Coco’s Fresh Food Markets v Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees [2001] QIRC 141 (2001) 168 QGIG 70

70 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 28 September, 2001 ########################################################################################################################### QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 156 – application for approval of certified agreement Coco’s Fresh Food Markets AND Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees (No. CA367 of 2001) COCO’S FRESH FOOD MARKETS – CERTIFIED AGREEMENT COMMISSIONER BLADES 13 September 2001 Certified agreement – Saturday and Sunday penalty rates traded off for 3% pay increase – Union objection – No-disadvantage test – Employees probably worse off – Test not met – Suggested parties include a clause providing for an accounting exercise after six months. DECISION Application has been made by Coco’s Markets Pty Ltd, Coco’s Trading Pty Ltd, Emmaland Pty Ltd, Riklime Pty Ltd and Cela Pty Ltd as employers, (Coco’s), and Margaret Taylor on behalf of the employees of the employer companies for the certification of an agreement replacing an earlier agreement. Objection to the certification of the Agreement has been made by the Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees (SDA) on the ground that the Agreement does not meet the “no-disadvantage test”. SDA submits that other employers, seeing favourable results of this application, would all endeavour to join the “Me too Club”, thereby making negotiation of agreements in this Industry most difficult. There are some minor errors in the Agreement, properly termed clerical or which do not adversely affect a relevant employee’s interest and which Coco’s has undertaken to have remedied. There is no point in making further reference to them. The Agreement provides for an initial 3% wage increase which would deliver to all employees an across the board wage increase of $11.80 per week over and above that provided for in the relevant Award, ie, the Retail Industry Interim Award – State (the Award). It is further provided that the rates of pay will not be less than the minimum rates specified in the Award and shall be amended annually in accordance with the findings of the National Wage Case. The Agreement also provides that there shall be no penalties paid for Saturdays and Sundays during ordinary working hours, hence the objection. Ordinary working hours for permanent employees on Saturdays are between 5.30 a.m. and 10.00 p.m. and on Sundays between 6.00 a.m. and 7.00 p.m. Coco’s is a seven-day trader. The SDA has submitted that to achieve the extra $11.80 per week payable over 52 weeks, the employees have given up a possible $48.42 for a Sunday shift of 7.6 hours or $24.21 for a Saturday shift of 7.6 hours. There is a similar shortfall in rates of pay for casuals. It is submitted by the employer that taken on a regular rotational roster basis, the extra 3% for all purposes for the entire year more than compensates for the occasional few hours on a Sunday. The 3% is payable for all leave, i.e., annual leave, sick leave, long service and an annualised approach should be taken. -- 1 of 2 -- 28 September, 2001 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 71 The employers have also submitted that if they are forced to pay penalty rates for weekend work, there will be a social consequence. In an affidavit sworn by Mr McPhee, the General Manager, Coco’s would be compelled to substantially adjust the ratio of “in store” junior employees to “in store” senior employees so as to predominantly engage junior employees, in order to reduce or avoid the effect of punitive penalty rates payable to senior employees. Mr McPhee says that if penalty rates become payable to adult employees, their employment would have to be predominantly confined to Monday to Friday opening hours. Rates of pay for junior labour ranges from 45% for under 16 years of age to 50%, 55%, 67.5%, 80%, 90% until the full adult wage is paid at age 21. It was submitted that long serving adult employees who wish to work weekends and who have voted for this Agreement will be denied the opportunity to receive that income. There is evidence that on Saturdays throughout the stores, 25 juniors to 72 seniors are employed and on Sundays, 30 juniors to 75 seniors. There is no evidence as to how many occasions an individual employee would work on a weekend. There may be those who, because of other commitments, cannot work during the week yet are pleased to work weekends for normal weekly rates. This may be a real alternative to no work at all, but those who work only weekends will suffer a disadvantage vis a vis other weekend employees under the Award. Employees who work a full complement of hours during the week are of course, required by the Agreement to be paid the usual rates of overtime. It may be that weekend work is rotated. To then receive an across the board increase of around $620 per annum in lieu of weekend penalties may soon prove a disadvantage to a worker performing work on more than about 12 Sundays per year. The affidavit of Mr McPhee reveals that at one store there are only about 9 employees. It is difficult to see these employees working less than 12 Sundays per year. In these circumstances, there may well be a significant disadvantage to those employees and I am unable to conclude that they work an “occasional few hours” on