 9-SDA14 (for Queensland) is on the letterhead of the Queensland Branch of the SDA, attaching a three-page summary, a "notes page", and promotional materials from the Queensland Branch of the SDA. The applicant's logo does not appear on this document.
[71] Exhibit 9-SDA15 (for Western Australia) does not contain the logos of either the applicant or the SDA. It is in the form of a personally-styled letter, using the first-person pronoun. It is authorised by the SDA's Western Australian Branch Secretary, Joe Bullock. Exhibit 9-SDA15 is a discursive document, containing commentary on matters including the world economy, stimulatory measures, inflation and business's capacity to pay. It also contains Mr Bullock's opinions about aspects of the Agreement, for example, "… rather than the Public Holidays being regarded as falling on the days on which they are most commonly observed in [Western Australia], the Agreement contains arrangements for additional and substitute days to be observed. This is likely to give rise to improved Public Holiday arrangements in future years". Exhibit 9-SDA15 concludes: "Having been involved throughout the negotiation process, I have no hesitation in recommending this Agreement for endorsement by McDonald's employers [sic]."
[72] Exhibit 9-SDA16 (for Broken Hill), like Exhibit 9-SDA11 for South Australia, has an SDA logo and the applicant's logo, adjacent to a photograph of Mr Malinauskas and employees at a McDonald's counter. It is a three-page document, signed by Mr Malinauskas next to a further photograph of him. Text at the foot of the second and third pages reads: "McDonald's Agreement 2009 SDA SUMMARY DOCUMENT".
[73] The summary documents have been prepared according to geographical areas relevant to the SDA's Branches, for example, Exhibit 9-SDA8 for the Newcastle and Northern Branch of the SDA. Exhibit 9-SDA16 for Broken Hill is from the South Australian Branch of the SDA which, to my knowledge, is the Branch which provides services for members in Broken Hill (in New South Wales) for reasons of geographical proximity. From the foregoing descriptions, the only summary documents that could be considered to have been joint documents were Exhibit 9-SDA12 (for Victoria) and Exhibit 9-SDA13 (for Tasmania), as they are unsigned and do not contain any promotional material for the SDA - but otherwise contain the logos of the applicant and the SDA. The remaining documents are either strongly identifiable as SDA documents or do not contain anything to indicate a connection with the applicant.
[74] I do not accept the proposition that electronic posting on Metime of SDA documents (or manual posting on a notice board at the workplace or provision of such documents at information sessions) satisfies the obligations on the applicant itself to provide such information. The applicant cannot come before Fair Work Australia saying it did not actually provide the information contemplated by s.180(5) of the Act, but the application should be approved because another organisation or person provided such information. It is irrelevant, in terms of satisfying the applicant's own obligations for the purposes of s.180(5) of the Act, whether, for example, an officer of a union wishes to extol what he or she personally perceives as the benefits of an enterprise agreement and, in so doing, provides some summary of the terms of the agreement (as in the case of Exhibit 9-SDA15), and the applicant determined to post that commendation on Metime. Similarly, the minimalist brochure in Exhibit 9-SDA11, for South Australia, is bereft of any information which reasonably could be regarded as satisfying the requirements of s.180(5) of the Act - but nothing turns on that, because it was the applicant's statutory responsibility to comply with s.180(5), not that of the South Australian Branch of the SDA.
[75] I do not consider the applicant's own obligations under s.180(5) are somehow delegable in the way that has been adopted in this matter. If the applicant's contention were to be accepted that it can rely on the SDA's materials as having discharged its own responsibilities under s.180(5) of the Act, then there could be, by extension to other applications that may come before Fair Work Australia, some perverse outcomes. For instance, an employer could come to Fair Work Australia saying it had not provided any information whatsoever to employees proposed to be covered by an enterprise agreement, but the application should be approved because: (a) the employer was aware another organisation, such as a union, had provided a summary document for the information of employees/members in recommending a vote for or against a particular agreement; and (b) the employer was aware these union materials had been posted on the staff notice board or the union notice board at the workplace; or (c) the employer had, for example, allowed a union to disseminate its materials concerning the enterprise agreement on the internal email system at the workplace.
[76] I note also there was no evidence of any summary document at all having been provided to employees in the Northern Territory so as to ensure the terms of the Agreement, and the effect of those terms were explained to employees in that Territory. Exhibit 9, which contained the SDA's summary documents, did not contain any documentation for employees in the Northern Territory. Moreover, if the computer screen shot in the applicant's evidence is complete, it shows no summary of the Agreement having been posted on Metime for employees in the Northern Territory (or, for that matter, Tasmania). The computer screen shot shows only the following postings:
Form 16 Application for Approval of Enterprise Agreement
[77] On the evidence before me, there is nothing to indicate the applicant, even via the SDA summary documents, took any steps at all to ensure the terms of the Agreement, and the effect of those terms, were explained to the employees in the Northern Territory. There is no evidence of any summary document having been prepared by the SDA for those employees and nothing to indicate anything else was posted by the applicant on Metime for employees in the Northern Territory. Although there was evidence of a summary document having been prepared for Tasmania, there was no evidence indicating it was posted by the applicant on Metime; and the evidence otherwise indicated that employees, likely including some employees in the Northern Territory and Tasmania, were provided with information in meetings held as late as 14 December 2009.
[78] Similarly, as I have noted earlier, the minimalist two-page brochure in Exhibit 9-SDA11, for South Australia, is bereft of information that would satisfy the requirements of s.180(5). The sparse information runs to barely a page, because of the amount of space otherwise devoted to photographs of Mr Malinaukas and employees of the applicant.
[79] I would dismiss the application as I have not been satisfied the requirements of s.180(5) of the Act have been met. The evidence does not support a conclusion the applicant properly discharged its own responsibilities concerning the provision of documentation such as might otherwise satisfy the requirements of s.180(5)(a) of the Act.
Explaining agreement in appropriate manner, taking into account the particular circumstances and needs of the relevant employees
[80] If I am wrong in my assessment about s.180(5)(a) of the Act, and the applicant is entitled somehow to appropriate the SDA summary information in satisfaction of its own obligations, then the provisions of s.180(5)(b) and s.180(6) of the Act have not been met. The information provided to the employees about the Agreement was the same irrespective of whether the employee was 15 or 55 and irrespective of any employees' culturally or linguistically diverse backgrounds, or other needs.
[81] In this respect, I note the recent comments of Cambridge C, who, in dismissing an application for the approval of the an enterprise agreement titled the Bowland Salisbury Agreement [2010] FWA 6842, said:
"[7] Further, in this instance some potential difficulties may arise in respect of subsections 180(5) and 180(6) of the Act which state:
(5) The employer must take all reasonable steps to ensure that:
(a) the terms of the agreement, and the effect of those terms, are explained to the relevant employees; and
(b) the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the relevant employees.
(6) Without limiting paragraph (5)(b), the following are examples of the kinds of employees whose circumstances and needs are to be taken into account for the purposes of complying with that paragraph:
(a) employees from culturally and linguistically diverse backgrounds;
(c) employees who did not have a bargaining representative for the agreement.
[8] The Declaration stated that 8 of a total of 24 employees were under 21 years of age. The response to question 2.5 of the Declaration about steps taken by the Employer to explain the terms of the Agreement to relevant employees was;
"On Monday 23rd November 2 information meetings were held for staff to attend. One at 9am the other at 4pm."
[9] Consequently FWA had no evidence of any particular step taken by the Employer relevant to the circumstances and needs of the young employees who constitute a significant proportion of the total number of employees to be covered by the Agreement. It may have been that each of the young employees was invited to have a parent or other older person attend the information meetings. Additionally the Employer may have invited each of the young employees to have a parent or other older person provide any questions or concerns about the terms of the Agreement on behalf of the young employee(s).
[10] The difficulty for FWA is that the absence of any mention of anything done by the Employer that connects to the circumstances and needs of young employees would create an evidentiary impediment to any compliance with subsection 180(5) of the Act." [Underlining in original]
[82] Unlike the enterprise agreement considered by Cambridge C, which covered eight young employees, this Agreement is proposed to cover 65,600 employees aged under 21 years. In this respect, I note also the comments of Mr Bullock in Exhibit 9-SDA15 that the applicant employs "large number of crew members aged under 16 years". If the applicant (or the SDA, or both) took any steps to differentiate the approach in the presentation of information about the Agreement to the young employees, many apparently very young indeed, there was no evidence of it in these proceedings. Moreover, there was no evidence of differential arrangements being put in place by the applicant (or the SDA, or both) to meet any special needs that may have been involved, for example, for the 2,400 employees with disabilities or the 28,800 employees from non-English speaking backgrounds who would be covered by this Agreement.
[83] I would dismiss the application for failure to address the obligations identified in s.180(5)(b) and s.180(6) of the Act.
[84] Section 186(2)(a) of the Act provides Fair Work Australia must be satisfied that "the agreement has been genuinely agreed to by the employees covered by the agreement". I consider there are reasonable grounds, within the meaning of s.188(c), for believing the agreement has not been genuinely agreed to by the employees. Section 188 of the Act deals with the meaning of "genuinely agreed", reading:
"188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if FWA is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre-approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees."
[85] Genuine agreement within the meaning of s.188(c) of the Act, in my view, necessarily comprehends properly-informed agreement. If, for example, employees were provided with information about a proposed enterprise agreement that was, for example, incorrect or misleading - whether intentionally or inadvertently - and the employees voted for the agreement in reliance on such information, then I do not consider the employees could be considered to have been genuinely agreed.
[86] First, to the extent the applicant relies on information in the summary documents prepared by the SDA, one important aspect of the information provided to some employees about the Agreement was incorrect. Clause 14 of the Agreement does not provide any casual rates for employees in the Australian Capital Territory and the Northern Territory. While I accept it was the intention of the applicant and the SDA that the casual loadings should apply to employees in the Territories, it remains the case the Agreement does not provide such loadings for employees in the Australian Capital Territory and the Northern Territory. Despite this, the summary document prepared for employees in the Australian Capital Territory of key changes indicated that: "Casual loadings increase from 20% to 22% over the life of the agreement (see point 2)". As I have noted earlier, there is no evidence of any summary document having been provided for Northern Territory employees, but I infer employees would have been informed at the information sessions about increases in casual rates. So much was confirmed in the submissions by Mr Bliss.
[87] The second aspect going to genuine agreement focuses on what the employees understood the savings provision to mean. Clause 41 of the Agreement provides that "No employee will, as a result of the introduction of this agreement, suffer a reduction in their hourly rate for hours worked prior to the commencement of this agreement". Clause 41 is a very limited saving provision - referencing only to the hourly rate as opposed, for example, to pay and conditions. Of course, the hourly rate is itself conditioned by the provisions in an industrial instrument attaching to working the hours in question by the individual employee.
[88] It emerged in the proceedings there appears, potentially at least, to be a significant divergence between the applicant and the SDA as to the meaning of this savings provision. The applicant's evidence and submissions indicated the calculations would be considered, for payroll purposes, in the context of the "base rate" of pay for employees who were administratively categorised for sampling purposes as "Group 1" and "Group 2" employees. The administrative payroll processes described in Ms Allen's evidence, such as basing entitlements on a sampling of "8 weeks' time clockings for each person in October and November 2009", are not reflected in the Agreement. Mr Bliss said there had been discussions between the Branches of the SDA and the applicant in the weeks preceding the final hearing date to ensure employees are not "worse off" under the Agreement. Mr Bliss submitted, first, it was the SDA's understanding the savings provision of the Agreement would be applied such that employees who currently work hours attracting a penalty rate would continue to receive that penalty rate, i.e. the hourly rate would be fully preserved. Second, the "grandfather employees" who were the subject of the savings provisions in the NSW instrument concerning the Shop Employees (State) Award would have their pay, but not their conditions, preserved. Mr Bliss continued that the hourly rate meant employees would be paid the difference between the Agreement base rate, including shift penalties and loadings applicable under the reference instrument, taking into account the regular pattern of work undertaken by the employee during an eight week period immediately preceding the approval of the Agreement.
[89] The applicant's evidence from Ms Allen and Mr McManus, coupled with the submissions by Mr Moir, seemed quite pointed in using the term "base rate" of pay. I do not consider cl.41 of the Agreement, within terms (as opposed to any arcane payroll policy, as described in the evidence of Ms Allen, that may be adopted by the applicant from time to time - such as sampling what employees earned in eight weeks around October-November 2009), actually preserves anything other than the "base rate" of pay. The savings clause does not preserve money allowances and, importantly, it does not preserve the conditions that would have attached to work performed at certain times and which otherwise would have set the parameters for what would be regarded as the appropriate hourly rate. For example, a part-time employee would have entitlement to payment of overtime under the WA instrument for all hours worked in excess of 30 hours a week, but that condition, which gives form and substance to the meaning of the appropriate hourly rate, is not preserved by the Agreement; instead, the Agreement provides that overtime payments are attracted after 36 hours' work for part-time employees or, in the case of regular part-time employees, hours in excess of those mutually arranged. By way of further example, as to employees working between the unsociable hours of 1.00am and 5.00am, their base rate of pay would be preserved - but not the much higher loading for work performed in ordinary hours that would have applied, for example, under the NSW instrument. As to the meaning of base rate of pay, see, for example, the general meaning in s.16 of the Act:
(1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:
[90] It is also entirely unclear whether the rate for calculations was to be determined against the various reference instrument or against the rates the employees actually received (which were higher in some instances, the SDA's submissions indicated, than the rates provided in the reference instruments). The evidence indicated it is the lower rates under some of the reference instruments that would be used, rather than the rates that actually were being received by the employees.
[91] The applicant and the SDA were partners in promoting a vote in favour of the Agreement, for example, in presenting information sessions to explain the Agreement. It appears the applicant and the SDA are now not as one in relation to the meaning of cl.41 of the Agreement, leading to questions about what information was actually provided to employees concerning the operation of this clause - so as to allow them to make a properly-informed decision when casting their votes and, thereby, genuinely agree to the Agreement. The SDA, of course, prepared the summary documents.
[92] The third aspect going to genuine agreement is that the summary documents concerning the Agreement contain some examples of information which is misleading; and which, I understand, would have formed the basis of the advice provided to employees at information sessions. It appears the summaries were not strictly a comparison of entitlements that would be considered by Fair Work Australia in assessing the application for approval, but an amalgam of pay and conditions that applied under certified or uncertified agreements; by way of policy; by way of local custom and practice; or, as some summaries added, "commitments made by the Company". Mr Moir submitted that the summary document for New South Wales was based on the reference instrument but in South Australia, for example, it was based on the certified agreement providing terms and conditions which were different from the SA instrument. Mr Moir submitted it was "thought by both [the applicant and the SDA] that the best way in which to explain the terms of the Agreement to employees in the various jurisdictions was to compare it with what the employees already received in the relevant jurisdictions". Mr Bliss submitted that with the summary for the Australian Capital Territory, for example, the information was reflective of what actually applied rather than what was contained in the reference instrument - with the result, for example, the actual increase in the case of an employee aged under 16 would be a movement in the hourly rate from $5.94 to $5.98. In the case of Queensland the summary document reflected the actual rates.
[93] I note and accept Mr Bliss's submission this approach to the presentation of information by the SDA was adopted so as to give the employees an appreciation of what the Agreement might actually involve for them in a practical sense. The reference instruments contain, after all, only notional terms and conditions against which an enterprise agreement must be assessed. But, in the end, the adoption of this approach in the summaries and any related information sessions meant employees were not provided with the appropriate information about at least some matters concerning the content of the Agreement itself, as opposed to matters outside the Agreement.
[94] Fourth, some of the summary materials put what might be described as the "best gloss" on the Agreement, rather than providing objective information. The summaries did not relevantly provide any information about the disadvantages or potential disadvantages that would arise under the Agreement. While there are many examples in this respect, the minimum engagement payment of one hour for attendance at crew meeting is perhaps one of the more pertinent examples. Most of the summaries referred to the one hour minimum payment for attendance at crew meetings - but without adverting to the loss of more financially-beneficial minimum engagement arrangements that would, but for the Agreement, have applied under all the reference instruments except the NSW instrument. For example, Exhibit 9-SDA11 (for South Australia) stated that: "The minimum engagement for employees in food court restaurants has been increased from 2 hours to 2.5 hours". The summary also indicated that as to part-time employees (only) that the minimum engagement "has been increased from 2.5 hours to 3 hours (except for crew meetings where a 1 hour minimum applies)."
[95] To put the minimum engagement provisions in some context, the youngest of employees under this Agreement would receive between approximately $6.00 and $9.00 as payment for attendance at a crew meeting - which would hardly be regarded as a reasonable minimum payment when considering the time involved in travelling and any travelling expenses associated with attending work. The minimum engagement provisions are considered in more detail later in this decision. Similarly, the inclusion of Level 4 employees apparently was presented as being a benefit to those employees, when it was nothing of the sort.
[96] Perhaps one of the sharpest examples of what the Agreement summary does not say arises from the State of Tasmania. According to the summary information provided by the SDA (Exhibit 9-SDA13), Level 1 Tasmanian employees are currently receiving $532.25 per week or $14.01 per hour. If approved, the Agreement would provide a full-time, Level 1 employee with a wage rate of $540.25 per week or $14.21 per hour (the SDA's summary is incorrect in as much as it specifies that the Agreement contains a slightly higher figure of $541.25). Thus, the Agreement provides wages for Tasmanian employees below the national minimum of $543.78 per week or $14.31 per hour. Moreover, under the provisions of cl.18.1 of the Agreement (a clause titled "Wage increases"), the already below-standard wage would be "increased" by the "FWA Annual Wage Review less $5.00" from 1 July 2010. Although this matter is now the subject of a proposed written undertaking, the employees, including the employees in Tasmania, obviously could not have "genuinely agreed" to that starting wage rate from 1 January 2010 and wage decrease under the Agreement, as they could not purport to agree to accept wages rates that would be contrary to law.
[97] For the foregoing reasons in the various examples given, I do not believe the employees could be considered to have genuinely agreed to the Agreement. I would dismiss the application for that reason alone.
Provision of material incorporated by reference in agreement
[98] The applicant appears to have failed to meet other pre-approval requirements. Certainly, there was no evidence the applicant provided employees with a copy of the NES, some of the provisions of which are specifically incorporated in the Agreement (in circumstances where the Agreement was made during the bridging period and the NES had not, at that time, come into operation). Similarly, there was no evidence the applicant gave the employees a copy of the Fast Food Industry Award 2010, albeit that instrument (and perhaps others) is incorporated inferentially in cl.18.3 of the Agreement as to wages. Clause 18.3 of the Agreement reads, in part:
In addition to the wage rates provided in 18.1 and 18.2 employees will be paid the following increases. Provided that an employee will not be paid less than the rate otherwise applicable to that employee under the transitional provisions of the relevant modern award."…
[99] Mr Moir submitted there was no obligation to provide the Fast Food Industry Award because cl.18.3 represented merely an iteration of the law. In this respect, he referred to Sch 9, Pt 4, item 13 of the Fair Work (Transitional Provisions and Consequential Amendments Act) 2009, which reads:
"Part 4 - Universal application of minimum wages to employees: transitional instruments
13 Base rate of pay under agreement-based transitional instrument must not be less than the modern award rate or the national minimum wage order rate etc.
If employee is covered by a modern award that is in operation
(1) If, on or after the FW (safety net provisions) commencement day:
(a) an agreement-based transitional instrument applies to an employee; and
(b) a modern award that is in operation covers the employee;
the base rate of pay payable to the employee under the transitional instrument (the instrument rate) must not be less than the base rate of pay that would be payable to the employee under the modern award (the award rate) if the modern award applied to the employee.
(2) If the instrument rate is less than the award rate, the transitional instrument has effect in relation to the employee as if the instrument rate were equal to the award rate.
If employee is not covered by a modern award that is in operation
(3) If, on or after the FW (safety net provisions) commencement day:
(a) an agreement-based transitional instrument applies to an employee; and
(b) the employee is not covered by a modern award that is in operation; and
(c) a national minimum wage order would, if the employee were an award/agreement free employee, require the employee's employer to pay the employee a base rate of pay (the employee's order rate) that at least equals the national minimum wage, or a special national minimum wage, set by the order;
the base rate of pay payable to the employee under the transitional instrument (the instrument rate) must not be less than the employee's order rate.
(4) If the instrument rate is less than the employee's order rate, the transitional instrument has effect in relation to the employee as if the instrument rate were equal to the employee's order rate.
Note: The AFPCS interaction rules may affect the base rate of pay payable to an employee (see item 22 of Schedule 3)."
[100] Mr Moir submitted, similarly, there was no requirement to provide a copy of the NES and that while the NES are referred to in the Agreement, the NES are not expressly incorporated into the Agreement. In this respect, the meaning of cl.6 of the Agreement remains unclear to me. The clause is titled: "Relationship between the Australian Fair Pay and Conditions Standard, the National Employment Standards and this Agreement" - but it does not actually address any such relationship; it simply sets out a pr�cis of some conditions under the NES. Clause 8 refers to disputes under the NES. Clause 15.2 refers to money due under the NES. Redundancy pay at cl.16.1 is referenced to the NES, albeit arrangements different from those in the NES applied under a number of the reference instruments and by virtue of the savings provisions. Annual leave is referenced to the NES at cl.29 of the Agreement, but then provides arrangements which provide that cashing-out is available only to Level 4 employees. Personal/carer's leave is dealt with in the Agreement by reference to the NES, albeit in a much-abridged form in cl.30.1. Public holidays are referenced to the NES, with advice at cl.31.1 that the Agreement supplements the NES as set out in the succeeding sub-clauses. Community service leave is referenced to the NES, but other forms of leave dealt with in the NES, such as cl.35 (jury service leave), do not appear to be so referenced.
[101] Similarly, there was no evidence the applicant provided a copy of the Long Service Leave Act 1987 (SA), or any summary document thereto for employees in Broken Hill, albeit the Agreement references long service leave entitlements to the South Australian statute for employees in Broken Hill.
[102] It may be the case Mr Moir's submissions are correct in saying the applicant was not obliged to provide a copy of the Fast Food Industry Award, but it would have been, at the least, prudent to do so given the pre-approval requirements. On balance, I think s.180(2)(a)(ii) did require the provision of at least the NES, albeit perhaps not necessarily the Fast Food Industry Award. That is, the provisions of s.180(2)(a)(ii) require the provision of any other material incorporated by reference in the Agreement, which here would include the NES and, for employees in Broken Hill, the Long Service Leave Act 1987 (SA). It does not appear to be open to employers to make discretionary assessments about which material incorporated in an agreement appropriately should be provided, in circumstances where s.180(2)(b) of the Act refers, within terms, to the requirement to provide a copy of, or provide access to, to "any" other material incorporated by reference in the agreement. Information about the NES was not, with one exception (Exhibit 9-SDA14 for Queensland), otherwise addressed in summary documents.
[103] More generally, there was no evidence that this obtuse part of cl.18 as it concerned the core issue of wage rates in the Agreement was explained to employees, although the SDA's summary document for Queensland noted, without further elaboration, that an employee "will not be paid less than the rate otherwise applicable to that employee under the transitional provisions of the relevant modern award".
