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Bakery agreement balances the BOOT

January 08, 2017

by Ben Desir, Workplace Advisor, NRA Legal

The Fair Work Commission has approved a franchise bakery’s enterprise agreement which cuts Sunday, public-holiday and late-night penalties in exchange for higher base pay, based on meeting the ‘Better Off Overall Test’ (BOOT).

The agreement covers 232 Beechworth Bakery workers at six sites across Victoria and NSW, and is now being appealed by the Shop, Distributive and Allied Employees Association (SDA) despite being approved by 86 per cent of workers in June.

The SDA opposed the application on the basis that agreement did not pass the BOOT. While the agreement had a higher weekday rate, employees who worked early morning shifts, Sundays and public holidays would be paid less than award rates.

The SDA sought to rely on the decision in Hart v Coles arguing that “if individual employees were financially disadvantaged under a proposed Agreement, the Agreement would not pass the BOOT” and pointing out that employees may be worse off if they only work on a Sunday, an early morning or a public holiday.

Fair Work Commission Deputy President Peter Sams (DP Sams) dismissed this line of reasoning. “It is trite to observe that an agreement does not necessarily fail the BOOT because employees do not receive weekend penalty rates, public holiday loading or any other Award term or condition” he said.

“Such a simplistic test would be to adopt an incorrect approach to the exercise or ensuring employees (and prospective employees) are ‘better off overall’ under the Agreement, rather than the [award].”

“It is not an exercise in which the Commission ‘negotiates’ with the parties over remotely unlikely ‘what if’ scenarios about implausible or fanciful work patterns or rosters which the employer has never utilised and never intends to.”

“The BOOT is a balancing exercise — not a ‘line- by-line’ comparison.”

Importantly, DP Sams distinguished the Beechworth application from the May 2016 Coles case, where the employer was invited, but refused, to provide undertakings to address concerns raised by the Full Bench of the Commission.

Unlike the Coles case, DP Sams was satisfied that Beechworth had attempted to readily acknowledge and correct these concerns by making proposed undertakings to ensure that employees who work solely on Sundays or public holidays would be paid at a rate to ensure they would not be ‘worse off’ under the Agreement compared to the award.

For example, during deliberation, DP Sams brought the recent decision in SDA v Aldi to the parties’ attention and indicated that the decision cast some doubts over Beechworth’s proposed undertakings. He indicated that the proposed undertaking to pay employees working only Sundays or public holidays at the award rate would not necessarily mean that the employees were better off.

Accordingly, Beechworth provided new undertakings which increased the relevant award rates for employees that have performed work only on a Sunday or public holiday by 1.5%. It also proposed that any reconciliation exercise that did not result in the employee being better off overall, would pay the employee the shortfall plus 1.5%.

Despite objections from the SDA, DP Sams indicated that, with the revised undertakings, he was satisfied that the agreement met the BOOT. Consequently, once satisfied that the agreement met all statutory requirements, the Commission approved the agreement.

The SDA has since launched an appeal of the agreement’s approval.

Importantly, the decision in Beechworth suggests that some of the objections raised in the Coles case can be addressed by negotiating undertakings on the part of the employer.

Preparing and lodging your application for an enterprise agreement can be a daunting task. The NRA have a wealth of experience working with employers to draft, negotiate and apply for an enterprise agreement, call on 1800 RETAIL (1800 738 245) to speak with one our workplace advisors.

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