Each and Every Employee Needs to Be Better Off Overall

A major retailer suffered a significant setback when its proposed nation-wide enterprise agreement was refused approval by a full bench of the Fair Work Commission. The agreement, intended to replace a range of state-based agreements, received 91.5% support at the ballot and full union support.

A key feature of the agreement, which was a continuation of the pre-existing agreements’ structure, was a reduction in time of day/day of week penalties in favour of a higher base rate. This process, seeing the Monday to Friday rate increase and weekend penalty rates decrease (eg Sunday from 200% to 150%), has been a common feature of many retailers’ workplaces for some years.

However a small group of employees, who worked predominantly at times which, under the award, would attract penalty rates, argued that they would not be better off overall under the enterprise agreement. They said the higher rate didn’t compensate them because the lower base rate plus penalties from the award, delivered a better result for them.

The full bench agreed, pointing out that the law requires “each and every employee” to be better off under an enterprsie agreeemnt. There was no evidence that these employees would work sufficient rosters in the non-penalty days/times to balance out. The evidence was these employees would continue to work days/times which would see them worse off.

The commission offered the company the option of making an undertaking that those employees would be paid higher rates to cover off the penalties they would have received under the award. The company declined meaning they have fallen back to their 2011 enterprise agreement.

This case is important as it confirms that each and every employee needs to be better off overall.

Hart v Coles Supermarkets Australia [2016] FWCFB 2887 (31 May 2016)