[104] I might note, in passing, that the pr�cis of the NES set-out at cl.6.2 of the Agreement states as following in relation to long service leave: "Long service leave consistent with federal award provisions" and otherwise provides in the Agreement for long service leave to be referable to relevant States' and Territories' legislation, except as to Broken Hill.
[105] I further note, again in passing, that if the employees had been provided with copies of the NES and the Fast Food Industry Award they might have had some better appreciation of the provisions of the Agreement that were being parlayed as supposed benefits. For example, various so-called benefits of the Agreement were nothing more than the national minima applicable in the NES from 1 January 2010. As to the Fast Food Industry Award, it contains, for example, higher base rates than provided in the Agreement and a casual loading set at a uniform 25 per cent, as opposed to the lower casual loadings ranging between 20 and 25 per cent for employees in the States (and none for employees in the Territories).
[106] I would dismiss the application for failure to comply with the provisions of s.180(2) of the Act.
3. PARTICULAR MATTERS ARISING FROM EARLIER STATEMENT
[107] In my statement, I identified what I considered to be numerous disadvantages for employees under the Agreement, when considered in the context of the reference instruments - first observing as follows:
"[14] The first principal observation to be made about these clauses is what might be described as the "opting out" arrangements contained at cll.12.4, 12.5, 12.6, 13.8, 13.9, 13.10 and 14.8. For example, permanent full-time and permanent part-time employees would not receive two consecutive days off work, or at least a weekend off a month, or consecutive working days of six or less, where the employee agrees otherwise. Similarly, there would be no cap on the number of consecutive days worked by a casual employee. Thus, the Agreement sets a framework which includes provisions for what might be regarded as reasonable patterns of working days (viewed, for example, in terms of occupational health and safety-related considerations, work/life considerations or typical industrial standards) but then provides that all these arrangements under the Agreement may be voided by agreement with the full-time or part-time employee; or in the case of casuals, as to working unlimited consecutive days. In circumstances where the employees to be covered by this Agreement are mostly young and employed casually, I consider there would be questions about whether the employees would have any real or practical capacity to disagree if asked or expected to work under these arrangements."
[108] As to this, Mr Moir submitted it was critical to note the rostering arrangements set out in cll.12.4, 12.5, 12.6, 13.8, 13.9, 13.10 and 14.8 of the Agreement are subject to the "mandatory" provisions set out in cll.12.2, 12.3, 13.5. 13.11, 14.6 and 14.7. To put those submissions in context in this decision, I reproduce the provisions of cll.11, 12, 13 and 14 of the Agreement:
11.1 Employees under this Agreement will be employed in one of the following categories:
11.2 At the time of engagement an employer will inform each employee of the terms of their engagement and, in particular, whether they are to be full-time, part-time or casual.
12.1 Means an employee who works average of 38 ordinary hours per week over a 4 week cycle with a minimum daily engagement shall be [sic] four hours (subject to the provisions of clause 20.3)
12.2 The maximum number of shifts in any week shall be five.
12.3 The maximum number of hours a full time employee shall work in any day shall 9.5 hrs [sic] excluding meal breaks
12.4 A full time employee is to be rostered so as to have 2 consecutive days off per week provided that a full time employee may agree otherwise
12.5 A full time employee is to be rostered so as to have 1 weekend off each 4 weeks, provided that a full time employee may agree otherwise.
12.6 The maximum number of consecutive days a full time employee shall work is 6, provided that a full time employee may agree otherwise.
12.7 Subclause 12.3, 12.4, 12.5 and 12.6 will not apply to Level 4 employees.
13.1.1 Works less than 36 hours per week but shall work at least 10 hours per week.
13.2 At the time of first being employed, the employer and the part-time employee will agree, in writing on paper or electronically, on a regular pattern of work, specifying at least:
13.2.2 which days of the week the employee will work;
13.2.3 the actual starting and finishing times of each day;
13.2.4 that any variation will be in writing; and
13.2.5 that the minimum daily engagement is 3 hours (subject to the provisions of clause 20.3)
13.3 Any Agreement to vary the regular pattern of work will be made in writing on paper or electronically, before the variation occurs.
13.4 The Agreement and any variation to it will be retained by the employer and a copy given by the employer to the employee.
13.5 An employer is required to roster a part-time employee for a minimum of 3 consecutive hours on any shift. The maximum number of starts in a week shall be five.
13.6 An employee who does not meet the definition of a part-time employee and who is not a full-time employee will be paid as a casual employee in accordance with clause 14 - Casual Employment.
13.7 A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed. Overtime is payable for all hours worked in excess of the hours as mutually arranged.
13.8 A part-time employee is to be rostered so as to have 2 consecutive days off per week, provided that a part time employee may agree otherwise
13.9 A part-time employee is to be rostered so as to have 1 weekend off each 4 weeks, provided that a part time employee may agree otherwise.
13.10 The maximum number of consecutive days a part time employee shall work is 6, provided that a part time employee may agree otherwise.
13.11 The maximum number of hours a part time employee shall work in any day shall 9.5 hrs [sic] excluding meal breaks
13.12 Subclause 13.8, 13.9, 13.10 and 13.11 will not apply to Level 4 employees.
14.1 A casual employee is an employee engaged and employed as such.
14.2 A casual will be paid both the actual hourly rate paid to a full-time employee and a casual loading. Such loading will be based on the state that the employee is working and will be as follows: …
14.3 Casual employees will be paid in accordance with pay arrangements for full-time employees
14.4 A casual employee will have a minimum engagement of 2 1/2 hours on any shift (subject to the provisions of clause 20.3)
14.5 The maximum number of ordinary hours to be worked by a casual employee is 38 per week.
14.6 The maximum number of shifts to be worked by a casual in any week shall be five.
14.7 The maximum number of hours a casual employee shall work in any day shall be 9.5 hrs excluding meal breaks
14.8 The maximum number of consecutive days a casual employee shall work is 6, provided that a casual employee may agree otherwise."
[109] The effect of the Agreement, Mr Moir submitted, is that full-time, part-time and casual employees cannot be rostered to work more than five shifts in any week and the further effect of the provisions is that an employee must have at least two days off per week. He submitted there is no ability to "opt out" of this restriction on the maximum number of weekly shifts; and it was not permissible for an employee, including a casual employee, to work unlimited, consecutive shifts.
[110] Mr Moir's submission is incorrect, at least to the extent it described the effect of cll.12.3, 13.11 and 14.7; those provisions are concerned only with maximum hours in a day being set at 9.5 hours, not with days of rostering from week to week. The expanded submission made by Mr Moir in relation to hours per day do not go to the matters raised in [14] of my statement.
[111] I do not otherwise accept Mr Moir's submission as to the construction of the provisions. Using the position of full-time employees as an example, there is nothing "mandatory" at all about the operation of cl.12.2 of the Agreement, such as would have the effect of making it impermissible for an employee to work more than five shifts a week.
[112] Mr Moir submitted there was an "absolute prohibition" under the Agreement on working more than five shifts a week. If there is any such prohibition, it apparently applies only to Level 4 employees - because level 4 employees are the only employees who are not otherwise subject to the opting-out provisions given the managerial exclusions. As to more general matters, I do not accept the contention that there is any such prohibition in the Agreement. While cl.12.2 provides the maximum number of shifts for full-time employees in any week shall be five, cl.12.6, in contradiction of cl.12.2, then specifically provides the maximum number of consecutive days a full-time employee shall work is six, but that the employee could work more than six consecutive days by agreement.
[113] Clause 12, within terms, albeit in a clearly internally-contradictory way, itself specifically contemplates working at least six days, but even more than six by agreement. Further, cl.27.2.1 of the Agreement, dealing with overtime, also specifically contemplates overtime rates being attracted for all work in excess of five shifts per week - thereby unambiguously indicating that working more than five shifts a week is otherwise contemplated in the Agreement. Even the SDA's summary documents provided to employees noted that more than six consecutive days could be worked by agreement (see Exhibit 9-SDA8 at cl.7 (i)-(v), as well as in Exhibit 9-SDA9, SDA-10, SDA-12 and SDA-13). Clause 12.6, cl.13.10 and cl.14.8, which provide the maximum number of consecutive days a full-time, part-time and casual employee shall work is six, provided that such employees may agree otherwise, do not, as I have noted, apply to Level 4 employees.
[114] As I observed in the statement, the Agreement's provisions which specify that a full-time employee is to be rostered to have two consecutive days off work a week (cl.12.4) or at least a weekend off a month (cl.12.5) can be voided by agreement. Parallel observations apply in relation to the equivalent provisions for part-time employees. There are no like provisions that apply to casuals, with the result that they, for example, have no framework arrangement under the Agreement that would contemplate two consecutive days off a week. Similarly, as to casual employees, there are no provisions that would, for example, provide that casuals should be rostered so as to have two consecutive days off per week or a weekend off per month, and, by virtue of cl.14.8, a casual employee could "agree" to work an unlimited number of days without a break. These arrangements concerning full-time, part-time and casual employees clearly raise occupational health and safety issues about reasonable working patterns during peak trading times, such as in school vacation periods.
[115] In an enterprise agreement which has a system of average pay (cl.23.4 of the Agreement), whereby any overtime payments that otherwise might be attracted could be averaged over an undefined and open-ended period "as may be agreed", the financial consequences also could be highly deleterious for the employees - putting aside the occupational health and safety issues and work/life balance considerations that arise from an Agreement which allows employees to work an unlimited number of consecutive days without a proper break for rest and recuperation.
[116] I accept Mr Bliss's submission it was the SDA's aim in relation to the rostering provisions to prevent unfair, "back-end" rostering practices, involving employees being rostered back-to-back on discrete rostering cycles. For example, an employee might work only five days in one cycle and five days in the next, but, nonetheless, be rostered for ten consecutive days. While I accept it may have been the SDA's intention the Agreement should prevent back-end rostering arrangements, this is not what the Agreement provides. It allows employees to work unlimited consecutive days by "agreement" and, added to that, any overtime payments which may have been attracted may be subsumed by the application of cl.23 (which allows an averaging of hours over four week cycle or even longer by agreement), coupled with a system of average pay where the averaging period is not limited in the Agreement.
[117] I note Mr McManus described the rostering provisions in the following way, as being benefits of the Agreement:
"[5(v)] Improved rostering arrangements that implement facilitative mechanisms to meet both McDonald's and the employee's [sic] requirements covering Full-time employees (clause 12 of the proposed agreement), Part-time employees (clause 13 of the proposed agreement) and casual employees (clause 14 of the proposed agreement). The proposed new rostering arrangements enable the degree of flexibility to be implemented, particularly with regards to the needs of a younger workforce meeting a work-life-study balance."
To similar effect, Mr Moir submitted the employees prefer flexible rostering arrangements of the type envisaged in the Agreement to take into account non-work interests and activities. He submitted these arrangements are not viewed as opting-out, as such; rather, they are facilitative. On the other hand, Mr Bliss submitted some of the matters identified in the statement are correct, such as those concerning the opting-out arrangements. He submitted that the opting-out arrangements needed, however, to be viewed in terms of the "stringent protections" of the Agreement, such as a maximum of five shifts in any week, a maximum 9.5 hours in a day and a maximum 36 hour week for part-time and casual employees.
[118] I do not accept the characterisation of the Agreement advanced by Mr McManus that the Agreement contains, considered in terms of the reference instruments, "improved rostering arrangments" for employees; there is no evidence before Fair Work Australia to support Mr Moir's submissions as to the views of the employees themselves about their preferences; and I have generally rejected the contention the Agreement contains any stringent protections of the type described by Mr Bliss. I consider the Agreement allows potentially quite exploitative arrangements for the rostering of employees, more particularly the young employees to whom Mr McManus refers. In my assessment, these types of employees would be unlikely, in many instances, to have much practical prospect of refusing requests to work under such potentially unsatisfactory arrangements. I do not say this is what would occur; I say this is what the Agreement allows - and it is the Agreement itself which is under consideration. I have not been persuaded by the submissions of the applicant and the SDA that I should resile from my preliminary assessment of the Agreement's opting-out provisions.
[119] The second principal issue addressed in my statement concerned the position of Level 4 employees under the Agreement. I commented as follows:
"[15] The second principal observation to be made is that the cll.12.3, 12.4, 12.5, 12.6, 13.8, 13.9, 13.10 and 13.11 do not apply to Level 4 employees. Level 4 employees are described in Schedule A (Classifications) of the Agreement in the following way:
A McDonald's employee Level 4 means an employee who is appointed to the position of 'Shift or Trainee Manager' or higher by the employer.
[16] The McDonald's/SDA-specific reference instruments (i.e., the SA/NT, ACT, NSW and Victorian instruments) do not presently appear to apply to Level 4 employees, given that the definition of "employee" in each such instrument does not include employees classified as managers, trainee managers, swing managers or employees in other managerial positions. However, reference instruments that are not McDonald's/SDA-specific (i.e., the WA and Queensland instruments) do not appear to exclude any classes of employees whose minimum terms and conditions would otherwise come within those instruments. In this respect, it may be noted the Queensland instrument applies, for example, to categories of employees including "a senior employee who is proficient in all operations functions and who is appointed by the employer to assist and supervise employees at Levels 1 and 2".
[17] I note that cl.18 of the Agreement specifies the following full-time weekly wages for Level 4 employees:
[18] As is evident from these wage rates, which are all under $40,000 a year, Level 4 employees under the Agreement are not high-earning employees of the type where an appropriate managerial salary might otherwise reasonably comprehend or offset conditions of the type variously described in cll.12.3, 12.4, 12.5, 12.6, 13.8, 13.9, 13.10 and 13.11 of the Agreement, as well as in relation to various other conditions under the Agreement. The matter is brought into sharp focus when the age-related percentages are applied to Level 4 employees, as clearly contemplated on the face of the wage rates in cl.19 of the Agreement. The age-related scales for juniors at cl.19 of the Agreement start at 40 per cent of weekly wages and graduate upwards to age 20 at different rates. For example, a Level 4 trainee manager (aged 18 years and working Queensland) would receive 70 per cent of the weekly wage specified in cl.18 of the Agreement, that is, $512.17 per week. If the Level 4 trainee manager was aged 16 and working in NSW, the ACT or Tasmania, he or she would receive 50 per cent of the adult rate which, in the case of Tasmania, would mean a weekly wage of $360.17. As I have noted earlier, 65,600 of the employees who would be covered by this Agreement are aged under 21 years and, as such, would be paid the percentage rates for juniors. While it is, of course, commonplace for industrial instruments to contain junior rates of pay, the point of distinction with this agreement is that low-paid, junior employees are treated under the Agreement as if they were, in effect, salaried employees whose income is set at a level to compensate for entitlement to terms and conditions that would otherwise apply to award-reliant or agreement-reliant employees."
[120] Mr Moir and Mr Bliss submitted that, properly construed, the reference instruments for Western Australia and Queensland do not apply to employees categorised at Level 4 of the Agreement. Therefore, if the Agreement passes the no disadvantage test in relation to Level 1, 2 and 3 employees, it passes the test in relation to all employees. In so submitting, Mr Moir referred to matters including principles of construction, management-type indicia in relation to the work performed by Level 4 employees under the Agreement, and under the WA and Queensland industrial instruments. Mr Bliss acknowledged there is "mixed precedent" with respect to the question of award coverage of managerial employees. He doubted, however, whether the WA instrument, on a plain English interpretation, could be stretched to include managerial employees, having regard to the classifications. He added that the relevant Branches of the SDA had not adopted an approach of considering these employees to be award-covered.
[121] On a consideration of Mr Moir's submissions and those of Mr Bliss, I accept the WA instrument may not, in terms of the callings identified, necessarily appear to comprehend managerial employees. On the other hand, there is, equally and importantly, no managerial exclusion in the WA instrument and, under cl.20(2) of the WA instrument, an employee in charge of other employees receives the following weekly payments: (a) if placed in charge of less than 6 employees - $7.20; (b) if placed in charge of 6-10 employees - $9.85; (c) if placed in charge of 11-20 employees - $11.60; and (d) if placed in charge of more than 20 employees - $19.15. To the extent the WA instrument includes payments for being placed "in charge" of employees, I consider this may well comprehend at least the role envisaged of the Level 4 "Shift or Trainee Manager", although perhaps not the more senior managers within the McDonald's outlets.
[122] Mr McManus described the role of Level 4 employees as having responsibilities including recruitment, people management, hiring and firing, budget setting, stock taking, setting of shift rosters and associated tasks. However, the Agreement at Schedule A does not delineate the roles to be undertaken by the various classes of Level 4 employee and there was no evidence which described the delineation of the roles performed by shift managers, trainee managers and the more senior managerial employees such as second assistant manager, first assistant manager and restaurant manager. No authorities were provided by either the applicant or the SDA concerning the question of managerial exclusion-related cases specific to this particular instrument. In the absence of any evidence or specific cases about that delineation, I incline to the view the WA instrument probably does comprehend the work undertaken by at least the more junior-ranked shift and trainee managers - and, for the purposes of this decision, conclude accordingly.
[123] As to the Queensland instrument, I do not accept the submissions by Mr Moir and Mr Bliss that, properly construed, it does not apply to managerial employees. Within terms, cl.1.7.5 of the Queensland instrument refers to "a senior employee who is proficient in all operations functions and who is appointed by the employer to assist and supervise employees at Levels 1 and 2". Mr Moir contended a Level 3 "senior employee" under the Queensland instrument has responsibility for supervising, but not management - and submitted this proposition was "reinforced by the qualification contained in cl.1.7.5 that: 'Such level does not apply to employees engaged in one-on-one training' (i.e. management-level employees)".
[124] I may have misunderstood the submissions, but Mr Moir appears to suggest the words "Such level does not apply to employees engaged in one-on-one training" represents some form of managerial exclusion if an employee undertakes one-on-one training. First, I do not accept undertaking the role of one-on-one training makes a person a manager. If that were so, the employees under the Agreement who would receive a crew trainer allowance would be entitled to be paid as Level 4 employees.
[125] Second, the concept of a managerial exclusion under an industrial instrument is a familiar one. Indeed, each of the McDonald's/SDA-specific reference instruments clearly contains managerial exclusions. The specific provisions thereto concerning the managerial exclusion stand in contrast with the absence of any such provisions in the reference instruments that are not McDonald's/SDA-specific. As the effect of the Queensland reference instrument is under consideration, I will use another Queensland instrument as an example of an instrument with a managerial exclusion. Clause 1.4 of the Clerical Employees Award 2002 (AN140067) provides as follows in relation to a managerial exclusion:
This Award applies to persons employed wholly or principally as a clerk as defined within the State of Queensland, but excluding:
(a) Any person who is a proprietor, director or manager of a company, business or undertaking, or a person to whom has been delegated the right to engage and terminate the employment of employees. …"
[126] There are countless examples of managerial exclusions (some of a more limited nature) contained in industrial instruments that have been made not only in Queensland, but in all jurisdictions.
[127] Mr Moir also made submissions about wages relativities with tradespersons in submitting it would be incongruous to consider the Queensland instrument as covering managerial employees. I did not consider those submissions persuasive. I would add that this Agreement clearly contemplates a junior Level 4 employee receiving less than an adult employee at a lower grade.
[128] I note also that the Broken Hill Commerce and Industry Agreement Consent Award, which is the subject of certain savings in the NSW instrument, unambiguously applies to managers (see cl.18.6). Similarly, the Shop Employees (State) Award describes allowances payable to employees "In charge of over 25 assistants", as well as for a "Section Head", which would appear to comprehend at least some level of managerial responsibility.
[129] I would add that if it is the case Level 4 employees undertake what is (contrary to my assessment) truly non-award covered, managerial work then questions may arise about whether the SDA was, as contended in the Form F18, relevantly entitled to represent the industrial interests of those employees. However, it is unnecessary to further consider this matter, given my conclusions about the WA instrument and Queensland instrument as they concern Level 4 employees.
[130] Mr Moir submitted that even if Fair Work Australia were to conclude Level 4 employees might be covered by the WA instrument and the Queensland instrument, Level 4 employees constitute "a very minor proportion of the workforce" and, on that basis, it cannot be assumed the employees as a whole would be disadvantaged on an overall basis. I find this a somewhat startling submission to be advanced on behalf of an applicant which has failed to provide the information required at cl.2.16 of the employer's declaration concerning the details of the geographical, operational or organisational basis for choosing the group of employees to be covered by the Agreement - so as to enable an assessment by Fair Work Australia whether the group was "fairly chosen" within the meaning of s.186(3)-(3A) of the Act.
[131] The only evidence before Fair Work Australia is: (a) the identification in the employer's declaration of the classification structure itself as including Level 4 employees; (b) Mr McManus's description of the type of work Level 4 employees may undertake, but without any differentiation concerning the various classes of managerial employees within Level 4; and (c) that the "company restaurants" operated by the applicant itself, as opposed to licensee-operated outlets, have 1,470 employees who would be classed as Level 4 employees. The number of Level 4 employees in the licensee-operated operated outlets was not in evidence. Based on an extrapolation across all outlets of the number of Level 4 employees in the company-operated outlets, there would be thousands of employees in this group. That is, the evidence indicated that in the applicant-operated outlets, the numbers of employees at the different classifications are:
[132] As to the disadvantages for Level 4 employees as against the conditions (generally) provided for Level 1-3 employees, I note the following provisions of the Agreement do not apply to Level 4 employees:
Level 4 employees are not entitled to any of the following allowances:
4. Non-adjustment of other allowances applicable to Level 4 employees
By cl.20.1 of the Agreement, Level 4 employees do not have any entitlement to the adjustment of allowances that would otherwise apply to them (such as locality allowances under cl.21), given the managerial exclusion found in the Agreement in:
Clause 23.1, providing for weekly payment of wages, does not apply to Level 4 employees. By cl.23.1, Level 4 employee may be paid "bi-monthly or fortnightly".
Clause 26.5.1, providing for minimum breaks between shifts of at least 10 hours (coupled with associated penalty rates where such a break is not given), does not, given the exclusion in cl.26.5.2, apply to Level 4 employees.
Level 4 employees are excluded from entitlement to the following payments:
By clause 31.5, all employees, except Level 4 employees, are entitled to payment for working on public holidays at the rate of 200 per cent (250 per cent in Queensland); and casual employees at the rate of 200 per cent (273 per cent in Queensland) of the weekly employees' ordinary hourly rate. Level 4 employees are not entitled to any additional rate for working on public holidays.
[133] In contrast with the somewhat industrially-confronting list of exclusions applying to Level 4 employees, the benefits of the Agreement specific to Level 4 employees are two-fold. By cl.22.1 of the Agreement, Level 4 employees may choose their own complying superannuation fund, rather than having payments directed to REST (the Retail Employees Superannuation Trust); and, second, by cl.29.4 Level 4 employees may apply to cash-out certain annual leave entitlements.
[134] I reiterate my observations from the statement that Level 4 employees are not high-earning, salaried employees. With the application of the junior scales to their wage rates, a 16 year old would earn less than $400. An 18 year old in Queensland would receive about $512.