a weekend. An agreement passes the no-disadvantage test if it does not disadvantage employees in relation to their working conditions. It disadvantages employees only if the Commission considers it would result in a reduction in the employees’ entitlements or protections – s. 160 Industrial Relations Act 1999 (the Act). These entitlements or protections are those provided for in an appropriate award [s. 160(6)]. The no-disadvantage test is to be applied on a global basis. Provided that any disadvantage in wages and conditions is offset overall by improvements such that employees do not suffer an overall reduction compared to the Award, the no-disadvantage test is taken to be satisfied – see Waggamba Shire Council – Certified Agreement 1997 158 QGIG 171. While it is not always appropriate to approach a determination on a purely mathematical basis, even that approach is impracticable in this case because of the uncertainty or unpredictability of the roster system to establish over how many weekends an employee might work in a given period of time. It should be emphasised that it is the Award against which comparisons are to be made, not the previous Certified Agreement from which penalty rates on Saturday and Sunday were also apparently excluded. It is of some relevance that the previous Agreement, although certified by the Commission, obtained Union approval, probably because it provided for annual increments superior to those in this Agreement. In all the circumstances, I am unable to come to a conclusion that the no-disadvantage test has been met. There is insufficient evidence to satisfy me that the result would not be a reduction in the employees’ entitlements or protections. To the contrary, what appears to be the case is that there may well be a reduction, at least for some employees. Section 160(4) of the Act provides in effect that if there is a reduction in entitlements or protections, the subsection is not to apply if the Commission considers that in the context of the employment conditions as a whole the reduction is not against the public interest. The term “public interest” is not defined. However in O’Sullivan v Farrer (1989) 168 CLR at 216 the High Court said: “Indeed, the expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only ‘in so far as the subject matter and the scope and purpose of the statutory enactments may enable . . . given reasons to be (pronounced) definitely extraneous to any objects the legislature could have had in view’.”. The objects of the Act are set out in s. 3 and all are applicable. In particular, the Act requires the support of economic prosperity and social justice for all employees and employers, helping to balance work and family life, promoting the effective and efficient operation of enterprises and industries and ensuring wages and conditions of employment provide fair standards in relation to living standards prevailing in the community. Meeting the needs of emerging labour markets and work patterns has particular relevance. These objects must be taken into account in assessing whether the reduction in entitlements is not against the public interest, although the Company is not limited to those matters providing whatever is taken into account is not in conflict with them. An award sets the standard and is binding on all to whom it applies. It prevails over a contract of service where there is an inconsistency in that contract less favourable to the employee. When an agreement does not provide for a sufficient counter-balance, it is clearly against the public interest for employees to trade off entitlements provided for in an award. This is not a temporary measure during a short-term crisis for the survival or revival of the business as mentioned as an example to s. 160(4). The submission that the jobs of adult employees may well be lost to juniors is probably relevant to a public interest test. There is also a similar submission where some employees are unable to work full-time during the week so that weekend work makes up their full-time hours. Other matters that could equally be considered to be in the public interest would be that some encouragement might be given to the employment of juniors. The public interest may not be served where a particular employer can achieve a commercial advantage over competitors by paying wages that in truth, turn out to be less than those set by law for the greater community. All of these matters may fall within the scope of the public interest, revealing competing public interests which are not determinative. I am unable to come to a conclusion that in the context of the employment conditions considered as a whole, the reduction is not against the public interest. However, having said all of that, it would seem to me to be appropriate to indicate that should the employers be prepared to include in the Agreement a clause that an accounting exercise be conducted after six monthly intervals and that any employee shown to have been disadvantaged by weekend work without penalty rates be reimbursed so as to receive not less than the Award would have provided for, I would see no objections to the Agreement. I order accordingly. B.J. BLADES, Commissioner. Released: 13 September 2001 Appearances:– Mr A. Herbert, Counsel, instructed by Colwell Wright Solicitors, for Coco’s Fresh Food Markets. Mr L. Gillespie for the Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees. -- 2 of 2 --