[135] Mr Moir submitted the employees as a whole would not be disadvantaged by the Agreement even if I concluded the Level 4 employees were disadvantaged. If Mr Moir's submissions were to be accepted on this point, then I consider, in the alternative, the group of Level 4 employees generally was not, within the meaning of s.186(3)-(3A) of the Act, "fairly chosen" for inclusion in the Agreement. That conclusion arises in circumstances where: (a) the conditions provided in the Agreement for Level 4 employees are so markedly different from the other employees; and (b) the number of Level 4 employees is so comparative small (albeit still running to thousands of employees) that the combined effect of even a block vote by them against the approval of an enterprise agreement which so adversely affected them would be statistically irrelevant to the outcome of a vote if it was otherwise approved by a majority of the Level 1-3 employees. Level 4 employees would have had no prospect of voting-down the Agreement when the statistics concerning the relative numbers of employees are concerned.
[136] Having considered the further submissions and evidence, I reiterate my concerns first expressed in the statement about the provisions of the Agreement concerning Level 4 employees.
[137] The third key observation I made in my statement on 25 February 2010 about the Agreement was the lack of casual loading for employees in the Australian Capital Territory and the Northern Territory. That is, the Agreement includes rates as follows:
14.1 A casual employee is an employee engaged and employed as such.
14.2 A casual will be paid both the actual hourly rate paid to a full-time employee and a casual loading. Such loading will be based on the state that the employee is working and will be as follows:
"[19] The third principal observation to be made is in relation to casual employees' remuneration. Clause 14.2 of the Agreement specifies that casual rates loaded at around 20-25 per cent over the life of the Agreement are applicable, based on the State in which the employee is working. There are, however, no casual loadings in the Agreement for employees working in the ACT or the NT, albeit the ordinary rates of pay for employees in the Territories are otherwise clearly delineated at cl.18 of the Agreement. The lack of casual loadings for casuals employed in McDonald's outlets in the ACT and NT is clearly financially disadvantageous for those employees."
[138] The applicant disagrees with my preliminary assessment in the statement the Agreement does not provide casual rates for employees in the Territories. Mr Moir submitted I was incorrect in that assessment and submitted, after I asked if he wanted to press the submission the Agreement contains casual loadings for employees in Australian Capital Territory and Northern Territory (as opposed to the States), that, on a proper construction of the Agreement read in context as a whole, that "State" means "Territory" within cl.14.2 of the Agreement. Despite Mr Moir's submission, I do not accept the submission that "State" means "Territory" within this Agreement (or ordinarily in contexts otherwise - see for example, s.17 of the Acts Interpretation Act 1901 (Cth)). There are specific examples within the Agreement of arrangements specific to individual States and Territories; and this Agreement does not otherwise define "State" as including "Territory".
[139] Mr Bliss submitted my assessment was probably correct and suggested, as there was a typographical error in not including casual rates for employees in the Territories, a written undertaking from the applicant might be appropriate in all the circumstances in relation to cl.14.2 of the Agreement. The applicant did not act on Mr Bliss's suggestion and tender any undertaking in relation to casual loadings for employees in the Territories, albeit it had earlier flagged that possibility in the submissions and tendered other undertakings on the day of the hearing.
[140] Mr Moir also submitted the casual loading would in fact be paid to employees in the Territories, and it was always the intention of the applicant and the SDA that casual loadings would apply to such employees. The Agreement itself is under consideration, not the existence of an understanding between the applicant and the SDA. As I noted in the proceedings, while the applicant and the SDA may have an understanding about how casual rates should be applied in the Territories, receivers and managers or administrators appointed to any one or more one of the licensee outlets would be unlikely to consider themselves bound by the understanding between the applicant and the SDA. If recovery or enforcement proceedings were initiated, consideration primarily would be given to the ordinary words of the Agreement - and those ordinary words do not include casual loadings for employees in the Territories. I would add it is possible there would simply be a renegade licensee or licensees who, properly advised as to obligations under the Agreement, determined not to pay anything more than actually legally obliged to pay under the Agreement as a cost-cutting measure, despite the understanding between the "head office" of the applicant and the SDA.
[141] The Agreement, on its face, does not provide casual rates for employees in the Australian Capital Territory and the Northern Territory. I do not consider the Agreement otherwise properly can be construed as including casual rates for those employees. As Madgwick J noted in Kucks v CSR Limited (1996) 66 IR 182 at 184, "A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award". The applicant, for its own reasons and notwithstanding the submissions of the SDA encouraging an undertaking, has determined not to provide any undertakings to address the issue of casual loadings for employees in the Australian Capital Territory and the Northern Territory. In consequence, the Agreement would provide only flat hourly rates for casual employees in the Territories. This would represent a significant financial disadvantage of around 20 per cent on the hourly rate as against the reference instruments.
4. GENERAL MATTERS ARISING FROM EARLIER STATEMENT
[142] As to more general matters of disadvantage, I commented as a fourth principal observation on the hours and overtime arrangements under the Agreement when compared to and contrasted with the oftentimes more favourable terms and conditions that otherwise applied to all employees under the reference instruments. I propose to deal with my findings in relation to this matter in the more general context of the submissions of the applicant and the SDA about the advantages and disadvantages of the Agreement in the context of the no disadvantage test.
[143] As I understand it, none of my preliminary assessments about the disadvantages relative to the comparator instruments, other than those actually contested in the submissions, is disputed by either the applicant or the SDA. As such, I confirm as findings the matters taken from the statement, which I largely reproduce below, with some editing, corrections and expansions. The sub-headings follow the clause numbers in the Agreement, commencing at cl.15.
[144] As I noted in the statement, there are provisions under the reference instruments which provide terms and conditions which, in miscellaneous instances, provide arrangements for employees that are more beneficial than the Agreement in relation to termination of employment.
[145] Clause 13.2.2 of the SA/NT instrument provides that if an employer fails to give notice of termination in accordance with 14.1, the employer shall pay to that employee an amount calculated in accordance with the ordinary rate of pay for a period being the difference between the notice given and that required to be given, the period of notice to be given shall be taken to be service with the employer for the purposes of the Long Service Leave Act 1987 (SA) and the Long Service Leave Act 1981 (NT). Clause 13.8 and cl.14.4 of the SA/NT instrument contain similar provisions in relation to payment in lieu of notice being treated as service for the purposes of computing service-related entitlements. There are no equivalent provisions in the Agreement. The Agreement, containing the same redundancy scales as those now applicable under the NES, provides severance payments which are superior to the maximum of 8 weeks contained in the SA/NT instrument.
[146] Clause 12.2.2, cl.12.8 and cl.13.4 of the ACT instrument appear to be relevantly similar to the SA/NT instrument identified above - and, generally, the same observations apply. The Agreement, containing the same redundancy scales as those now applicable under the NES, also provides severance payments which are superior to the maximum of 8 weeks contained in the ACT instrument.
[147] Clause 13.2.2, cl.14.1.3 and cl.14.4 of the NSW instrument appear to be relevantly similar to the SA/NT instrument identified above - and, generally, the same observations apply.
[148] The Victorian instrument similarly contains these leave-computing provisions at cl.13.2.2, cl.13.8 and cl.14.1 and, again, the same observations apply.
[149] The Queensland instrument is cast in terms unlike the provisions of the instruments that are specific to McDonald's and the SDA. Although aspects of the provisions in the Queensland instrument would now be captured by the NES, that cannot be said of all the provisions. In particular, the redundancy pay scales are more beneficial for employees with certain years of service under the Queensland instrument, although that is not the case in all instances.
[150] Under the Agreement, the scale is as follows - referenced to the NES:
"16.1 Redundancy pay is provided for in the National Employment Standards as follows:
Employee's period of continuous service with the employer on termination
[151] Under the Queensland instrument, the scale is as follows:
"(a) In addition to the period of notice prescribed for ordinary termination in clause 4.2.2(a), and subject to further order of the Commission, an employee whose employment is terminated for reasons set out in clause 4.4.1(a), shall be entitled to the following amounts of severance pay:
[152] It may be seen that with respect to some years of requisite service, employees may be better served by the application of the Agreement rather than the Queensland instrument, and vice versa. For employees with service of ten years or more, the Queensland instrument provides more beneficial severance payments than the Agreement. To that extent, longer-term employees who are made redundant would appear to be disadvantaged under the Agreement by reference to the provisions in cl.16.1 of the Agreement and, as the Agreement preserves only the hourly rate of pay, these provisions would not be protected.
[153] I note that while the redundancy provisions of the Agreement and the Queensland instrument contain what might be regarded as a balance of advantages and disadvantages considered in an overall sense, the same certainly cannot be said for the provisions concerning redundancy payments for some employees in New South Wales. In contrast with the Queensland instrument, far superior redundancy scale payments would apply to some employees in New South Wales who are the subject of a savings provision under the NSW instrument than under the Agreement, as discussed later in this decision in connection with my consideration of the savings provisions concerning the Shop Employees (State) Award.
[154] The WA instrument does not contain provisions concerning redundancy, but the minima concerning such matters would otherwise have been as specified by the General Order of the Western Australian Industrial Relations Commission that took effect on 1 August 2005.
[155] Clause 18.3 of the Agreement potentially contemplates a reduction in, or at least static, rates of pay in 2010. For example, if the 2010 annual wage review amount was equal to or less than the amounts specified in cl.18.3, then wages would be decreased for certain classes of employees. In this respect, cl.18.3 of the Agreement relevantly reads as follows:
In addition to the wage rates specified in 18.1 and 18.2 employees will be paid the following increases. Provided that an employee will not be paid less than the rate otherwise applicable to that employee under the transitional provisions of the relevant modern award.
[156] I note the submissions suggested it would be unlikely any annual review amount would be equal to or less than the amounts in cl.18.3. As to this, I would simply note what many commentators considered to be the surprise outcome of the last Australian Fair Pay Commission determination; the outcome is speculative at this stage. But if the annual wage review was, for example, proportioned by reference to junior percentage rates, then this Agreement would provide for minimal or no increases at or beyond the national minimum for large numbers of junior employees proposed to be covered by its terms. As to this, I note both the provisions of cl.41 (Savings) and Mr McManus's evidence that if the amount was $7.50 or less in 2010, "there will be no reduction in the employee's wage level and employees will not receive any wage adjustment either".
[157] Clause 19 of the Agreement deals with the percentage of adult rates to be paid to junior employees. The provisions in the Agreement for junior rates for Level 2, 3 and 4 employees are inferior, in some instances, to the percentages that would apply under the WA instrument. For example, the Agreement provides Level 2, 3 and 4 employees aged 15 years and under receive 48.5 per cent of the adult rate, whereas cl.21 of the WA instrument sets the percentage at 50 per cent. Similarly, the Agreement provides Level 2, 3 and 4 employees aged 20 years receive 96.8 per cent of the adult rate, whereas cl.21 of the WA instrument sets the percentage at 100 per cent.
[158] I diverge to note the seemingly inaccurate information contained in Exhibit 9-SDA15 (the SDA's summary document for Western Australia). The document reads:
The proposed Agreement also provides improvements to junior rates at some classifications and age levels.
McDonalds employs large numbers of crew members aged under 16 years. The junior rate for these employees is currently 40% of the adult rate. Under the proposed Agreement, these employees' rates will increase to 50% of the adult rate for Level 1 employees and to 48% of the adult rate at all other levels.
20 year olds will also receive a significant lift. For Level 1 employees the junior percentage will lift from 90% to 100% of the adult rate while at all other levels the junior percentage is to rise from 90% to 96.8% of the adult rate."
[159] In fact, the junior rate in the cl.21(2) of WA instrument for employees aged less than 16 years is presently 50 per cent; and, by that same clause, 20 year olds are presently entitled to 100 per cent of the adult rate. But even if this summary was, perhaps, based on the certified agreement that applies to various employers in Western Australia named in Schedule A of the McDonald's Employees, Agreement 2003, then the summary information is still incorrect as to junior employees. Clause 21(2) of the WA instrument specifies a junior scale of 45 per cent for employees aged less than 16 years, effective from 1 February 2006. If the information in Exhibit 9-SDA15 is correct in stating that employees aged less than 16 years are being paid at 40 per cent of the adult rate, there may be underpayments - whether considered in terms of the WA instrument or the certified agreement.
[160] Clause 20 of the Agreement deals with allowances under the following headings:
20.11 Adjustment of allowances other than expense related allowances
[161] The first observation to be made is that Level 4 employees do not have an entitlement to most of the allowances the Agreement, whereas there is no such exclusion in, for example, the Queensland instrument and the WA instrument. In this respect, I reiterate the observation from the statement that Level 4 employees are not high-earning salaried managers, more especially so when they are paid the junior pay scales.
[162] More generally, the following may be said about the allowances in the Agreement and the reference instruments.
[163] Clause 20.2 of the Agreement provides as follows in relation to meal allowances:
An employee who is required to work overtime after 6.30pm on any one day shall be given a meal allowance of $10.03 or provided with suitable meal at no cost to the employee."
[164] Clause 19.1 of the SA/NT instrument provides that an employee who is required to work overtime after 6.30pm on any one day shall be given a meal allowance of $9.50; or be provided with a suitable meal at no cost to the employee.
[165] Clause 18.1 of the ACT instrument provides a meal allowance of $11.60, which is higher than the allowance in the Agreement; or be provided with a suitable meal at no cost to the employee.
[166] Clause 19.1 of the NSW instrument provides that an employee who is required to work overtime after 6.30pm on any one day shall be given a meal allowance of $9.80; or be provided with a suitable meal at no cost to the employee.
[167] Clause 19.1 of the Victorian instrument provides a meal allowance of $11.10 for overtime after 6.30pm on any one day; or be provided with a suitable meal at no cost to the employee. Like the ACT instrument, this amount is, again, higher than the Agreement.
[168] Clause 6.3 of the Queensland instrument provides for payment of a meal allowance of $9.60 if the employer does not provide the meal for any employee who is required to work overtime of more than one hour beyond their rostered ceasing time (which may be before 6.30pm).
[169] Clause 13 of the WA instrument provides:
Any employee who is required to work overtime for more than two hours on any day, without being notified on the previous day or earlier, that he or she will be required to work such overtime, will either be supplied with a meal by the employer or be paid $9.30 meal money."
This clause of the WA instrument, like the Queensland instrument, is not limited to work after 6.30pm. It would similarly apply if the overtime commenced at a time in the day apart from the 6.30pm otherwise provided in the Agreement. The amount of the meal allowance is unclear to me, as the SDA's comparative documents suggest a figure of $11.20 rather than $9.30. In this regard, I note that Exhibit 9-SDA7 specifies a figure of $11.20, arising from "a nexus with the Shop and Warehouse (Wholesale and Retail Establishments) State Award 1991 in application 1928 of 2002".
[170] Thus, the Agreement provides money amounts which are inferior to the ACT instrument and the Victorian instrument. The Agreement is also inferior to the Queensland instrument and the WA instrument, given it is limited to overtime worked after 6.30pm, whereas the provisions in those two instruments are cast more broadly. This would be a relevant consideration in relation to an Agreement which covers employees who work in outlets that operate 24 hours a day.
[171] Mr Moir drew attention to the fact that although the money meal allowance is less than some of the reference instruments, the reference instruments allow the provision of a meal in lieu of the money allowance. Given the nature of the business conducted by the applicant and the licensees, they would be "well equipped", he submitted, to provide a meal at no cost to the employee in lieu of the allowance.
[172] Accepting that the reference instruments presently all provide for a payment in lieu of a meal allowance, I note it appears employees are not given meals at no cost. Although nothing turns on it in terms of this application for the approval of the Agreement, I note, in passing, the applicant's website provides the following information about the benefits of working for McDonald's, relevantly advising as to payment for meals as follows:
You'll receive the exclusive metime Benefit Card, offering fantastic discounts on McDonald's food and a huge range of your other favourite stores. You'll also get a 50% discount on a meal during, before or after each shift you work". [My underlining]
[173] Hence, based on the information on the applicant's website, employees may not presently be provided with a meal "at no cost to the employee". Employees apparently pay for any meal they may choose to buy at McDonald's in connection with working a shift involving overtime after 6.30pm, albeit at a discounted rate of 50 per cent of the normal retail cost to customers.
[174] It is possible the applicant and the licensees may have adopted a different policy approach to payment for meals connected with overtime after 6.30pm in connection with the approval of this Agreement. Nonetheless, I would observe that so far as the prevailing reference instruments are concerned (read in conjunction with the information about the prevailing payment policy for McDonald's concerning meals partaken by employees), there may have been instances of underpayments of meal allowances payable to employees in circumstances where meals have not been provided at no cost to those employees in connection with overtime shifts.
[175] The matters I dealt with in the statement concerning crew meeting payments are now addressed, in part, in this decision under the heading "Minimum Engagement". But as to the statement, I noted the following matters in relation to crew meeting payments.
Employees shall be paid a minimum of one hours wages for their attendance to any crew meeting they are requested to attend by the employer. Should the duration of the meeting extend past one hour, the employees shall be paid for the entire duration of the meeting. Attendance at meetings is not compulsory but is encouraged."
[176] If an employee attended work, at the employer's request, on a day when he or she was not rostered for work, or if the employee remained at work or returned to work because of the crew meeting, then the employee would be disadvantaged by reference to the minimum engagement provisions found in various reference instruments that otherwise would apply. Payment for attendance at work at the employer's request ordinarily would attract minimum engagement provisions under the reference instruments, but under the Agreement, employees would be paid only a minimum of one hour's pay, by way of an "allowance". Similarly, if an employee had to arrive early for work or remained at work for the purpose of attending the crew meeting into a span of hours that otherwise would have attracted overtime payments, the employee would also be disadvantaged by cl.20.3 of the Agreement in as much as it appears to provide payment only at ordinary hours rates rather than overtime rates.
[177] Clause 11.2.2 of the SA instrument provides for a minimum engagement of four hours for full-time employees; two hours for casual employees (cl.11.3.1(b)); and two and a half hours for a part-time employee (cl.11.4.5). There is also a two hour minimum engagement for training new recruits under cl.11.3.5.
[178] Clause 11.2.2 of the ACT instrument provides for a minimum engagement of four hours for full-time employees; three hours for casual employees (cl.11.3.1); and three hours for a part-time employee (cl.11.4.5).
[179] Clause 11.1.3 of the NSW instrument is the only reference instrument that presently contemplates special payments for attendance at crew meetings. The clause reads:
"[Full-time, casual, regular part-time, and flexible part-time employees] may be required to attend a crew meeting throughout the year. On such occasions (up to a maximum of 6) the minimum engagement shall not apply. Instead they shall be paid for the time spent at the actual meeting only. Crew meetings are not compulsory but attendance is encouraged." [My bolding]
[180] Thus, cl.11.1.3 of the NSW instrument provides that employees may be required to attend crew meetings throughout the year, and be paid for time spent at the actual meeting only (which may involve payment for less than one hour if the crew meeting did not last for at least an hour). To that extent, the minimum payment of one hour in the Agreement is more beneficial than the NSW instrument.
[181] However, the crew meeting arrangements in the Agreement are less beneficial than the NSW instrument if an employee attended more than six crew meetings in a year. It seems to me there are at least two available constructions of cl.11.1.3 of the NSW instrument. On the first construction, cl.11.1.3 sets a limit of six crew meetings over a calendar year an employee may be required to attend, but I do not think this is the proper reading of the clause (albeit it may have the same practical effect of limiting the number of meetings). By way of illustration, I reproduce below an example of a provision from a McDonald's/SDA-specific certified agreement that places a limitation on the number of crew meetings. The McDonald's & SDA - Australian Capital Territory - Certified Agreement 2004, which was identified by the applicant at cl.4.3 of the employer's declaration as being one of the certified agreements that operated in relation some employees, provides as follows for casuals:
"15.2.8 Notwithstanding the minimum engagement prescribed herein, casual employees may be engaged for a period of not less than one hour on not more than six occasions in any year for the purpose of crew meetings or training. Should the meeting go for longer than one hour, the employee shall be paid a minimum period of three hours. Such crew meetings and training are not compulsory, but attendance is encouraged."
[182] On the second construction, cl.11.1.3 of the NSW instrument does not restrict to six the number of crew meetings in a calendar year. What it does, instead, is to specify that the minimum engagement provisions do not apply to only the first six crew meetings an employer may schedule throughout a calendar year. Thus, if the employer scheduled more than six crew meetings a year, the employees who attended would be entitled to the ordinary minimum engagement provisions otherwise applicable under the NSW instrument concerning attendance at the seventh crew meeting and any or all subsequent meetings.
[183] On either construction, the Agreement represents a disadvantage to employees when considered against the NSW instrument, because it does not place any cap at all on the number of crew meetings.
[184] If employees other than those employed under the NSW instrument (or the certified agreements that presently contain special minimum engagement arrangements for attendance at crew meeting or staff meetings) have been attending crew meetings at the request of the applicant or its licensees, then the ordinary minimum engagement provisions of the appropriate reference instruments would, I note, have applied to those employees' entitlements to payments for such attendance at work at the employer's request. If the employees of the applicant and its licensees have been attending crew meeting and have not been paid the minimum engagement provisions applicable under the reference instruments, then it appears those employees may have been underpaid.
[185] I note also the Shop Employees (State) Award, which is the subject of certain savings provisions in the NSW instrument (and which would apply to outlets that were not individually nominated in the schedules to the NSW instrument or in the roping-in award), provides at cl.5 for a minimum payment of three hours.
[186] Clause 11.2.2 of the Victorian instrument provides for a minimum engagement of four hours for full-time employees; two hours for casual employees (cl.11.3.1); and two and a half hours for a part-time employee (cl.11.4.5).
[187] Clause 6.1.2(c) of the Queensland instrument provides a minimum engagement of four hours for full-time employees; two hours for casual employees (cl.4.8.4); and two hours for a part-time employee (cl.4.7.4(c)).
[188] Clause 9(3) of the WA instrument provides for payment at the rate of double time with a minimum payment for three hours for work on a rostered day off; a minimum engagement of two hours for casual employees (cl.10(2)); and a minimum engagement of three hours for part-time employees (cl.11(1)); and a minimum payment as for four hours at double time rates for public holidays.
[189] In addition to the matters noted in the statement, I would add also the hourly rate for attendance at crew meeting is under the general heading of "Allowances" and, hence, would be subject to the adjustment provisions specified for allowances, rather than wages. In this respect, I note cl.20.11 specifically provides as follows:
"20.11 Adjustment of allowances other than expense related allowances
Allowances other than locality allowances and expense related allowances shall be adjusted on each occasion that wage rates in this agreement are increased and shall be adjusted by the % increase which occurs to the wage rate for a level 2 employee."
[190] Hence, the adoption of this adjustment formula means that the Level 3 employees would see the amount of money they would receive for attendance at crew meetings atrophy over time, because the amount is linked to the Level 2 rate (whereas the Level 1 employees' rate would gradually increase over time, for parallel reasons). There would be, over time, an erosion of the rate for the Level 3 employees. Level 4 employees, of course, would not be affected, as they would not receive an allowance or any other payment for attending a crew meeting. I note Mr Moir's submission it was the intention the crew meeting payments would be adjusted in line with wage increases, but that is not what the Agreement provides. The crew meeting payment is categorised with all other allowances set out in cl.20 of the Agreement and cl.20.11 deals with the adjustment of allowances other than expense-related allowances.
[191] The Agreement provides for a crew trainer allowance for Level 2 employees set at between 45-65 cents, which appears to be more beneficial than under all the reference instruments.
[192] Clause 20.5 of the Agreement provides arrangements that are financially inferior for employees in relation to uniform and laundry allowance provisions than apply under a number of the reference instruments. Clause 20.5 of the Agreement provides as follows:
Where the employer requires an employee to wear a uniform, the employer will supply the uniform and the employee will launder the uniform."
[193] Under cl.18 of the ACT instrument, there is a money allowance for laundering undertaken by employees. That clause reads:
Where the employer requires an employee to wear a uniform or any other distinctive type of clothing, the employer must reimburse the employee for the cost of purchasing, maintaining and (if necessary) laundering such clothing. The provisions of this clause do not apply where uniforms or other required clothing are supplied, maintained and/or laundered by the employer. If an employee is responsible for laundering the uniform they shall be paid the following allowance:
[194] Under cl.36 of the Victorian instrument, the following arrangements apply to uniforms, albeit without specifying the laundering amount:
Where the employer requires an employee to wear a uniform or any other distinctive type of clothing, the employer must reimburse the employee for the cost of purchasing, maintaining and (if necessary) laundering such clothing. The provisions of this clause do not apply where uniforms or other required clothing are supplied, maintained and/or laundered by the employer."
[195] Under cl.5.5 of the Queensland instrument, laundry allowances are dealt with in the following way:
5.5.1 Where an employer does not launder a uniform or clothing which is provided, then the employer shall pay in lieu thereof an allowance of $2.25 per week, in the case of full-time employees, and 45 cents per day in the case of casual or part-time employees."
[196] Under cl.24 of the WA instrument, the following laundry allowances apply, together with an allowance of $2.65 per week for a full-time cook:
Where uniforms are required by the employer to be worn they shall be supplied, laundered and/or dry cleaned by the employer and remain the property of the employer, provided that in lieu of the employer laundering and/or dry cleaning same, the employee shall be paid the following laundry allowance per week -
Provided that any employee employed as a full time Cook shall be paid $2.65 per week for laundry and/or dry cleaning. Provided further that the provisions of this clause may be altered by written Agreement between the union and the employer."
I note that in Exhibit 9-SDA7, the figures provided in the comparative table are higher than in the copy of the WA instrument I have. That it, the figure for a full-time cook is identified as being $3.00 per week, and the other figures provided are $1.60, $2.00 and $2.50 respectively. I cannot ascertain which figure is correct.
[197] Clause 20.7 of the Agreement concerns fares. The provision reads as follows:
Where a level 1 or level 2 employee in the course of their employment is required by the employer to travel for work purposes, then the employee shall receive all fares so incurred. When such an employee is required to use their private vehicle on Company business, then the employee shall received the following allowance for the kilometres so travelled:
From first pay period on or after commencement of agreement
[198] This clause compares unfavourably with the fares provisions in a number of the reference instruments. In particular, the reimbursement of fares applies only to Level 1 and Level 2 employees, rather than providing an entitlement to reimbursement for all employees. While there are general exclusions concerning Level 4 employees in this Agreement, it is difficult to see the rationale for also undermining such conditions as they apply to Level 3 employees.
[199] In this respect, I note the ordinary, industrial position is that reasonably-incurred, work-related expenses, such as fares incurred in the circumstances contemplated in cl.20.7 of the Agreement, would be reimbursed by the employer. This ordinary position is reflected in the reference instruments. For example, see the SA/NT instrument at cl.33.2; cl.18.5.2 of the ACT instrument; cl.35.2 of the Victorian instrument; and cl.8.1.1 of the Queensland instrument. I cannot envisage any good reason why only Level 1 and Level 2 employees should be entitled to reimbursement of their fares in the manner provided in the Agreement and, beside that observation, these provisions of the Agreement are otherwise inferior in as much as Level 3 employees have such allowances in some reference instruments.
[200] Clause 20.8 of the Agreement concerns the first aid allowance. The provision reads as follows:
Where a level 1 or level 2 employee who holds an appropriate first aid qualification is appointed by the employer they will be paid an extra of $9.30 each week. Part-time or casual employees will be paid $1.86 per shift."
[201] This provision compares unfavourably with the first aid allowances that would otherwise apply under only one of the reference instruments, namely the ACT instrument. First, as with other examples in the Agreement, the allowance applies only to Level 1 or Level 2 employees, as opposed to all employees. Second, the money amount is inferior to cl.18.3 of the ACT instrument. The ACT instrument provides an additional per shift allowance of $2.24, which would total, for example, $11.20 in a working week comprising five days or $15.68 in a working week comprising seven days (the figure provided by the SDA in Exhibit 9-SDA2, specifying a figure of $2.02, is incorrect). The other instruments do not appear to provide first aid allowances or first aid allowances superior to the Agreement.
ALLOWANCES AND RELATED PAYMENTS - MISCELLANEOUS
[202] There are miscellaneous allowances and related payments in the reference instruments that are not carried-over into the Agreement, thereby disadvantaging employees. For example, under cl.20(2) of the WA instrument, an employee in charge of other employees receives the following weekly payments: (a) if placed in charge of less than 6 employees - $7.20; (b) if placed in charge of 6-10 employees - $9.85; (c) if placed in charge of 11-20 employees - $11.60; and (d) if placed in charge of more than 20 employees - $19.15.
[203] Clause 23 of the Agreement deals with the payment of wages in the following way:
23.1 Subject to 23.2, Wages will be paid weekly, and also may be paid in arrears.
23.2 Clause 23.1 does not apply to Level 4 employees. Wages of level 4 employees may be paid bi monthly or fortnightly. It may also be paid in arrears.
23.3 The employer shall supply to each employee a payslip with each pay which meets all the requirements under relevant legislation.
23.4 Where ordinary hours are worked over a one, two, three or four week cycle (or such period as may be agreed between the employer and the employee), an employer may employ a system of average pay. In calculating average pay, the employer must calculate the total wages that an employee would earn for working ordinary hours over the cycle. This total must then be divided by the number of weeks of the cycle."
[204] Once again, the Agreement provides a form of exclusion for Level 4 employees, whereas under the reference instruments for Queensland and Western Australia, there are no such exclusions for employees who otherwise would be subject to the relevant provisions. Considered in the context of the proposed system of average pay, the Agreement also acts to the detriment of employees when compared to and contrasted with, for example, the ACT instrument. The ACT instrument limits to two weeks the period over which the averaging may occur:
"17.4 Where ordinary hours are worked by a full-time employee over a two weekly cycle, the employer may employ a system of average pay. In calculating average pay, the employer must calculate the total wages that an employee would earn for working ordinary hours over the cycle. This total must then be divided by the two weeks of the cycle."
[205] To the extent the Agreement provides at cl.17 for a "system of average pay", the Agreement does not specify any closed period for averaging purposes where a period over four weeks is "agreed", albeit I note cl.18.4 of both the NSW instrument and the Victorian instrument provide for averaging cycles of between 1-4 weeks, unless some other period is agreed.
[206] In the earlier stages of the proceedings, the applicant submitted, without further elaboration, that the averaging would be dealt with in accordance with the NES, which I take to be s.63 of the Act for averaging under an enterprise agreement (or, for example, s.64 in the case of award/agreement-free employees). The implications under the Agreement of this system of average pay for undermining the concept of 38 ordinary hours a week seem problematic, when there appears to be a capacity to average ordinary hours for payment purposes over an undefined and otherwise open-ended period.
[207] The Queensland instrument does not contain a provision for average pay, and otherwise provides for payment of wages at cl.5.3 in a set manner - which appears to be more beneficial, on various levels, to employees than the provisions of the Agreement, particularly when read in conjunction with cl.6.1 concerning hours of work.
[208] The provisions of the WA instrument do not provide for a system of average pay. Like the Queensland instrument, the WA instrument provides for payment of wages in a set manner which similarly appears to be more beneficial to employees than the provisions of the Agreement particularly when read in conjunction with cl.8 (Hours) and cl.9 (Overtime) - even accepting the WA instrument has 40 hours per week.
ORDINARY HOURS OF WORK (CLAUSE 26) AND OVERTIME (CLAUSE 27)
[209] The Agreement provides as follows in relation to ordinary hours of work and overtime. As to ordinary hours of work, cl.26 of the Agreement provides as follows:
26.1 This clause does not operate to limit or increase or in any way alter the trading hours of any employer as determined by the relevant State or Territory legislation.
26.2.1 Ordinary hours may be worked any time Monday to Sunday,
26.2.2 Hours of work on any day will be continuous, except for rest pauses and meal breaks.
An employee may be rostered to work up to a maximum of 9.5 hours on any day exclusive of meal breaks.
The following options shall be available to determine the manner in which full-time employees are to work their 38 ordinary hours:
26.4.1 a fixed or rotating day off in each four week period; or
26.4.2 a shorter working day of not more than four hours work in ordinary time on one day in each two week period; or
26.4.3 a shorter working day of not more than six hours in ordinary time on one day in each week; or
26.4.4 a shorter working day of not more than 7.6 hours work in ordinary time on any day.
26.4.5 An employer may with the agreement of the majority of employees in a restaurant or with the individual employee concerned substitute the day or part of the day that the employees are or the individual employee is to take off. Such substituted day or part-day is to be arranged and taken as soon as practicable and in any event prior to the next rostered day or part-day off.
26.5.1 Subject to clause 26.5.2 an employee must be given a continuous period of at least 10 hours for rest between each engagement. An employee who is not given a 10 hour break between engagements, shall be paid overtime at the rate of time and half for the first 2 hours and double time thereafter until such time as the employee is given a 10 hour break.
26.5.2 Clause 26.5.1 will not apply to Level 4 employees."
[210] As to overtime, cl.27 of the Agreement provides as follows:
27.1.1 Subject to clause 27.1.2, an employer may require an employee to work reasonable overtime at overtime rates in accordance with the provisions of this clause.
27.1.2 An employee may refuse to work overtime in circumstances where the working of such overtime would result in the employee working hours which are unreasonable having regard to:
27.1.1.2 the employee's personal circumstances including any family responsibilities;
27.1.1.3 the needs of the workplace or enterprise;
27.1.1.4 the notice (if any) given by the employer of the overtime and by the employee of their intention to refuse it; and
27.2.1 Overtime rates of time and half for the first 2 hours and double time thereafter shall be paid for all work in excess of:
27.2.1.1 152 hours per 4 weeks for a full time employee.
27.2.1.2 36 hours per week for a part-time and casual employee.
27.2.1.3 The hours as mutually arranged, in respect of regular part-time employees.
27.2.1.6 hours worked by an employee where clauses 12.4 and 12.5 and 13.8 and 13.9 are not complied in a given week or 4 week period for that employee as the case may be.
A loading of 10% will apply for ordinary hours of work within the span of hours between 1.00 am and 5.00am, and for casual employees an additional 10% of the rate on top of the casual rate.
Level 4 employees will not be entitled to overtime or penalty rates as set out in clause 27.2, 27.3 or 27.5."
[211] The arrangements in the Agreement concerning hours and overtime compare unfavourably for employees when examined against the comparator provisions in the reference instruments. Once again, there is a general exclusion at cl.27.4 of the Agreement for Level 4 employees, whereas there is no such exclusion concerning hours and overtime payments for any classes of employees in two reference instruments, namely the WA instrument and the Queensland instrument.
[212] As to the provisions of the various instruments more generally, the following observations also may be made.
[213] Clause 25 of the SA/NT instrument provides that the ordinary hours of work are 38 hours per week, whereas the Agreement provides such an employee works an average of 38 ordinary hours over a four week cycle with a minimum daily engagement of four hours (subject to the provisions of cl.20.3). Clause 23.1 provides that overtime shall be paid for all work in excess of (a) 38 hours per week for a full-time and casual employees; (b) the hours as mutually agreed for part-time employees, which may well be less than 36 hours a week as per the Agreement; and (c) 9.5 hours per day (exclusive of meal breaks) for all employees or outside a spread of twelve hours from start to finish time.
[214] Under the Agreement, there is no real notion of specified overtime payments being attracted when more than 38 hours are worked within one week, because cl.27.2.1.1 provides that overtime arises in the case of a full-time employee for work in excess of 152 hours over four weeks. In the case of casuals and part-time employees, overtime payments under cl.27.2.1.2 of the Agreement are attracted only when the employee works more than 36 hours, whereas under the SA/NT instrument the entitlement arises when the hours of work exceed the mutually-arranged part-time hours - which may be less than 36 hours.
[215] The Agreement also compares detrimentally with the hours and overtime provisions of the SA/NT instrument, such as those in cl.23.5. Clause 23 of the SA/NT instrument provides as follows:
23.1 Overtime shall be paid for all work in excess of:
23.1.1 38 hours per week for a full-time and casual employee.
23.1.2 The hours as mutually arranged, in respect of regular part-time employees.
23.1.3 9.5 hours per day (exclusive of meal breaks) for all employees or outside a spread of twelve hours from starting time to finishing time on any shift.
23.2 Except as provided for otherwise in this clause, overtime shall be paid for at the rate of time and one half for the first three hours and double time thereafter.
23.3 All overtime worked on a public holiday shall be paid for at the rate of double time with a minimum payment as for three hours worked.
23.4 The basis for calculating overtime rates shall be the ordinary hourly base rate (i.e. 1/38th of the appropriate weekly base rate).
23.5 By mutual Agreement in writing time off for full-time and regular part-time employees may be taken in lieu of payment for overtime provided that:
23.5.1 overtime taken off during ordinary time hours shall be taken at the penalty rate equivalent;
23.5.2 the employee is entitled to a fresh choice of payment or time off on each occasion overtime is worked;
23.5.3 time off must be taken within one calendar month of the working of the overtime or it shall be paid out."
[216] The Agreement also compares unfavourably with the ACT instrument, again for reasons including the dilution of the notion of 38 hours being worked within one week and also for overtime being attracted when hours above the part-time employees' arranged hours are worked, should those hours be less than 36. Clause 22 of the ACT instrument provides as follows:
22.1 Overtime shall be paid for all work in excess of:
22.1.1 38 hours per week for a full-time and casual employee.
22.1.2 The hours as mutually arranged, in respect of regular part-time employees.
22.1.3 Ten hours per day (exclusive of meal breaks) for all employees or outside a spread of twelve hours from starting time to finishing time on any shift.
22.1.5 Six engagements per week for casual employees.
22.2 A weekly employee called back to work overtime on a rostered day off shall be paid a minimum of four hours at overtime rates.
22.3 There shall not be less than eight hours break between finishing work (including overtime) on one shift and the commencement of work on the next shift. If on the instructions of the employer an employee resumes work without having such period off duty, the employee shall be paid at the appropriate overtime rate for the time worked within that eight hour period. Provided further that there shall be a minimum payment of one hour at the overtime rate.
22.4 For the purposes of this clause a shift may include a broken shift in the of full-time employees, provided it is worked within a spread of twelve hours and in accordance with 11.2.4. In addition, such eight hour break shall not apply to breaks between two separate casual engagements worked within a spread of twelve hours and in accordance with 11.3.2.
22.5 Except as provided for otherwise in this clause, overtime shall be paid at the rate of time and one half for the first three hours (170% for casuals) and double time (220% for casuals) thereafter.
22.6 All overtime worked on a public holiday shall be paid at the rate of double time and a half (25% for casuals) with a minimum payment as for three hours worked.
22.7 By mutual Agreement in writing time off for full-time and part-time employees may be taken in lieu of payment for overtime provided that:
22.7.1 overtime taken off during ordinary time hours shall be taken at the penalty rate equivalent;
22.7.2 the employee is entitled to a fresh choice of payment or time off on each occasion overtime is worked; and
22.7.3 time off must be taken within one calendar month of the working of the overtime or it shall be paid out.
22.8 All overtime shall be calculated on a daily basis and each day shall stand alone.
22.9 An employee working overtime shall be allowed a meal break of twenty minutes without deduction of pay after each four hours of overtime."
[217] Notably, cl.22.8 of the ACT instrument provides that "All overtime shall be calculated on a daily basis and each day shall stand alone" - which would be more advantageous to employees than the provisions under the Agreement.
[218] The provisions of the Victorian instrument are relevantly the same as the SA/NT instrument, and the same observations apply.
[219] The Queensland instrument is in terms quite different from the McDonald's/SDA-specific instruments applicable in South Australia, the Australian Capital Territory, New South Wales and Victoria. The Queensland instrument at cl.6.1.2(c) provides that ordinary hours are to be worked with a minimum of four hours; two hours' minimum daily payment for part-time employees (cl.4.7); and two hours' minimum engagement for casuals (cl.4.4.8). The Queensland instrument also provides at cl.6.1.2(d) that an employee shall not be rostered to work more than four consecutive days of ten hours without a break of at least 48 hours. Similarly, cl.6.1.2(d) prohibits rostering of employees to work for more than ten successive days without a break. These provisions of the Queensland instrument, which, among other matters, would operate for occupational health and safety, and work/life balance reasons, may be compared to, and contrasted with, the provisions in the Agreement to which I have referred earlier in the decision.
[220] The WA instrument provides at cl.8 for forty hours per week ordinary hours, not exceeding nine per day, to be worked over not more than five days of the week, within a daily spread of eleven hours. It provides each employee "shall" be entitled to two clear days off duty per week, unlike the opting-out provisions of the Agreement.
[221] Clause 9 of the WA instrument provides as follows:
(1) All work done outside the daily spread of eleven hours, or beyond nine hours in any one day, or beyond forty hours and/or five days in any one week or at times other than those which the employee is rostered to work, shall be overtime.
(2) Subject to the provisions of subclause (3) hereof, all overtime worked between Monday to Friday, both inclusive, and prior to twelve noon on Saturday shall be paid for at the rate of time and a half for the first two hours and double time thereafter. All overtime worked after twelve noon on a Saturday and all day on a Sunday, shall be paid for at the rate of double time.
(3) All work done on an employee's rostered day off shall be paid for at the rate of double time with a minimum payment as for three hours' work.
(4) Notwithstanding anything contained in this clause to the contrary, where a part time employee is requested to work overtime beyond his or her regular finishing time in order to meet unforeseen operational and/or staffing requirements, the first hour of such overtime shall be paid for at the ordinary time rate of pay, the second hour of such overtime shall be paid for at the rate of time and a half with double time for any hours worked thereafter."
[222] As to part-time employees, cl.11 of the WA instrument provides:
(1) A part time employee shall mean an employee engaged on a weekly contract of service, who works regularly from week to week for not less than three consecutive ordinary hours per time, or more than eight ordinary hours per day, and not less than nine or more than thirty ordinary hours each week over not more than five days of the week.
(2) Part time employees shall be paid at the ordinary time rate of pay of one fortieth of the full time weekly rate of pay for the appropriate classification as set out in subclause (1) of Clause 20. - Wages, provided that this rate shall be increased to double time for all work performed on the holidays referred to in subclause (1) of Clause 16. - Holidays of this award.
(3) All time worked by a part time employee beyond eight ordinary hours per day, thirty ordinary hours per week or five days per week or at times other than those which the employee is rostered to work shall be overtime and paid for at the appropriate overtime rate prescribed in Clause 9. - Overtime of this award." [My emphasis]
Even when the 40 hours are taken into account, the WA instrument provides conditions in relation to overtime payments which would be more beneficial to the employees than under the Agreement, more particularly when considered in terms of the "opting out" arrangements I have noted earlier in the statement and the exclusion of overtime payments for Level 4 employees under the Agreement. In this regard, see cl.9(1) of the WA instrument concerning overtime payments beyond the daily spread of eleven hours or beyond 9 hours in any one day. For example, the Agreement provides for a maximum number of 9.5 full-time hours (without necessarily attracting overtime payments), whereas it appears that under the WA instrument the 0.5 hours after 9 hours would attract payment at time and one half. Similarly, under the WA instrument, in all cases, all overtime worked after noon on a Saturday and all day on a Sunday would be paid at double time rates - which is obviously superior to the Agreement. Under the WA instrument, all work on a rostered day off would be paid at double time, with a minimum of three hours.
[223] The provisions concerning overtime payments for part-time employees under the WA instrument also appear more beneficial to employees than the arrangements under the Agreement. Overtime rates under cl.27.2 of the Agreement for part-time employees arise only after the employee has worked hours in excess of 36 hours (subject to the potential tension whereby the Agreement also contemplates overtime for hours beyond those mutually arranged for part-time employees, which I have addressed elsewhere in the decision). Under cl.11(3) of the WA instrument, all hours worked by a part-time employee beyond eight ordinary hours per day, thirty ordinary hours per week or five days per week or at times other than those which the employee is rostered to work shall be overtime and are paid at overtime rates specified in cl.11 of the WA instrument. The WA instrument otherwise provides at cl.9 in relation to overtime for part-time employees that "… where a part time employee is requested to work overtime beyond his or her regular finishing time in order to meet unforeseen operational or staffing requirements, the first hour is paid at ordinary rates, the second hour at time and a half and double time for any hours worked thereafter".
[224] As to hours, Mr Moir submitted the Agreement preserves the notion of a 38 hour week for full-time employees. This is not strictly correct, because cl.12.1 provides that hours may be averaged over a four week cycle. Further, his submissions otherwise indicated the effect of the hours and shifts provisions, is that employees cannot be required to work more than 47.5 hours per week (being a submission I do not accept). As I have noted above, the reference instruments mostly otherwise clearly provide for, for example, a definite 38 hour week and collateral arrangements that apply in connection with circumstances where overtime payments are attracted - such as calculating the overtime rate in terms of the hours worked on a particular day or in a given week.
[225] Mr Moir submitted the Agreement yields significant advantages for casual employees because overtime payments are attracted under cl.27.2.1 after 36 hours. As to this, I would observe there is a clear and irreconcilable tension within the Agreement, because cl.14.5 provides that the maximum number of ordinary hours to be worked by a casual employee is 38 per week. Irrespective of whether the ordinary hours are 36 or 38 for casual employees, the Agreement still suffers by comparison with the reference instruments which provide a definite 38 hour working week for full-time employees and definite overtime entitlements for employees who work more than the relevant part-time hours prescription, and attendant entitlements that flow from these provisions.
MINIMUM BREAK BETWEEN TIMES WORKED - CLAUSE 26.5
[226] Clause 26.5.1 of the Agreement provides that employees, other than Level 4 employees, must be given a continuous period of at least 10 hours for rest between each engagement. If that break is not given, the employee shall be paid overtime at the rate of time and a half for the first two hours and double time thereafter until such time as the employee is given a 10 hour break.
[227] I would observe this style of provision in an industrial instrument is typically for occupational, health and safety-minded purposes in relation to minimum breaks. There is no good reason why Level 4 employees should not have this type of provision applied to them, so as to act as a financial disincentive to requiring employees to work hours in ways that do not permit sufficient rest time.
[228] The Queensland instrument, for example, provides arrangements concerning minimum breaks that are more beneficial to employees than the Agreement in as much as the employee is paid double time for all relevant time (as opposed to the initial two hours' time and a half under the Agreement) and is also entitled to be absent until a minimum break is provided. Clause 6.6.3 of the Queensland instrument provides in this respect as follows:
"6.6.3 An employee who works so much overtime between the termination of ordinary work on one day and the commencement of ordinary work on the next day that the employee has not had at least 10 consecutive hours off duty between those times shall, subject to clause 6.6.4, be released after completion of such overtime until the employee has had 10 consecutive hours off duty without loss of pay for ordinary working time occurring during such absence. If, on the instructions of the employer, such an employee resumes or continues work without having had such 10 consecutive hours off duty, the employee shall be paid double rates until released from duty for such period and the employee shall then be entitled to be absent until the employee has had 10 consecutive hours off duty without loss of pay for ordinary working time occurring during such absence."
[229] Clause 27.3 of the Agreement provides rates for early morning work, as follows:
A loading of 10% will apply for ordinary hours of work within the span of hours between 1.00 am and 5.00am, and for casual employees an additional 10% of the rate on top of the casual rate."
[230] The provisions in relation to the rate for early morning work are relevantly similar in the SA/NT instrument (cl.24), the ACT instrument (cl.23) and the Victorian instrument (cl.24) albeit the rates are described as "Penalty time". Employees in New South Wales, however, would be disadvantaged by the Agreement. The NSW instrument contains early morning rates higher than the Agreement, set at between 20 and 40 per cent (albeit less in practical terms when the casual loading component is considered), as follows:
24.1 A weekly employee who works any ordinary hours in penalty time, that is between 1.00a.m. and 5.00a.m. Monday to Sunday, shall be paid an additional 20% for all hours so worked during that period.
24.2 A casual employee who works any ordinary hours in penalty time, that is between 1.00a.m. and 5.00a.m. Monday to Sunday, shall be paid a loading of 40% for all hours so worked during that period, in lieu of the 20% loading prescribed in 11.3.4.
24.3 A flexible part-time employee who works any ordinary hours in penalty time, that is between 1.00a.m. and 5.00a.m. Monday to Sunday, shall be paid a loading of 33% for all hours so worked during that period, in lieu of the 13% loading prescribed in 11.4."
[231] Also, in the Queensland instrument, at cl.5.52 there is a penalty rate for late work, whereby for all ordinary time worked on weekdays between 11.00pm and 12.30am, employees receive an additional $1.11 per hour. Clause 6.5.3 of the Queensland instrument also provides that all ordinary time worked between 12.30am and 5.00am attracts an additional payment of $1.91 per hour or part-hour worked during those hours.
[232] Mr Bliss's submissions acknowledged there are aspects of the Agreement where employees would receive less on an hourly basis than under the reference instruments, for example, under the "penalty time" provisions of the NSW instrument. In this respect, he submitted as follows:
" Notwithstanding improvements in the base rate of pay and casual loadings contained in this Agreement, these improvements are insufficient in and of themselves to compensate for the loss of the loading applicable during these hours. It is a clear reduction. It applies to a small number of employees working at these times."
I observe that although Mr Bliss submitted a small number of employees would be affected by the reduction in the early morning work allowance, there was no evidence before Fair Work Australia as to the actual number of employees who would be affected. This information is supposed to be provided by an applicant at cl.3.4 of the employer's declaration, but the applicant has not provided this information, even in the supplementary declaration. Mr Bliss also submitted such reductions needed to be considered in terms of the savings provision for affected employees. I have considered the operation of the savings elsewhere in this decisions and I do not accept that cl.41 of the Agreement saves such entitlements.
[233] Clause 27.5 of the Agreement provides that all ordinary time worked by full-time employees on a Saturday or a Sunday shall be paid, depending on geographical location, at rates set at between time-and-a-quarter and time-and-a-half. However, the Queensland special rates do not apply to Level 4 employees, given the exclusion at cl.27.4. Under the Queensland instrument, these rates otherwise would apply to all employees subject to its terms and conditions (see cl.6.5.1).
[234] Clause 28 of the Agreement provides as follows in relation to breaks:
One meal break of at least 30 minutes but not more than 60 minutes
Two 10 minute paid drink breaks subject to 28.1.4
One or two meal breaks of at least 30 minutes but not more than 60 minutes subject to 28.1.5
28.1.2 Level 3 or 4 employee may instead of the meal break in subclause (a) choose to have instead a 30 minute paid break, which is to be taken according to operational requirements. Such paid break will be called a Crib Break.
28.1.3 Subject to subclause (b) where an employee does not receive a meal break as and when prescribed, the employee shall be paid at double ordinary time from the time when the meal break becomes due until such time as it is given.
28.1.4 Paid drink breaks are to be taken as directed by a manager or shift supervisor within the period specified so as not to interfere with the efficient operation of the business.
28.1.5 An employee shall not work more than 5 hours without a meal break."
[235] The first observation to be made about cl.28.1.2 of the Agreement is that it allows the re-casting of a meal break for Level 3 and Level 4 employees as a "crib break", to be taken in accordance with operational requirements. As such, the familiar industrial/occupational health and safety protection in cl.28.1.5 that an employee ordinarily should not work for more than approximately 5-6 hours without a meal break does not apply to those classes of employees. I doubt there would be much choice in the matter of the breaks at busy times.
[236] Second, in re-casting the meal break provision as a crib break, Level 3 and Level 4 employees would not have an entitlement to payment under cl.21.1.3 at double ordinary time from the time when the meal break becomes due until such time as it is given, albeit the crib break would be paid at ordinary rates. In the statement, I noted there are references within cl.28 to sub-clauses (a) and (b), being sub-clauses that are not found within the clause itself, appeared to be typographical errors. No clarification has since been provided in the further proceedings.
[237] The very purpose of meal breaks - an occupational health and safety-based purpose - in industrial instruments concerning the provision of reasonable breaks at minimum intervals seems to have been lost on the drafters of this Agreement (together with, similarly, the provisions concerning minimum breaks between shifts not applying to level 4 employees). The purpose of such provisions is to either prohibit outright working without reasonable break or, in the alternative, to provide a clear financial disincentive, by way of penalty rates imposed by an industrial instrument, to allowing or requiring work to be performed without an adequate break after a specified period of time.
[238] On the other hand, the drink breaks in the Agreement appear more beneficial to employees than some of the reference instruments, in as much as there are time frame and set intervals at which breaks must be taken.
[239] Clause 22 of the SA/NT instrument provides employees are entitled to a meal break after five hours, subject to the proviso an employee may work through the meal break at the ordinary rate of pay, provided that a meal break must be taken after six hours. Overtime payments then apply if the employee does not receive a meal break "as and when prescribed".
[240] Clause 21 of the ACT instrument similarly provides that employees shall be allowed a break in respect of shifts of more than 5 hours. The meaning of cl.21.1.1 of the ACT instrument is unclear, as it seems likely the word "possible" may be intended to read "not possible" or "impossible", but the effect of the clause also seems to be an entitlement to overtime payments when a meal break is not allowed.
[241] I noted in the statement that cl.21.3 of the ACT instrument also provides for a paid crib break in certain circumstances for maintenance employees. I noted that if any maintenance employees were intended to be covered by this Agreement, that provision is not reproduced in the Agreement. Although I raised the matter of maintenance employees being included in the Agreement in the statement, no clarification was provided in the subsequent statutory declarations and submissions; and, as I have noted earlier in this decision, I consider there are grounds for considering the applicant has not fully identified all the reference instruments applicable to the employees proposed to be covered by the Agreement - given, for example, the reference to undertaking "handy work" at Levels 1-2 and persons exercising "trades skills" at Level 3 of Schedule A of the Agreement.
[242] Like the SA/NT instrument, cl.22 of the NSW instrument provides that employees are entitled to a meal break after five hours, subject to the proviso an employee may work through the meal break at the ordinary rate of pay, provided also that a meal break must be taken after six hours. Overtime payments then apply if the employee does not receive a meal break "as and when prescribed".
[243] The NSW instrument, at cl.22.1, provides that the general meal break provisions do not apply to shift supervisors, who may, instead, be required to take a crib break in accordance with operational requirements. The clause clearly contemplates that the 30 minutes need not be contiguous; and the time is not counted as ordinary hours nor time worked. If the provisions of cl.22.1 of the NSW instrument cast some light on how crib breaks in lieu of meal breaks may operate for these classifications of employees under the Agreement, they are even more problematic than they appear on the face of the document. The crib break for employees may just be a short break of a few minutes, rather than a clear break of no less than 30 minutes - again raising occupational health and safety issues; but also by failing to provide enough time for an employee to attend to personal matters during the meal break, such as personal errands.
[244] The Victorian instrument has provisions similar to the SA/NT and NSW instruments, and the same general observations apply.
[245] Clause 6.3.1 of the Queensland instrument contains the following provisions concerning meals and meal breaks:
6.3.1 No employee shall be required or permitted to work for more than 5.5 hours continuously (excluding rest pauses) without an unpaid meal break of not less than 30 minutes nor more than one hour:
Provided that such meal break shall be given and taken not earlier than after the completion of 2 hours' work and before the commencement of the seventh hour.
6.3.2 Where an employee is required to work through their usual meal break, that employee shall be paid for all time so worked at double time and such double time shall continue to be paid until the employee ceases work for the day or is allowed an unpaid meal break of at least 30 minutes' duration.
6.3.3 Any employee who is required to work overtime for more than one hour beyond their rostered ceasing time shall be provided with an adequate meal by the employer, or, in the event of the employer being unable to provide such meal, be paid an allowance of $9.60 in lieu thereof."
[246] The Queensland instrument provides arrangements which are, in terms of occupational health and safety considerations arising in relation to minimum breaks while at work, and considered financially, more beneficial for employees than the Agreement.
[247] The Queensland instrument also provides as follows in relation to part-time and casual employees:
6.4.1 Full-time employees - Full-time employees shall receive a rest pause of 10 minutes' duration in the first half and the second half of each day worked.
6.4.2 Part-time and casual employees - Part-time and casual employees who work a minimum of 4 consecutive ordinary hours, but less than 7.6 consecutive ordinary hours on any one day shall receive a rest pause of 10 minutes' duration. Employees who work a minimum of 7.6 consecutive ordinary hours (excluding the meal break) on any one day shall receive a rest pause of 10 minutes' duration in the first half and the second half of the period worked.
6.4.3 Rest pauses shall be taken in the employer's time.
6.4.4 Rest pauses shall be taken at such times and in such a manner to suit the convenience of the employer and so as not to interfere with the continuity of work where continuity is necessary. 6.4.5 Notwithstanding the provisions of clause 6.4.1, where the employer and employees agree, the rest pauses may be combined so that employees have one rest pause of 20 minutes' duration."
[248] The Agreement does not provide a paid drink break/rest pause if fewer than 4 hours are worked, whereas the Queensland instrument provides, at least for full-time employees, paid breaks in each half of the shift; and, in the case of part-time and casual employees similar entitlements when 7.6 hours are worked.
[249] Clause 12 of the WA instrument provides every employee is entitled to meal breaks as follows:
(1) Every employee shall be entitled to a meal break of not less than one half hour nor more than one hour, after not more than five hours of work. Where it is not possible for the employer to grant a meal break on any day, the said meal break shall be treated as time worked and the employee shall be paid at the rate applicable to the employee at the time such meal break is due, plus fifty per cent of the ordinary hourly rate applying to such employee, until such time as the employee is released for a meal.
(2) In addition to breaks for a meal, there may be one other break of at least two hours during each shift. Such break of two hours may include a meal break."
[250] Clause 29 of the Agreement provides annual leave by reference to the NES, and also addresses annual leave loading (cl.29.2), paid leave in advance (cl.29.3) and cashing-out of annual leave for Level 4 employees. Under cl.29.4 of the Agreement, cashing-out of annual leave appears to be restricted only to Level 4 employees. As I have noted earlier, the NES do not necessarily comprehend this type of delineation in industrial instruments in relation to the classes of employees who may seek the employer's agreement to cashing-out.
PERSONAL/CARER'S AND COMPASSIONATE LEAVE - CLAUSE 30
[251] Clause 30 of the Agreement deals with personal/carer's leave and compassionate leave, by reference to the NES. The NES are the new minima for nominated classes of industrial entitlements, and represent only a statutory floor. To the extent the Agreement incorporates only the minima, the Agreement excises entitlements that otherwise would have been more beneficial and comprehensive under the reference instruments.
[252] It is difficult to disaggregate the specific advantages and disadvantages that apply as between the reference instruments and the Agreement, because there can be few direct comparisons, in circumstances where otherwise discrete forms of similar entitlements have been folded-into the general provisions of the NES. With those comments being made, I highlight a small number of detrimental changes.
[253] Clause 29.2 of the SA/NT instrument permits an employee to elect, with the consent of the employer, to take unpaid leave for the purpose of providing care to an immediate family member who is ill. Under the NES, s.103 of the Act provides that an employee "cannot" take unpaid carer's leave during a particular period if the employee could instead take paid personal/carer's leave. Clause 29.4 allows employees to work make-up time, as is common in industrial instruments - but which does not feature in the NES. Clause 29.3 also allows an employee, with the consent of the employer, to take annual leave in single days to a maximum of five days per year for special family leave purposes.
[254] Clause 26 of the ACT instrument deals with "Personal leave for personal injury and sickness". Clause 26.2 of this instrument provides for 80 hours' leave, which would appear to be more than the Agreement as it incorporates the NES. Clause 26.9 provides that if illness during annual leave exceeds one week and is the subject of medical certification, that the time shall be treated as sick leave - with an equivalent number of days being added to annual leave.
[255] Clause 27 provides for up to three days' paid bereavement leave, in the event of the death of a relevant person.
[256] Clause 28 of the ACT instrument deals with leave to care for an immediate family or household member. Clause 28.2 permits an employee to elect, with the consent of the employer, to take unpaid leave for the purpose of providing care to an immediate family member who is ill. Under the NES, s.103 provides that an employee "cannot" take unpaid carer's leave during a particular period if the employee could instead take paid personal/carer's leave. Clause 28.3 allows an employee, with the consent of the employer, to take annual leave in single days to a maximum of ten days per year for special family leave purposes. Clause 28.4 also allows employees to work make-up time.
Clause 27 of the NSW instrument deals with personal leave for personal injury and sickness, with an entitlement set at 76 hours. Clause 27.1.2 provides that in the first year of service, sick leave entitlements accrue on the basis of a maximum of one day (7.6 ordinary hours) per completed month of service, up to a maximum of 76 hours after ten months of service. The NSW instrument further provides that if sick leave is taken during the first year and is unpaid because of this proportionate arrangement, an employee shall receive payment for such leave if and when he or she qualifies for the entitlement.
[257] Clause 28 of the NSW instrument provides for three days' paid bereavement leave.
[258] Like the SA/NT and ACT instruments, the NSW instrument also allows the employee, with the consent of the employer, to elect to take unpaid carer's leave even if paid leave has not been exhausted. Clause 29.2 of the NSW instrument allows an employee, with the consent of the employer, to take annual leave in single days to a maximum of ten days per year to care for an immediate family or household member and also, at cl.29.4, allows for make-up time.
[259] The Victorian instrument provides, at cl.27, for sick leave at 76 hours; 3 days' paid bereavement leave at cl.28; and, for special family leave purposes under cl.29, access to up to five single days of annual leave with employer consent and the capacity to work make-up time.
[260] The sick leave provisions of the Agreement appear to be at least equal to, or better than, the Queensland instrument, subject to the following exceptions. Clause 7.2.4(b) of the Queensland instrument provides that an employee's sick leave entitlements are preserved when there is re-employment within three months. Clause 7.2.4 (c) similarly preserves sick leave entitlements when the employer or the employee terminates the employment relationship because of illness or injury, and the employee is re-employed without having been employed in the interim.
[261] At cl.7.4 of the Queensland instrument, there is an entitlement to two days' paid bereavement leave, consistently with the NES as incorporated in the Agreement. However, Clause 7.4.4 also allows for additional unpaid bereavement leave, with the consent of the employer, when the standard entitlement of two days' paid leave is insufficient.
[262] The Queensland instrument incorporates the Family Leave Award 2003. Under cl.3.2. of the Family Leave Award, an employee may elect, with the consent of the employer, to take unpaid leave for caring purposes, whereas, under the Agreement, as it incorporates the NES, an employee "cannot" take unpaid carer's leave during a particular period if the employee could instead take paid personal/carer's leave. An employee may also elect, with employer consent, to take up to five single days of annual leave and, by cl.3.5, may work make-up time. The Queensland instrument also provides, at cl.3.4, flexibility to take time off in lieu of overtime to provide care or support for defined classes of persons, irrespective of whether that person is sick.
[263] The sick leave provisions of the Agreement appear to be at least equal to, or better than, the WA instrument, except in one respect. Clause 14(5) of the WA instrument contains detailed provisions concerning the substitution of sick leave for annual leave. Clause 14(5)(a) of the WA instrument provides that on application, and subject to meeting the requirements of the clause, the employer "shall grant paid sick leave in place of annual leave".
[264] Clause 15 of the WA instrument otherwise provides for two days' paid bereavement leave, consistently with the NES as incorporated in the Agreement.
[265] There is no provision in the WA instrument addressing personal/carer's-type leave. To that extent, the Agreement is more beneficial to employees than the WA instrument.
[266] The Agreement provides reasonably detailed provisions which supplement the NES concerning public holidays. While the Agreement provides for loaded rates of between 200-250 per cent for work on public holidays, those loaded rates, as with so many other provisions of the Agreement, once again do not apply to Level 4 employees given the exclusion in cl.31.5 of the Agreement. Classes of employees would be financially disadvantaged under the Agreement by the removal of public holiday rates of pay that otherwise would have been attracted under the provisions of some of the reference instruments.
[267] I should also observe that Easter Saturday and Labour Day apply generally to employees under the Agreement, being public holidays not contained in the NES but which otherwise feature in the reference instruments - with the exception of the WA instrument, which does not have an Easter Saturday holiday.
[268] There are examples of provisions under the reference instruments in relation to public holidays which are advantageous to employees when compared to and contrasted with the Agreement.
[269] Clause 13.6 of the ACT instrument, which has no equivalent payment provision in the Agreement, deals with termination of employment within 14 days of a public holiday in the following way:
"13.6 Termination within 28 days of a public holiday
Where an employer terminates the employment of an employee, except for misconduct on the part of the employee (proof whereof shall lie on the employer) within fourteen days prior to a public holiday or a group of public holidays, the employee shall be paid for that holiday or group of holidays provided he or she has been employed for a period of at least 28 days prior to the termination of employment. Provided further, that where the employee is re-employed within a period of 28 days of the termination of the engagement, the employee shall be entitled to receive re-employment; provided also that no employee shall be entitled to receive payment from more than one employer in respect of the same public holiday or group of holidays."
[270] Clause 31.6.5 of the ACT instrument, which has no equivalent provision in the Agreement, provides as follows:
"In the event Christmas Day is a Saturday or a Sunday and a holiday in lieu thereof is observed on 27 December (pursuant to 31.6.1 above) employees working on Christmas Day shall be paid 50% in addition to the ordinary hourly rate for all hours so worked (in lieu of the 20% loading prescribed in 11.3.4 in the case of casual employees)."
[271] The ACT instrument, at cl.31.6, specifies a public holiday on the first Monday of March each year, titled "Union Picnic Day" attracting, at cl.31.10, additional paid time off or payment in lieu. This holiday is not carried-over into the Agreement, thereby disadvantaging employees.
[272] The NSW instrument specifies arrangements concerning a holiday named the "First Tuesday in November". At cl.32.7, there are details about the payments that apply, including, at cl.32.7.3, payment on termination. There is no equivalent provision in the Agreement. Clause 32.7.3(d) provides for public holidays falling during annual leave or long service leave to be added to the next period of annual leave.
[273] Clause 7.6.8 of the Queensland instrument (being a provision which has no equivalent in the Agreement) provides as follows in relation to stand-downs and dismissal occurring in December:
Any and every employee who, having been dismissed or stood down by the employee's employer during the month of December in any year, and re-employed by that employer at any time before the end of the month of January in the next succeeding year shall, if that employee shall have been employed by that employer for a continuous period of 2 weeks or longer immediately prior to being so dismissed or stood down, be entitled to be paid and shall be paid by the employee's employer (at the ordinary rate payable to that employee when so dismissed or stood down) for any one or more of the following holidays, namely Christmas Day, Boxing Day and the 1st day of January occurring during the period on and from the date of the employee's dismissal or standing down to and including the date of the employee's re-employment as aforesaid."
[274] The Queensland instrument also provides as follows in relation to workers who are not Monday to Friday workers:
"7.6.9 Employees, other than casuals, who are not Monday to Friday workers
In the case of employees who do not ordinarily work Monday to Friday of each week, they shall be entitled to public holidays as follows:
(a) A full-time employee shall be entitled to either payment for each of the abovementioned public holidays or a substituted day's leave.
(b) A part-time employee shall be entitled to either payment for each of the public holidays or a substituted day's leave provided that the part-time employee would have been ordinarily rostered to work on that day had it not been a public holiday.
(c) Where a public holiday would have fallen on a Saturday or a Sunday but is substituted for another day all employees who would ordinarily have worked on such Saturday or Sunday but who are not rostered to work on such day shall be entitled to payment for the public holiday or a substituted day's leave.
(d) A part-time employee who works an average five days per week, but whose roster is not a regular Monday to Friday roster, will not be disadvantaged by the fact that a prescribed holiday falls upon a day when the employee would not be working. The appropriate compensation is:
For the purposes of clause 7.6.9, "day off" means the average number of hours rostered per day in the four week cycle prior to the public holiday."
[275] The WA instrument provides, at cl.16(1), for a minimum payment of four hours on public holidays that applies to all employees, which is a more beneficial provision for employees than the arrangements under the Agreement in terms of minimum engagements. The Agreement provides, at cl.31.6, for a minimum engagement on public holidays of three hours.
[276] The provisions of Agreement in relation to jury service leave are more beneficial in some respects than the reference instruments and the NES. For example, the NES require, at s.111(5), payment only for the first ten days of service, whereas under cl.35 of the Agreement, there is no such cap. This would clearly provide an advantage to employees who were on extended jury service. In this respect, the Agreement provides as follows:
Where an employee is absent from his or her employment for a period because of jury service; [sic] and the employee is not a casual employee, the employee will be entitled to be paid their base rate of pay for the employee's ordinary hours of work in the period, subject to providing evidence."
[277] At cl.32 of this instrument, the employee is entitled to the difference between the jury fees received and the employee's rate of pay as if working. Potentially, at least, the employees' rate of pay as if working would be higher than the base rate of pay.
[278] Clause 41 of the Agreement reads as follows:
No employee will, as a result of the introduction of this agreement, suffer a reduction in their hourly rate for hours worked prior to the commencement of this agreement."
[279] In the statement, I commented that the SA/NT instrument and ACT instrument do not contain a savings provision concerning any entitlements arising under previous instruments (for example, the savings provision in cl.16.4.2 of the SA/NT instrument expired in 2004). I noted the NSW instrument contains, at cl.16.4, a savings provision concerning the Shop Employee (State) Award and the Broken Hill Commerce and Industry Consent Agreement Award. The short, roping-in instrument in the NSW instrument that is applicable to Tasmania also contains a savings clause which protected existing wages and condition. There was no evidence identifying which instrument would have determined those saved wages and conditions in Tasmania.
[280] The savings provision in cl.16.4 of the NSW instrument reads as follows:
16.4.1 No existing full-time, part-time or casual employee (i.e. those employed prior to this award being made), whether adult or junior, shall suffer a reduction in their weekly earnings and conditions of employment.
16.4.2 For the purpose of clause 16.4.1 the relevant weekly earnings and conditions of employment are those wages and conditions of employment which would be applicable to the employee employed in New South Wales, excluding the County of Yancowinna (Broken Hill), in accordance with the Shop Employees (State) Award as made and varied by the Industrial Relations Commission of New South Wales as at 8 February 2006 together with any pay increases to be determined by the Australian Fair Pay Commission. Such increases will apply at the same time as they are applied to the McDonald's SDA - NSW - Award 2006.
16.4.3 For the purpose of clause 16.4.1 the relevant weekly earnings and conditions of employment are those wages and conditions of employment which would be applicable to the employee employed in the County of Yancowinna (Broken Hill) in accordance with the Broken Hill Commerce and Industry Agreement Consent Award 2001 as made and varied by the Industrial Relations Commission of New South Wales as at 8 February 2006 together with any pay increases to be determined by the Australian Fair Pay Commission. Such increases will apply at the same time as they are applied to the McDonald's SDA - NSW - Award 2006.
16.4.4 If a term or condition of the Shop Employees' (State) Award or Broken Hill Commerce and Industry Agreement Consent Award 2001 referred to in clauses 16.4.2 and 16.4.3 above relates to a matter not pertaining to the employment relationship, that term or condition is void and does not void any other term of this Award.
16.4.5 An employer may offer an employee engaged prior to the date of this award being made, the opportunity to move onto this award in its entirety (i.e. the McDonald's SDA - NSW - Award 2006). In these circumstances the Shop Employees (State) Award or Broken Hill Commerce and Industry Agreement Consent Award 2001, as appropriate, will no longer apply. Such an offer is at the employer's discretion, and subject to the employee's Agreement.
16.4.6 Any dispute about the operation of this clause is to be dealt with in accordance with the procedure for the avoidance of disputes provided for in this award."
[281] To the extent there is a savings provision at cl.41 of the Agreement, it is a very limited one confined only to the hourly rate of pay rather than a broad one of the type contained in cl.16.4 of the NSW instrument. The NSW instrument saves various conditions of employment under the Shop Employees (State) Award and the Broken Hill Commerce and Industry Agreement Consent Award which are, on any analysis, more advantageous to employees than the Agreement. I noted it was beyond the scope of the already lengthy statement to itemise every single one of the many conditions of the Shop Employees (State) Award and the Broken Hill Commerce and Industry Agreement Consent Award that would be preserved for relevant employees by the NSW instrument, but which are not otherwise preserved by the Agreement. As such, I focused on four key matters: redundancy, annual leave, casual conversion and parental leave, and also do so in this decision.
Savings - Redundancy - NSW, including County of Yancowinna
[282] The Shop Employees (State) Award and the Broken Hill Commerce and Industry Agreement Consent Award address severance payments on termination by redundancy in a way that might be described as the "New South Wales standard", providing severance payments which are superior to those in the Agreement and, for that matter, the NES. I reproduce the relevant provisions of cl.33(4) (Severance Pay) of the Shop Employees (State) Award (the provisions are in relevantly identical terms in the cl.1.33(f) of the Broken Hill Commerce and Industry Agreement Consent Award):
(i) Where an employee is to be terminated pursuant to subclause 3, Termination of Employment, subject to further order of the Industrial Relations Commission of New South Wales, the employer shall pay the employee the following severance pay in respect of a continuous period of service:
(a) If an employee is under 45 years of age, the employer shall pay in accordance with the following scale:
(b) Where an employee is 45 years of age or over, the entitlement shall be in accordance with the following scale:
[283] The provisions of the Agreement concerning severance payments disadvantage employees whose entitlements otherwise may be the subject of the existing savings provision in cl.16.4 of the NSW instrument.
Savings - Annual leave - County of Yancowinna only
[284] The Broken Hill Commerce and Industry Agreement Consent Award was applicable to the County of Yancowinna, which is in the vicinity of Broken Hill in far-western New South Wales. The 2001 Broken Hill Commerce and Industry Agreement Consent Award (like its successor instrument) contains industrially-atypical annual leave entitlements, as historically has been the position with many entitlements that have been negotiated by the Barrier Industrial Council in the County of Yancowinna. Shortly stated, cl.1.3 of the Broken Hill Commerce and Industry Agreement Consent Award provides five weeks' annual leave for all employees as follows:
a. An employee after twelve months service in any one establishment of one employer shall be granted five (5) weeks holidays on full pay. Provided that by Agreement between the employer and employee, one (1) week's entitlement under this clause may be "cashed out" and the period of actual leave reduced to four weeks. Each year stands alone."
[285] To the extent the Agreement does not have a savings in relation to anything other than the hourly rate of pay, then relevant employees in the County of Yancowinna would be disadvantaged by the loss of the savings under the NSW instrument of an annual leave entitlement set at five weeks a year under cl.1.3 of the Broken Hill Commerce and Industry Agreement Consent Award.
Savings - Casual conversion - NSW, including County of Yancowinna
[286] The Shop Employees (State) Award contains a casual conversion provision titled "Secure Employment" (the provision is also included in the Broken Hill Commerce and Industry Agreement Consent Award at cl.1.29). Clause 5A of the Shop Employees (State) Award as it concerns casual conversion reads as follows:
The objective of this clause is for the employer to take all reasonable steps to provide its employees with secure employment by maximising the number of permanent positions in the employer's workforce, in particular by ensuring that casual employees have an opportunity to elect to become full-time or part-time employees.
(i) A casual employee engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment under this Award during a calendar period of twelve months shall thereafter have the right to elect to have his or her ongoing contract of employment converted to permanent full-time employment or part-time employment if the employment is to continue beyond the conversion process prescribed by this subclause.
(ii) Every employer of such a casual employee shall give the employee notice in writing of the provisions of this sub-clause within four weeks of the employee having attained such period of twelve months. However, the employee retains his or her right of election under this subclause if the employer fails to comply with this notice requirement.
(iii) Any casual employee who has a right to elect under paragraph (b)(i), upon receiving notice under paragraph (b)(ii) or after the expiry of the time for giving such notice, may give four weeks' notice in writing to the employer that he or she seeks to elect to convert his or her ongoing contract of employment to full-time or part-time employment, and within four weeks of receiving such notice from the employee, the employer shall consent to or refuse the election, but shall not unreasonably so refuse. Where an employer refuses an election to convert, the reasons for doing so shall be fully stated and discussed with the employee concerned, and a genuine attempt shall be made to reach agreement. Any dispute about a refusal of an election to convert an ongoing contract of employment shall be dealt with as far as practicable and with expedition through the disputes settlement procedure.
(iv) Any casual employee who does not, within four weeks of receiving written notice from the employer, elect to convert his or her ongoing contract of employment to full-time employment or part-time employment will be deemed to have elected against any such conversion.
(v) Once a casual employee has elected to become and been converted to a full-time employee or a part-time employee, the employee may only revert to casual employment by written agreement with the employer.
(vi) If a casual employee has elected to have his or her contract of employment converted to full-time or part-time employment in accordance with paragraph (b)(iii), the employer and employee shall, in accordance with this paragraph, and subject to paragraph (b)(iii), discuss and agree upon:
(1) whether the employee will convert to full-time or part-time employment; and
(2) if it is agreed that the employee will become a part-time employee, the number of hours and the pattern of hours that will be worked either consistent with any other part-time employment provisions of this award or pursuant to a part time work agreement made under Chapter 2, Part 5 of the Industrial Relations Act 1996 (NSW).
Provided that an employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert his or her contract of employment to full-time employment and an employee who has worked on a part-time basis during the period of casual employment has the right to elect to convert his or her contract of employment to part-time employment, on the basis of the same number of hours and times of work as previously worked, unless other arrangements are agreed between the employer and the employee.
(vii) Following an agreement being reached pursuant to paragraph (vi), the employee shall convert to full-time or part-time employment. If there is any dispute about the arrangements to apply to an employee converting from casual employment to full-time or part-time employment, it shall be dealt with as far as practicable and with expedition through the disputes settlement procedure.
(viii) An employee must not be engaged and re-engaged, dismissed or replaced in order to avoid any obligation under this subclause. …"
[287] Casual conversion provisions are industrially beneficial for employees in precarious employment. In this respect, I noted in the statement that more than 64,000 casual employees would be covered by the Agreement, albeit the exact number of employees across New South Wales who otherwise would have been the entitled to the application of the savings provision in cl.16.4 of the NSW instrument was not in evidence. Some evidence as to number has now been provided in Exhibit 4. In the applicant-operated outlets, there are 680 employees (comprising 418 casual employees, 138 full-time employees and 124 part-time employees) who would be entitled to the benefit of the savings provision in the NSW instrument. However, the applicant adduced no evidence identifying the number of employees in the licensee-operated outlets who would be similarly entitled to the benefit of this savings provision. I reiterate my comment in the statement that the failure of the Agreement to have a savings provision in relation to entitlements of importance to casual employees acts to the significant disadvantage of any such classes of employees.
[288] In this regard, I note that although the employees numbering 680 in total is statistically very small in comparison with the number of employees who would be covered by the Agreement that number is still large. It is significantly larger than the number of employees who are covered by many enterprise agreements that come before Fair Work Australia for approval.
Savings - parental leave - NSW, including County of Yancowinna
[289] The Shop Employees (State) Award and the Broken Hill Commerce and Industry Agreement Consent Award cross-reference parental leave entitlements to the Industrial Relations Act 1996 (NSW). In this respect, I note the Industrial Relations Act 1996 does not permit an employer to require a pregnant woman to provide a medical certificate so as to continue working to the date of her choosing (as would now be contemplated by the Agreement in as much as it cross-references to parental leave under the NES). That is, under s.73 of the Act, a healthy, but pregnant, woman who is entitled to maternity leave, may be required by the employer to take unpaid parental leave within six weeks before the anticipated date of the birth of her child, irrespective of whether she has applied for maternity leave. Under the Agreement, as it incorporates the NES, the employer may ask the woman for a medical certificate indicating; (a) whether she is fit for work and/or; (b) if she is fit for work, whether it is inadvisable for her to continue in her present position for reasons outlined in that section of the Act. Moreover, by s.73 of the Act, an employer may require a woman to take unpaid leave should she fail to provide medical certification as to fitness.
[290] As I commented in the statement, it is difficult to think of an example within an employment relationship whereby an otherwise perfectly healthy employee might be required by an employer to provide medical certification as to fitness and, in connection with that, to bestow upon the employer the right to stand-down the employee without pay should such certification not be provided. Of itself, pregnancy does not, within six weeks of the anticipated date of the birth of a child, ordinarily or necessarily render a woman incapable of performing her normal work responsibilities - and it is discrimination on the basis of sex or pregnancy to assume otherwise by requiring medical certification to continue working. If the characteristics of the woman's duties are such that some modification to standard duties is required to accommodate the pregnancy so as to permit the woman to maintain her livelihood for as long as possible, it is open to the woman to make an appropriate application for modified duties. Alternatively, the employee herself may make an application for leave, should she so choose. For an example of the way in which pregnant employees may experience discriminatory conduct of the type now contemplated in the NES, see, for example, Oanh Nguyen v A-N-T Contract Packers Pty Ltd t/as A-N-T Personnel & Thiess Services Pty Ltd t/as Thiess Services [2003] NSW IRComm 1006; (2003) 128 IR 241.
[291] So far as the NES are concerned, I reiterate my comment from the statement that it seems to me they are themselves systemically discriminatory in this respect and ought be reviewed so as to remove their potentially discriminatory operation. To round-out my comments from the statement, I note that legislation and industrial instruments in the New South Wales jurisdiction historically contained similar provisions. So far as the Industrial Relations Act 1996 (NSW) was concerned, such provisions were not carried-forward on the recommendation of Professor Ron McCallum who advised the New South Wales Government on the drafting of that legislation.
[292] The historical operation of provisions such as those now contained in the NES was discussed by me in New South Wales Lotteries Corporation (Salaries, Allowances and Conditions of Employment 2001) Award (unrept; IRC8372 of 2001; 7 June 2002), albeit in relation to an award application which contained mandatory unpaid leave provisions after the birth of a child:
"As to more substantive matters, the parties had proposed by consent six weeks' compulsory maternity leave immediately following the birth of a child, other than where a medical practitioner states the female was fit to return to work. The clause initially proposed by the parties relevantly read:
(e) An employee, who has been granted maternity leave and who gives birth to a living child shall not resume work on either a full-time or part-time basis, before the expiration of six weeks after the birth of the child, unless a medical practitioner states that she is fit to do so.
There has been a legislative history in New South Wales (and in other jurisdictions) of imposing restrictions on the employment of pregnant women and women who have given birth. Such provisions arose as a result of as combination of the then-prevailing notions of benign paternalism for pregnant women, new mothers and new-born children and, to a lesser extent, occupational health and safety-minded considerations. For example, s153G of the Industrial Arbitration Act 1940 [NSW] ("the 1940 Act") and s30(4) of the Industrial Relations Act 1991 [NSW] ("the 1991 Act") each provided that where maternity leave was taken, the female employee had to take a period of six weeks' compulsory unpaid leave immediately following confinement. To similar effect, employers had the statutory right under s153E of the 1940 Act and s32(3) of the 1991 Act to require female employees to commence maternity leave at any time within the six weeks of the expected date of birth, upon the giving of a fortnight's notice in writing - irrespective of the employee's wishes in the matter, her ability to continue working or her financial need to continue working. Section 48 of the Factories and Shops Act 1912-1957 (NSW) prohibited employment during the four weeks following birth. Likewise, s50 of the Factories, Shops and Industries Act 1962 (NSW) created an offence of knowingly allowing a women to work in a factory in the six weeks following birth.
It is discriminatory to require women to take six weeks' leave before or following confinement as a condition to accessing parental leave, and may be discriminatory to assume that a female is unfit to return to work in the six weeks following birth unless given a clearance by a medical practitioner. So much was acknowledged in the decision of the Legislature not to carry-forward into the [Industrial Relations Act 1996 (NSW)] provisions which permitted employers to require female employees to commence maternity leave in the six weeks prior to the expected date of confinement and also requiring women to take a minimum of six weeks' unpaid maternity leave in the period following confinement. Such statutory requirements no longer exist in any form under the 1996 Act and, in its final form, will not feature in this award.
The exigencies associated with childbirth obviously necessitate at least some period of leave of absence from work for a female employee and some of the beneficial maternity leave-related provisions can sensibly apply only to women rather than to men, such as special measures in relation to breastfeeding among other female-specific provisions. It is, however, discrimination on the basis of sex to require female employees to take six weeks' leave in the period following childbirth. By contrast, a requirement to take a minimum of six weeks' leave at a particular time does not apply to male employees who wish to access parental leave. As noted in New South Wales Independent Education Union v Hunter Life Education Centre (1997) 71 IR 255 at 259, "…every family unit, however constituted, will be required to provide or arrange care for any infant child …the domestic necessity must be met". Parents should, of course, be entitled to make their own choices regarding the care of newborn children, rather than having such a decision imposed by the operation of an award. It is an example of systemic discrimination in relation to the gendering of parental responsibilities to determine by an award-based provision that a female accessing maternity leave entitlement must take six weeks' leave following confinement. This is particularly so given that parental leave entitlements typically provide that a male employee may not use paternity leave entitlements at the same time that his female spouse or de facto spouse is absent from work on maternity leave (other than where there is, for instance, an entitlement to take maternity leave and short paternity leave concurrently).
I was concerned to ensure that award-based entitlements to access parental leave should not impose discriminatory requirements on a female employee to take leave at a specified time or for a specified minimum period of time (with the collateral effect of potentially excluding the male employee from accessing paternity leave at the same time), as this award application did in its initial form. After I had raised concerns with the parties about their consent application for a clause concerning a period of compulsory maternity leave, the parties subsequently submitted that the provision was no longer being pressed. Had the parties persisted in their consent position, I would not have given effect to their proposed clause concerning compulsory maternity leave."
[293] No criticism can be made of this Agreement in as much as it simply cross-references to the NES in relation to parental leave, except to the extent that the reference instruments that are specific to McDonald's and the SDA otherwise presently contain standard anti-discrimination provisions. Those provisions note the intention to prevent and eliminate discrimination. For the reasons I have given, I consider the Agreement, in as much as it appears to cross-reference parental leave entitlements to the NES, includes a provision which is discriminatory.
[294] Lastly, on this topic, s.70 of the Industrial Relations Act 1996, as incorporated in the Shop Employees (State) Award and the Broken Hill Commerce and Industry Agreement Consent Award, also provides for transfers to accommodate breast-feeding, being provisions that have not been carried-over into the Agreement and are not preserved given the limited nature of the saving provision of the Agreement.
[295] I noted in the statement that in so many instances where provisions can be compared, the Agreement appeared to displace, remove, omit or reduce conditions that would have applied under the reference instruments. This is now conceded by the applicant and the SDA, but they contend the advantages of the Agreement are such that it would otherwise meet the no disadvantage test.
[296] In this respect, the following matters, in particular, were highlighted in Mr Moir's submissions:
I turn now to consider the matters highlighted in Mr Moir's submissions.
[297] I accept the evidence discloses that employees' wages under the Agreement are increased on the rates in the reference instruments. (The position is less clear in relation to the rates actually being received by the employees, but the rates above those in the reference instruments do not arise as a statutorily-relevant consideration.) The rates in the Agreement are as follows:
[298] An examination of the wage rates shows that in the case of Queensland employees, the starting wage rate for Level 1 employees is said to compensate, in an overall sense, for the loss of a range of conditions under the reference instrument is no more than the standard national minimum of $543.78 a week. The starting wage rates for employees at Levels 2-4, which would be relative to that basic minimum wage rate, would, from 1 July 2010 be adjusted, by operation of cl.18.3, as follows: "FWA Annual Wage Review less $7.50", thereby compressing wage relativities for employees whose wages are scaled by reference to a rate which is no more than the national minimum.
[299] In the case of Tasmania, the Agreement provides for a starting rate of $540.25, which is less than the standard national minimum of $543.78, although that rate is now the subject of a proposed undertaking. As I have noted earlier, as to Tasmanian employees, the Agreement provides for the 2010 adjustment of wages as follows: "FWA Annual Wage Review less $5.00".
[300] The Agreement provides higher remuneration than the reference instruments, which effectively have been set in aspic apart from adjustments that have operated from Australian Fair Pay Commission adjustments. For example, the SA/NT instrument apparently has not been adjusted since 2003; the applicant's submissions treated their comparative tables for that reference instrument as being based on the federal national minimum of $543.78. The summary document provided for employees in South Australia by the SDA (Exhibit 9-SDA11) otherwise specified the "Current Full Time weekly rate for Level 1 employees as being "$559.26" - which is the same as the rate otherwise specified at para. 50 of the applicant's submissions as being the "Agreement weekly rate from 1 January 2010". It is difficult from the conflicting evidence and submissions to ascertain what comparator rates are supposed to apply in some instances, such as for employees under the SA/NT instrument.
[301] One way or the other, providing starting rates under the Agreement for Level 1 employees which are no more than the national minimum in the case of Queensland and less than the national minimum in Tasmania could hardly be said to satisfactorily off-set the otherwise substantial loss of conditions that would result from the approval of this Agreement for those employees.
[302] In the case of Queensland employees, there is no "upfront" increase for employees at Level 1. As I understand it, the existing rates and the rates proposed to take effect from 1 January 2010 are the same - the national minimum. While the Level 1 employees would receive the national minimum adjustment from July 2010, the Level 2-4 employees' wages would be adjusted by the national minimum adjustment less $7.50. The summary document for Queensland also states "Employee Level 1 will be paid no less than 90% of the Employee Level 2 rate for the duration of the Agreement", but the advice contained in the summary document is not contained in the Agreement itself.
[303] More generally as to wages, as I have mentioned earlier, the Agreement provides a formulation that, oddly, provides for pay increases linked to the minimum wage reviews, but then reduces any such amounts by between $3.84 and $7.50 in 2010. From July 2011 and July 2012, the increases then would be the minimum wage adjustment, plus either $2.00 or $5.00. In the applicant's case, this "discount" in 2010 was said to be for the purpose of assisting the company to fund the considerable increase in costs associated with the full implementation of the Agreement, and in recognition that the July 2010 increase would be the third increase enjoyed by the applicant's employees in "the space of just fifteen months". Mr Moir also submitted that should Fair Work Australia determine an amount of $7.50 or less per week in 2010, the applicant would not reduce employees' wages.
[304] First, I am perplexed by the applicant's reliance on pay increases pre-dating the Agreement being advanced in support of a proposition that it is acceptable to adjust wages in 2010 by less than what otherwise would be the national minimum adjustment. I note also the submissions and evidence that were to the effect that even if the Agreement contemplated wage reductions at cl.18, no such deductions would be implemented by the applicant. There is an undeniable tension between cl.18 (Minimum weekly wages) and cl.41 (Savings) of the Agreement, and the payroll policy that may be adopted by the applicant is not relevantly under consideration, the Agreement is the focus.
[305] Second, Mr McManus deposed that employees will receive wage adjustments in 2011 and 2012 which are "guaranteed to be superior to any National Wage outcome". Similarly, Mr Bliss submitted it was "no small mean feat" the SDA had negotiated wage increases that would be above the minimum annual wage review. However, if the adjustments are considered over the life of the Agreement, the adjustments are, in some instances, less than the national minimum adjustment. To illustrate this, I will first reproduce cl.18 of the Agreement, which provides as follows concerning wage adjustments:
In addition to the wage rates specified in 18.1 and 18.2 employees will be paid the following increases. Provided that an employee will not be paid less than the rate otherwise applicable to that employee under the transitional provisions of the relevant modern award.
[306] Looked at another way, cl.18.1 and cl.18.2, by my calculations (albeit dealing with the adjustments in reverse date order), provide that employees would receive the following wage adjustments over the three year nominal life of the Agreement (in the following examples, I have used the Level 1 base rate for South Australia, the Northern Territory and the ACT):
1. Employees in New South Wales - July 2010 to expiry of Agreement
2. Employees in Victoria - July 2010 to expiry of Agreement
3. Employees in Western Australia - July 2010 to expiry of Agreement
4. Employees in Tasmania - July 2010 to expiry of Agreement
(Note: The below-minimum rates for Tasmania set at $540.25 for Level 1 employees in the Agreement are considered elsewhere in this decision)
5. Employees in Queensland (Level 1) - July 2010 to expiry of Agreement
6. Employees in Queensland (Levels 2, 3, 4) - July 2010 to expiry of Agreement
7. Employees in SA/Northern Territory - July 2010 to expiry of Agreement
8. Employees in the ACT - July 2010 to expiry of Agreement
[307] Hence, over the life of the Agreement, the adjustments over the national minimum adjustments would, in fact, amount to $3.50 less than the national minimum for employees in New South Wales and Victoria, and most employees in Queensland. I expect these combined States would have the majority of employees, though there was no evidence in this respect as to the numbers of employees. Employees in Western Australia would benefit by sixteen cents. Employees in the Australian Capital Territory would benefit by $1.00. Other employees would benefit by up to $5.50.
[308] Despite Mr Moir's submissions, I fail to see how the introduction of what was described as a "comprehensive classification structure" could, of itself, be characterised as an advantage for employees under the Agreement. The classification structure does no more and no less than categorise four different classes of employees at Levels 1-4, in a way that reflects the arrangements that, at least as I understand it from the McDonald's/SDA-specific reference instruments, broadly apply at present at McDonald's outlets. That is:
[309] Mr Moir submitted the classification structure is comprehensive, with "management staff [enjoying] the protection of an enterprise agreement for the first time". Similarly, I note Exhibit 9-SDA15, for Western Australia, stated that "Under the proposed Agreement management staff will enjoy the protections of an Agreement for the first time". I do not accept this characterisation of the inclusion of Level 4 employees in the Agreement. First, I have already concluded the WA instrument and the Queensland instrument would have applied to at least some of the more junior-ranked employees now proposed to be classified as Level 4 employees under the Agreement; and significant conditions of employment for those employees have been excised in this Agreement.
[310] As to the other employees under the McDonald/SDA-specific reference instrument who were otherwise the subject of the managerial exclusion, the Agreement brings them under the umbrella of the Agreement and then, by virtue of all the exclusions that apply to Level 4 employees, systematically strips them of the entitlements that would typically apply to award-reliant and agreement-reliant employees (such as entitlement to reasonable working hours, meal breaks, minimum breaks between shifts, overtime payments, public holiday rates, etc.,) and/or at common law (such as reimbursement of reasonable, work-related travel expenses). Any suggestion that Level 4 employees would be benefitted by the Agreement - a view promoted in some of the summary documents, as well as in aspects of the evidence and submissions - is risible. If, however, I am wrong in relation to the Level 4 employees, that leaves open the question of what conditions are presently applying to them if the Agreement does constitute a benefit to them.
[311] As to the supposed benefits of this new classification structure for the lower-ranked Level 1 and Level 2 employees, I note that general cleaning, such as to include toilet cleaning, has never been an ordinarily-understood part of the duties of a retail employee - at least in New South Wales under the Shop Employees (State) Award (which would have been the industrial instrument covering many of these employee in New South Wales, were it not for the making of the NSW instrument). So much is clear from the general prohibition on such work in the Shop Employee (State) Award which reads at cl.30(ii): "An employee shall not be required to wet wash floors, clean lavatories, sweep pavements or clean the exterior of windows other than for the removal of occasional defacements". Yet in this Agreement, toilet cleaning duties are specifically included the Agreement as part of the responsibilities of the retail employees graded at Level 1 and Level 2, whereas such responsibilities were not included in any of the reference instruments. Schedule A of the Agreement provides that: "A McDonald's Employee [Level 1 and Level 2] will undertake duties as directed within the limits of their competence, skills and training including incidental cleaning, cleaning of toilets, other handy work." It could hardly be said to be an advantage to the retail employees concerned to be expected under the new classification structure in the Agreement to undertake cleaning the high-traffic, public toilet facilities, baby change facilities and the like at the McDonald's outlets (even if this task is now comprehended in the Fast Food Industry Award). The inclusion in the Agreement of toilet cleaning responsibilities was not identified in any of the summary documents other than Exhibit 9-SDA14 for Queensland.
[312] I accept the Agreement would, from July 2010, provide improvements in casual rates for employees in New South Wales (subject to comments concerning annual leave below), South Australia, Victoria and Tasmania, where the casual loading is 20 per cent under the reference instruments. The following table describes the casual rates under the Agreement:
[313] As to the casual loadings more generally, I note that while the Agreement provides arrangements which are more advantageous than the casual rates applicable to employees in a number of the States, in other instances casual loadings are static or actually reduced by the Agreement, rather than being increased.
[314] For example, the Agreement provides Level 1 employees in Western Australia would receive casual loadings set at 25 per cent over the life of the Agreement. A casual loading of 25 per cent for Level 1 employees is identical to the rate already contained in cl.10.3 of the WA instrument. Hence, there is no "increase" in casual loadings for those employees over the life of the Agreement; the loadings are static, doing no more than reflecting the existing provision in the WA instrument.
[315] Mr Moir submitted that under the Agreement, the casual loading will "rise to" 21.5. per cent in July 2001 and 22 per cent in July 2012. Despite this submission, so far as employees above Level 1 are concerned, the Agreement actually reduces the casual loadings in Western Australia, because cl.10.3 of the WA instrument sets casual loadings at 25 per cent. Thus, the Agreement reduces the existing 25 per cent loading for employees above Level 1 as follows:
[316] Even at the expiry of the nominal term of the Agreement, employees at Levels 2, 3 and 4 would still not even attain the casual rates of 25 per cent presently attracted under the WA instrument. In my consideration of the question of casual rates, I have taken into account the fact the WA instrument contains 40 hours a week for casuals, whereas cl.14.5 of the Agreement provides for 38 hours, subject to the averaging arrangements.
[317] Similarly, the Queensland instrument cl.3 provides a casual loading of 23 per cent for employees in the South Eastern Division, and 24 per cent excluding the South Eastern Division. Under the Agreement, there is no increase in the casual loadings for employees in the South Eastern Division; the rate is static over the life of the Agreement and is identical to the reference instrument. However, to the extent the Agreement provides only for a flat 23 per cent casual loading for all employees, then the employees who would otherwise have been entitled under the reference instrument to a casual loading of 24 per cent would suffer a reduction, not an increase, in casual loadings. Mr Moir submitted that while the Queensland instrument prescribes a higher casual loading of 24 per cent for areas outside the South-Eastern Division, this "higher loading is offset by the reduced hourly award rate for casual employees working outside the South-Eastern Division - namely, these casual employees receive only an hourly rate of 1/39th of the appropriate full time rate, rather than 1/38th of the appropriate full time rate". This submission appears to be incorrect, at least in as much as it footnoted cl.4.8.2 of the Queensland instrument in support of this off-setting proposition. That is, cl.4.8.2 provides that the calculation of casual rates in both Divisions was the same from 2 August 2005, i.e. 1/38th.
[318] As to Mr Moir's submissions concerning casual rates, I reiterate my earlier conclusion that the Agreement contains no casual loadings at all for employees in the Australian Capital Territory and the Northern Territory - so it could not be said that the Agreement represents any advantage whatsoever for the employees in the Territories. To the extent the ACT instrument and SA/NT instrument presently provide loadings for casual employees, the employees in the Territories would be disadvantaged significantly by the absence of such loadings in the Agreement.
[319] I accept the submissions advanced by the applicant and the SDA the Agreement provides increases in casual loading for employees in New South Wales, South Australia, Victoria and Tasmania and this would be involve a sizeable number of employees. Despite Mr Moir's submissions that the casual loading are "significantly in advance of the minimum casual loadings" the improvements for employees in those States are, however, modest - moving to 21 per cent in July 2010; 21.5 per cent in July 2011; and 22 per cent in July 2012. The rates for Western Australia or Queensland are either static, or have been reduced. The Agreement otherwise contains no casual loadings for employees in the Australian Capital Territory and the Northern Territory. I have otherwise considered the hours arrangements in the WA instrument as they affect considerations concerning casual rates.
[320] Some special mention needs to be made about the casual loadings for employees in New South Wales. As to the NSW instrument, the annual leave provisions are expressed in cl.26 to apply only to full-time and regular part-time employees. The NSW instrument does not, however, deal with annual leave payments for casual employees. It is well-established in the New South Wales jurisdiction that casual employees have an entitlement to proportionate payments with respect to annual leave under the Annual Holidays Act 1944 (NSW). As the NSW instrument is silent on the question of annual leave payments for casual employees, it appears the Annual Holidays Act 1944 (NSW) therefore entitled casuals in New South Wales employed under the NSW instrument to a payment of 1/12th an hour with respect to proportionate annual leave payments, as well as the ordinary hourly casual loading.
[321] The same 1/12th payment by way of an annual leave loading certainly applies to those casual employees whose pay and conditions under the Shop Employees (State) Award and the Broken Hill Commerce and Industry Agreement Consent Award were saved by the NSW instrument. In this regard, see, for example, the summary of casual pay rates under the Shop Employees (State) Award in the website of the NSW Office of Industrial Relations. That website shows the standard payments applicable in New South Wales. That is, the hourly rate for casual employees is calculated with the casual loading, plus an additional 1/12th (starting at $1.58 per hour in the case of adult employees) in recognition of annual leave entitlements for casual employees under the NSW Annual Holidays Act. To the extent the Agreement does not address the entitlements to payment with respect to annual leave for casual employees in New South Wales, the Agreement represents a disadvantage for those employees. I am unfamiliar with the entitlement to payment, if any, with respect to statutory annual leave entitlements that may have applied to casual employees in jurisdictions other than New South Wales. However, if casual employees in New South Wales have not been paid the 1/12th with respect to annual leave payments under the Annual Holidays Act, it appears some employees may have been underpaid.
[322] So far as this application is concerned, the entitlement casual employees in New South Wales have to the 1/12th annual leave loading has not otherwise been addressed in the Agreement.
[323] As to Mr Moir's submission noted there are improved junior rates at some classifications and age levels. Equally, as identified initially in my statement, there are other examples of inferior junior rates at some classifications and wage levels. The evidence as to this matter was, in the end, at best equivocal as to comparative advantages and disadvantages.
[324] Despite Mr Moir's submissions, I do not accept the Agreement contains any prescription on the number of weekly shifts and, thus, I do not accept the submission that the purported prescription on the maximum number of weekly shifts represents any advantage for employees under the Agreement. My conclusions generally in this regard are set out earlier under the heading "Opting-out".
[325] The applicant's submission that the Agreement provides higher minimum engagement provisions than the reference instruments is insupportable, except in relation to the NSW instrument. The minimum engagement provisions under the reference instruments are as follows:
[326] In contrast with these minimum engagement provisions, cl.20.3 of the Agreement provides for the following minimum engagement payments:
Employees shall be paid a minimum of one hours wages for their attendance to any crew meeting they are requested to attend by the employer. Should the duration of the meeting extend past one hour, the employees shall be paid for the entire duration of the meeting. Attendance at meetings is not compulsory but is encouraged."
[327] As can be seen, cl.20.3 of the Agreement is disadvantageous to employees when compared to and contrasted with the minimum engagement provisions for employees in the majority of States and Territories. Moreover, Level 4 employees are not entitled to any payment under cl.20.3 of the Agreement for attendance at such meetings.
[328] Mr Moir submitted it is important to note cl.20.3 of the Agreement provides that while attendance at crew meetings is encouraged, it is not compulsory - and an employee attending a crew meeting would not be required to perform normal duties. I do not consider anything turns on the question of compulsion. The no disadvantage test is an objective test; either the Agreement provides a disadvantage considered in terms of one or more of the reference instrument or it does not. In this respect, I note the comments of Watson SDP and Lewin C in the MSA Security Officers Certified Agreement 2003 (AG823747 PR937654), where this was said of a provision which allowed extra hours to be worked by agreement at ordinary rates rather than overtime rates:
"[76] In the proceedings below, the appellant submitted that the working by agreement of additional hours, which attract the overtime provisions of the Award, would result in a disadvantage to employees given clause 15 of the Award provides for overtime done outside of ordinary hours to be paid at the rate of time and a half for the first two hours and double time thereafter..
[77] In the proceedings before Polites SDP, the respondent relied on a distinction between hours which are worked in line with the employee's preference to work additional hours and to earn extra income, versus hours which are worked at the request or instruction of the employer and submitted that the ability to work to earn extra income is something that is one of the beneficial parts of the Agreement.
[78] In his Decision, Polites SDP appears to have accepted this distinction, assuming that the provision in the Agreement which provides that consent to working voluntary additional hours should not be unreasonably withheld does not mean that an employee may be pressured over his or her reasons for refusing consent.
[79] We fail to see how the distinction between hours performed beyond ordinary hours at the employer's direction and hours performed with the voluntary agreement of the employee is available for the purpose of applying the no-disadvantage test, given the terms of the Award. To the extent it was relied upon, Polites SDP relied on an irrelevant matter and misconstrued and misapplied the no-disadvantage test. That test is to be applied by reference to the terms and conditions of the competing instruments - the Award and the Agreement.
[80] The terms of the Award in relation to work performed in excess of the ordinary hours prescribed by the Award do not distinguish between voluntary and directed work. On the contrary, the Award, in clause 16.1, specifically used the term "All work done outside ordinary hours prescribed by clause 15". Had the Award described the basis for payment of overtime rates differently, providing, for example, that the rates applied in circumstances where the employee was required to work hours in excess of those in clause 15, the situation may have been different. However, it is not a situation which we need consider further given the particular terms of the relevant Award in the present circumstances. In applying the statutory test by reference to the terms and conditions of the competing instruments in the circumstances of the present matter, the Award is clear in its requirement for the payment of overtime rates prescribed in relation to all work done outside ordinary hours prescribed by clause 15.
[81] Further, the consideration in relation to work undertaken in excess of those prescribed as ordinary hours by the Award, which led Polites SDP to consider the effect of clause 28 of the Agreement on the no-disadvantage test seems to have included an assumption that by working an additional number of hours at a significantly lesser rate of pay (the ordinary time rate) than that prescribed by the Award (time and a half for the first 2 hours and double time thereafter) employees would not be disadvantaged. The assumption reflects the respondent's contention that the opportunity to work more hours, in addition to the ordinary hours prescribed in the Award, would offset the disadvantage arising from the lesser rates prescribed in the Agreement. We fail to see the relevance of this proposition to the application of the no-disadvantage test. This is because the no-disadvantage test does not involve an analysis of matters other than the terms and conditions of the Award as against the Agreement. The number of hours of work which may be performed by the employees, as opposed to what they will be paid for hours worked, is not a matter prescribed by the Agreement. The subject matter addressed by the respondent concerned the operational possibilities of the employers business to provide additional working hours at rates of pay less than those prescribed by the Award. By having regard to the employers prediction of what the operational circumstances of the business would or might be Polites SDP departed from the statutory test. What was being compared was not the terms of the Award and the Agreement. By relying upon what was put to him by the respondent, SDP Polites was comparing the terms of the Award with the effects of the potential operational arrangements of the employer, rather the terms of the Agreement in relation to the amounts payable to employees for hours worked compared to the terms of the Award in that respect.
[82] Consequently Polites SDP failed to properly take into account the relevant consideration of disadvantage arising from a real reduction in the terms and conditions of employment concerning hours of work under the Agreement, by reliance on the employers operational intentions to provide longer hours of work under the inferior terms of the Agreement.
[83] In any case, we think his Honour's apparent concerns about this provision would have required an undertaking, rather than an assumption that an employee would not be pressured over his or her reasons for refusing consent, in order to ensure that employees were not disadvantaged. It is clear that notwithstanding his understanding as to the voluntary nature of the additional hours and his assumption concerning the withholding of consent, Polites SDP remained concerned about this provision of the Agreement, when satisfying himself as to s.170LT(2), and relied on clause 28 - No Disadvantage, as addressing those concerns. We next address that provision."
[My bolding; underlining in original; endnotes omitted]
[329] Considerations similar to those discussed in the MSA Security Officers Certified Agreement arise in this Agreement. The test to be applied is an objective one, based on a comparison of the Agreement as against the reference instruments. Under the reference instruments, other than the NSW instrument, an employee who agreed to an employer's request to attend work for a crew meeting would have been entitled to payments that would have been attracted under the minimum engagement provisions of those instruments - no more and no less than if an employee agreed, for example, to an employer's request to perform overtime he or she would have been entitled to overtime payments. The question of lack of compulsion does not relevantly arise. It is an ordinarily-applied principle of Australian employment law that employees and employers cannot, even by genuine mutual agreement, lawfully "contract out" of minimum provisions provided in industrial instruments and employment-related statutes such as those under the reference instruments concerning minimum engagements.
[330] I am not otherwise persuaded by Mr Moir's submissions the minimum engagement provisions of the reference instruments would not relevantly arise in relation to attendance at crew meetings on the basis that attendance at crew meetings does not constitute the actual performance of work. First, I consider attendance at work-specific meetings such as the crew meetings contemplated in the Agreement would be considered as involving an ordinary incident of work. There was no evidence as to what matters might be dealt with at such meetings, but I would expect they would involve discussion of work-specific matters, including those related to the production and sale of food and beverages, rostering of employees, supervisory issues, training issues, workplace programming, and the like - in short, any range of matters relevant to the everyday work of the outlet.
[331] Second, if I am wrong about these matters and something does turn industrially on the lack of compulsion concerning attendance at work for crew meetings, I very much doubt employees would have any real or practical capacity to disagree with an employer's request or resist the expectation concerning such attendance at work. I note that in this respect Mr Moir submitted as follows:
"The provision for a minimum only of one hour's wages when a crew meeting is conducted would operate to the disadvantage of the relevant employees, but only where the employee chooses to attend the meeting. So in other words, the disadvantage under the Agreement would only apply if the employee consents or chooses to attend the meeting out of their rostered hours. So the disadvantage would apply only in limited circumstances and it is where the employee makes a decision to attend. Under the Agreement, is says quite clearly that attendance is not compulsory. They are the words that have been used very specifically by the parties and which have been approved by the majority of employees and, clearly therefore, those words are the safeguard."
[332] Most of the employees covered by the Agreement are in precarious employment as casuals and, added to that, they are mostly young. I doubt there would be much real capacity for young, casual employees to decline to attend any such meetings if requested to attend.
[333] Lastly, there is no cap on the number of crew meeting that might be scheduled. Mr Moir submitted the applicant expected employers would not schedule more than about two meetings a year and it would be open to employees or the SDA to invoke the dispute resolution procedures if an employer scheduled too many crew meetings. Mr Moir submitted that "within the proper confines" of the Agreement the employer could conduct only one or two crew meeting a year and this is the current practice. As to this, I would simply note the Agreement itself contains no cap on the number of crew meeting - there is no confinement of the type suggest by Mr Moir. The applicant's expectations concerning the number of crew meetings that might be scheduled in individual outlets does not relevantly arise for consideration in the context of the no disadvantage test. Plainly, under the terms of the Agreement, it would be open to an employer to schedule crew meetings as often as considered appropriate, for example, weekly. The capacity to invoke the dispute procedures about an employer scheduling what the employees regarded as an unreasonable number of crew meetings does not relevantly arise for consideration in terms of the no disadvantage test in relation to a comparison of the minimum engagement provisions.
[334] I have noted also the submissions by Mr Bliss that the SDA is satisfied the Agreement provides better minimum shift arrangements generally for employees, albeit not in relation to the crew meeting arrangements. He described this as "swings and roundabouts".
[335] As to minimum engagement provisions more generally, I note that the provisions in the Agreement would, as the submissions of the applicant and SDA indicated, represent an improvement of 30 minutes on two hour minimum engagement provisions for casuals under the NSW instrument, the SA/NT instrument, the Victorian instrument, the Queensland instrument; and the WA instrument - which each provide a minimum engagement of two hours for casual employees. However, the Agreement would provide a decrease in entitlements by comparison with the ACT instrument, which presently provides for a standard minimum engagement for casuals of three hours, with a proviso that an employee may, by consent, agree to two hour minimum engagements.
[336] As for full-time employees, the Agreement provides for minimum engagements of four hours - which appears to be generally in accordance with the minimum engagement provisions under the reference instruments.
[337] As for part-time employees, the Agreement provides for minimum engagements of three hours, which represents an improvement of 30 minutes on cl.11.45 of the NSW instrument; a maintenance of three hours under the ACT instrument (cl.11.4.3); an improvement on the two-and-a-half hours in the NSW instrument (cl.11.4.4 and 11.5.5); an improvement on the two-and-a-half hours in the Victorian instrument (cl.11.4.5); an improvement on the Queensland instrument's two hours (cl.4.7.4(b)). It is the same as the WA instrument's three hours (cl.11.(1)).
Apart from the matters I have addressed more generally earlier in this decision concerning matters such as wage rates and casual rates, I note Mr Moir identified a number of the advantages relied on by the applicant in support of the approval of the Agreement as follows:
[338] The SDA's submissions overlapped, in some parts, in the identification of matters which it considers to be advantages of the Agreement. While acknowledging the improvements and reductions are not uniform across all jurisdictions, Mr Bliss submitted that in addition to improvements in base wages and casual loadings, the Agreement contains a number of other improvements. Mr Bliss's submissions identified those matters as follows:
[339] I have already considered various matters specifically relied on by the applicant and the SDA in support of the contention the Agreement, on balance, does not disadvantage employees. I rely on my findings thereto as considered elsewhere in the decision. I turn now to a number of matters not otherwise addressed earlier in this decision.
[340] As to the submission the Agreement "secures entitlements" to statutory long service leave entitlements for Western Australia, I would say this. As I understand it, the General Order referred to in Mr Moir's submissions was repealed with effect from 4 July 2006 by s.64 of the Labour Relations Amendment Act 2006 (WA) and, from that time, any reference to the General Order has been taken to be a reference to the Long Service Leave Act 1958 (WA); and federal legislation, such as s.16(3)(f) of the Workplace Relations Act 1996, otherwise treated long service leave as a non-excluded matter.
[341] The comments concerning the additional benefits for employees in Broken Hill, which are referenced to the Long Service Leave Act 1987 (SA), must also be tempered by the fact any longer-term employees in the County of Yancowinna, who would be most relevantly affected by long service leave arrangements the subject of the comprehensive savings provision in the NSW instrument, would have had entitlements which were superior to both the Long Service Leave Act 1955 (NSW) and the Long Service Leave Act 1987 (SA). The Broken Hill Commerce and Industry Agreement Consent Award contains an amalgam of the better provisions of both statutes. It provides the 13 weeks' long service leave as provided by the South Australian Act, which is more beneficial than the New South Wales Act; but it also provides access to proportionate entitlements at five years' service in accordance with the New South Wales Act, which is more beneficial than the seven years in the South Australian Act; and also counts all service, including service as a junior, given it is expressed to apply to "all employees".
[342] Despite the submissions in the early stages of proceedings, I also have doubts about the provisions of the Long Service Leave Act 1987 (SA) being applied to employees in Broken Hill in New South Wales, for reasons going to enforceability. Section 4 of this statute reads:
_(1) Subject to this section, a worker's long service leave entitlement accrues under this Act in respect of - _
(b) service outside the State where the worker is predominantly employed in the State;
(c) service outside the State in pursuance of a contract of employment of which South Australia law is the proper law.
(2) Where a worker would, but for this subsection, have a long service leave entitlement both under this Act and a corresponding law, the worker may elect to take the entitlement under this Act or under the corresponding law, but not under both."
[343] Further, the Agreement does not deal with the preservation of continuity of service for employees in Broken Hill that was accrued under the Long Service Leave Act 1955 (NSW) or the Broken Hill Commerce and Industry Consent Agreement Award, or both. I note, the summary document for Broken Hill (Exhibit 9-SDA16) does not include any information for those employees about the quite specific and atypical long service leave arrangements that were proposed to apply to them under cl.10 of the Agreement.
[344] I note the reliance by the applicant and the SDA on the miscellaneous paid and unpaid leave entitlements for what I might describe as "worthy purposes", but they really do not amount to much in terms of tipping the balance in favour of finding this Agreement satisfies the no disadvantage test. For example, seeking an "approved period of unpaid leave" is available within any employment relationship, whether for study or other purposes such as those contemplated in cl.36.3 of the Agreement.
[345] It is important to note the other forms of leave and payments under the Agreement concerning jury service, emergency services, blood and bone marrow donations, natural disasters, and defence force activities are all contingent entitlements only. They are of benefit to the employees only if certain circumstances are met. I am not satisfied that the inclusion of contingent entitlements in the Agreement, being benefits which may not be realised, would satisfactorily offset the removal of so many core, guaranteed conditions that were otherwise specified under the reference instruments. The contingent entitlements principally apply to permanent employees, a statistically small group. The jury service and defence force provisions would provide no benefit to employees aged less than 18 years. I would expect bone marrow donations would be even less common than blood donations and there was no evidence as to the number of permanent employees who are members of the ADF. The ADF pays most reservists, other than trainees, better pay rates than this Agreement provides - so the contingent benefit of "make-up" pay for this group of employees is even further diminished.
[346] Before leaving the topic of blood donor leave, Mr Moir drew attention to the provisions of the Agreement entitling permanent employees to paid donor leave on four occasions a year at two paid hours per occasion. He submitted the Agreement provisions are modelled on and directly in line with blood donor arrangements under the Queensland instrument. He submitted the other reference instruments do not contain an entitlement to blood donor leave and, as such, the extension of the Queensland blood donor national workforce is another important overall advantage for employees. As to this, I note that paid blood donor leave has been a very long-standing entitlement for retail employees in New South Wales, by virtue of cl.19 of the Shop Employees (State) Award - but that condition was not preserved by the Agreement for relevant employees, given the limited nature of the savings provision. Now this entitlement is being presented in the applicant's case as a benefit, whereas for at least some employees it only maintains what otherwise would have been an established entitlement. The same observation applies to paid jury service leave (see cl.22 of the Shop Employees (State) Award).
[347] In the statement, I commented there appeared to be a tension within cl.27.2 of the Agreement, reflected in some of the other McDonald's/SDA-specific reference instruments, in as much as it is unclear whether overtime payments are attracted under cl.27.2.1.2 after 36 hours, or after the (undefined) hours as mutually arranged, in respect of regular part-time employees. The applicant did not clarify this matter specifically, but overtime payments may be attracted only after 36 hours are worked by part-time employees, rather than the hours in excess of those otherwise mutually arranged, such as 20 hours or 30 hours a week.
[348] I note the Agreement appears to use different terminology within cl.27.2 for part-time employees. Clause 27.2.1.2 of the Agreement refers to "36 hours per week for a part-time employee", whereas cl.27.2.1.3 describes different overtime arrangements for what is called a "regular part-time employee". The Agreement does not, in the definitions section at cl.3 of the Agreement or in cl.11 (Employment Categories), otherwise provide any definition of a "regular part-time employee" as opposed to the ordinary definition of "part-time employee" at cl.11.1.2. It is unclear, but it seems the reference to a "regular part-time employee" is some form of remnant from the McDonald/SDA-specific reference instruments, such as cl.11.4 and cl.11.5 of the NSW instrument, that provided for two classes of part-time employees, namely "flexible part-time employees" and "regular part-time employees".
[349] My appreciation of the meaning of "flexible part-time employees" and "regular part-time employees" has been better informed as a result of Mr Bliss's submissions that one of the perceived advantages of the Agreement is the deletion of the employment category named flexible part-time employees, which he aptly described a providing what was, in effect "cheap casual labour". I accept the submission that the removal of this category of employment would be an advantage of the Agreement. Using the NSW instrument to illustrate this, flexible part-time employees are paid loadings of only 13 per cent on the ordinary rates, which is said to compensate the part-time employee for annual leave, annual leave loading, sick leave and personal/carer's leave (and I doubt this loading would be adequate).
[350] Although I accept the submissions the Agreement is beneficial in as much as it is said to remove the flexible part-time work category found in a number of the McDonald's/SDA-specific reference instrument, there is a clear tension in the Agreement concerning overtime for part-time employees. Clause 27.2.1.3 provides overtime is payable for overtime beyond those mutually arranged in respect of "regular part-time employees". The Agreement at cl.27.2.1.2 otherwise provides that overtime payments for "a part-time" employee will be attracted after 36 hours per week. Thus, within terms, the Agreement contemplates two classes of overtime payments for differently-titled classes of employees, albeit there is no such delineation otherwise contemplated in the employment categories set out in cl.11 of the Agreement. Thus, the notion of a regular part-time employee, as opposed to another category of part-time employee who is not a regular part-time employee, seems to survive - at least from a plain reading of the overtime provisions.
[351] It is also unclear from the Agreement what would happen to employees who are presently engaged as flexible part-time employees. While the category of employment is not specified in the Agreement itself, I note that the employees' permanency as part-timers is not preserved by the Agreement. To the extent there is information in the summary documents about the status of the flexible part-time employees, I note the summary document for New South Wales (Exhibit 9-SDA9), for example, reads as follows:
Flexible part-time employment is not included in the proposed Agreement.
At the commencement of the proposed agreement, any crew member who was engaged as a flexible part time crew member will become a casual crew member.
If a flexible part time crew member wishes to be engaged on a part time basis, they need to raise their request with the Company as soon as possible. The Company will consider all such requests on a case by case basis."
Hence, if this summary document may provide any guidance, it is anticipated the flexible part-time employees would have their permanency (albeit under flexible working hours arrangements) as part-time employees removed. These part-time employees would be converted into casual employees, rather than permanent employees, unless the employees were successful in any requests made to the applicant or its licensees to be made part-time once the Agreement was introduced. The unilateral conversion from permanent employment to casual employment ordinarily would be regarded as industrially disadvantageous.
[352] On the application of ordinary industrial principle, if an employee's permanent position as a part-time employee is abolished, the employee would, absent any other considerations, have a presumptive entitlement to redundancy entitlements specified in the relevant industrial instrument. While the loading presently payable to flexible part-time employees is said to cover certain leave entitlements, I note it is not expressed to apply to redundancy and severance entitlements.
[353] Mr Moir submitted, in part, as follows in relation to the principles to be applied concerning the application of the no disadvantage test:
"26. Those principles may be summarised as follows:
(a) The no-disadvantage test is an objective test;
(b) The no-disadvantage test is a global one and not a line-by-line examination.
(c) The Tribunal must undertake an objective topic by topic comparison of the terms and conditions of employment under the relevant award as against the terms and conditions of employment in the Agreement, and identify matters of advantage or disadvantage. The Tribunal must then compare the old terms and conditions of employment with those of the new in a global or aggregate fashion to determine whether, on balance, there is a reduction of the overall terms and conditions of employment for the employees concerned.
(d) An important implication of this approach is that the Agreement will not fail the test merely because a particular condition of employment is reduced provided that, on balance, there is no reduction of the overall terms and conditions of employment of the employees concerned.
(e) Whether the no disadvantage test has been met in a particular case is a matter for the impression and judgment of the Tribunal member. However, the key determinant remains a proper comparison of the terms and conditions of the competing instruments.
(f) The no-disadvantage test does not involve an analysis of matters outside the terms of the Agreement and the relevant award instruments. Thus, in MSA Security, a majority of the Full Bench of the Australian Industrial Relations Commission held that an employer's rostering practices were irrelevant in determining whether the no-disadvantage test was met.
(g) Further, the Tribunal should refrain from exercising a value judgment by importing what it believes is an appropriate minimum level of entitlements for an employee, or discounting certain aspects of an Agreement as exceeding an acceptable level of entitlements.
(h) However, any diminution of widely established rights of employees should be carefully scrutinised with a view to preventing modification or undermining of community standards."
[354] Mr Bliss made submissions to similar effect, emphasising the Act requires that Fair Work Australia make an evaluation on balance as to the overall position of employees. He highlighted matters the SDA considered to be the countervailing advantages of the Agreement, which were primarily identified as including: higher base wages for employees than the reference instruments, as adjusted by the Australian Fair Pay Commission scales, together with an "upfront" increase from the commencement of the Agreement; guaranteed increases above annual wage reviews in 2011 and 2012; introduction of new allowances, e.g. crew trainer allowances; removal of flexible part-time work arrangements; additional leave provisions; and improved hours of work provisions. He also submitted that where the Agreement leads to a reduction in the hourly rate of pay at a particular time of the day, the savings provision would apply. He referred particularly to the summary of principles concerning the relevant test given by Smith C in BUPA Care Services, ANF and HSU Enterprise Agreement 2009 [2010] FWA 16 at [6]. Mr Bliss's submissions were encapsulated as follows:
"As a general proposition, the SDA submits that the improvements negotiated as a result of this Agreement will be widely enjoyed; disadvantages will apply at the margins to some, but not all employees, and any monetary disadvantage with respect to hourly rates of pay is saved [sic] to ensure employees will not be worse off as a result of the introduction of this Agreement."
[355] In support of this, Mr Bliss annexed to his submissions various tables identifying the hourly rates of pay in the various States and Territories compared to the reference instruments. Some further tables subsequently were filed post-proceedings.
[356] While I do not repeat the matters already identified under the various headings in this decision, I have considered the disadvantages and advantages of the Agreement in terms of the reference instruments considered in the context of the further evidence and submissions. Accepting the submissions by the applicant and the SDA as a distillation of some of the relevant principles to be considered in terms of the no disadvantage test, and considering the matters relied on as to the content of the Agreement, I am not satisfied the multitude of disadvantages presented by the Agreement is, in a form of overall industrial equilibrium, offset by its marginal advantages. I do not consider the Agreement satisfies the no disadvantage test. I would dismiss the application for that reason.
[357] There was an issue I addressed in the statement concerning the operation of cl.15.2 of the Agreement concerning termination - as to whether one aspect of the clause could be included in an enterprise agreement. What follow largely reproduces the relevant part of the statement.
[358] The provisions in cl.15.2 of the Agreement concerning termination of employment are as follows:
The notice of termination required to be given by a Level 1, 2 employee is 1 week and the notice of termination required to be given by a Level 3 and 4 employee is the same as that required of an employer except that there is no requirement on the employee to give additional notice based on the age of the employee concerned. If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination under this award [sic] or the NES, an amount not exceeding the amount the employee would have been paid under this award [sic] in respect of the period of notice required by this clause less any period of notice actually given by the employee."
[359] In my opinion, this provision, to the extent it permits unilateral deductions from wages or other monies due on termination, is a matter which cannot be the subject of a provision within the Agreement, considered in the terms of the Act. The following observations do not involve questions of the "no disadvantage" test; rather, the question is whether such a provision may be properly included in an enterprise agreement at all. Section 172 of the Act, relevantly provides as follows as to permitted matters for inclusion in an enterprise agreement:
(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(c) deductions from wages for any purpose authorised by an employee who will be covered by an Agreement;
[360] Thus, to the extent an enterprise agreement may deal with deductions from wages, any such deductions must, pursuant to s.172(c) of the Act, be authorised by the employee. Section 172 of the Act does not contemplate the making of deductions that have not been authorised by an employee, such as is proposed in cl.15.2 of the Agreement. The approach to deductions in s.172(c) of the Act is consistent with the provisions of Ch.2, Part 2-9, Div.2 of the Act concerning payment of wages. I have also taken into consideration the provisions of s.326 of the Act (Certain terms have no effect) and reg.2.12 (Certain terms have no effect - reasonable deductions) of the Fair Work Regulations 2009 as they concern notions of reasonableness and the requirement for the written consent of the parent or guardian to the deduction if the employee is aged under 18 years. Relevantly, s.324 of the Act provides that deductions from wages may be made by an employer only in the following circumstances:
(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:
(a) the deduction is authorised in writing by the employee and is principally for the employee's benefit; or
(b) the deduction is authorised by the employee in accordance with an enterprise agreement; or
(c) the deduction is authorised by or under a modern award or an FWA order; or
(d) the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court."
[361] The concept of employee-authorised deductions (as opposed to unilateral, unauthorised deductions by employers) under industrial instruments is a familiar concept. Indeed, at cl.22 and cl.40 of this Agreement, there are two examples of authorised deductions. The first is in relation to voluntary superannuation contributions:
22.3.1 Subject to the governing rules of the superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause 22.1.
22.3.2 An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months' written notice to their employer.
22.3.3 The employer must pay the amount authorised under this sub clause no later than 28 days after the end of the month in which the deduction authorised under this sub clause was made." [My underlining]
[362] The second example in the Agreement concerning authorised deductions relates to union dues:
40.3. The Employer undertakes upon authorisation to deduct SDA membership dues, as levied by the SDA in accordance with its rules, from the pay of employees who are members of the SDA. Such monies collected shall be forwarded to the SDA at the beginning of each month together with all necessary information to enable the reconciliation of crediting of subscriptions to members' accounts." [My underlining]
[363] The provisions of the Act at s.172(c) and s.324(1)(b), which allow deductions pursuant to an enterprise agreement only when authorised by an employee, may be compared to, and contrasted with, the provisions of s.324(1)(c) concerning deductions under a modern award, which provides that an employer may deduct an amount from an amount payable to an employee in accordance with s.323(1) if the deduction is authorised by or under a modern award. It is an ordinary principle of statutory construction that an express reference to one matter indicates that others are excluded. Following from that principle, it is a reasonable assumption that where legislation includes provisions relating to similar matters, but in different terms, there is a deliberate intention to deal with them differently. Such appears to be the case here, given the different approaches to what may be permitted in an award and an enterprise agreement concerning deductions.
[364] I note there will be many instances where there would be a voluntary payment by an employee of any amounts which may be owed in relation to notice requirements, but not necessarily in all cases. Equally, however, payments on termination of employment, particularly if the termination has arisen in acrimonious circumstances, are often in sharp dispute between an employee and employer - with claims and counter-claims of alleged underpayments and overpayments. For example, an employee may disagree with the employer's view that alleged misconduct justified a summary dismissal without notice or a payment in lieu of notice; but, if the employer did not give notice or make a payment in lieu of notice, the employee would have to initiate recovery proceedings to attempt to recoup the notice money amounts.
[365] Just as an employer may summarily terminate an employment relationship where there has been, for example, some serious and wilful misconduct, it is equally the case that an employee may be entitled to summarily terminate the employment relationship without notice or payment in lieu thereof where, for example, the employer has given an unlawful or unreasonable instruction. In circumstances where an employee was entitled to summarily terminate the employment relationship, it would seem inappropriate, considered in the different legislative contexts that apply to awards as against enterprise agreements, that the applicant or licensees should have the right to unilaterally make deductions from wages otherwise due on termination as envisaged in this clause of the Agreement if notice or a payment in lieu was not given by the employee.
[366] The applicant submitted that cl.15.2 of the Agreement would be a permitted matter within the meaning of s.172 of the Act. Mr Moir noted s.118 of the Act states that "a modern award or enterprise agreement may include terms specifying the period of notice an employee must give in order to terminate his or her employment". He drew attention to Re Request from the Minister for Employment and Workplace Relations (2008) 177 IR 364; [2008] AIRCFB 1000, where the Full Bench dealing with award modernisation included a standard clause giving employers the right to deduct monies on termination for notice not given by employees - finding that the term "period of notice" in s.118 includes the ability to deduct monies for notice not given and the deduction of notice is "reasonable" for the purpose of s.326. Mr Moir submitted the Full Bench amended a draft provision for the withholding of monies by the employer should the employee fail to give the required notice of termination, observing at [53]-[54]:
"The redrafted clause will permit the employer to withhold monies due on termination equivalent to the amount the employee would have earned for the period of notice less an amount for any notice actually given. It is appropriate that the employer should only have the right to withhold monies due to the employee under the award or the NES. The redrafted clause is:
'If an employee fails to give the required notice the employer may withhold from any monies due to the employee on termination under this award or the NES, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by the clause less any period of notice actually given by the employee.'"
[367] He also submitted that cl.15.2 of the Agreement is replicated in cl.14.2 of the Fast Food Industry Award 2010; other members of Fair Work Australia have approved similar deduction clauses in enterprise agreements made under the Act; and this type of deduction clause has been inserted in federal awards since the original Termination, Change and Redundancy Test Case.
[368] Mr Moir further submitted that even if it is correct that cl.15.2 of the Agreement is not a permitted matter, the content of the notice of termination provisions would not constitute a barrier to the approval of the Agreement. Non-permitted matters may be included in an enterprise agreement, he submitted, provided they are not unlawful terms. In this respect, he drew attention to s.253 of the Act, which provides:
"Terms of an enterprise agreement that are of no effect
(1) A term of an enterprise agreement has no effect to the extent that:
(a) it is not a term about a permitted matter; or
(2) However, if an enterprise agreement includes a term that has no effect because of subsection (1), or section 56 or 326, the inclusion of the term does not prevent the agreement from being an enterprise agreement."
[369] He added that the Explanatory Memorandum which accompanied the Fair Work Bill indicated the following legislative intention regarding the provisions contained in s.253 of the Act, in particular sub-section (2):
"Clause 253 will have the effect that an agreement will still be valid even where it includes terms that are not about permitted matters. It is not intended that FWA will have to scrutinise each enterprise agreement to ensure that all its terms are about permitted matters as this would unduly delay the agreement approval process."
[370] Despite Mr Moir's submissions, I have not been dissuaded from my preliminary view that cl.15.2 of the Agreement is not a matter which properly may be included in an enterprise agreement, albeit I consider it would be amenable to a written undertaking. Shortly stated, while it is clear such deductions are available under awards made by Fair Work Australia, there are different provisions applying under the Act concerning matters enterprise agreements.
[371] The applicant has put forward the two sets of undertakings. The first set of undertakings ("the first undertakings") was filed on 5 February 2010. The first undertakings relevantly read:
"I Kathryn Allen, National Resources Manager (Corporate) give the following undertakings with respect to the McDonald's Australia Enterprise Agreement ("agreement"):
1. that the term "spouse" in the agreement will be interpreted by McDonalds Australia Limited to include a de facto partner as defined by the Fair Work Act.
2. that the term "standard rate" in the agreement means the rate of a level 2 employee.
3. that in clause 16.2 of the Agreement, an employee shall only be transferred to lower paid duties by reason of redundancy, where the employee whose job as become redundant, has accepted the offer for [sic] the lower paid duties."
[372] The second set of undertakings was tendered in proceedings on 29 March 2010 and marked as Exhibit 7 ("the second undertakings"). Those undertaking relevantly read:
"I Frank McManus, Senior Vice President/Director People Resources for McDonald's Australia Pty Ltd give the following undertakings with respect to the McDonald's Australia Enterprise Agreement 2009 ("agreement"):
1. That in reference to the wage increases provided for under the agreement, Level 1 employees in Tasmania in which their base weekly rate of pay as at 1 January 2010 is $540.25. [sic]
2. McDonald's undertakes to ensure that any applicable minimum base rate to these class [sic] of employees will be at least equal to the Federal Minimum Wages [sic] which is [sic] $543.78.
3. McDonald's also undertakes that in the first increases under the agreement for level 1 employees in Tasmania as at 1 July 2010, there will be no discount of $5.00 removed to [sic] this class of employees.
4. These undertakings are provided to address any subsequent raise [sic] differences that may have arisen during the life of the agreement."
[373] As to cl.1 of the first undertakings, I am satisfied this satisfactorily addresses the concern I raised about the unlawful term involving discrimination on the face of the Agreement against same-sex partners (except, perhaps, to the extent it appears to apply only to the interpretation that would be given by the applicant, but not its licensees).
[374] As to cl.2 of the first undertakings, it addresses an omission in the Agreement concerning the lack of a definition of the terms "standard rate" for the purposes of cl.20.10 (Adjustment of expense-related allowances). I consider this undertaking to be satisfactory, except as to its application to the crew meeting payments. As I have noted earlier, the effect of adjusting the crew meeting allowance in cl.20.3 of the Agreement by reference to the Level 2 rate as the standard rate would result in an erosion of the money amount of this allowance for Level 3 employees.
[375] As to cl.3 of the first undertakings, this satisfactorily addresses the concern I raised about the Agreement perhaps suggesting an employee could, on termination by redundancy, be unilaterally transferred to a lower-paid position. The undertaking accords with the wording and effect of similar clauses existing in other reference instruments, such as cl.13.9 of the SA/NT instrument and cl.12.9 of the ACT instrument.
[376] As to the second undertakings, I do not consider them satisfactory in terms of addressing the problem of the below-minimum wages in Tasmania. While the undertakings seek to address the sub-standard wages for Level 1 employees and provide they would not have wages further reduced as a result of the formulation in cl.18.3 of the Agreement providing for a wage increase of "Fair Work Annual Wage Review less $5.00", it does not address the position of the Tasmanian employees at other levels. The wages for employees at Levels 2, 3 and 4 are leveraged from percentages of a below-minimum base rate. Two observations may be made. The first is that these undertakings, if accepted, would negatively compress wage relativities for employees whose wages are scaled by reference to a below-national minimum rate. Second, the value of the wages for Level 2, 3 and 4 employees would go further backwards in real terms with an adjustment formula that would still apply the $5.00 "discount" in 2010 even though the wages were derived from a sub-standard, below-minimum rate.
[377] I note Mr Moir foreshadowed in his written submissions that: "For the sake of clarity, the Applicant is prepared to give an undertaking to the effect that the words 'All States except QLD & WA' in the table appearing in cl.14.2 include the Australian Capital Territory and the Northern Territory". Mr Bliss submitted, so far as the SDA was concerned, the omission of casual rates for the Australian Capital Territory and the Northern Territory was "patently a drafting error", albeit one amenable to a written undertaking. Despite Mr Moir flagging the possibility of providing an undertaking and SDA's suggestion this should be done, the applicant did not tender a proposed undertaking on 29 March 2010 (and none has since been filed) to address the issue of casual loadings for employees in the Territories.
[378] I accept it would have been an onerous task endeavouring to meet the aim of developing a single, national enterprise agreement where there were many markedly different existing terms and conditions applicable in each State and Territory. I note also the evidence and submissions indicated the Agreement was the subject of detailed negotiations, with industrial concessions by both the applicant and the SDA. In my initial statement, I observed that in so many instances where provisions can be compared, the Agreement appeared to displace, remove, omit or reduce conditions that would have applied under the reference instruments. I now have fully considered the matters raised by the applicant and the SDA as to some countervailing advantages of the Agreement. While I accept the Agreement contains a mix of advantages and disadvantages, I have concluded the Agreement would represent an emphatic diminution in overall terms and conditions for the employees who would be subject to its proposed operation.
[379] The 80,000 employees of the applicant and its licensees would be poorly served by Fair Work Australia if the McDonald's Australia Enterprise Agreement 2009 were to be approved. The Agreement not only fails to satisfy the no disadvantage test, on various levels it significantly compromises industrial standards that would be expected for agreement-reliant employees - considering, in particular, that these employees are mostly young and mostly casually employed.
[380] The application cannot be approved for the reasons detailed in this decision, including the deficient application; the failure to meet pre-approval requirements; the failure to meet the no disadvantage test; and the inadequacy of some of the proposed written undertakings.
[382] I propose also to direct that a copy of this decision be forwarded to the Fair Work Ombudsman, given the evidence suggesting the applicant or its licensees, or both, may have been underpaying some employees.
M. Moir of counsel with A. Powter for the Australian Industry Group.
D. Bliss with B. Govind for the Shop, Distributive and Allied Employees' Association.
Printed by authority of the Commonwealth Government Printer
(1996) 66 IR 182
(2008) 177 IR 364
(1997) 71 IR 255
(2003) 128 IR 241